Daily metals

What's Moving Markets?Global stocks closed at new highs, extending the record-setting gains from the prior session as investors digested upbeat corporate earnings, the Fed’s first rate cut of 2025, and signs of progress in US-China relations. Markets also tracked a lengthy call between President Trump and China’s Xi Jinping, with Trump noting progress on trade, fentanyl, and a potential TikTok deal. Rate cut fails to boost sentiment in commodity markets. Global gas markets gained amid fears of supply disruptions. Yields on 10- year US Treasuries rose by 6bp last week to 4.13%, while the USD index was 0.1% stronger at 97.6.The outlook on global rates will remain the focus this week, with key speeches from FOMC members, including Chairman Powell, to follow up on the Fed's recent rate cut. Markets and policymakers will assess updates on PCE inflation, personal consumption and spending, and an updated Q2 GDP estimate for important insights on the economy. Other important US releases include durable goods orders, PMI readings, the current account, and new home sales. On the geopolitical front, world leaders are convening in New York for the United Nations General Assembly at a turbulent moment for global politics.AI Has the Potential to Redefine Trade and Growth: Artificial intelligence is no longer just a buzzword — it’s becoming a powerful engine for reshaping the global economy. According to the WTO, AI could boost global trade by 34–37% and raise global GDP by 12–13% by 2040.The US DoE’s Office of Fossil Energy & Carbon Management has announced up to $6mn in federal funding available for R&D projects to help establish a secure domestic supply chain for gallium — a critical material for the energy, defence, and semiconductor sectors.Precious metals came off their highs after the Fed’s tone on future rate cuts was less dovish than expected after its Sep meeting concluded. Chair Jerome Powell struck a cautious tone on further easing, describing the move as a risk-management measure in response to a softening labour market. He added that the central bank will take a “meeting-by-meeting” approach to assessing the future path of interest rates. Swap markets are pricing in at least one additional cut by the year end. Gold has now exceeded its inflation-adjusted peak of Jan 1980.The base metals sector struggled to hold its head above water as the stronger USD weighed on investor appetite. Higher metals output in China also weighed on sentiment. China’s zinc output in Aug hit its highest monthly level since Q124 as smelters benefited from higher processing fees and improved availability of ore. Refined zinc output rose 23% YoY to 651kt, according to data from China’s National Bureau of Statistics. Production of refined copper was also stronger, rising 15% YoY to 1.3Mt. LME aluminium prices have climbed by 5–6%. Key drivers are China’s production cuts – energy restrictions and CO₂ caps have reduced smelter output. US tariffs (50%) – on primary aluminium and semi-fabricated products from China & the EU → Midwest premiums rising, pulling metal from other regions. China’s imports – Jul imports +38% YoY (360kt), strong demand from EVs and infrastructure.Iron ore gave up recent gains on weak Chinese economic data. Weak Chinese economic data highlighted ongoing property sector stress, with new home prices falling 0.3% in Aug from the previous month, extending a downturn that began in May 2023.