Metals like copper, aluminum, and zinc saw a rebound after a volatile week marked by hotter-than-expected US inflation and a selloff in AI stocks. Risk appetite returned on Friday, with copper ending a three-day decline driven by concerns over Federal Reserve interest rate hikes. Aluminum recovered from its lowest close this year, while zinc surged as much as 1.5%.
The outlook for US monetary policy has been a major factor in metal prices recently, but sector-specific issues also played a role. For copper, shifts in US trade policy expectations significantly impacted markets after a surge of metal imports tightened supply elsewhere.
BMI, a Fitch Solutions company, noted that industrial metals will likely see mixed performance due to a challenging macroeconomic backdrop and varying commodity-specific fundamentals. Tighter monetary conditions are expected to limit broad-based price increases.
Fed Chair Kevin Warsh’s comments in Bangkok on Friday eased bets on an imminent rate hike, though markets still anticipate a quarter-point rise before year-end. Copper prices rose 0.1% to $14,365 a ton, aluminum climbed 0.8% to $3,010, and zinc increased 0.6% to $3,685 a ton on the London Metal Exchange.
Citigroup Inc. maintained a near-term neutral stance on copper and aluminum, predicting little change in prices over the next three months. The bank highlighted elevated positioning in both metals, with 2027 balances looking flat for copper and in surplus for aluminum due to stronger supply growth expectations.