Copper Prices Set to Rise After Fed Rate Cut; Volatility Ahead

Higher copper prices are anticipated following the US Federal Reserve’s recent interest rate cut, as a weaker dollar is expected to boost demand, especially in China’s property sector.

On September 18, the Fed lowered the rate by 50 basis points to 4.75-5%, the first cut since 2020, with more reductions likely ahead.

While copper prices showed minor fluctuations after the announcement—dipping 0.2% on the LME but rising 0.43% on the SHFE—some traders warn of potential short-term softness, as the rate cut had been largely anticipated.

Additionally, declining copper inventories in China, due to restocking for the Mid-Autumn Festival, may provide some support for prices. Overall, analysts are divided, with some optimistic about future price increases and others cautious about the near-term outlook.