SMM Morning Comment For SHFE Base Metals (Apr 28)

SHANGHAI, Apr 28 (SMM) –
Copper
On Friday evening, LME copper opened at $9,375.5/mt. It initially dipped to $9,350/mt, fluctuated considerably during the session, hitting a high of $9,401.5/mt, and closed at $9,360/mt after continued fluctuations, marking a 1% decline. Trading volume reached 13,000 lots, and open interest stood at 286,000 lots. On the same evening, the most-traded SHFE copper 2506 contract opened at 77,510 yuan/mt. It fluctuated rangebound in the early session, with the price center shifting downward, hitting a low of 77,250 yuan/mt. The price center rebounded towards the end of the session, reaching a high of 77,550 yuan/mt, and closed at 77,470 yuan/mt, down 0.22%. Trading volume reached 45,000 lots, and open interest stood at 162,000 lots. On the macro front, US stocks generally showed mediocre performance on Friday, with market participants continuing to await more information on the tariff war. Market sentiment remained somewhat uneasy after Trump stated that he would consider it a "total victory" if foreign import tariffs reached 50% within a year. However, overall market sentiment remained cautious due to the deteriorating economic outlook and tariffs eroding corporate profits. The US dollar recorded its first weekly gain since mid-March, putting pressure on copper prices. On the fundamental side, supply-side factors saw a slight loss in SHFE copper imports, leading to tight arrivals. Coupled with limited replenishment of circulating supplies in the Shanghai area after destocking, suppliers maintained firm quotes. On the demand side, large factories had largely completed their stockpiling for the May Day holiday, while small and medium-sized enterprises began stockpiling this week. Additionally, with copper prices at high levels, downstream buyers remained cautious about factors such as tariffs, adopting a wait-and-see attitude and restraining trading activity. Regarding prices, the US Fed is still struggling to cut interest rates, with vague expectations, raising concerns that the Fed may only take action after an actual US economic recession occurs. Copper prices are already under pressure from the current situation, and with a series of economic data scheduled for release this week, copper prices may experience significant volatility.
Aluminum
On the previous trading day's night session, the most-traded SHFE aluminum 2506 contract opened at 19,950 yuan/mt, with a high of 19,995 yuan/mt, a low of 19,920 yuan/mt, and closed at 19,970 yuan/mt, down 60 yuan/mt or 0.30% from the previous close. LME aluminum opened at $2,458.5/mt on the previous trading day, with a high of $2,468/mt, a low of $2,426/mt, and closed at $2,437.5/mt, down $22/mt or 0.89%.
At the macro level, a series of domestic policies have played a positive role in stabilizing the real estate market, and the domestic macro bullish atmosphere remains unchanged. In overseas markets, Trump's policy stance has been inconsistent, and there are still many uncertainties from attitude to policy implementation. On the fundamental side, the cost side of the aluminum industry has shown stable performance, while the demand side has exhibited structural recovery characteristics. Benefiting from the continuous influx of new orders in May, there has been a boost in pre-holiday stockpiling demand for raw materials such as aluminum ingots and aluminum billets. The de-stocking of domestic aluminum ingot inventory has provided support for aluminum prices, but suppliers have been actively selling at highs, leading to a pullback in spot premiums. Overall, whether substantial easing in Sino-US trade can be achieved remains to be observed over time. In the short term, the imbalance between bullish and bearish factors is still evident. As the transition between the off-season and peak season approaches and the PV installation rush nears its end, downstream aluminum orders are expected to decline, and the momentum for aluminum prices to rise sharply again is insufficient. It is expected that domestic aluminum prices will fluctuate mainly before the holiday.
Lead
On Friday, LME lead opened at $1,961.5/mt, touched a high of $1,965/mt in early trading, and then fluctuated downward due to the strong performance of the US dollar index. LME lead fell to a low of $1,941/mt in the closing session and closed at $1,945/mt, down 0.66%.
On Friday evening, the most-traded SHFE lead 2506 contract opened at 16,940 yuan/mt, touched a high of 16,960 yuan/mt in early trading, and then fluctuated downward due to the weak performance of LME lead. The low during the session was 16,825 yuan/mt, and it closed at 16,855 yuan/mt, down 0.53%.
