SMM Morning Comment For SHFE Base Metals (Apr 21)

SHANGHAI, Apr 21 (SMM) –
Copper
Futures market: LME copper was closed last Friday evening. The SHFE copper 2506 contract opened at 76,110 yuan/mt last Friday evening, with a high of 76,200 yuan/mt and a low of 75,820 yuan/mt, closing at 75,900 yuan/mt. The overall trend showed initial fluctuations followed by a downward fluctuation, with a change of -90 yuan, a decrease of 0.12%. The trading volume was 39,206 lots, and the open interest was 160,221 lots, with a daily increase of -3,262 lots, a daily change rate of -2.00%.
Prices: On the macro front, Trump criticized businessmen who oppose tariffs as not being good at business, but what they are really not good at is politics. Trump listed eight non-tariff "cheating" methods, naming Japan and the EU. Meanwhile, the Trump administration has begun discussing the establishment of a task force to urgently address the crisis of imposing additional tariffs on China. Trump does not want tariffs to continue to rise and claims that an agreement with China will be reached within one month. US media: Trump's "own people" are also restless, secretly hoping that the US Supreme Court will halt the tariff war. US media reported that over 700 protests erupted across the US, opposing the US government's large-scale layoffs of federal employees, agency cuts, and immigration expulsion policies. Under the repeated tariff policies, copper prices fluctuated at highs. On the fundamental side, recent market arrivals were limited, and imported copper supplements were also limited. Against the backdrop of active shipments, inventories continued to decline. This week, SMM is about to hold a copper industry conference, and it is expected that suppliers will decrease, but coinciding with the concentrated delivery period of long-term contracts, spot premiums are expected to continue to rise. Overall, it is expected that today's copper prices will have limited upward momentum.
Aluminum
Futures market: In the previous night session, the most-traded SHFE aluminum 2506 contract opened at 19,680 yuan/mt, with a high of 19,805 yuan/mt, a low of 19,625 yuan/mt, and closed at 19,785 yuan/mt, up 90 yuan/mt or 0.46% from the previous close. LME aluminum opened at $2,385/mt in the previous session, with a high of $2,396/mt, a low of $2,363/mt, and closed at $2,385/mt, down $3.5/mt or 0.15%.
Summary: On the macro front, the domestic bullish atmosphere remains unchanged, but the impact of the US tariff war continues, and market sentiment is cautious. Fundamentally, the destocking of domestic aluminum ingot inventory supports spot premiums and provides a strong bottom for aluminum futures. In terms of aluminum consumption, the comprehensive operating rate of the aluminum processing sector has seen a slight correction. Except for aluminum wire and cable, the operating rates of other sectors have weakened slightly, and subsequent orders are expected to decline. The momentum for a significant rise in aluminum prices is insufficient, and domestic aluminum prices are expected to fluctuate in the short term.
Lead
Last Friday evening, LME lead was closed due to the holiday.
Last Friday evening, the most-traded SHFE lead 2506 contract opened with a gap at a low of 16,820 yuan/mt, fluctuated upward, touched a high of 16,880 yuan/mt, then experienced a slight correction, and subsequently consolidated around 16,850 yuan/mt, finally closing at 16,870 yuan/mt, up 40 yuan/mt, a gain of 0.24%.
Scrap battery prices remain high, squeezing secondary lead smelting profits, leading to reduced production enthusiasm among smelters. Additionally, as the Labour Day holiday approaches, the lead-acid battery market's off-season trend intensifies, with some downstream enterprises considering production cuts or early holidays. Lead ingot supply and demand are expected to decline. Recently, post-delivery supply re-entered the circulation market, and some downstream enterprises gradually transferred lead inventory from social warehouses. After probing lows, lead prices rebounded, and the reduction in visible inventory may boost the upward movement of the lead price center.
Zinc
Last Friday, LME zinc was closed due to the Easter holiday.
Last Friday, the most-traded SHFE zinc 2506 contract opened at 22,100 yuan/mt. After the opening, shorts increased their positions, pushing SHFE zinc down to a low of 21,935 yuan/mt before it rebounded, reaching a high of 22,255 yuan/mt during the day. Subsequently, SHFE zinc maintained a fluctuating trend around 22,200 yuan/mt, eventually closing up at 22,230 yuan/mt, an increase of 180 yuan/mt or 0.82%. The trading volume rose to 85,377 lots, while the open interest decreased by 2,988 lots to 126,000 lots. SHFE zinc recorded a bullish candlestick, with the middle line of the Bollinger Bands forming resistance. Continued destocking of zinc ingots supported zinc prices during the week, but macro factors continued to weigh on prices. Concerns about downstream demand persist, and SHFE zinc may remain in the doldrums.

Tin
Last week, the most-traded SHFE tin contract (SN2505) experienced a pattern of intense fluctuations characterized by "jumping initially and then pulling back—sideways movement for recovery—and then under pressure again," with the price center significantly shifting downward. Phase 1 (April 14-15): Influenced by the phased resumption of production in the Bisie mining area in the DRC, the delayed expectation of resumption in Myanmar's Wa State, and the weakening of the US dollar index, the most-traded SHFE tin contract rebounded to 261,850 yuan/mt (up 2.48% in the midday session on April 14). However, prices later pulled back due to market risk aversion triggered by rumors of the US raising tariffs on China to 245%. Phase 2 (April 16): The US officially announced an increase in tariff rates from 125% to 245%, directly impacting the export expectations of China's electronics industry chain. The most-traded SHFE tin contract fell 1.68% in a single day, closing at 255,150 yuan/mt, with the intraday low touching 254,800 yuan/mt. Phase 3 (April 17): After partially digesting the negative news, bargain-hunting buying supported price recovery. However, the rebound was capped by the US Fed's stance of "no interest rate cuts within the year" and expectations of logistics recovery in the DRC. Ultimately, SHFE tin maintained a sideways movement within the range of 252,000-260,000 yuan/mt. Last week, the spot market saw relatively active overall trading due to the downward trend in SHFE tin prices. Most traders reported daily transactions of 1-2 truckloads, with downstream and end-user customers showing positive procurement sentiment, engaging in some just-in-time procurement and partial restocking. If SHFE tin prices remain weak and rangebound this week, the spot market may continue its active state.
Nickel
Last week, nickel prices rebounded strongly. The weekly average price of SMM 1# refined nickel was 126,215 yuan/mt, up 3.6% WoW. For the most-traded SHFE nickel contract, the implementation of Indonesia's nickel ore royalty (PNBP) policy, the recovery of market sentiment, and the cost support effect drove nickel prices to gradually rebound. As of April 18, the closing price was 125,600 yuan/mt, up 3.5% for the week. Supply side, refined nickel production in March was about 34,000 mt, up 21% MoM, still showing a supply surplus. Demand side, after the rebound in nickel prices, major downstream alloy special steel companies mainly adopted a wait-and-see approach this week. No significant demand increase was seen in other sectors. Inventory side, domestic social inventory this week was about 44,000 mt, with a buildup of about 650 mt WoW. Inventory remains at a high level, to some extent limiting the upside room for nickel prices. It is expected that SHFE nickel will maintain a fluctuating upward trend next week, but the upside space will be constrained by high inventory and weak demand.