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Copper prices recovered after two consecutive days of losses as investors focused on growing long-term demand driven by investment in Artificial Intelligence (AI) and data centres, according to the latest market commentary by Access Bank group.
The bank said optimism over the expanding use of AI technologies helped offset concerns that renewed geopolitical tensions in the Middle East could weigh on global economic growth and industrial metals demand.
Access Bank noted that fresh United States strikes on Iran and the risk of disruptions to energy supplies through the Strait of Hormuz remain downside risks for the global economy and commodity markets.
Read more: Copper gains on easing geopolitical tensions as Kwacha holds firm
However, the bank said investors continued to view copper’s long-term demand outlook positively, supported by the expected expansion of AI infrastructure and data centres, which are likely to increase the consumption of the industrial metal.
The bank cautioned that rising oil prices could keep inflation elevated in the United States, prompting the US Federal Reserve to maintain higher interest rates for longer.
It said tighter monetary policy and a stronger US dollar could weigh on metal prices in the months ahead.
On the domestic market, Access Bank reported that the Zambian Kwacha strengthened against the US dollar on Wednesday, extending recent gains.
According to Bloomberg data cited by the bank, the local currency appreciated by about 0.37 percent to close just below K18.30 per US dollar, supported by favourable liquidity conditions in the market.
Access Bank said the Kwacha could receive additional support from anticipated foreign currency inflows ahead of the July 10 provisional tax payment deadline, as companies convert foreign exchange into local currency to meet tax and other domestic obligations.
The bank said the expected inflows could help sustain demand for the kwacha in the near term, although global market developments, including movements in commodity prices and the strength of the US dollar, will continue to influence the local currency.
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