SMM Morning Comment For SHFE Base Metals (August 13)

SHANGHAI, August 13 (SMM) -

Copper

Futures: Overnight, LME copper opened at $9,768.5/mt, touched a low of $9,747.5/mt at the beginning of the session, then fluctuated upward throughout the day, nearing a high of $9,865/mt before closing at $9,840/mt, up 1.17%. Trading volume reached 18,000 lots, while open interest stood at 266,000 lots. Overnight, the most-traded SHFE copper 2509 contract opened and touched a low of 79,220 yuan/mt, then fluctuated upward, nearing a high of 79,510 yuan/mt before closing at 79,410 yuan/mt, up 0.6%. Trading volume reached 23,000 lots, while open interest stood at 158,000 lots.

Prices: Macro-wise, the US unadjusted CPI YoY for July remained flat at 2.7% MoM, while the unadjusted core CPI YoY rose to a five-month high of 3.1%. Following the data release, traders increased bets on a US Fed interest rate cut in September. Trump urged Powell to cut rates immediately, and US Treasury Secretary Besant suggested the Fed consider a 50-basis-point cut in September. The US dollar index declined, boosting copper prices. On the supply side, domestic supply remained limited, with some smelters reluctant to sell, tightening spot market availability. Demand side, copper prices dropped slightly during the day, with downstream buyers maintaining just-in-time procurement. Price-wise, the latest US inflation data bolstered expectations of a Fed rate cut, supporting copper prices at the bottom today.

Aluminum

Futures: On Tuesday night session, the most-traded SHFE aluminum 2509 contract opened at 20,770 yuan/mt, with a high of 20,820 yuan/mt, a low of 20,755 yuan/mt, and closed at 20,800 yuan/mt. Trading volume was 32,700 lots, and open interest was 216,000 lots. On Tuesday, LME aluminum opened at $2,582/mt, with a high of $2,631/mt, a low of $2,582/mt, and closed at $2,622.5/mt.

Summary: From a macro perspective, the US July CPI data and related market reactions, mainly through the weakening of the US dollar triggered by interest rate cut expectations and the impact on production costs, have exerted a certain upward driving force on aluminum prices. From a fundamental perspective, there have been relatively small changes in terms of supply, with the operating production of primary aluminum showing a slight increase amid stability. In terms of costs, the total weekly cost of the primary aluminum industry was 16,738 yuan/mt, with minimal changes, and the industry's high profits persisted. The key focus is on demand, which is currently weakening under the influence of the off-season, with consumption from terminals to processed materials remaining sluggish. The growth rates of industries that previously provided strong support, such as home appliances and PV, have slowed down. Some aluminum end-use export orders have also declined, and the construction industry is still experiencing a super-seasonal decline. The aluminum social inventory has breached the 550,000 mt mark. Although uneven arrivals caused periodic inventory data fluctuations last week, high aluminum prices amid the off-season atmosphere may further dampen consumption, with the short-term inventory buildup trend remaining unchanged. Overall, macro tailwinds coupled with potential aluminum supply risks drove aluminum prices to rebound to high levels. However, inventory buildup pressure remains significant during the consumption off-season. After the positive sentiment is digested, the price center of aluminum is expected to pull back, with the 21,000 yuan/mt mark still under pressure.

Lead

Overnight, LME lead opened at $2,000.5/mt. It rose slightly during the Asian session and then traded sideways around the $2,000/mt level during the European session before rising again. After a slight correction, it closed at $2,016/mt, up $18.5/mt or 0.93% from the previous close.

Overnight, the most-traded SHFE lead contract opened at 16,940 yuan/mt. It dipped slightly to 16,935 yuan/mt early in the session before rising to 16,975 yuan/mt. It then pulled back slightly and traded sideways above the daily average price, eventually closing at 16,960 yuan/mt, up 40 yuan/mt or 0.24% from the previous close.

