SMM Morning Comment For SHFE Base Metals (August 15)

SHANGHAI, August 15 (SMM) -

Copper

Futures: Overnight, LME copper opened at $9,775.5/mt, initially plunged straight to a low of $9,714/mt, then fluctuated considerably upward, touching a high of $9,780/mt near the close, and finally settled at $9,777/mt with a 0% change. Trading volume reached 15,000 lots, and open interest stood at 269,000 lots. Overnight, the most-traded SHFE copper 2509 contract opened at 78,760 yuan/mt, initially touched a high of 78,960 yuan/mt, then saw its center shift downward to a low of 78,740 yuan/mt before rebounding in a "V"-shaped pattern toward the close, ultimately settling at 78,940 yuan/mt, down 0.23%. Trading volume was 18,000 lots, and open interest totaled 152,000 lots.

Prices: Macro-wise, the US July PPI MoM surged 0.9%, marking the largest increase since 2022 and signaling broader inflationary pressures in the coming months. Following the data release, US Fed officials pushed back against expectations of a significant interest rate cut in September, driving the US dollar index higher and weighing on copper prices. On the supply side, although imported copper arrivals supplemented the market, domestic supply remained tight. Imported copper arrivals are expected to increase further next week, potentially improving the supply structure. Demand side, recovery momentum emerged as downstream demand gradually rebounded in late August, driving weekly inventory declines. Data showed that as of Thursday, August 14, SMM's mainstream copper inventories across China fell 6,000 mt from Monday to 125,600 mt, down 6,400 mt WoW from the previous Thursday. Price-wise, copper prices were expected to fluctuate rangebound as Trump and Putin were scheduled to meet today to discuss the Russia-Ukraine conflict.

Aluminum

Futures: On Thursday night session, the most-traded SHFE aluminum 2509 contract opened at 20,710 yuan/mt, with a highest price of 20,785 yuan/mt, a lowest price of 20,705 yuan/mt, and closed at 20,760 yuan/mt. Trading volume was 43,000 lots, and open interest was 198,000 lots. On Thursday, LME aluminum opened at $2,606/mt, with a highest point of $2,627.5/mt, a lowest point of $2,606/mt, and closed at $2,624/mt.

Summary: On the macro front, although Thursday's US data did not shake the rationale for an interest rate cut in September, it did raise market concerns that tariffs could still stimulate inflation in the coming months and alter the interest rate cut trajectory for the remainder of the year. From a fundamental perspective, there have been relatively small changes in terms of supply, with the operating production of electrolytic aluminum showing a steady and slight increase. Regarding costs, the total weekly cost for the electrolytic aluminum industry was 16,738 yuan/mt, with the industry still enjoying high profits. On the demand side, as the September-October peak season approaches, downstream weekly operating rates have shown signs of recovery this week. However, under the influence of the off-season, it is difficult for consumption from terminals to processed materials to exceed expectations. The growth rates of industries such as home appliances and PV, which had strong support in the early stage, have slowed down. Some aluminum terminal export orders have also declined, and the construction industry is still experiencing a super-seasonal decline. Amid the off-season atmosphere, aluminum prices are fluctuating at highs, while consumption recovery remains relatively weak. Against the backdrop of still sufficient supply, the trend of continued inventory buildup in the short term remains unchanged. Overall, domestic and overseas macro tailwinds coupled with potential supply risks in aluminum kept prices holding up well. However, during the off-season, inventory buildup pressure remained significant. After the positive sentiment is digested, the price center of aluminum may face the risk of jumping initially and then pulling back, with the 21,000 yuan/mt level still under pressure.

Lead

Overnight, LME lead opened at $1,988/mt, fluctuated downward during the Asian session, rebounded after hitting a low of $1,980/mt in the European session, reached a high of $1,996.5/mt, and finally closed at $1,990/mt, up $2/mt or 0.10%.

