SMM Morning Comment For SHFE Base Metals (Apr 22)

SHANGHAI, Apr 22 (SMM) –
Copper
Futures: LME copper was closed overnight. The SHFE copper 2506 contract opened at 77,400 yuan/mt overnight, touched a high of 77,490 yuan/mt at the beginning of the session, then fluctuated downward to a low of 76,640 yuan/mt, and finally closed at 76,760 yuan/mt, up 0.41%, with a trading volume of 45,721 lots and open interest of 164,089 lots.
Prices: Macro-wise, sources: The originally scheduled Thailand-US trade talks on April 23 will no longer be held, Vance met with Modi, India is seeking tariff relief from Trump, and India has imposed a 12% tariff on some steel products for 200 days. The US plans to impose new tariffs on solar products imported from Cambodia, Thailand, Malaysia, and Vietnam. Trump said there is almost no inflation (problem) and demanded Powell cut interest rates, otherwise economic growth may slow down. Recently, Trump has repeatedly criticized Powell, reducing investors' confidence in US assets, and the US dollar index plummeted. With the US dollar index falling and increased tariff policies, copper prices closed higher overnight. Fundamentally, with limited domestic arrivals and limited imported copper supplements, coupled with moderate market trading, copper cathode destocking accelerated. As of Monday, April 21, SMM's mainstream copper inventories nationwide decreased by 36,900 mt WoW to 196,500 mt. Compared to last Friday's inventory changes, only Chongqing saw a slight increase, while other regions destocked. Overall, with the US dollar index stopping its decline and running at low levels, copper prices are expected to maintain relatively high levels today.
Aluminum
Futures: In the previous night session, the most-traded SHFE aluminum 2506 contract opened at 19,900 yuan/mt, with a high of 19,900 yuan/mt and a low of 19,805 yuan/mt, closing at 19,815 yuan/mt, down 55 yuan/mt or 0.28% from the previous close. LME aluminum opened at $2,386.5/mt, with a high of $2,390.5/mt and a low of $2,383.0/mt, closing at $2,390.5/mt, up $5.5/mt or 0.23%.
Summary: On the macro front, the domestic bullish atmosphere remains, but the impact of the US tariff war continues, and market sentiment is cautious. Fundamentally, domestic aluminum ingot destocking supports spot premiums, providing a strong bottom for aluminum futures, with the futures market fluctuating. In terms of aluminum consumption, the overall operating rate of the aluminum processing sector has slightly corrected, with all sectors except aluminum wire and cable showing slight weakness, and subsequent orders are expected to decline. Aluminum prices lack strong upward momentum, and domestic aluminum prices are expected to fluctuate in the short term.
Lead
Overnight, LME lead was closed due to the Easter holiday.
Overnight, the most-traded SHFE lead 2506 contract opened at 17,085 yuan/mt, initially declined to a low of 16,940 yuan/mt, and then consolidated above the 16,950 yuan/mt level, eventually closing at 16,955 yuan/mt, up 15 yuan/mt, or 0.09%.
Recently, lead prices have held up well, with suppliers actively selling. As the spread between futures and spot prices narrowed, suppliers preferred ex-factory cargo pick-up. Meanwhile, the previous round of lead ingot delivery cargoes re-entered the market, with noticeable inventory reductions in social warehouses in Jiangsu, Zhejiang, and Tianjin. Scrap battery prices continued to rise, leaving secondary lead companies in a loss-making position, and secondary lead smelters' production willingness declined. Suppliers stood firm on quotes and were reluctant to sell—secondary refined lead quotations in some regions were at parity with the SMM 1# lead average price ex-factory. Downstream just-in-time procurement leaned toward primary lead. Before the Labour Day holiday, coinciding with the traditional consumption off-season, battery companies showed moderate enthusiasm for stockpiling, and spot market trading was sluggish. The cost of secondary refined lead provided bottom support for lead prices, and short-term lead prices may continue to consolidate.
Zinc
Futures market: Monday coincided with the Easter holiday, and LME zinc was closed. Overnight, the most-traded SHFE zinc 2506 contract opened at 22,450 yuan/mt, reaching a high of 22,450 yuan/mt at the opening, then fluctuating downward, touching a low of 22,250 yuan/mt near the end of the session, and finally closing down at 22,270 yuan/mt, a decrease of 125 yuan/mt, or 0.56%. Trading volume decreased to 51,630 lots, while open interest increased by 1,199 lots to 127,000 lots.
Overnight, SHFE zinc recorded a bearish candlestick, with the 5-day moving average providing support. On Monday, SMM zinc ingot inventory continued to destock, providing bottom support for zinc prices. However, on the fundamentals side, zinc ingot supply continues to increase, coupled with ongoing market concerns about consumption, SHFE zinc maintained a low-level fluctuation.
Tin
The US plans to impose new tariffs on solar products imported from four Southeast Asian countries. The US announced new tariffs on solar products imported from Cambodia, Malaysia, Thailand, and Vietnam. According to a decision published on the US Department of Commerce website on Monday local time, the agency calculated anti-dumping duties on solar products from these four Southeast Asian countries ranging from 6.1% to 271.28%, depending on the company and country. Countervailing duties ranged from 14.64% to 3,403.96%. These four countries currently supply about 77% of the US PV modules, with solar equipment exports to the US totaling $12.9 billion last year. This tariff decision is the final result of a one-year trade investigation. The investigation was initiated by domestic US solar manufacturers and launched by former President Biden. While domestic manufacturers view this as a victory, the new tariffs may exacerbate cost pressures in the renewable energy industry, which is already facing policy shifts and economic headwinds. The Trump administration is attempting to revive the fossil fuel industry and continues to cut support for green projects. Spot market: The spot market was relatively quiet yesterday. Most traders reported transactions of around 10 mt, and as prices rose, many companies began to adopt a wait-and-see approach, with some companies conducting small-scale restocking for essential needs.
Nickel
Spot Market: SMM 1# refined nickel price ranged from 125,450 to 128,350 yuan/mt, with an average price of 126,900 yuan/mt, down 400 yuan/mt from the previous trading day. The mainstream spot premium for Jinchuan No.1 nickel was quoted in the range of 2,300 to 2,600 yuan/mt, with an average premium of 2,450 yuan/mt, up 100 yuan/mt from the previous trading day. The premium/discount for Russian nickel was quoted in the range of 0 to 300 yuan/mt, with an average premium of 150 yuan/mt, unchanged from the previous trading day.
Futures Market: SHFE nickel futures showed a fluctuating consolidation trend. The most-traded contract 2505 closed at 125,930 yuan/mt, up 0.25%, with an intraday fluctuation range of 124,660 to 126,450 yuan/mt.
Nickel prices may maintain a sideways movement in the range of 120,000 to 128,000 yuan/mt in the short term, as the cost increase from Indonesia's policy implementation and high inventory suppression create a tug-of-war between bulls and bears. Macro factors such as the US dollar trend, international trade situation, and global economic conditions also contribute to cautious market sentiment.