Copper prices rebounded on Tuesday, reclaiming the April support trendline and recovering from the previous week's decline. This movement followed a broader rally in AI-related stocks triggered by the public filing of Anthropic's IPO. Despite this growth, copper remains approximately 3.5% below its record high set in September, with rising inventories in US warehouses potentially capping further gains.
The correlation between AI sector performance and copper stems from infrastructure requirements. Anthropic’s filing disclosed $587 billion in compute and lease obligations, highlighting the massive demand for data centers, which are heavily reliant on copper wiring. Analysts note that the metal has become increasingly sensitive to the volatility of the AI sector, as evidenced by the price drop during the recent tech selloff on October 22.
On the London Metal Exchange, three-month copper rose 1.1% to $14 487.50 per tonne, marking its highest level since October 16. Supply conditions outside the US remain tight, with China’s Yangshan premium reaching a nearly 13-year high of $188 per tonne. Additionally, inventories on the Shanghai exchange dropped by more than 25% in a single week due to smelter maintenance.
Copper is currently trading near $6.72 per pound, testing a resistance zone between $6.64 and $6.72. A successful daily close above this range could signal a move toward the record price of $6.95. If the momentum stalls, market participants are looking at the $6.31 level as a primary support area. The market now awaits upcoming Federal Reserve decisions and Big Tech earnings reports.
