The price spread of Meilun was fully released, and the social inventory of copper slightly increased within the week. [Institutional Commentary]

【Copper】

SHFE copper experienced a reduction in positions and fluctuated on Thursday, with the decline temporarily limited by the 10-day moving average. Spot copper prices stood at 81,585 yuan/mt today, with Shanghai at a discount of 30 yuan and Guangdong's premium narrowing to 90 yuan. High copper prices have affected the destocking speed, with SMM's social inventory increasing by 900 mt to 334,500 mt within the week. The overnight LME spread has approached Goldman Sachs' estimate of $1,700, drawing attention to speculative and arbitrage activities, with a tendency for this driver to shift marginally. SHFE copper shows signs of short-term adjustment, but the pullback is expected to be limited during the peak season, likely within the range of 80,500-81,500 yuan. Midstream and downstream players are pricing on demand.

【Aluminum & Alumina】

SHFE aluminum rose today, with spot prices maintaining a slight discount. Social inventories of aluminum ingots and billets decreased by 25,000 mt and 13,000 mt respectively compared to Monday, with destocking speed slightly faster than in previous years. The market anticipates peak season consumption, focusing on whether spot feedback will improve as inventories decline. Higher profits after significant cost reductions require larger deficit expectations. In the short term, SHFE aluminum is expected to fluctuate near the low point of its one-month range at 20,500 yuan, continuing to test resistance at 21,000 yuan. Alumina operating capacity fluctuates at historically high levels, with expanded production cuts and maintenance failing to alter the long-term loose trend. Domestic and overseas spot prices remain under pressure, with the latest Australian transaction falling to $368. As some northern alumina producers face cash cost losses, the decline in alumina may slow before ore prices loosen further, but the rebound space is relatively limited, with resistance at the 20-day moving average and the middle Bollinger Band.

【Zinc】

Zinc prices fluctuated at high levels, with downstream buyers hesitant to purchase at elevated prices. SMM's zinc social inventory increased slightly by 1,100 mt to 130,000 mt compared to Monday. Mine profits remain as high as 6,000 yuan/mt, with the resumption pace progressing as expected. SMM reported that the average TC for domestic and imported ores in April rose by 350 yuan and $5 to 3,450 yuan/mt (metal content) and $40/dmt respectively, further improving smelter profits. With no shortage of ore, zinc ingot supply is unlikely to be tight. The specifics of the US tariff policy on April 2 remain unclear, with funds inclined to take profits, and longs reducing positions at high levels. SHFE zinc retraced to the 60-day moving average. The renovation of old and dangerous houses and urban villages in April partially offset the drag on consumption from the real estate sector. Home appliance production schedules are moderate, with producers actively stockpiling for the peak season but expressing concerns about order declines after the export rush. Consumption remains resilient but lacks incremental growth. SHFE zinc is expected to remain volatile, with resistance at 24,250 yuan/mt.

【Lead】

LME lead inventories fluctuated around the high level of 230,000 mt, with the ratio of cancelled warrants surging to 31.2%. Investment funds reduced short positions, and the overseas market consolidated near the previous high resistance level, with the spot import window remaining closed. Domestic raw material supply remains tight, with scrap battery prices continuing to rise, maintaining strong cost-side support. As delivery supplies gradually enter the market, SMM's lead social inventory decreased by 4,800 mt to 69,200 mt WoW. The futures market fluctuated at high levels, with the price spread between primary metal and scrap widening to 100 yuan/mt, and the spread between futures and spot prices remaining as high as 230 yuan/mt. With profitable delivery opportunities, the tight supply of lead ingots is difficult to resolve. Downstream purchase willingness is low at month-end, with weak off-season demand and high raw material costs, prompting small and medium-sized battery producers to consider production cuts to control finished product inventories. The fundamentals are mixed, with volatility expected in the near term, and resistance at 17,880 yuan/mt.

【Nickel & Stainless Steel】

SHFE nickel rebounded slightly, with active market trading. Jinchuan's premium rebounded to 2,000 yuan, while Russian nickel was at a discount of 25 yuan, and electrodeposited nickel at a discount of 100 yuan. High-grade NPI prices remain strong, with Indonesian ore still influencing raw material pricing, quoted at 1,027 yuan per mtu. In terms of inventories, NPI inventories dropped sharply by 6,000 mt to 23,000 mt, refined nickel inventories decreased by 1,900 mt to 47,000 mt, and stainless steel inventories slightly declined to 990,000 mt. After the price drop, NPI remains the main cost-side support, with strong short-term support estimated around 130,000 yuan. Technically, SHFE nickel has not weakened yet, waiting for short opportunities to mature.

【Tin】

SHFE tin closed higher, with the Tin Association meeting focusing on supply reduction. Spot tin prices stood at 278,900 yuan/mt today, with a real-time discount of 200 yuan/mt against the delivery month. LME tin inventories dropped to a recent low of 3,080 mt, with the LME 0-3 month spot premium expanding to $163, boosting short-term tin prices. Wa State continues to arrange resumption work. Against the backdrop of supply being more easily priced quickly, it is recommended to pay more attention to the demand side, with a tendency to view 280,000-285,000 yuan as the high-price zone.

(Source: SDIC Futures)