SMM Morning Comment For SHFE Base Metals (Mar 13)

SHANGHAI, Mar 13 (SMM) –
Copper
Overnight, LME copper opened at $9,763/mt, initially fluctuating upward to an intraday high of $9,800/mt. It then fluctuated downward, hitting a low of $9,729/mt, before rebounding to higher levels by the session's end, ultimately closing at $9,679/mt, up 1.14%. Trading volume reached 18,000 lots, and open interest stood at 297,000 lots. Overnight, the most-traded SHFE copper 2504 contract opened at 79,800 yuan/mt, briefly hitting an intraday high of 79,870 yuan/mt. It then fluctuated downward to a low of 79,340 yuan/mt before slightly rebounding and pulling back again, finally closing at 79,530 yuan/mt, up 0.86%. Trading volume reached 34,000 lots, and open interest stood at 165,000 lots. Macro side, the US February CPI data came in below expectations across the board, fueling market expectations for a US Fed interest rate cut in June. Traders increased bets on at least two rate cuts within the year. The US dollar index hovered near a five-month low, coupled with market digestion of the US-EU tariff dispute and the potential for a Russia-Ukraine ceasefire, creating an overall macro environment supportive of copper prices. Fundamentally, supply side, with copper prices at highs, suppliers held a tight supply outlook for smelters, leading to strong sentiment of holding back cargoes and limited market circulation. Demand side, due to the significant rise in copper prices, downstream enterprises showed cautious purchase willingness, primarily purchasing as needed. Overall market transactions remained sluggish, with sellers and buyers in a stalemate. In terms of prices, copper prices are currently driven largely by macro sentiment. However, the uncertainty surrounding Trump's tariff-related remarks has heightened market caution. Copper prices are expected to continue fluctuating at highs today.
Aluminum
Futures Market: Overnight, the most-traded SHFE aluminum 2505 contract opened at 21,060 yuan/mt, hitting a high of 21,100 yuan/mt and a low of 20,945 yuan/mt, and closed at 20,970 yuan/mt, up 5 yuan/mt or 0.02%. On Wednesday, LME aluminum opened at $2,704/mt, reached a high of $2,726/mt and a low of $2,692.5/mt, and closed at $2,700/mt, down $4/mt or 0.15%.
Summary: On the macro side, US February inflation data fell short of expectations, alleviating some market concerns and raising expectations for a US Fed interest rate cut in June. Fundamentals side, domestic aluminum production resumption continues; aluminum ingot social inventory remains in destocking mode during the week, coupled with sustained recovery in aluminum processing enterprise operations, strengthening support from the consumption side. Overall, recent macro sentiment is bullish, and fundamentals show a supply-demand increase trend. Order recovery across multiple sectors is driving downstream operations higher, with social inventory destocking providing support for aluminum prices. In the short term, aluminum prices are expected to hover at highs.
Lead
Overnight, LME lead opened at $2,051/mt, edged up slightly during the Asian session, continued to fluctuate upward during the European session, reaching a high of $2,083/mt. Before the close, it consolidated slightly and finally settled at $2,082.5/mt, up $27.5/mt or 1.34%. Overnight, the most-traded SHFE lead 2504 contract opened at 17,575 yuan/mt, initially climbed to 17,640 yuan/mt before weakening to a low of 17,545 yuan/mt. It then rebounded to hover near the daily moving average and finally closed at 17,585 yuan/mt, up 140 yuan/mt or 0.80%.
Overnight, base metals generally strengthened, with macro bullish factors continuing to ferment. Lead prices are expected to hover at highs. Fundamentals side, the lead market this week shows increases in both supply and demand. Affected by raw material supply, some smelters are standing firm on quotes, reluctant to sell, or prioritizing long-term contract sales, leading to a decline in market circulation in certain regions. On the end-use consumption side, the government work report proposed increasing subsidies for trade-in programs for e-bikes and automobiles. The extent to which this offsets the traditional off-season demand remains to be seen.
Zinc
Overnight, LME zinc opened at $2,913.5/mt. At the beginning of the session, LME zinc fluctuated downward slightly, hitting a low of $2,898/mt, then quickly rebounded to a high of $2,975/mt. Subsequently, LME zinc pulled back from the high and fell below the daily average line. Near the end of the session, it rebounded slightly to near the daily average line, ultimately closing up at $2,933/mt, an increase of $13/mt or 0.45%. Trading volume increased to 21,305 lots, and open interest rose by 955 lots to 215,000 lots. Overnight, LME zinc recorded a bullish candlestick, with support provided by the 5-day moving average below. LME zinc inventory decreased by 450 mt to 161,375 mt, a decline of 0.28%. The US February non-seasonally adjusted CPI annual rate came in below market expectations, and the US dollar index remained at a low level. Additionally, Nyrstar announced yesterday that its Hobart zinc smelter will reduce production by approximately 25% starting in April 2025. With the expectation of reduced supply, LME zinc saw a significant intraday increase.

