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SMM Morning Comment For SHFE Base Metals (July 23)

iconJul 23, 2025 10:04
Source:SMM
Futures market: LME copper opened at $9,871.5/mt overnight, fluctuated upward initially before plunging to $9,858.5/mt, then gradually rebounded to a high of $9,923/mt, finally closing at $9,898/mt, up 0.31%, with trading volume at 13,000 lots and open interest at 266,000 lots.

SHANGHAI, July 23 (SMM) -

Copper

Futures market: LME copper opened at $9,871.5/mt overnight, fluctuated upward initially before plunging to $9,858.5/mt, then gradually rebounded to a high of $9,923/mt, finally closing at $9,898/mt, up 0.31%, with trading volume at 13,000 lots and open interest at 266,000 lots. The most-traded SHFE copper 2509 contract opened at 79,830 yuan/mt overnight, immediately hitting a high of 80,130 yuan/mt before retreating to 79,630 yuan/mt, then fluctuating upward to close at 79,970 yuan/mt, up 0.4%, with trading volume at 38,000 lots and open interest at 170,000 lots.

Prices: On the macro front, US Treasury Secretary Besant stated that August 1 is a "relatively hard deadline" for all countries. US President Trump claimed Japan would pay a 15% reciprocal tariff, heightening market concerns over tariffs. He also asserted that "Powell will be out soon" and advocated for a 3-percentage-point rate cut, while US Fed Governor Bowman emphasized the need for monetary policy independence and maintaining transparency and accountability. The overnight US dollar index declined, supporting copper prices. On the fundamentals, smelters began replenishing supplies to Shanghai warehouses this week, but spot cargo remains tight. Demand side, downstream demand weakened due to the off-season and high copper prices. Overall, macro support and tight supply provided some 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 20,915 yuan/mt, with a high of 20,975 yuan/mt, a low of 20,890 yuan/mt, and closed at 20,925 yuan/mt, up 0.12% from the previous close. LME aluminum opened at $2,639.0/mt, with a high of $2,660.0/mt, a low of $2,631.5/mt, and closed at $2,652.0/mt, up 0.42%.

Summary: Overall, in terms of macro factors, domestic policies related to "anti-rat race" competition have driven industrial metals higher, with the long-term tone of "promoting consumption and stabilizing growth" remaining unchanged. Overseas, macro tariff easing and increased market attention to interest rate cut expectations. On the fundamental side, due to factors such as arrival rhythms, inventory performance has fluctuated, but considering the release of supply increments and the suppression of the off-season for consumption, expectations for inventory buildup remain strong. Recently, capital sentiment has been strongly influenced by macro policies such as "anti-rat race" and "high-quality development." It is expected that aluminum prices will mainly fluctuate at highs in the short term. Subsequent attention should be paid to changes in inventory and capital sentiment.

Lead

Overnight, LME lead opened at US$2,012.5/mt, diving to a low of US$1,994/mt during the Asian session. Entering the European session, it rallied, reaching a high of US$2,018/mt in the tail end, and closed at US$2,014.5/mt, down 0.02%.

Overnight, the most-traded SHFE lead 2509 contract opened at RMB16,930/mt, touched a low of RMB16,890/mt early in the session, rebounded to a high of RMB16,985/mt, and closed at RMB16,945/mt, up 0.03%.

After the lead price stopped falling and rebounded, the shipping enthusiasm of lead smelters has recovered somewhat, especially secondary lead smelters planning production resumptions according to demand. The spot circulation volume in some regions has increased, and downstream enterprises have more procurement options. Currently, the terminal consumption of the lead-acid battery market is weak, with battery producers' weekly operating rates remaining stable above 70%. The buying sentiment for spot orders has not changed much, and the social inventory of lead ingots is being digested slowly.

Supply side, production at some primary lead smelters in Henan has not yet resumed, and the operating rate of secondary lead has steadily increased. On the consumption side, orders for lead-acid batteries have not shown significant improvement, with battery producers' weekly operating rates remaining stable above 70%. The buying sentiment for spot orders has not changed much, and the social inventory of lead ingots is being digested slowly. After macro sentiment briefly boosted market sentiment, the current lead price is still dragged down by fundamentals.

