(Bloomberg) -- Copper rose to a two-month high to cap a strong week for metals, helped by the Federal Reserve’s half-point rate cut.
Base metals have advanced with other global risk assets after Fed Chair Jerome Powell kicked off the bank’s easing cycle on Wednesday, while US jobless data reinforced expectations of a soft landing for the world’s biggest economy.
In China, too, conditions in metals market are showing signs of improvement. Premiums on imported copper rose to the highest since the start of 2024 this week, and inventories on the Shanghai Futures Exchange dropped.
“Marco conditions are turning positive now,” said Xu Wanqiu, an analyst with Cofco Futures Co.. “People are no longer talking about recessions and the consensus is that the US economy will be fine, inflation will slow.”
Base metals sank to multi-month lows in August amid disappointment over Chinese demand and a cloudy outlook for the global economy. The Fed’s rate cut has soothed sentiment for now, but uncertainty over the US presidential election is subduing some risk appetite.
There was also positive news on the policy front in China. The government is mulling the potential removal of some of the major remaining curbs on home purchases as it tries to arrest the prolonged property slump, according to people familiar with the matter
Copper rose 0.3% to $9,546.50 a ton on the London Metal Exchange as of 3:46 p.m. Shanghai time, and was up 2.6% for the week. Nickel climbed 0.7%, while aluminum and zinc edged lower. Iron ore futures fell 0.9% in Singapore, and was down 1.1% for the week.
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