Copper Hits Fresh All-Time High After Fed Delivers Rate Cut
ManuelSummary:
Copper was up 2.7% to settle at $11,872 a ton on the London Metal Exchange, as all metals except nickel rallied on the exchange.
Copper climbed to a fresh record high and most other industrial metals rose, after the Federal Reserve delivered a widely expected interest-rate cut and upgraded its growth forecast for the US economy.
Copper advanced as much as 3% to $11,906 a ton in London, surpassing a peak struck on Monday. The US central bank lowered rates for a third straight meeting, but subtly changed the wording of its statement to hint at greater uncertainty around future reductions as it seeks to support growth while keeping inflation under control.
The Fed now expects the US economy to grow by 2.3% next year, up from its previous projection of 1.8%, while anticipating that the pace of inflation will slow to 2.4%. Lower rates tend to benefit metals and other commodities, both by boosting their appeal relative to yield-bearing investments like bonds, and by lowering borrowing costs for capital-intensive manufacturing and industrial businesses.
The sanguine outlook for the US economy also bolsters the demand outlook for industrial metals after a sharp decline in Chinese copper consumption over recent months. Beijing signaled on Monday that it would stick with a “proactive” fiscal approach and maintain a “moderately loose” monetary stance as it seeks to strengthen domestic demand.
Copper has rallied almost 35% this year, buoyed by a series of mine disruptions and fears of a shortage outside the US as traders rush supplies there ahead of potential tariffs next year. Rising consumption by the renewable energy sector is underpinning demand for the red metal over the longer term.
Copper was up 2.7% to settle at $11,872 a ton on the London Metal Exchange, as all metals except nickel rallied on the exchange. Tin surged 4.4% to $41,751, the highest since April 2022, while zinc jumped 3.9%.
Source: Bloomberg
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