Nickel

Introduction: Metals Step Out of the Shadows

Monday. The London Metal Exchange opens the week with confident growth. Copper is rising for the third day in a row, interrupting a two-week losing streak that had made investors nervous. Aluminum continues to recover from a four-month low, adding another 0.5% and returning to levels that had seemed lost forever.

What has changed? The main driver is the shift in expectations regarding the Federal Reserve’s policy. Fed Chair Kevin Warsh said last week that price risks are declining. This became a signal for markets, which immediately reduced their bets on tighter monetary policy. And for industrial metals, which are highly sensitive to the macroeconomic backdrop, this came as a long-awaited relief.

Another factor is also at play — China. Funds in China are beginning to flow into shares and futures of metals producers in anticipation of solid first-half earnings. Several Chinese companies are expected to present preliminary results in the coming weeks, and the commodity rally, from gold to copper, is expected to support their profits compared with last year.

Copper is trading at $13,402.50 per ton, gaining 0.3%. Aluminum is at $3,107 per ton, up 0.5%. These are not spectacular figures, but they matter as a shift in trend. After weeks of decline, when metals were losing 1–2% per day, even a small gain feels like a victory.

Let’s break down what is really behind this recovery, why the Fed is changing its rhetoric, and how Chinese investors are influencing the industrial metals market.

The Fed: From Hawkish Rhetoric to Dovish Signals

Kevin Warsh Acknowledges Declining Price Risks

The key event that changed sentiment in metals markets was a statement by Fed Chair Kevin Warsh last week. He acknowledged that price risks are declining. This may sound like a technical phrase,...

Introduction: The Red Metal Is Back in Play

Friday. The London Metal Exchange is coming back to life. Copper, often called “Dr. Copper” for its remarkable ability to predict industrial cycles, is gaining nearly 1%. This is not just a random move. It marks the end of a two-week decline that had made investors nervous and forced them to reconsider their positions.

What changed? The dollar, the main enemy of commodity markets in recent months, has started to lose ground. The dollar index is falling for the second day in a row, making metals cheaper for holders of other currencies. Weak U.S. labor market data has reduced expectations of another Fed rate hike. And that was enough for industrial metals to breathe a sigh of relief and begin recovering.

But it is not that simple. Yes, copper rose by 0.7% to $13,413 per ton. Aluminum gained 0.6% to $3,110 per ton. Nickel posted an even more impressive increase — 1.8% to $16,540 per ton. Zinc and tin also became more expensive. But, as analysts note, the potential for this growth is limited, because weakness in traditional industrial sectors has not disappeared.

Let’s take a closer look at what is really happening in the industrial metals market, why the dollar has finally started to retreat, and whether this trend can last.

The Dollar Loses Ground: The Main Driver of Metal Prices

Weak Employment Data Hits Hawkish Expectations

It all started with U.S. labor market data released on Thursday. The figures were significantly weaker than forecast, and this changed the balance of power across all markets — from currencies to commodities. While just a week ago markets were confident that the Fed could raise rates this year, that confidence has now been shaken.

The CME FedWatch tool, which tracks the probability of...