Weekly Metal Price Volatility: Steel, Aluminum, Copper, Lead, Zinc, Nickel. Key Data, Developments, and Expert Opinions

The past week saw a mixed performance across base metals. Some metals faced moderate downward pressure, while others remained relatively stable, supported by supply concerns and expectations of looser monetary policy. Here is a summary of key data (as of September 19, 2025), an analysis of the week’s price drivers, and expert opinions on the impact of the U.S. Federal Reserve’s (Fed) rate cut.

Key Factors Impacting Metal Prices This Week

1) Fed Cuts 0.25 Basis Points (September 17, 2025): Immediate and Limited Effect The Fed decided to cut its policy rate by 25 basis points and signaled the possibility of further easing in future meetings. While this decision provided a psychological boost for risk assets, the market’s reaction in base metals was modest and varied. This was because the Fed simultaneously emphasized the risk of persistent inflation, making investors cautious about the future path of interest rates and the U.S. dollar.

2) Aluminum Supply Tensions & Major Trader Moves Tensions related to aluminum supply continued to support prices. Reports indicated that a major trader, Mercuria, planned a significant withdrawal of aluminum from LME warehouses. This technical move reduces on-exchange inventory and increases price sensitivity, especially given that global stockpiles are already low. This partly explains why aluminum remains at a relatively high level compared to its recent history, even with a slight dip this week.

3) Steel Demand and Signals from China China’s crude steel production fell for the third consecutive month, reaching 77.37 million tons in August—the lowest since late 2024. This reflects weak domestic demand due to a stagnant real estate market. However, China is boosting steel exports, creating competitive pressure on the global supply. This factor is putting downward pressure on domestic steel prices in some regions while driving price volatility in export markets.

4) Technical Inventory and Energy Cost Factors In some regions, particularly Europe, aluminum smelters have been shutting down due to high energy costs, leading to a reduction in actual supply. Meanwhile, the nickel market is being influenced by supply changes in Indonesia and the Philippines and the technical aspects of contract trading. Overall, input costs (energy, coking coal, transport) continue to be a dominant factor shaping producers’ profit margins.

Analysis by Metal Group

Copper

• Situation: Copper prices were stable around $9.9k per ton (closing on Sept. 19) and were down slightly by about 0.5% for the week. The market reflects limited industrial growth expectations but still finds support from demand for electrification, power transmission, and green infrastructure.
• Outlook: If the Fed continues to cut rates and real GDP recovers, copper will benefit through the channel of industrial demand. Conversely, if the Fed cuts but weak growth persists, real demand will struggle to pick up significantly.

Aluminum

• Situation: Aluminum prices are around $2,673 per ton, down a modest 1% this week but still high compared to the yearly average due to tight supply and major trader withdrawal activities.
• Outlook: Aluminum is a volatile metal due to concentrated inventory buildup (LME warrant issues) and energy costs. The Fed’s rate cut could support long-term demand, but the risk of a short-term correction remains if smelters increase production again.

Zinc & Lead

• Situation: Zinc was down slightly by about 0.78% this week, while lead saw small fluctuations around $2,003 per ton. Zinc’s relatively low LME inventory levels contribute to its volatility.
• Outlook: Both metals are directly impacted by the metal plating, construction, and automotive sectors. Therefore, the extent of the economic recovery (especially in China and the EU) is the decisive factor.

Nickel

• Situation: Nickel prices stood at around $15,200–15,300 per ton, with minor fluctuations. Demand for “class one” nickel (for EV batteries) remains a bright spot, but industrial nickel (stainless steel) is under supply pressure.
• Outlook: The battery/EV demand channel could continue to be a medium-to-long-term anchor for nickel. However, supply from Indonesia and the Philippines could limit price gains if production explodes.

Steel (Rebar / HRC)

• Situation: China’s rebar price was stable around 3,150 RMB per ton (up slightly by 0.5% this week). August production was down, but inventory and exports increased, creating mixed pressure on domestic prices.
• Outlook: The Fed’s rate cut will have an indirect effect: if lower rates improve global credit and stimulate infrastructure, steel will benefit. But the decisive short-term factors remain China’s economic recovery and its export policies.

Expert Opinions & Market Response

Daniel Pavilonis (RJO Futures): He believes that the prospect of a Fed rate cut could push base metals higher if it leads to longer-term inflation and stimulates infrastructure investment, increasing metal demand. However, he warns that investors should be cautious as the risk of stagflation (weak growth + high prices) still exists.

Neil Welsh (Britannia Global Markets): He commented that the initial reaction of copper and other base metals was quite “modest” due to the cautious message from the Fed. This means the market is uncertain whether the rate cut cycle will be sufficient to trigger real demand. He also noted that technical factors like LME inventory and large trader positions (e.g., the aluminum case) can amplify volatility.

Market Assessment: Immediately after the Fed’s decision, risk assets (equities, some metals) saw a slight increase, but the reaction was not strong. This is because the Fed’s warning of a “meeting-by-meeting” approach and persistent inflation made investors weigh the benefits of lower borrowing costs against the risk of rising input/global prices.

Scenarios to Watch

• Optimistic Scenario (Fed continues to ease + growth recovers): Base metals (especially copper, aluminum, steel) will receive support from increased infrastructure and manufacturing demand. Prices are likely to gradually rise.
• Cautious Scenario (Fed cuts but weak growth persists): Prices will struggle to break out as real demand is not strong. Volatility will be primarily driven by supply and technical factors (LME inventories, Chinese export activity).
• Short-term risks: Tariff/quota policies, production disruptions (due to energy costs), the positions of large traders (like the aluminum withdrawal), and developments in Chinese demand.

Source: Compiled from various internet sources