Copper moves lower as US election undermines AI and tariff trade

Copper slumped to its lowest since July as a political shake-up in Washington threatened to blunt two key bullish drivers: the rapid build-out of AI infrastructure, and the risk of US import tariffs on the metal.

Industrial metals have joined a broader flight from risk since the Democrats swept Congress, as technology stocks tumble on concerns over tighter regulation on artificial intelligence. Copper, used in cables and wiring for data centres and power equipment, fell as much as 1% toward $13 700 a ton, after a 1.2% decline on Thursday.

The Republican wipeout — fuelled by angst over inflation — has also triggered fresh speculation about the chances of expanded US import tariffs on copper. The prospect of fees had kept US prices for the metal higher and tightened the global market by pulling in huge volumes to American stockpiles. On Thursday, that price differential disappeared.

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“Many traders believe aggressive copper tariffs are now less likely with the Democratic Party controlling the US Congress, with affordability being the Achilles heel for the governing party heading into 2028,” TD Securities said in a note.

The risks of an AI downturn or the absence of tariffs had already been flagged by many analysts, and copper forecasts have generally been cautious in recent months. The worst-case scenario for tariffs — if the Trump administration explicitly rules out import levies — raises the prospect of outflows back to the LME network.

“Market expectations point to obstacles facing the Trump administration’s fiscal policies, a slowdown in AI-related tech investments, tightening cross-asset liquidity and simultaneous outflows of capital from both tech stocks and nonferrous metals,” Chinese brokerage Chaos Ternary Futures Co wrote in a note.

Copper was down 1% at $13 712 a ton on the London Metal Exchange as of 11:50 a.m. in Shanghai. Aluminium fell 0.5% and zinc was down 1%.

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