Copper stocks declined broadly, with China Nonferrous Mining Corporation Ltd (HKEX: 01258) falling 5.73% to HK$11.52, China Molybdenum Co., Ltd. (HKEX: 03993) dropping 5.31% to HK$12.12, Jiangxi Copper Company Limited (HKEX: 00358) sliding 3.90% to HK$24.64, and MMG Limited (HKEX: 01208) shedding 3.44% to HK$6.87.
On the news front, Democrats scored a major victory in the midterm elections, prompting the market to reassess the policy and regulatory risks that US data center construction may face. At the same time, the return cycle on massive AI capital expenditure, financing costs, and the actual delivery capacity of data center projects are facing growing scrutiny. As a result, the market's outlook for demand for materials needed in data center construction and circuit board soldering is becoming increasingly pessimistic.
Public information shows that copper is heavily used in data centers and power grid construction, and a slowdown in data center buildout could drag on copper demand. In addition, Macquarie analyst Alice Fox pointed out that copper prices have exceeded the range that supply levels can support: "A massive global surplus emerged last year, and we expect it to persist for several years to come." The artificial market distortion caused by potential US copper tariff policy is also seen as one of the important factors pushing prices higher, and once the tariff threat is lifted, the market could face rapid destocking pressure.
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