Overnight, the most-traded SHFE zinc 2505 contract opened at 24,080 yuan/mt, reaching a high of 24,120 yuan/mt at the beginning of the session. It then fluctuated downward, hitting a low of 23,935 yuan/mt, and ultimately closed up at 23,965 yuan/mt, an increase of 150 yuan/mt or 0.63%. Trading volume increased to 55,165 lots, and open interest rose by 7,579 lots to 89,708 lots. Overnight, SHFE zinc recorded a bearish candlestick, with resistance formed by the upper Bollinger Band. Boosted by the performance of the overseas market, SHFE zinc opened higher with a gap during the night session. However, recent domestic spot consumption has remained weak, and fundamental support for zinc prices has not improved, leading SHFE zinc to fluctuate downward after the opening.

Tin
Last night, Sundar Pichai, CEO of Google (GOOG.O), announced the open-source release of the latest multimodal large model, Gemma-3, which focuses on low cost and high performance. Gemma-3 offers four parameter options: 1 billion, 4 billion, 12 billion, and 27 billion. Even the largest 27 billion-parameter model can perform efficient inference with just one H100, whereas similar models require at least 10 times the computing power to achieve the same results. It is currently the most powerful small-parameter model. According to blind test data from LMSYS ChatbotArena, Gemma-3 ranks second only to DeepSeek's R1-671B, surpassing well-known models such as OpenAI's o3-mini and Llama3-405B. Overall, SHFE tin prices in the night session fluctuated upward within a narrow range, oscillating at high levels between 263,000-266,000 yuan/mt. In the tin ingot spot market, spot transactions were relatively sluggish yesterday, with most traders reporting scattered deals and overall poor sales. As night session tin prices fluctuated upward, the spot market became even quieter. Downstream enterprises continued to make just-in-time procurement, with high prices suppressing restocking willingness. However, the "trade-in" policy and high production schedules in the home appliance sector provided potential support for demand.
Nickel
Spot Premiums/Discounts: The mainstream spot premium quotation range for Jinchuan No. 1 nickel was 1,200-1,300 yuan/mt, with an average premium of 1,250 yuan/mt, down 50 yuan/mt from the previous trading day. The quotation range for Russian nickel was -200 to 0 yuan/mt, with an average discount of -100 yuan/mt, up 50 yuan from the previous trading day. Futures: Nickel prices rose after the opening. As of 11:30, the closing price was 132,550 yuan/mt, up 0.20% from the previous trading day's settlement price, with a high of 132,780 yuan/mt. Spot Premiums/Discounts: The premium for Jinchuan nickel continued to decline by 50 yuan from the previous trading day. Traders adopted a strategy of lowering prices to promote transactions, but the results were moderate. End-users remained mostly on the sidelines. From a technical and market sentiment perspective, SHFE nickel futures contracts fluctuated upward. In the short term, sentiment continues to have a greater impact on market prices than fundamentals.