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

Fed Rate Cut Signals Possible Copper Price Rebound

Copper prices may rise following the U.S. Federal Reserve’s recent interest rate cut. On September 18, the Fed lowered its benchmark rate by 50 basis points, marking the first cut since 2020. This move is expected to weaken the U.S. dollar, potentially increasing copper demand, especially in China’s property sector.

Immediately after the announcement, copper showed mixed reactions. London Metal Exchange (LME) prices dipped 0.2%, while Shanghai Futures Exchange (SHFE) prices climbed 0.43%. Traders warn that near-term softness may persist, as markets had already priced in the rate decision.

Falling Inventories Could Support Prices

Another factor influencing copper prices is declining copper inventories in China. Restocking ahead of the Mid-Autumn Festival has reduced available supply, offering potential price support. However, analysts remain divided. Some expect continued price growth, while others urge caution due to short-term market volatility.