SMM Morning Comment For SHFE Base Metals (Mar 12)

SHANGHAI, Mar 12 (SMM) –

Copper

Overnight, LME copper opened at $9,619/mt, initially edged higher before pulling back to an intraday low of $9,608.5/mt. It then fluctuated upward, reaching an intraday high of $9,679/mt near the close and finally settled at $9,679/mt, up 1.96%. Trading volume reached 18,000 lots, and open interest stood at 300,000 lots. Overnight, the most-traded SHFE copper 2504 contract opened at 78,420 yuan/mt, fluctuated rangebound initially, then dipped to an intraday low of 78,270 yuan/mt. It later moved upward and fluctuated rangebound near the close, hitting an intraday high of 78,600 yuan/mt before finally settling at 78,500 yuan/mt, up 0.91%. Trading volume reached 23,000 lots, and open interest stood at 157,000 lots. Macro side, Trump announced plans to double the 25% import tariff on Canadian metals, but White House officials later stated that this plan would not be implemented. Following the release of conflicting tariff news, market trading fluctuated, U.S. stocks fell, and the US dollar index hit a new low, providing support for copper prices. Fundamentally, copper prices pulled back from highs yesterday, while downstream orders showed some recovery. Some enterprises reported a slight increase in purchasing demand, but finished product inventories at plants remained at high levels, with destocking pressure persisting. In the spot market, trading sentiment only slightly improved, with most traders and downstream enterprises purchasing as needed. Overall, the market supply-demand imbalance persists, limiting the upside room for copper prices, though bottom support remains relatively solid.

Aluminum

Futures Market: Overnight, the most-traded SHFE aluminum 2504 contract opened at 20,880 yuan/mt, hitting a high of 20,910 yuan/mt and a low of 20,810 yuan/mt, before closing at 20,830 yuan/mt, up 75 yuan/mt or 0.36%. On Tuesday, LME aluminum opened at $2,685/mt, reached a high of $2,711/mt and a low of $2,669/mt, and closed at $2,704/mt, up $17.5/mt or 0.65%.

Summary: Macro perspective, US tariff policies on major trading partners have caused significant market volatility and heightened concerns over economic growth. The US dollar index hit its lowest level since mid-October last year. The market will focus on the US Consumer Price Index on Wednesday and the Producer Price Index on Thursday, with traders currently expecting the US Fed to cut interest rates in June. Fundamentals side, domestic aluminum production resumption continues to advance. Weekly aluminum ingot social inventory remains on a destocking trend, making the destocking turning point increasingly clear. Coupled with the sustained recovery in aluminum processing enterprises' operating rates during the peak season, consumption-side support is strengthening. Overall, the macro perspective shows a tug-of-war between longs and shorts. Domestic pro-growth policies maintain a positive tone, while overseas trade barriers heighten market risk aversion. Fundamentals indicate a dual increase in supply and demand, with order recovery in multiple sectors driving downstream operating rates higher, supported by continued destocking of social inventories, which provides support for aluminum prices. In the short term, aluminum prices are expected to hover at highs, with key resistance at 21,000 yuan/mt. Focus on the evolution of tariff policies, US inflation data, and the pace of end-use consumption recovery.

Lead

Overnight, LME lead opened at $2,040/mt, weakened slightly during the Asian session, fluctuated upward during the European session, and finally closed at a high of $2,055/mt, up $15/mt or 0.74%.

Overnight, the most-traded SHFE lead 2504 contract opened at 17,380 yuan/mt, hit a high of 17,435 yuan/mt in early trading, then consolidated above the daily moving average, and finally closed at 17,425 yuan/mt, down 35 yuan/mt or 0.20%.

Yesterday morning, lead prices strengthened, but spot market transactions remained weaker than futures. Some suppliers slightly lowered premiums and discounts against SHFE lead, and branded lead continued to be transferred to delivery warehouses. On the supply side, the tight supply of scrap batteries and lead concentrates continued to support lead prices. For refined lead, although the environmental protection inspection team has entered Anhui province, the supply of secondary refined lead has not been significantly affected recently. Downstream battery producers' sentiment of rushing to buy amid continuous price rise and concerns over subsequent secondary supply shortages increased their willingness to purchase, leading to better transactions for secondary refined lead compared to primary lead. Moving forward, attention should be paid to the impact of downstream production resumption and the recovery of refined lead supply after the end of environmental protection measures on prices.

