SMM Morning Comment For SHFE Base Metals (Mar 14)

SHANGHAI, Mar 14 (SMM) –
Copper
Overnight, LME copper opened at $9,760/mt, initially fluctuated downward to a low of $9,713.5/mt, then fluctuated upward, reaching a high of $9,836/mt near the session's end. It slightly pulled back at the close, finally settling at $9,749/mt, down 1.14%. Trading volume was 23,000 lots, and open interest was 298,000 lots. Overnight, the most-traded SHFE copper 2505 contract opened at 79,480 yuan/mt, dipped to 79,340 yuan/mt in early trading, then fluctuated upward, peaking at 80,290 yuan/mt near the session's end. It slightly pulled back at the close, finally settling at 79,800 yuan/mt, up 0.15%. Trading volume reached 58,000 lots, and open interest stood at 214,000 lots. On the macro front, Trump stated that if the EU does not remove tariffs on spirits, he plans to impose a 200% retaliatory tariff on wine and champagne, escalating global trade tensions. Market confidence was hit, US stocks fell, and the US dollar index jumped initially and then pulled back, pressuring LME copper to close lower. Domestically, the central bank held a meeting and indicated plans to implement moderately loose monetary policies, including RRR cuts and interest rate cuts when appropriate, providing strong macro support for SHFE copper. On the fundamentals, supply side, rising copper prices prompted suppliers to hold back cargoes, tightening market circulation and pushing spot premiums higher. Demand side, high copper prices suppressed downstream purchase willingness, leading to sluggish market transactions and a supply-demand stalemate. As of March 13, SMM copper inventories in major regions nationwide fell to 356,000 mt, marking two consecutive weeks of destocking, down 21,000 mt from the year's peak. Looking ahead to next week, due to increased exports and reduced imports, inventories are expected to continue declining, though the pace of decline may narrow. In terms of prices, the macro front presents mixed signals, with escalating trade tensions weighing on market sentiment, while domestic loose monetary policies provide support for copper prices. Copper prices are expected to fluctuate at highs today, with attention on the US dollar index and macro policy developments.
Aluminum
Futures Market: Overnight, the most-traded SHFE aluminum 2505 contract opened at 20,945 yuan/mt, hitting a high of 21,035 yuan/mt and a low of 20,875 yuan/mt, before closing at 21,020 yuan/mt, up 35 yuan/mt or 0.17%. On Thursday, LME aluminum opened at $2,701/mt, reached a high of $2,707.5/mt and a low of $2,666.5/mt, and closed at $2,705/mt, up $5/mt or 0.19%.
Summary: Macro side, the central bank emphasized implementing an appropriately loose monetary policy and timing RRR cuts and interest rate cuts. Fundamentals side, domestic aluminum production resumption continues; with weak spot prices for alumina and petroleum coke, cost side support for aluminum weakens further. Aluminum ingot social inventory continued destocking during the week, coupled with a sustained recovery in aluminum processing enterprise operations, providing support on the consumption side. However, high aluminum prices suppressed downstream purchase willingness, limiting the momentum for operating rate growth in some enterprises, while spot premiums in various regions faced constraints. Aluminum prices are expected to hover at highs in the near term, with close attention to changes in US tariff policies and the actual release of downstream demand.
Lead
Overnight, LME lead opened at $2,077.5/mt, fluctuating around the daily moving average during the Asian session. Entering the European session, it dipped to a low of $2,064.5/mt before rebounding to a high of $2,084.5/mt. It slightly pulled back before the close, finally settling at $2,073/mt, down $9.5/mt or 0.46%.

