Base Metals Gain After Fed Leaves Interest Rates Unchanged

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• LME Aluminum 3M Select trades $15.25 higher to $3195 at 8:19:37 AM

• LME Copper 3M Select trades $197.25 higher to $13778.5 at 8:20:05 AM

  • (Bloomberg) – Copper gained as traders monitored signs of tight supply and clues for the future path of monetary policy after the US Federal Reserve left interest rates unchanged.  Base metals had traded cautiously ahead of the meeting on fears that the Fed may increase rates with the escalation of the US-Iran war fanning inflationary risks. Higher borrowing costs typically weigh on economic growth and consumption, hurting demand from industries that use metals as inputs. The Fed’s decision wasn’t unanimous, however, with three of the 12 policymakers favoring a quarter-point increase to fight inflation.  Most metals in London are on track for modest monthly gains as tight physical markets offset macroeconomic and geopolitical headwinds, including the resurgence of the conflict in the Middle East.   Short-term tightness in the copper market has led to a surge in price spreads on the LME, with nearby contracts trading at a $24 premium to three-month futures, in a condition known as backwardation that signals tightening supply. The spread has traded at a discount for most of this year. China’s import premiums have also flashed signs of tightness, hitting their highest level since 2022 last week.  The world’s biggest commodity consumer has thus far held back from aggressive measures to boost economic growth despite an abrupt slowdown. On Thursday, Chinese officials struck a more supportive tone on the economy but stopped short of announcing fresh stimulus. A package of government spending supporting manufacturing and consumption would be a boon for industrial metals like copper.

• CME HRC Steel last traded at $1195 and $3 higher at 7/29/2026

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