SMM Morning Comment For SHFE Base Metals (July 15)

SHANGHAI, July 15 (SMM) –

Copper

Futures market: Overnight LME copper opened at $9,609/mt, dipped to $9,575/mt in early trading, then fluctuated upward and peaked at $9,649/mt near the close, finally settling at $9,643.5/mt with a 0.2% loss. Trading volume reached 21,000 lots and open interest stood at 280,000 lots. Overnight, the most-traded SHFE copper 2508 contract opened at 77,900 yuan/mt, dipped to 77,810 yuan/mt in early trading, consolidated sideways, then edged higher to peak at 78,160 yuan/mt near the close, settling at 78,020 yuan/mt with a 0.34% loss. Trading volume reached 31,000 lots and open interest stood at 172,000 lots.

Prices: On the macro front, Trump threatened to impose 100% secondary tariffs on Russia if no Ukraine peace deal is reached within 50 days, potentially disrupting global oil supply/demand dynamics. This uncertainty triggered a sharp decline in international oil prices, weighing on copper prices. Fundamentally, supply-side participants showed strong selling sentiment, though suppliers refrained from further quote reductions amid narrowing price spreads between futures contracts. Demand-side buying sentiment weakened compared to late last week, with procurement enthusiasm pulling back. As of Monday, July 14, SMM's national copper inventory across major regions rose by 3,900 mt WoW to 147,600 mt. Regional inventory changes since last Thursday showed widespread increases except in Shanghai. Regarding pricing, Trump renewed criticism of Powell, advocating for 1% or lower interest rates, but Fed officials stated no urgent need for rate cuts. The US dollar strengthened against major currencies on Monday, maintaining pressure on copper prices.

Aluminum

Futures Market: On the previous trading day's night session, the most-traded SHFE aluminum 2508 contract opened at 20,390 yuan/mt, with a high of 20,410 yuan/mt, a low of 20,335 yuan/mt, and closed at 20,405 yuan/mt. The trading volume was 42,200 lots, and the open interest was 215,000 lots. On the previous trading day, LME aluminum opened at $2,603/mt, with a high of $2,604.5/mt, a low of $2,574/mt, and closed at $2,596.5/mt.

Summary: On the macro side, the domestic favorable atmosphere remains unchanged; the US June CPI data is about to be released, with market expectations that prices of goods affected by tariffs, such as furniture and toys, may rise faster, potentially pushing the core inflation rate up to 2.9%. Meanwhile, the impact of overseas tariffs on trade flows has not yet dissipated. On the fundamental side, domestic operating capacity for primary aluminum slightly decreased due to replacement projects, with the proportion of liquid aluminum falling to 74.78% and casting ingot volumes increasing. Cost side, there has been an upward trend in recent times due to rising alumina prices. On the demand side, most downstream sectors are in a strong off-season atmosphere, with aluminum prices rising during the off-season, further suppressing demand. Operating rates in the aluminum processing sector remain sluggish. Additionally, domestic social inventory of primary aluminum ingots has once again turned to an inventory buildup trend. SMM expects that aluminum prices will be under pressure in the short term, with subsequent focus on changes in inventory and demand.

Lead

Futures Market:

Overnight, LME lead opened at US$2,022/mt. After opening, it came under pressure from the intraday average line and fluctuated downward all the way. Before the market closed, it hit a low of US$2,001/mt and finally closed at US$2,005/mt, down US$12/mt or 0.59%. Bulls reduced their positions and exited the market for several consecutive days, and LME lead recorded three consecutive days of decline. Overnight, the most-traded SHFE lead contract opened at RMB 17,060/mt. After hitting a low of RMB 17,005/mt in the early session, it fluctuated upward and reached a high of RMB 17,080/mt. After that, it came under pressure and pulled back to near the intraday average line, finally closing at RMB 17,035/mt, down RMB 25/mt or 0.15%.

Today's Lead Price Forecast:

As the delivery of the SHFE lead 2507 contract approaches, downstream enterprises' purchases are more inclined towards cargoes self-picked up from production sites of smelters with relatively low prices. Suppliers continue to transfer inventory to delivery warehouses, and unreported inventory is expected to be revealed as scheduled, dragging down lead prices. However, in terms of supply, the new capacity of primary lead enterprises in Central China has not been put into operation as expected in recent days, and unplanned maintenance has occurred, resulting in a regional tight supply of lead ingots. Delivery brand enterprises have limited deliverable cargoes, and the increase in lead ingot inventory transfer has slowed down. After lead prices weakened, some suppliers adopted a wait-and-see attitude and were reluctant to sell. The support at the 17,000 yuan per tonne level for lead prices was moderate. Peak season consumption still needs to be verified. In the short term, lead prices may continue to be in the doldrums.

