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Weekly Base Metal Macro Economic Slides

By: Natalie Scott-Gray, Senior Metals Demand Analyst, EMEA and Asia region

Weekly Base Metal Macro Economic Slides

Key Takeaways: 

  • Base Metals Market Overview
    • Provided a comparative view of the base metals index versus other commodities, highlighting a significant drop in the index at end-July due to Trump’s surprise announcement to tariff only copper semi and fully manufactured products at 50%. Over H1 of August, price recovery has largely been supported by a weaker US dollar. 
    • Noted that the LMEX index is outperforming last year.  
  • Copper-Gold Ratio & US Manufacturing
    • Explained the copper-gold ratio remains weak, correlating with US ISM manufacturing data, capping copper price gains. 
    • Emphasized the US dollar’s influence and predicted further weakening due to monetary policy, not trade uncertainty. 
  • US Monetary Policy & Data Focus
    • StoneX Strategy Team expects a Federal Reserve rate cut in September, supported by the release of inflation and labour market readings.  
    • Key upcoming data: US retail sales (Thursday), China data dump, and Trump-Putin meeting (Friday).
  • Metals Performance & Macro Trends
    • July saw zinc as the only metal posting gains; tin and copper are outperformers year-on-year, with the other metals in the suite showing modest results due to lukewarm macro conditions.
  • Tariffs Update
    • President Trump announced a 50% tariff increase on India (effective August 27) due to Russian oil purchases, with electronics and pharmaceuticals exempt. Warned of possible escalation with China and Turkey depending on Trump-Russia negotiations.
    • US-China: 90-day truce extension granted, but relationship remains vulnerable; Chinese exports to the US are declining, with a projected 10–11% loss in export market share. 
    • EU-US: Only 15% baseline tariffs on European exports in effect; joint statement pending, uncertainty remains.
  • Copper Market Outlook
    • August prices led by US dollar and Chinese data, with building inventories likely to cap gains.
    • Q4 expected to see upward momentum due to China’s upcoming 15th Five-Year Plan and increased stimulus, supporting infrastructure and automotive sectors. 
    • US scrap export limits and tight ore supply will support prices; stocks expected to move lower in Q4. 
    • Q1 2026 marks the Chinese demand off-season, however, if the seasonal stock build comes in lower than previous years, it may provide price support. In addition, optimism over China’s Five Year Plan may support increased investor appetite for copper.
    • Q2 2026 prices expected to benefit from seasonal Chinese demand, ongoing US cyclical demand recovery and potential de-escalation in geopolitical tensions.
  • Aluminum (Ali) Market
    • LME expected to outperform SHFE this month; grid cable demand to recover in Q4.
    • Long-term, market to remain balanced with small surpluses due to new supply projects in India and Indonesia, keeping price expectations muted compared to copper. 
  • China Macroeconomics
    • July exports higher than expected, but sustainability is uncertain due to transshipment tariff risks. 
    • PMI readings remain in recession; new export orders have held in recession since May 2024.
    • Inflation risks: GDP deflator on track to post 10th month in the red. Credit data has come in below expectations, with new yuan loans issued at their lowest monthly level since 2007. 
    • More credit support and rate cuts expected in Q4 to help China hit GDP targets. 
    • July vs. last year: GDP growth, retail sales, exports, and jobless rate better, but fixed asset investment and property market remain weak.
  • US Macroeconomics
    • Recent data shows weakening labor market and manufacturing; CPI slightly higher but recession risks rising. 
    • Federal Reserve expected to cut rates in September. StoneX Strategy Team forecast ~100 basis points of cuts projected over the next year, supporting copper and manufacturing demand.
    • Rate cuts expected to warm the metals macro market and support cyclical demand recovery. 
  • Europe & Global PMI
    • European manufacturing mostly in recession, with slight improvements in confidence. 
    • July global PMI flipped back into recession. 
  • Economic Calendar & Key Dates
    • China: Watch for US-Russia talks and potential tariff impacts.
    • Europe: Thursday focus on industrial production and employment data.
    • US: CPI in line; upcoming PPI and retail sales to inform rate cut expectations. 
  • Base Metals

This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.


The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.


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