Copper Hits Two-Month High With Fed Cut Driving Metals Markets

(Bloomberg) -- Copper climbed to a two-month high as the US Federal Reserve’s half-point rate-cut drove broader gains in metals markets.

The Fed’s focus on quashing inflation has been a major headwind for metals in recent years, along with deepening doubts over the health of China’s economy. Investors are now waiting to see whether the central bank’s move helps shore up US growth and stems recent weakness in global manufacturing.

Copper rose as much as 2%, extending Wednesday’s gain, and was up 1.2% at $9,510 a ton as of 3:45 p.m. in London. Lead added 2.5% and zinc, 1.2%.

The half-point cut unveiled by Fed Chair Jerome Powell is “beneficial to expectations for a soft landing in the US,” Everbright Futures Co. said in a note, adding that fundamentals for copper were gradually improving.

While most metals are solidly higher this year, performance has fallen short of widely held bullish expectations — especially for copper. Chinese demand has been lackluster, and uncertainty surrounding the US presidential election in November has further soured sentiment.

There are now signs of improvement in China’s copper market, with inventories in Shanghai Futures Exchange-tracked warehouses falling back toward normal levels. Premiums on imported copper have also rebounded to the highest since early 2024, after trading below zero for most of May and June.

--With assistance from Ben Sharples and Sana Pashankar.