Overnight, the most-traded SHFE lead 2504 contract opened lower at 17,510 yuan/mt. It initially rose to a high of 17,595 yuan/mt before weakening and consolidating around the daily moving average, eventually closing at 17,560 yuan/mt, down 15 yuan/mt or 0.09%.
As the delivery date for the SHFE lead 2503 contract approaches, suppliers are expected to continue transferring to delivery warehouses, with social inventory maintaining its upward trend. Heavy pollution weather warnings in regions such as Hebei and Henan have been lifted, and vehicle transportation has returned to normal, alleviating the pressure of in-plant inventory accumulation after smelters resumed production. Additionally, the recent brief opening of the lead ingot import window is expected to bring a certain volume of imported crude lead into the domestic market, potentially filling the gap in domestic lead concentrates and scrap batteries, and quickly converting into refined lead. Furthermore, large-scale delivery brand smelters are planning maintenance in late March, which may slow the growth of social inventory of lead ingots. Lead prices are likely to continue fluctuating at highs.
Zinc
Futures Market: Overnight, LME zinc opened at $2,934/mt. After opening, LME zinc fluctuated around the daily average line, hitting a low of $2,903.5/mt during the session. During the night session, LME zinc rose rapidly, peaking at $2,966.5/mt near the close and finally closing up at $2,958.5/mt, an increase of $25.5/mt or 0.87%. Trading volume decreased to 12,444 lots, while open interest increased by 2,608 lots to 217,000 lots. Overnight, the most-traded SHFE zinc 2505 contract opened at 24,035 yuan/mt. At the beginning of the session, SHFE zinc hit a low of 23,960 yuan/mt and then fluctuated upward, peaking at 24,190 yuan/mt near the close and finally closing up at 24,135 yuan/mt, an increase of 105 yuan/mt or 0.44%. Trading volume decreased to 56,820 lots, while open interest increased by 9,502 lots to 107,000 lots.
Social Inventory: On March 13, LME zinc inventory decreased by 1,050 mt to 160,325 mt, a decline of 0.65%. As of March 13, total zinc ingot inventory across seven regions monitored by SMM was 135,900 mt, an increase of 1,900 mt compared to March 6 and an increase of 100 mt compared to March 10, indicating a rise in domestic inventory.

Zinc Price Forecast: Overnight, LME zinc recorded a bullish candlestick, with support from the 5-day moving average below. The previous supply-side reduction expectations continued to exert influence, sustaining the upward trend in LME zinc, with the overall center slightly moving upward. Overnight, SHFE zinc also recorded a bullish candlestick, supported by the 5-day moving average below. Boosted by the overseas market, SHFE zinc remained at high levels during the night session. However, SMM reported that zinc ingot inventory increased by 100 mt WoW to 135,900 mt as of Thursday, and downstream demand showed no significant improvement, indicating insufficient upward momentum for SHFE zinc.
Tin
Alphamin Temporarily Halts Mining Operations. Yesterday, Alphamin Resources Corp announced that its board of directors had made the difficult decision to suspend mining operations at the Bisie tin mine in Walikale, North Kivu Province, eastern DRC. Bisie is the world's third-largest tin mine, with tin concentrate production reaching 17,300 mt in 2024, accounting for approximately 6% of global tin ore supply. Affected by the news of the suspension of mining operations at the Bisie tin mine, SHFE tin surged 9% in the night session, while LME tin rose 8%. Market concerns over the supply side intensified, with strong bullish momentum pushing SHFE tin prices to break through the 290,000 yuan/mt mark at one point, closing at 289,000 yuan/mt. In the spot market for tin ingots, spot transactions were relatively sluggish yesterday. Most traders reported scattered transactions with overall poor sales. With the sharp rise in tin prices during the night session, spot market transactions may come to a halt, as downstream and end-user enterprises are expected to adopt a wait-and-see approach, awaiting clearer price signals.
Nickel
The mainstream spot premium quotation range for Jinchuan Nickel was 1,150-1,200 yuan/mt, with an average premium of 1,175 yuan/mt, down 75 yuan/mt from the previous trading day. The premium/discount quotation range for Russian Nickel was -100 to 0 yuan/mt, with an average discount of -50yuan/mt, up 50 yuan from the previous trading day.
Futures: Nickel prices opened lower and fluctuated downward on March 13. As of 11:30, the closing price was 132,500 yuan/mt, up 0.18% from the previous trading day's settlement price, with a high of 134,450 yuan/mt.
From a technical perspective, SHFE nickel futures contracts opened lower, experienced a brief rebound, but then pulled back again. In the short term, market sentiment continues to dominate nickel price trends, with overall sentiment remaining cautious.