U.S. Tariff Policy Swings, Nonferrous Metals Significantly Revised Upwards [Institutional Commentary]

【Copper】

On Thursday, SHFE copper rebounded sharply, as the new US President's shift in stance on reciprocal tariffs boosted risk assets. However, the negative sentiment surrounding tariffs is unlikely to dissipate fundamentally, and the copper market is expected to transition into a slow and fluctuating decline. The support level for SHFE copper during this phase is at 71,000 yuan, near the gap from the March rally last year. Domestic spot prices rose to 75,000 yuan today, with the premium narrowing to 30 yuan ahead of delivery. SMM social inventory decreased by 31,500 mt to 267,200 mt this week. The tight supply of domestic primary and secondary copper raw materials, coupled with the resistance to decline, indicates that short-term demand remains. Technically, LME copper faces resistance at $9,300, while SHFE copper's corresponding level is 76,500 yuan. The extent of the rebound warrants attention.

【Aluminum & Alumina】

Today, SHFE aluminum followed the broader commodity rebound. Aluminum ingot and billet social inventories decreased by 30,000 mt and 13,000 mt respectively compared to Monday, with total aluminum market inventories at a low for the same period in recent years. Apparent consumption is strong, and the fundamentals are relatively robust among non-ferrous metals. In the short term, macro factors dominate commodity trends, and the volatility in US policies has increased market fluctuations. SHFE aluminum is expected to fluctuate, with support at the 19,000 yuan limit-down level from Monday, and resistance at the 20,000 yuan psychological barrier and the annual moving average. Spot alumina indices across regions have successively fallen below 2,900 yuan. While the increasing maintenance activities have improved the April balance, the surplus outlook remains unchanged. As companies gradually face cash losses, larger-scale production cuts are anticipated. This week's low point in the futures market corresponds to a cost expectation equivalent to ore prices falling to around $70. Alumina remains in a weak and fluctuating state, but the downside may be limited.

【Zinc】

The US tariff policy has fluctuated again, leading to an upward revision in risk assets. However, the prospects for tariff negotiations are not optimistic, and funds are inclined to take profits. SHFE zinc's weighted open interest decreased by 17,500 lots to 208,600 lots. Downstream buyers are purchasing on dips, and SMM zinc social inventory has dropped to 102,100 mt, with the 0-2 month price spread widening to 515 yuan/mt. Pessimistic sentiment on the consumption side has somewhat eased. In the short term, SHFE zinc may fluctuate within the 22,000-23,000 yuan/mt range. However, the CZSPT group expects domestic mine TC to rebound to 4,500 yuan/mt in June, and imported mine TC to rise to $60-70/dmt. The expectation for increased production remains strong after smelters return to profitability. The pressure for a downward shift in zinc's price center persists, and the strategy of shorting on rebounds continues.

【Lead】

The US tariff policy remains uncertain, and the pessimistic expectations on the consumption side have slightly improved. Shorts significantly reduced their positions, leading to a notable rebound in SHFE lead. SMM's #1 lead price rose by 250 yuan/mt to 16,700 yuan/mt, shifting to a discount of 75 yuan/mt against the near-month futures. The price spread between primary metal and scrap increased by 125 yuan to 25 yuan/mt. SMM lead social inventory stands at 69,500 mt, with little overall change. With lead prices at low levels, primary and secondary lead smelters are reluctant to sell, and some downstream buyers are cautious about price increases. However, overall consumption is in the off-season, providing limited support for high lead prices. After the inversion between primary and scrap lead was resolved, downstream buyers tend to purchase low-priced secondary lead. Lead ingot supply is not tight. SHFE lead is expected to fluctuate within the 16,300-17,000 yuan/mt range, with limited operability, and a wait-and-see approach is recommended.

【Nickel & Stainless Steel】

SHFE nickel consolidated at low levels, with lackluster market activity. Jinchuan's premium rebounded to 2,900 yuan, while Russian nickel's premium stood at 200 yuan, and electrodeposited nickel's premium at 150 yuan. High-grade NPI prices retreated, and Indonesian ore continues to influence raw material pricing, with the latest offer at 1,024 yuan per mtu, down 10 yuan for the week. In terms of inventory, NPI inventory decreased by 2,500 mt to 20,000 mt, refined nickel inventory dropped by 1,400 mt to 46,000 mt, and stainless steel inventory fell by 1,000 mt to 980,000 mt. Technically, SHFE nickel rebounded, with resistance in the 12.3-12.5 range, awaiting a better short position.

【Tin】

SHFE tin recovered the losses from the night session, as Alphamin's move to resume mining operations overnight dragged LME tin down. Amid significant fluctuations in supply and demand variables, SHFE tin reclaimed 255,000 yuan. Spot tin remained firm today at 256,200 yuan, and the substantial tightness in tin resource supply is unlikely to ease in April. Tin prices are transitioning into a fluctuating phase, with a tendency for social inventory destocking this week. A wait-and-see approach is recommended.