Zinc

Futures Market: Overnight, LME zinc opened at $2,844/mt. Initially, LME zinc fluctuated near the daily average line. During European trading hours, bears increased their positions, pushing the center of LME zinc below the daily average line, with a low of $2,823/mt. Entering the night session, bulls increased their positions, driving LME zinc to rally rapidly and touch a high of $2,863/mt. It eventually closed up at $2,853.5/mt, with a gain of $9/mt or 0.32%. Trading volume decreased to 13,540 lots, while open interest increased by 837 lots to 185,000 lots. Overnight, the most-traded SHFE zinc 2509 contract opened at 22,850 yuan/mt. Initially, SHFE zinc consolidated near the daily average line. Subsequently, bulls surged in, pushing SHFE zinc to rally and touch a high of 23,020 yuan/mt. It eventually closed up at 22,970 yuan/mt, with a gain of 110 yuan/mt or 0.48%. Trading volume decreased to 76,490 lots, while open interest increased by 818 lots to 135,000 lots.

Zinc Price Forecast: Overnight, LME zinc recorded a four-day winning streak, with the daily candlestick's center moving upwards. Amid escalating trade tensions and conflicts between the White House and the US Fed, the US dollar continued to decline, leading to a general rise in non-ferrous metals. Additionally, LME zinc inventory decreased again, with bulls mainly increasing their positions, resulting in zinc prices maintaining their strength. Overnight, SHFE zinc recorded a five-day winning streak, with the KDJ indicator expanding upwards. The optimistic sentiment in the overnight market continued to ferment, with the State Council issuing regulations on rural roads, boosting demand expectations. Zinc prices are expected to fluctuate at highs.

Tin

Futures: The most-traded SHFE tin contract (SN2508) fluctuated upward during the night session, closing at 269,300 yuan/mt, up 0.71% from the previous trading day.

Macro: (1) According to Japan's NHK, the US and Japan agreed to set tariffs on Japanese auto imports at 15%. Citing government sources, the report stated both sides agreed to reduce additional tariffs on Japanese cars from the previously planned 25% to 12.5%, bringing the total tariff to 15% when combined with the initial 2.5% duty. (Bullish★) (2) US Treasury Secretary Besant announced on the 22nd in a Fox News interview that the third round of China-US trade talks will be held next Monday and Tuesday in Stockholm, Sweden. Previous talks occurred in Geneva and London. Reports indicate August 12 marks the deadline for the China-US tariff hike suspension, with the latest negotiations aiming to extend this deadline. (3) Tariffs—①US Treasury Secretary Besant: August 1 remains a "relatively hard deadline" for all nations. EU trade negotiations proceed separately from Russia-Ukraine sanction talks. Japanese negotiations are progressing very smoothly. ②Ontario Premier: Electricity export taxes remain under consideration. ③South Korea considers painful concessions to avoid comprehensive US tariffs. ④Trump: Reached trade deal with the Philippines, imposing 19% tariffs on Philippine goods. The Philippines will open its market to US products with zero tariffs. ⑤US releases details of trade agreement with Indonesia. ⑥Canadian PM: No "US-favorable deal for Canada" currently on the table.

Fundamentals: (1) Supply-side disruptions: Tin ore supply tightens in major production areas like Yunnan. Some smelters may maintain maintenance shutdowns or implement minor production cuts in July. (Bullish★) (2) Demand side: PV sector: Post-installation rush, tin bar orders decline in east China with reduced operating rates at some producers. Electronics: South China's electronic end-users enter off-season amid high tin prices, maintaining only essential orders due to strong wait-and-see sentiment. Other sectors: Stable demand in tinplate and chemical industries without exceeding expectations.

Spot market: The spot market remains sluggish with thin overall transactions. Most traders report single-digit deals, while a few complete approximately one truckload. As SHFE tin prices continue rising, downstream enterprises primarily utilize existing inventory for production amid declining end-user orders.

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