Lead prices have rebounded and strengthened amid a positive macroeconomic atmosphere and strong cost support. The shipping intention for secondary refined lead has improved compared to yesterday. Although smelters are still mainly quoting at premiums, some suppliers have offered cargoes self-picked up from production site at slight discounts. Attention should be paid to changes in the supply of secondary refined lead in Hebei in late August. The peak consumption season for the downstream lead-acid battery sector has been slow to materialize, with general enthusiasm for raw material stocking and a continued focus on just-in-time procurement, with many adopting a wait-and-see attitude. As the delivery date for the SHFE lead 2508 contract approaches, traders have no short-term intention to expand discounts for shipments, and lead prices may continue to hold up well.

Zinc

Futures: Overnight, LME zinc opened at $2,809.5/mt. Initially, it dipped to $2,809/mt, then fluctuated upward, reaching a high of $2,854.5/mt near the close. It closed up at $2,848/mt, gaining $40/mt or 1.42%. Trading volume increased to 8,564 lots, while open interest decreased by 39 lots to 193,000 lots. Overnight, the most-traded SHFE zinc 2509 contract opened at 22,720 yuan/mt. Initially, it reached a high of 22,775 yuan/mt, then fluctuated downward, dipping to 22,630 yuan/mt. Subsequently, it oscillated below the daily average line, closing up at 22,685 yuan/mt, gaining 55 yuan/mt or 0.24%. Trading volume decreased to 42,749 lots, while open interest decreased by 1,609 lots to 85,879 lots.

Zinc price forecast: Overnight, LME zinc recorded a bullish candlestick, with the 20-day moving average providing support below. The US July CPI rose mildly, further supporting expectations for a US Fed interest rate cut in September. The US dollar index weakened, and coupled with the 90-day suspension of the implementation of 24% tariffs between China and the US, market sentiment was boosted, and LME zinc continued to rise. Overnight, SHFE zinc recorded a bearish candlestick, with the upper Bollinger Bands forming resistance. The positive macro sentiment in the market boosted SHFE zinc to open higher with a gap, but domestic zinc ingot inventory continued to build up. Driven by profits, smelters had high production enthusiasm. With a strong supply and weak demand in the fundamentals, SHFE zinc lacked upward momentum in the night session.

Tin

Futures: The most-traded SHFE tin contract (SN2509) fluctuated rangebound during the night session, closing at 270,600 yuan/mt, up 0.1% from the previous trading day.

Macro: (1) During the 14th Five-Year Plan period, China has significantly increased investment in computing power infrastructure, achieving remarkable results. Data shows that in 2025, China's general computing power is expected to grow by 20%, while its intelligent computing power is projected to expand by 43%, ranking second globally after the US. Over the past five years, the total computing power scale has maintained an annual growth rate of around 30%. (2) US President Trump stated on Monday that Nvidia might be allowed to sell its Blackwell AI chips in China, which are likely more powerful than the previously approved H20 chips. Foreign Ministry spokesperson Lin Jian responded that specific questions should be directed to relevant Chinese authorities, reiterating China's consistent stance on US chip exports and urging the US to take concrete actions to maintain stable global supply chains. (3) On August 12, CPCA data showed June passenger vehicle sales reached 2.14 million units (up 20.6% YoY, 14.7% MoM), with new energy vehicle sales at 1.11 million units (up 33.3% YoY, 15.0% MoM), outperforming the overall market. NEVs accounted for 51.9% of total passenger vehicle sales (up 0.2% MoM, 4.9% YoY), including 676,000 BEVs (up 42.1% YoY, 16.8% MoM) and 434,000 PHEVs (up 21.6% YoY, 12.4% MoM). Cumulative NEV sales in 2025 totaled 5.274 million units, up 30.9% YoY.

Fundamentals: (1) Supply disruptions: Tin ore supply tightens in major production areas like Yunnan, with some smelters potentially maintaining maintenance shutdowns or minor production cuts in August (Bullish★). (2) Demand: PV sector: Post-installation rush, tin bar orders declined in east China, lowering operating rates at some producers; Electronics: South China's terminal electronics entered off-season amid high tin prices, with end-users adopting wait-and-see sentiment and maintaining only essential orders; Other sectors: Stable demand in tinplate and chemical industries without exceeding expectations.

Spot market: As tin prices stabilized above 270,000 yuan, downstream enterprises turned cautious with subdued restocking sentiment. Most traders reported only sporadic transactions.