Copper: Overnight, both domestic and international copper prices fluctuated higher. The import window for domestic refined copper spot opened, but import profits narrowed significantly. Macroeconomic developments saw continued market speculation about potential interest rate cuts this year following Fed Chair Powell's dovish remarks, alongside positive news indicating willingness from both the U.S. and Iran to de-escalate Middle East conflicts. U.S. JOLTS job openings fell to 6.882 million in February, with the hiring rate hitting a six-year low and the layoff rate edging up. Eurozone inflation rose to 2.5% in March, the largest increase since 2022, rapidly boosting expectations for interest rate hikes. Domestically, China’s March manufacturing PMI climbed to 50.4, while the non-manufacturing PMI rose for the second consecutive month. The central bank emphasized leveraging the combined effects of incremental and existing policies to strengthen monetary policy adjustments. Inventory-wise, LME copper stocks decreased by 175 tons to 362,425 tons; Comex copper stocks fell by 866 tons to 532,673 tons; SHFE copper warrant stocks dropped by 9,710 tons to 221,261 tons; BC copper warrants remained at 13,055 tons. On the demand side, significant restocking by domestic downstream users has accelerated the drawdown of social inventories, reflecting resilience in domestic demand. The market remains focused on U.S.-Iran tensions; while optimism prevails following signals of eased conflict, caution is warranted until navigation through the Strait of Hormuz is reliably resolved. Short-term trading within a range is advised, with gradual long positions built at key support levels, monitoring copper prices within the 90,000–100,000 yuan/ton range.
Nickel & Stainless Steel: Overnight, LME nickel fell 0.75% to $17,195/ton, while SHFE nickel rose 0.13% to 135,800 yuan/ton. LME inventories decreased by 48 tons to 281,526 tons; SHFE warrant stocks increased by 685 tons to 57,858 tons. LME 0-3 month backwardation remained negative; import nickel premiums held at -350 yuan/ton. Tight nickel ore supply and rising freight costs are keeping nickel ore prices elevated, with nickel iron prices and MHP discount coefficients strengthening, while primary nickel faces significant pressure. Supply disruptions persist due to tightened nickel ore quotas in Indonesia. Given strengthening cost support, short-term long opportunities near cost levels may be considered, but attention is needed on overseas geopolitical factors and market sentiment. Expectations for additional quotas in July and high primary nickel inventories may pressure prices; monitor whether inventory changes yield positive feedback.
Alumina, Electrolytic Aluminum & Aluminum Alloy: Overnight, alumina weakened slightly, with AO2605 closing at 2,813 yuan/ton, down 2.12%, and open interest rising by 4,158 lots to 203,000 lots. SHFE aluminum strengthened modestly, with AL2605 closing at 24,915 yuan/ton, up 0.61%, and open interest falling by 2,094 lots to 257,000 lots. Aluminum alloy also firmed, with AD2605 closing at 23,745 yuan/ton, up 0.81%, and open interest down 174 lots to 6,784 lots. Spot SMM alumina prices rebounded to 2,787 yuan/ton. Aluminum ingot spot discounts widened to 100 yuan/ton. Foshan A00 prices rose to 24,520 yuan/ton, at a 70 yuan/ton discount to Wuxi A00. Aluminum billet processing fees held steady in most regions, rising 30 yuan/ton in Xinjiang and Guangdong, but falling 50 yuan/ton in Wuxi. Aluminum rod processing fees for 1A60 series were stable, while low-carbon aluminum rod prices increased by 90–270 yuan/ton. Domestic alumina plant inventories remain at a three-month high, with concentrated imports and new capacity in Guangxi contributing to renewed inventory accumulation. High futures premiums accelerated warrant registrations, pressuring alumina. Attacks on major aluminum plants in Bahrain and the UAE may further reduce overseas output, supporting international prices. Domestic aluminum ingot accumulation has eased noticeably, with destocking likely in April. Short-term focus remains on Middle East geopolitics; domestic demand has yet to fully materialize, and divergent inventory trends between domestic and international markets may sustain weaker SHFE and stronger LME patterns.
Industrial Silicon & Polysilicon: On March 31, industrial silicon weakened, with the main 2605 contract closing at 8,355 yuan/ton, down 1.71%, and open interest falling by 18,817 lots to 202,000 lots. The Baichuan spot reference price held at 9,155 yuan/ton. The lowest deliverable grade price rose to 8,800 yuan/ton, with the spot premium widening to 445 yuan/ton. Polysilicon also weakened, with the main 2605 contract closing at 35,200 yuan/ton, down 3.1%, and open interest down 128 lots to 34,456 lots. Baichuan N-type polysilicon prices fell to 38,500 yuan/ton, with the lowest deliverable grade also at 38,500 yuan/ton and the spot premium widening to 3,300 yuan/ton. Industrial silicon production is slowly resuming in northern and southern regions, with prices caught between cost support and marginal inventory buildup. Rising petroleum coke and electricity costs have lifted offers from traders, eliminating low-priced supply, but overall sentiment remains subdued, leading to range-bound trading. Polysilicon is in a policy lull, with output steadily rising and centralized solar project deliveries slowing. