Copper Price Drops 6.6% as Trump Tariff Risks and AI Spending Fears Raise Crash Concerns

• Copper price fell 6.6% in 30 days as US tariff uncertainty and rising inventories weighed on the market
• Copper price crash concerns are growing as tariff risks and a potential slowdown in the AI boom threaten short-term demand
• Copper supply constraints could support long-term prices, while the copper prediction remains uncertain amid shifting demand and tariff policies

Copper prices are facing fresh pressure after their recent pullback from a record high. Factors such as uncertainty around US tariffs, rising inventories, and the future of the AI boom have raised questions about copper demand in broader terms. At the same time, copper remains an important metal for electricity networks, leaving its long-term outlook harder to predict with the current uncertainties in place. What does the future hold for copper?

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Why Is Copper Falling?

Copper prices have fallen by 6.6% within 30 days of hitting a record high. The metal has hit $6.55 per pound as uncertainty around US tariffs weighs on prices. On October 22, benchmark three-month copper on the London Metal Exchange fell to its lowest level in five weeks, with prices facing pressure from new warehouse inflows and doubts about the AI outlook.

However, amid all this, the tariff issue has weighed on the asset more than ever. Traders have been sending copper to US warehouses ahead of potential import tariffs. This has helped increase copper inventories in the US. According to Reuters, US warehouses held more than one million metric tons of copper, roughly 70% of visible global stocks.

The proposed US tariff rates on refined copper stand at 15% for 2027 and 30% in 2028. At the same time, much of the expected increase in copper demand comes from the growing AI boom. If this demand falters at any point, it could impact copper prices in a significant manner.

“Copper is down 6.6% within 30 days after reaching its highest level in history. President Trump’s tariff uncertainty is the immediate concern, which has led to massive copper stockpiling in the US. With proposed tariffs of 15% on refined copper in 2027 and 30% in 2028, manufacturers in the US hoarded as much as 714,000 tonnes in COMEX warehouses, nearly 750% jump since Feb 2025. Copper inventories rose 40% in one week, per Reuters, and now the same excess supply is dragging short-term prices down. But the bigger risk could be the AI boom itself. Much of the rise in demand comes from AI equipment, data centers, and the power used to keep them running. As long as the spending continues, the demand for copper holds up. Once that slows down, we could see a bigger correction in copper prices. Plus, if the US levies tariffs, the increased prices could slow down the overall manufacturing boom that could affect the prices.”

Moreover, this scenario could lead to a sharper copper crash dynamics, potentially pushing the metal lower.

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Copper Supply Remains a Pressing Issue

Despite such risks, copper supply remains another pressing issue affecting the metal’s price outlook. Copper supply comes with its own challenges, with a new copper mine taking around 17 years to produce the metal, according to industry estimates. That being said, additional production costs, delays, and declining ore grades may also affect its price outlook.

According to Goldman Sachs copper prediction, copper prices could fall to around $11,000 per metric tonne, although this forecast should be distinguished from its more recent projections. Bank of America, on the other hand, puts its long-term copper prediction at $13,577 per metric tonne for 2031. Citi’s copper price forecasts range from $15,000 to $17,000 per metric tonne, depending on the timeframe and assumptions used.

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