SMM Morning Comment For SHFE Base Metals (Apr 3)

SHANGHAI, Apr 3 (SMM) –
Copper
LME copper opened at 9,702.0 overnight, reaching a high of 9,721.0 and a low of 9,670.0 during the session, showing a fluctuating trend overall. It finally closed at 9,721.0, up 0.29%, with a trading volume of 16,695 and an open interest of 302,920. SHFE copper 2505 contract opened at 79,840 yuan/mt overnight, reaching a high of 79,950 yuan/mt and a low of 79,710 yuan/mt during the session, showing a downward fluctuating trend overall. It finally closed at 79,780 yuan/mt, down 0.13%, with a trading volume of 28,289 and an open interest of 194,696. On the macro front, around 4:00 AM Beijing time on Thursday, US President Trump delivered a speech in the White House Rose Garden. He stated that he would impose a minimum 10% tariff on all exporters to the US and additional tariffs on about 60 countries/regions with the largest trade imbalances with the US. According to senior White House officials, the base tariff rate (10%) will take effect at around 4:00 AM on April 5, and reciprocal tariffs will take effect at around 4:00 AM on April 9. White House documents indicate that some goods will be exempt from reciprocal tariffs, including: steel/aluminum products and automobiles/auto parts already subject to Section 232 tariffs; copper, pharmaceuticals, semiconductors, and wood products; all items that may be subject to Section 232 tariffs in the future; gold; energy and certain other minerals that the US cannot obtain. Trump stated that if other countries remove trade barriers to US exports, he would consider lowering the tariff rates. The night session maintained a fluctuating trend while awaiting the announcement of reciprocal tariffs, and market concerns about a trade war resurfaced after the tariffs were announced. On the fundamental side, with the Qingming Festival approaching, downstream sentiment remains cautious due to persistently high absolute prices, and pre-holiday stocking demand has not yet materialized. Overall, with the announcement of US reciprocal tariffs and heightened market concerns, copper prices are expected to decline today.
Aluminum
Futures market: Overnight, the most-traded SHFE aluminum 2505 contract opened at 20,455 yuan/mt, with a high of 20,520 yuan/mt, a low of 20,430 yuan/mt, and closed at 20,520 yuan/mt, up 80 yuan/mt, or 0.39%. Yesterday, LME aluminum opened at $2,509/mt, with a high of $2,510/mt, a low of $2,485/mt, and closed at $2,489.5/mt, down $15/mt, or 0.60%.
Summary: On the macro front, Trump's latest actions undoubtedly added fuel to the already tense global trade situation. His related measures further intensified trade frictions, significantly reducing market risk appetite, and the entire commodity market was shrouded in uncertainty. On the fundamentals side, the aluminum industry chain remains mainly bullish, with the "golden March and silver April" seasonal destocking trend becoming more evident, and aluminum ingot inventory continuing to decline to around 800,000 mt; end-use consumption such as NEVs is steadily growing, and downstream restocking demand has also warmed up. As the peak consumption season approaches, order volumes and operating rates in most sectors have rebounded, coupled with the continued destocking of social aluminum ingot inventory, providing bottom support for aluminum prices. However, it cannot be ignored that the market is facing severe external pressure in the short term. The US is wielding the tariff stick at will, once again disrupting market order and bringing heavy downward pressure on aluminum prices. In the current context of high macro uncertainty and rising trade protectionism, aluminum price trends have fallen into a dilemma of fluctuating downward in the short term. Continued close attention should be paid to changes in macro sentiment and the actual release of downstream demand.
Lead
Overnight, the most-traded SHFE lead contract opened with a gap at 17,300 yuan/mt, briefly touched a high of 17,355 yuan/mt at the beginning of the session, then fluctuated downward to a low of 17,250 yuan/mt, and finally closed at 17,265 yuan/mt, down 80 yuan/mt, a decrease of 0.46%.

