Wa State Slightly Farther from Epicenter, Tin Prices Surge Then Retreat [Institutional Commentary]

【Copper】

On Friday, SHFE copper fell to 80,500 yuan/mt as positions were reduced, with spot copper prices adjusted to 80,605 yuan/mt. The spot discount in Shanghai narrowed to 5 yuan/mt, while the premium in Guangdong continued to shrink to 60 yuan/mt. The price difference between primary metal and scrap tightened further. The pullback is likely to be limited below the MA20 daily average line, around 80,000 yuan/mt. The market awaits the March PCE data in the evening. Midstream and downstream players priced on demand.

【Aluminum】

SHFE aluminum pulled back today, with spot discounts narrowing slightly. Social inventories of aluminum ingots and billets fell by 25,000 mt and 13,000 mt respectively compared to Monday, with destocking speed slightly faster than in previous years. The market expects consumption during the peak season, focusing on whether spot feedback can improve as inventories decline. Higher profits after a significant cost reduction require a larger deficit expectation. In the short term, SHFE aluminum continues to fluctuate, with support at the low point of the past month’s trading range of 20,500 yuan/mt. Alumina operating capacity fluctuates at historically high levels, and while the scale of production cuts and maintenance has expanded, it is difficult to reverse the long-term loose trend. Domestic and overseas spot prices remain under pressure, with the latest Australian transaction falling to around $370/dmt. As some northern alumina producers face cash cost losses, the decline in alumina may slow before ore prices loosen further, with limited rebound potential. Resistance is seen at the 20-day moving average and the middle Bollinger Band.

【Alumina】

Alumina operating capacity fluctuates at historically high levels, and while the scale of production cuts and maintenance has expanded, it is difficult to reverse the long-term loose trend. Domestic and overseas spot prices remain under pressure, with the latest Australian transaction falling to around $370/dmt. As some northern alumina producers face cash cost losses, the decline in alumina may slow before ore prices loosen further, with limited rebound potential. Resistance is seen at the 20-day moving average and the middle Bollinger Band.

【Zinc】

On April 2, the new round of US tariff policy weighed on consumption prospects, leading to weaker zinc prices. Mine profits remain as high as 6,000 yuan/mt, and the pace of resumption is progressing as scheduled. SMM reported that the average TC for domestic and imported ore in April rose by 350 yuan/mt and $5/dmt to 3,450 yuan/mt (metal content) and $40/dmt, respectively. Smelter profits improved further, and with no shortage of ore, zinc ingot supply is unlikely to be tight. The renovation of old and dangerous houses and urban villages in April partially offset the drag on consumption from the property sector. Home appliance production schedules are moderate, and producers are actively stockpiling for the peak season but expressed concerns about order declines after the rush to export ends. Consumption remains resilient but lacks incremental growth. SHFE zinc is still expected to fluctuate, with resistance at 24,250 yuan/mt. Trading strategies still favor shorting in line with the loosening logic of the ore side.

【Lead】

The market focused on the US tariff developments on April 2, with the possibility of additional tariffs on automobiles potentially negatively impacting lead prices. The spot import window remains closed, and domestic raw material supply remains tight. Scrap battery prices are relatively resilient, providing support on the cost side. As delivery supplies gradually enter the market, downstream purchase willingness is low at month-end, with weak demand in the off-season and high raw material costs. Small and medium-sized battery producers intend to cut production to control finished product inventories. SHFE lead is expected to fluctuate between 17,200-17,800 yuan/mt.

【Nickel and Stainless Steel】

SHFE nickel rebounded slightly, with active market trading. Jinchuan’s premium rebounded to 2,000 yuan/mt, while Russian nickel was at a discount of 25 yuan/mt, and electrodeposited nickel at a discount of 100 yuan/mt. High-grade NPI prices remain strong, with Indonesian ore still influencing raw material pricing, quoted at 1,027 yuan/mtu. NPI inventories stand at 23,000 mt, while refined nickel inventories fell by 1,900 mt to 47,000 mt, and stainless steel inventories declined slightly to 990,000 mt. After the price pullback, NPI remains the main support on the cost side, with strong short-term support estimated around 130,000 yuan/mt. Technically, SHFE nickel has not weakened yet, and the market awaits the maturity of shorting opportunities.

【Tin】

A 7.9-magnitude earthquake in Mandalay, Myanmar, briefly boosted tin prices and tin-related stocks, but the tin market gave back most of its gains in the afternoon. The epicenter was about 400-450 km from Wa State, with a deep focus, and the situation remains under observation. The ITA Tin Association emphasized supply losses, with current tightness in concentrate supply, and production schedules are being monitored. SHFE tin ingot inventories rose during the week. SHFE tin faces technical resistance at 285,000-287,000 yuan/mt, with the market sensitive to supply and also tracking demand.

(Source: SDIC Futures)