The Freefall in Base Metals Halts; Copper Returns to $14,000 and Aluminum Climbs Above $3,000
The global base metals market recovered its upward trend at the end of weekly trading, overcoming the waves caused by US inflation data and the tech stock selloff. Following the Fed Chair's anti-tightening remarks in Bangkok and the return of risk appetite to trading floors, copper's three-day consecutive decline was halted, aluminum returned to the $3,000 channel after touching its annual low, and zinc experienced a 1.5% jump; a trend that, alongside heavy physical copper absorption by the US market ahead of new trade tariffs, turned the London Metal Exchange (LME) board green in Friday's closing trading.
After a volatile week shaped by worse-than-expected US inflation data and a sharp selloff in AI sector stocks, risk appetite returned to the metals market, providing the basis for a price recovery in key commodities.
At the close of Friday trading on the London Metal Exchange (LME), copper rose 0.1% to $14,365 per ton, ending its three-day losing streak driven by fears of interest rate hikes. Meanwhile, aluminum, rebounding from its lowest closing price of the year, gained 0.8% to stand at $3,010 per ton.
Zinc also rose 0.6%, settling at $3,685, although it had recorded a 1.5% jump at one point during trading.
Dual Effect of Monetary Signals and Trade Developments
The outlook for the US central bank’s tightening policies remains the dominant variable shaping commodity price direction. Kevin Warsh, Fed Chair, in his recent speech in Bangkok, showed no sign of rejecting market expectations for a pause in rate hikes at the October meeting; a factor that dampened bets on immediate monetary tightening, although markets still consider a 0.25 percentage point rate hike likely before the end of this calendar year.
Global Copper Prices
In the copper market, in addition to monetary factors, expectations of changes in US tariff policies have had a direct impact; the heavy flow of copper imports into the US market, motivated by avoiding potential future tariffs, has contributed to the physical contraction and restriction of supply in other global consumption centers.
International Institution Assessment: Divergent Behavior of Industrial Metals
BMI Research (a Fitch Solutions subsidiary) emphasized in an analytical note:
“Industrial metals will record heterogeneous and dual performance under the dual pressure of a challenging macroeconomic environment on one hand and fundamental supply-demand differences in each product on the other; meanwhile, tight monetary conditions will not allow uniform and widespread price surges.”
On the other hand, Citigroup investment bank has assessed its medium-term stance on copper and aluminum as “neutral” and predicted that prices will stagnate around current levels over the next three months. According to the bank’s experts, open long positions in both metals are very high; the copper balance for 2027 is estimated to be near break-even, but the aluminum market will face a production surplus in the coming year amid faster supply-side growth.