Overnight, LME lead opened at $1,971/mt, initially fell and then rose to a high of $1,980/mt during the Asian session, and then fluctuated downward to a low of $1,964/mt during the European session, finally closing at $1,964.5/mt, down $10.5/mt, a decrease of 0.53%.
Refined lead supply in April is relatively stable, although new capacity for secondary refined lead still has plans to increase production in April, but given the expected tight supply of scrap battery raw materials and declining profits, it is not ruled out that smelters may be forced to cut production. On the consumption side, the lead-acid battery market is about to enter the traditional consumption off-season, with demand expected to weaken. Subsequent attention should be paid to the progress of "trade-in" subsidy policies in various provinces and cities to buffer the impact of the off-season. Downstream stocking enthusiasm was poor before the Qingming Festival holiday, with spot market trading being light, and lead prices may continue to fluctuate downward.
Zinc
Overnight, LME zinc opened at $2,821.5/mt, with shorts exiting at the start, pushing the center higher to $2,837/mt. During European trading hours, shorts increased positions, causing LME zinc to plunge to $2,773.5/mt in the night session. Subsequently, the center moved higher, closing down at $2,790/mt, a drop of $26.5/mt, or 0.94%, with trading volume falling to 12,931 lots and open interest increasing by 1,662 lots to 225,000 lots. Overnight, LME zinc recorded a large bearish candle, with the 5/10 daily averages forming resistance. Market concerns over the economic damage from reciprocal tariffs intensified, with fears of a US recession dragging down non-ferrous metals, and LME zinc's center moved lower. Trump signed an executive order imposing a 10% "minimum benchmark tariff" on all countries and will levy reciprocal tariffs, with LME zinc expected to fluctuate downward.

Overnight, the most-traded SHFE zinc 2505 contract opened lower with a gap at 23,205 yuan/mt, with shorts increasing positions at the start, causing SHFE zinc to break below the daily average and consolidate at 23,140 yuan/mt, briefly touching a low of 23,135 yuan/mt. Subsequently, the center moved higher, closing down at 23,190 yuan/mt, a drop of 190 yuan/mt, or 0.81%, with trading volume falling to 64,845 lots and open interest increasing by 1,555 lots to 112,000 lots. Overnight, SHFE zinc recorded a large bearish candle, with the lower Bollinger Band forming resistance. Macro front, the market is still awaiting details on reciprocal tariffs, while fundamental consumption shows no significant increase, and supply remains loose, with SHFE zinc declining, expected to fluctuate downward in the short term.
Tin
The US White House plans to announce measures to impose "reciprocal tariffs" on trading partners on April 2. This is considered the most extensive and impactful tariff policy of the current US administration. Analysts pointed out that "reciprocal tariffs" will have multiple adverse effects on US households, industries, and the macro economy. Political and business figures from multiple countries stated that the US's escalating trade protectionist measures of imposing additional tariffs will severely undermine the order of free trade and the stability of the global industry chain and supply chain, exacerbating global economic uncertainty. The Yale University Budget Lab predicts that after the implementation of "reciprocal tariffs," if other countries do not take retaliatory measures, US personal consumption expenditure (PCE) will rise by 1.7% in the short term, and the real GDP growth rate in 2025 will drop by 0.6 percentage points; if other countries take retaliatory measures, the increase in US personal consumption expenditure will expand to 2.1%, and the real GDP growth rate will drop by 1 percentage point. Goldman Sachs Group released a report stating that as the US government's tariff policies impact the global economy and financial markets, the probability of a US economic recession in the next 12 months has risen to 35%, higher than the previously expected 20%. Not long ago, the US White House also issued an executive order announcing a 25% tariff hike on imported cars, effective from April 3. This move has also faced fierce criticism and opposition from both domestic and overseas public opinion. John Murphy, Senior Vice President of International Policy at the US Chamber of Commerce, told the media that imposing additional tariffs will "hurt rather than help the US auto industry," endangering many American jobs. In yesterday's night session, SHFE tin prices maintained high-level consolidation, reaching a high of 297,980 yuan/mt and closing at 295,000 yuan/mt. Affected by last night's Trump tariff policy, SHFE tin prices may drop back slightly today. Yesterday, the spot market remained sluggish. If SHFE tin prices fall back from highs today, it may stimulate increased activity in the spot market, and downstream and end-user enterprises may consider small-scale restocking.
Nickel
The mainstream spot premium quotation range for Jinchuan No.1 nickel was 1,700-1,800 yuan/mt, with an average premium of 1,750 yuan/mt, up 50 yuan/mt from the previous trading day. The premium/discount quotation range for Russian nickel was -100 to 300 yuan/mt, with an average premium of 100 yuan/mt, up 50 yuan/mt from the previous trading day. Futures side: Nickel prices fluctuated rangebound today. As of 11:30, the closing price was 129,530 yuan/mt, up 0.67% from the previous trading day's settlement price, with a high of 130,120 yuan/mt. From a macro perspective, although Indonesia's new tax policy has not been released as scheduled, market expectations for its implementation remain high, which provides some support for nickel price costs. Coupled with the still tight supply at the mine end, there is some room for nickel prices to rise in the short term.