Core Viewpoint - Recent fluctuations in copper prices indicate a shift from a bullish trend to a more cautious outlook, driven by macroeconomic uncertainties and adjustments in demand forecasts related to AI developments [1][2][3]. Macroeconomic Factors - Uncertainties in U.S. trade policies and fluctuating expectations regarding Federal Reserve interest rate cuts are exerting pressure on copper prices [3]. - The recent lack of new tariffs on copper from the U.S. has diminished speculative demand, contributing to price corrections [3]. - The total open interest in Shanghai copper futures has decreased from approximately 690,000 contracts to around 627,000 contracts, indicating a reduction in bullish sentiment [3]. Supply and Demand Dynamics - Domestic copper inventories are at a five-year high, reflecting a slowdown in demand as higher prices have started to suppress consumption [4]. - The increase in COMEX copper inventories suggests potential risks in the market, leading to uneven global inventory distribution [4]. Impact of AI Demand Projections - A significant revision of copper demand estimates related to AI infrastructure by Nvidia has led to a reassessment of future copper demand, with the copper requirement for a traditional data center being corrected from 500,000 tons to 200 tons [5][6][7]. - This correction has prompted market participants to reevaluate the "AI copper shortage" narrative, contributing to a decline in copper prices [8]. Long-term Demand Outlook - Despite the short-term negative sentiment from Nvidia's data correction, the long-term demand for copper is expected to be supported by diverse factors, including AI-related infrastructure, electric vehicle charging stations, and renewable energy projects [9]. - The most significant turning point for copper prices in 2026 is anticipated to be influenced by the Federal Reserve's monetary policy decisions, particularly the potential cessation of interest rate cuts [9].