Zinc

Overnight, LME zinc opened at $2,855/mt. At the beginning of the session, LME zinc fluctuated slightly and dipped to $2,832.5/mt, then climbed all the way up, reaching a high of $2,920/mt near the session's end, and finally closed higher at $2,920/mt, up by $75.5/mt or 2.65%. Trading volume increased to 13,124 lots, while open interest decreased by 3,439 lots to 214,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the upper Bollinger Band forming resistance. LME zinc inventory increased by 1,725 mt to 161,825 mt, up by 1.08%. Cancelled warrants reached 67,000 mt, and registered warehouse warrants fell to their lowest level in over a year. Additionally, the weakening US dollar index boosted the performance of base metals, leading to a significant overnight rise in LME zinc.

Overnight, the most-traded SHFE zinc 2505 contract opened at 23,950 yuan/mt. At the beginning of the session, SHFE zinc touched a high of 23,950 yuan/mt, then slightly declined below the daily average line, followed by fluctuating movements. During the session, it dipped to 23,845 yuan/mt and finally closed higher at 23,880 yuan/mt, up by 95 yuan/mt or 0.4%. Trading volume decreased to 35,981 lots, while open interest increased by 1,715 lots to 80,639 lots. Overnight, SHFE zinc recorded a bearish candlestick, with support provided by the 10-day moving average below. Boosted by the performance of the overseas market, SHFE zinc opened higher with a gap during the night session. However, the fundamental factors provided insufficient support for zinc prices, and SHFE zinc hovered at highs.

Tin

OpenAI conducted a technical livestream, open-sourcing the first Agent SDK and releasing the Responses API, significantly simplifying and enhancing the development process for intelligent agents. One of the key features of the Agent SDK is its support for dynamic task collaboration among multiple agents, enabling the development of highly complex intelligent automation workflows, similar to Manus. For instance, a multinational e-commerce platform handling orders from different regions worldwide can use the Agent SDK to develop multiple agents for language recognition, inventory inquiry, real-time order updates, and after-sales services, allowing them to collaborate automatically throughout the sales and after-sales processes. The Responses API, on the other hand, comes with numerous enhanced features such as web search, file search, computer control, observability, process tracking, and agent orchestration. These tools are essential for developing highly complex automation workflows and can be seamlessly integrated with the Agent SDK. Overall, during the night session, SHFE tin prices fluctuated within the range of 260,000-265,000 yuan/mt. In the tin ingot spot market, spot transactions were relatively sluggish yesterday, with most traders reporting scattered deals and a small number of post-pricing transactions, resulting in overall poor sales. Some downstream enterprises are approaching low inventory levels and are expected to restock at lower prices in the future to alleviate inventory pressure.

Nickel

Spot Premiums/Discounts: The mainstream spot premium quotation range for Jinchuan No. 1 nickel was 1,200-1,400 yuan/mt, with an average premium of 1,300 yuan/mt, down 50 yuan/mt from the previous trading day. The premium/discount quotation range for Russian nickel was -200 to 0 yuan/mt, with an average discount of -100 yuan/mt, also down 50 yuan from the previous trading day.

Futures: Nickel prices rose after the opening yesterday. As of the 11:30 closing price, it reached 132,100 yuan/mt, up 0.42% from the previous trading day's settlement price, with a high of 133,910 yuan/mt.

Spot Premiums/Discounts: Jinchuan brand nickel fell by 50 yuan compared to the previous trading day. Market sentiment remained high, but downstream buyers were still mainly on the sidelines. Traders continued to lower prices to promote transactions, but with limited success.

From a technical and market sentiment perspective, SHFE nickel futures contracts rebounded after an initial drop at the opening, indicating that market sentiment remains relatively optimistic. Coupled with the upward trend in LME nickel, short-term sentiment is expected to continue dominating market price movements.

Nickel Sulphate Price Spread: Today, nickel briquette prices were 130,500-131,600 yuan/mt, with an average price of 131,050 yuan/mt, down 200 yuan/mt from the previous trading day's spot price. Nickel sulphate remains at a discount to refined nickel.