SHANGHAI, July 21 (SMM) -
Copper
Futures market: LME copper opened at $9,729/mt last Friday night, initially fluctuating rangebound and testing the low of $9,710/mt before gradually moving higher and probing $9,799/mt near the session close, eventually settling at $9,794.5/mt, up 1.2%. Trading volume reached 15,000 lots, while open interest stood at 266,000 lots. The most-traded SHFE copper 2509 contract opened at 78,560 yuan/mt last Friday night, initially dipping to 78,530 yuan/mt before rallying steadily to probe 79,190 yuan/mt near the session close, finally settling at 79,140 yuan/mt, up 1.03%. Trading volume reached 32,000 lots, while open interest stood at 146,000 lots.
Prices: Macro perspective, Besant continued to dissuade Trump from dismissing Powell, while Trump insisted he needed no explanation of Powell's pros and cons. Waller remained ambiguous about the July meeting stance but expressed willingness to assume leadership at the US Fed if nominated by the president. The US Commerce Secretary stated a potential agreement with the EU, while imposing a 10% baseline tariff on smaller countries starting August 1. Domestically, MIIT will issue a new round of nonferrous metals growth stabilization plans to promote high-quality development in copper, aluminum, and gold industries, providing a floor for copper prices. Fundamentally, LME inventory showed consecutive minor rebounds but remained at historically low levels. Demand side weakened significantly with the price rebound, coupled with traditional off-season effects, resulting in a temporary dual weakness in supply and demand. Comprehensive assessment suggests tariffs and US Fed personnel disputes pose short-term volatility risks, but domestic policy support and low inventory provide downside support for copper prices.
Aluminum
Futures Market: On the previous trading day's night session, the most-traded SHFE aluminum 2509 contract opened at 20,560 yuan/mt, with a high of 20,795 yuan/mt, a low of 20,560 yuan/mt, and closed at 20,770 yuan/mt, up 1.27% from the previous close. LME aluminum opened at $2,589.5/mt, with a high of $2,638.5/mt, a low of $2,582.5/mt, and closed at $2,638.0/mt, up 1.89%.
Summary: Macro-wise, uncertainties surrounding overseas tariff policies and rumors of personnel changes continue to keep risk assets cautious. Domestically, industrial metals rose driven by policies against "rat race" competition. Fundamentals-wise, with supply increments being released and consumption in the off-season, the expectation of inventory buildup remains strong. Aluminum prices are expected to fluctuate at highs in the short term. Subsequent attention should be paid to casting ingot volumes and inventory changes.
Lead
Last Friday, LME lead opened at $1,970.5/mt. During the Asian session, it fluctuated at lows, with a low of $1,967/mt. Entering the European session, boosted by macroeconomic news from the Chinese market, LME lead rallied, reaching a high of $2,014/mt in the late session, and finally closed at $2,011.5/mt, up 1.72%.
On the evening of last Friday, the most-traded SHFE lead 2508 contract opened higher with a gap at 16,850 yuan/mt and then rallied firmly. As the MIIT spoke about promoting the stable development of key industries such as non-ferrous metals, bears reduced their positions, pushing SHFE lead to a high of 16,995 yuan/mt. It finally closed at a high of 16,980 yuan/mt, up 0.95%.
The impact of maintenance at primary lead smelters has intensified, coupled with an expansion in losses for secondary lead smelters. Finished product inventories at smelters have generally declined, and there has been a regional tightening of circulating supplies. Last week, spot discounts for lead narrowed significantly compared to the previous week, potentially providing strong support for lead prices. In addition, the Ministry of Industry and Information Technology (MIIT) said last Friday that it would introduce a work plan to stabilize growth in ten key industries, including non-ferrous metals, which may inject new momentum into the lead market.
Zinc
Futures Market: Last Friday, LME zinc opened at $2,737.5/mt. In the early session, LME zinc consolidated around the daily average line. During the European trading session, bulls increased their positions, causing LME zinc to fluctuate upward with the center running above the daily average line. Entering the night session, LME zinc accelerated its upward movement, with the center running near $2,820/mt and touching a high of $2,826.5/mt. It finally closed up at $2,824.5/mt, gaining $86.5/mt or 3.16%. Trading volume increased to 18,401 lots, while open interest decreased by 507 lots to 187,000 lots. Last Friday, the most-traded SHFE zinc 2509 contract opened higher with a gap at 22,420 yuan/mt. In the early session, bullish funds pushed SHFE zinc to rally rapidly, with the center moving up to near 22,800 yuan/mt. It touched a high of 22,890 yuan/mt and finally closed up at 22,880 yuan/mt, gaining 580 yuan/mt or 2.6%. Trading volume increased to 152,000 lots, while open interest increased by 18,294 lots to 134,000 lots.
Zinc Price Forecast: On Friday last week, LME zinc recorded a large bullish candlestick, and the MACD turned bullish. On the same day, the US dollar index pulled back, leading to a general rise in non-ferrous metals. The LME 0-3 zinc contract once again shifted to a backwardation structure, and LME zinc inventory decreased. Coupled with the renewed focus on "anti-rat race" competition in China, capital concentration increased, pushing the center of LME zinc prices higher. On Friday last week, SHFE zinc also recorded a large bullish candlestick, with various moving averages below providing support and the KDJ indicator expanding upwards. On Friday last week, zinc prices showed a strong upward trend, driven by increased concentration of overseas capital. Additionally, the Ministry of Industry and Information Technology (MIIT) in China proposed the imminent release of a stable growth work plan for ten key industries, including steel, non-ferrous metals, and petrochemicals. Coupled with the commencement of the hydropower project in the lower reaches of the Yarlung Zangbo River, these factors were favorable for non-ferrous metals, leading zinc prices to lead the gains. Considering the positive macroeconomic and capital sentiment, zinc prices are expected to hold up well.
Tin
Last week, in terms of international macroeconomic developments, the US Treasury Secretary indicated that negotiations between the US and China on suspending the imposition of additional tariffs were progressing well, alleviating market concerns about trade tensions. Additionally, the Vice Chairman of the Thai Chamber of Commerce stated that Thailand would propose exempting 90% of US goods from tariffs, further boosting market confidence. Domestically, the Ministry of Finance adjusted the consumption tax policy for super luxury cars, imposing a consumption tax on passenger cars and medium and light commercial buses with a retail price of 900,000 yuan or more per unit. This move may affect the consumption demand in related industries. From the overall perspective of the tin ore market, the supply-demand relationship remains tight. In terms of supply, the supply of tin ore in major producing areas such as Yunnan has tightened, and some smelters may maintain production shutdowns for maintenance or slightly cut production in July, causing continuous disruptions to the supply side. In terms of demand, after the installation rush in the PV industry ended, orders for PV tin strips in east China declined. The electronics industry entered the off-season, and end-users had a strong wait-and-see sentiment, with orders only meeting immediate needs. Demand in other fields such as tinplate and chemicals remained stable, without any unexpected growth. In the spot market, despite price fluctuations, downstream purchase willingness was low, and most buyers adopted a strategy of "small batches, multiple orders" to restock based on immediate needs. The overall market remained sluggish. In summary, it is expected that tin prices will maintain a fluctuating trend next week. Investors need to pay attention to domestic and overseas market dynamics and policy changes, and operate cautiously.
