METALS-Copper prices diverge as US rate outlook, AI sentiment weigh

SHANGHAI, Dec 18 (Reuters) - Copper prices move in opposite directions on Thursday, as the market focussed on the outlook for U.S. interest rates, while waning confidence in the artificial intelligence sector weighed on sentiment.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 closed 0.23% higher at 92,600 yuan ($13,151.73) a metric ton.

The benchmark three-month copper on the London Metal Exchange CMCU3 declined 0.16% to $11,718.50 a ton, as of 0718 GMT.

In his national address on Wednesday, U.S. President Donald Trump said that the next chairman of the Federal Reserve will be someone who believes in lower interest rates "by a lot".

Trump previously indicated that he will announce his choice to replace Fed Chair Jerome Powell, whose term ends in May, early next year.

President Trump's comments came a week after the U.S. central bank lowered its policy rate by 25 basis points, which helped copper to outperform its base metal peers.

The market is sceptical about whether any of the known finalists, White House economic adviser Kevin Hassett, Federal Reserve Governors Kevin Warsh and Chris Waller, would lower rates as Trump desired.

The dollar edge higher =USD, weakening the greenback-priced commodities by making them more expensive for investors using other currencies.

Meanwhile, scepticism around AI deepened after Oracle's ORCL.N data center partner Blue Owl Capital was reported as backing a $10 billion deal for its next facility amid concerns about rising debt and spending. Copper is a key metal used in data centers.

The red metal still found good support from supply shortage prospects and demand outlook, limiting the scale of the session's decline.

Among other SHFE metals, aluminium SAFcv1 was up 0.25%, zinc SZNcv1 gained 0.52%, lead SPBcv1 nudged 0.06% higher, nickel SNIcv1 gained 1.07%, and tin SSNcv1 surged 2.88%.

Elsewhere on LME, aluminium CMAL3 dropped 0.45%, zinc CMZN3 declined 0.36%, lead CMPB3 dipped 0.13%, nickel CMNI3 gained 1.10%, and tin CMSN3 advanced 0.37%.

($1 = 7.0409 Chinese yuan)