Zinc

Overnight, LME zinc opened at $2,748/mt, then reached a high of $2,746/mt. Subsequently, LME zinc declined slightly and consolidated around the daily average line. During European trading hours, LME zinc plunged below the daily average line, fluctuating rangebound around $2,720/mt, with a low of $2,711/mt. In the end, LME zinc recovered some losses and closed at $2,732.5/mt, down $5.5/mt or 0.20%. Trading volume increased to 112,000 lots, and open interest rose by 1,614 lots to 194,000 lots. Overnight, SHFE zinc opened at 22,110 yuan/mt. In the early session, SHFE zinc briefly fluctuated around the daily average line, with a low of 22,080 yuan/mt. Subsequently, bears reduced their positions, and SHFE zinc quickly rose above the daily average line, reaching a high of 22,195 yuan/mt. In the end, bulls reduced their positions, and SHFE zinc dropped back slightly, closing at 22,145 yuan/mt, down 105 yuan/mt or 0.47%.

Zinc Price Forecast: Overnight, LME zinc recorded a long lower shadow bearish candlestick, with the upper Bollinger Bands acting as resistance and the 40/60-day moving averages providing support below. The increase in overseas inventories weakened the support for LME zinc. Meanwhile, Trump stated that if Russia fails to reach an agreement on the Russia-Ukraine conflict within 50 days, a 100% secondary tariff will be imposed on Russia. The macro sentiment turned bearish, causing the center of LME zinc prices to decline. Overnight, SHFE zinc recorded a small bullish candlestick, with the 5/10-day moving averages acting as resistance and the 40/60-day moving averages providing support below. Influenced by LME, SHFE zinc opened lower with a gap. However, yesterday, the State Council Information Office held a press conference, stating that the cumulative increase in social financing scale for the first half of 2025 (H1) was 22.83 trillion yuan, achieving reasonable growth in the financial aggregate. The domestic market sentiment was relatively positive, leading to a slight upward movement in SHFE zinc prices.

Tin

Futures: The most-traded SHFE tin contract (SN2508) opened slightly lower in the night session, then fluctuated at lows before rebounding modestly to around 265,300 yuan/mt near the close, down 0.33% from the previous trading day.

Macro: (1) According to CPCA data, pickup truck sales reached 48,000 units in June 2025, up 7.5% YoY but down 7.4% MoM, remaining at a five-year high. January-June 2025 sales totaled 307,000 units, up 16.4% YoY. (Bullish★) (2) Sources indicate Panasonic Holdings postponed full operations at its new US EV battery plant after its key client Tesla reported sluggish sales, prompting production plan reassessment. (Bullish★) (3) Ministry of Public Security statistics show China's automobile ownership reached 460 million by June-end 2025, including 36.89 million NEVs (10.27% penetration). Pure EV ownership stood at 25.539 million (69.23% of NEVs). H1 2025 saw 5.622 million new NEV registrations, up 27.86% YoY to a record high, accounting for 44.97% of total new vehicle registrations.

Fundamentals: (1) Supply disruptions: Tin ore supply tightened in major production areas like Yunnan, with some smelters likely maintaining maintenance shutdowns or minor production cuts in July. (Bullish★) (2) Demand side: PV sector: Tin bar orders declined in east China post-installation rush, lowering operating rates at some producers; Electronics: End-users in south China entered off-season amid high tin prices, maintaining wait-and-see sentiment with only essential orders; Other sectors: Stable demand from tinplate and chemical industries without exceeding expectations.

Spot market: Downstream purchase willingness weakened notably after prices rebounded above 266,000 yuan/mt, with most restocking conducted via "small-volume, multi-batch" strategies. Smelters held firm on prices but faced limited actual transactions.

Nickel:

Spot Market: On July 14, the SMM 1# refined nickel price ranges from 120,600 to 122,900 yuan/mt, with an average price of 121,750 yuan/mt, down 400 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel range from 1,900 to 2,000 yuan/mt, with an average premium of 1,950 yuan/mt, down 50 yuan/mt from the previous trading day. The spot premiums and discounts for electrodeposited nickel from mainstream domestic brands range from -100 to 300 yuan/mt.

Futures Market: The most-traded SHFE nickel contract (2508) closed down 0.5% at 120,590 yuan/mt in the night session, gradually strengthened during the daytime session, reaching a high of 121,280 yuan/mt. As of the midday session, SHFE nickel was quoted at 120,970 yuan/mt, down 0.18%. Recently, the domestic concept of "anti-rat race" competition has boosted the commodity market, offsetting external negative factors, and nickel prices have rebounded in tandem. Looking ahead, the external macro environment remains uncertain, and nickel prices are expected to maintain a fluctuating trend within a range of 118,000 to 123,000 yuan/mt.