Overnight, the most-traded SHFE lead contract opened lower with a gap at 16,820 yuan/mt, rose slightly in the early session, reached a high of 16,870 yuan/mt before weakening under pressure, hit a low of 16,790 yuan/mt, and finally closed at 16,805 yuan/mt, down 10 yuan/mt or 0.06%.

Zinc

Futures: Overnight, LME zinc opened at $2,818/mt. After opening, LME zinc fluctuated along the daily average line, hitting a low of $2,810.5/mt during the session. It then fluctuated upward, reaching a high of $2,851/mt near the end of the session, closing up at $2,842.5/mt, up $31/mt. Trading volume increased to 7,717 lots, while open interest decreased by 588 lots to 194,000 lots. Overnight, the most-traded SHFE zinc 2510 contract opened at 22,500 yuan/mt. In the early session, SHFE zinc hit a low of 22,500 yuan/mt. After opening, it fluctuated considerably around the daily average line, reaching a high of 22,600 yuan/mt during the night session. It then pulled back again to near the daily average line, closing up at 22,570 yuan/mt, up 75 yuan/mt or 0.33%. Trading volume decreased to 30,792 lots, while open interest increased by 4,772 lots to 87,974 lots.

Zinc price forecast: Overnight, LME zinc recorded a bullish candlestick, with the 20-day moving average providing support below. US PPI data for July showed the largest increase in three years, and hawkish remarks from the US Fed resurfaced, causing the US dollar index to rebound from its lows. Investors remained cautious, but with LME zinc inventory continuing to decline, the low inventory level provided some support for zinc prices. LME zinc initially fell but then rose, with the overall center basically stable. Overnight, SHFE zinc recorded a bullish candlestick, with the 5-day moving average acting as resistance above. On Thursday, domestic zinc ingot inventory increased by 10,000 mt MoM to 129,000 mt, with the inventory growth trend continuing. However, supported by the rebound in LME zinc prices, SHFE zinc maintained a fluctuating trend during the night session.

Tin

Futures: The most-traded SHFE tin contract (SN2509) fluctuated rangebound at low levels during the night session, closing at 266,500 yuan/mt, down 0.76% from the previous trading day.

Macro: (1) According to informed sources, the Trump administration is negotiating with Intel (INTC.O) for the US government to acquire a stake in the struggling chipmaker, supporting its domestic manufacturing expansion. This deal would aid Intel's planned Ohio factory hub, initially promised to become the world's largest chip plant despite repeated delays. The discussions followed a meeting this week between Trump and Intel's CEO. The proposal involves US government equity payment, with details still being finalized and the potential stake size unclear. Intel shares surged 8.9% to $24.20 in late trading on the news. Year-to-date, the stock has gained 11% as of Wednesday's close. (2) CPCA data showed pickup truck sales reached 41,000 units in July 2025, up 1.7% YoY but down 15.0% MoM, at a median level over the past five years. January-July sales totaled 348,000 units, up 11.0% YoY. (3) US Fed updates: ① Daly: A significant interest rate cut next month seems inappropriate. ② Moussalem: A 50-bp cut doesn’t align with current economic conditions or data. ③ US Treasury Secretary Besant: Did not advocate for a 150-bp Fed rate cut, merely noted models suggest a lower neutral rate.

Fundamentals: (1) Supply disruptions: Tin ore supply tightens in key production areas like Yunnan, with some smelters likely maintaining maintenance shutdowns or minor production cuts in August (Bullish★). (2) Demand side: PV sector: Post-installation rush, tin bar orders declined in east China, lowering operating rates at some producers. Electronics: South China’s end-users entered the off-season amid high tin prices, fostering strong wait-and-see sentiment with only just-in-time procurement orders. Other sectors: Stable demand for tinplate and chemicals without exceeding expectations.

Spot market: SHFE tin dipped slightly during the night session, prompting some clients to prepare bids near 265,000 yuan/mt, while a few made just-in-time procurement. Most traders reported limited transactions, with overall volume remaining low.