Among primary lead smelters, there were both production increases and decreases, and supply changes were relatively small. Meanwhile, the spread between futures and spot prices of lead widened, increasing suppliers' intention to transfer to delivery warehouse. Attention should be paid to changes in social inventory of lead ingots next week. Spot transactions are expected to remain at a discount. For secondary lead, due to factors such as losses and production cuts, the price discount of secondary refined lead gradually narrowed, and even inverted against primary lead. It is expected that secondary lead enterprises may stand firm on quotes and sell before the profit and loss situation improves. On the consumption side, downstream enterprises plan to take holidays during the Labor Day period. Due to weak end-use consumption, producers have purchased relatively small volumes of inventory before the holiday, and there is no expectation of a significant improvement in spot transactions.
Zinc

On Friday, LME zinc opened at $2,705.5/mt. At the start of the session, bears increased their positions, pushing LME zinc briefly higher to $2,710/mt. Subsequently, LME zinc fluctuated downward throughout the session, dipping to a low of $2,642/mt by the close. It eventually closed at $2,645.5/mt, down $59.5/mt or 2.2% from the previous close. Trading volume increased to 10,898 lots, while open interest rose by 1,055 lots to 205,000 lots. On the same day, the most-traded SHFE zinc 2506 contract opened at 22,630 yuan/mt. At the start of the session, bulls reduced their positions, causing SHFE zinc to briefly dip to 22,525 yuan/mt. It then oscillated around the daily average line, with fluctuations of less than 100 yuan. It eventually closed at 22,550 yuan/mt, down 200 yuan/mt or 0.88% from the previous close. Trading volume decreased to 61,118 lots, while open interest increased by 2,803 lots to 120,000 lots.
On Friday, LME zinc recorded a large bearish candlestick, with the 5/10-day moving averages providing support below and the middle Bollinger Band forming resistance above. Driven by hopes of easing global trade tensions, the US dollar index rose, pushing the center of LME zinc prices downward. On Friday, SHFE zinc recorded a small bearish candlestick. According to SMM, zinc concentrate TCs for May increased by 50 yuan/mt (metal content), with the rate of increase slowing. However, consumption support gradually weakened, and SHFE zinc prices were mainly in the doldrums. It is expected that zinc prices will continue to fluctuate.
Tin
The US announced measures to impose "reciprocal tariffs" on multiple countries, sparking market concerns and leading to fluctuations in the US dollar index and a rise in risk-averse sentiment, which suppressed the prices of non-ferrous metals. Fed Chairman Powell clearly stated that there would be no interest rate cut for the time being and warned of the dual risks of rising unemployment and high inflation facing the US economy, further exacerbating market uncertainty. The supply-demand pattern in the domestic tin ore market is tight. In terms of supply, the operating rates of refined tin smelters in Yunnan and Jiangxi provinces have pulled back, constrained by tight raw material supply. In particular, the delayed production resumptions in Myanmar and the recent 7.9-magnitude earthquake have intensified market panic over tin ore supply. In terms of demand, downstream solder enterprises are making just-in-time procurement along with some restocking. However, the "trade-in" policy and the high level of home appliance production schedules provide potential support for demand. The operating rate of the tin solder industry surged to 75.81% in March and is expected to remain at a relatively high level in April. Despite the news that the Bisie tin mine would resume operations, which once boosted market confidence, overall, SHFE tin prices may fluctuate considerably in the short term within the range of 252,000-266,000 yuan/mt. In summary, SHFE tin prices may continue to fluctuate considerably in the short term. It is recommended that investors pay close attention to changes in market fundamentals, operate cautiously, and avoid the risk of chasing high prices.
Nickel
Last week, nickel prices continued the fluctuating trend seen since mid-April. The average price of SMM 1# refined nickel was 126,850 yuan/mt last week, up slightly by 0.5% WoW. LME nickel futures prices fluctuated rangebound around $15,600-15,800/mt. Expectations for US Fed interest rate hikes in June intensified, putting pressure on LME nickel prices denominated in US dollars. Risk aversion sentiment among investors was pronounced, and the tug-of-war between longs and shorts in the market intensified. In terms of supply, the Indonesian president signed a policy to increase nickel ore royalties, which will take effect on April 26. Local nickel ore prices are relatively high, and rising costs have provided some support to nickel prices. The operating rate of domestic refined nickel smelters remains high. On the demand side, downstream alloy demand was weak last week, mainly due to the significant decline in nickel prices earlier caused by the reciprocal tariff policy. Most enterprises had stockpiled in advance, resulting in low spot transaction volumes of refined nickel at month-end.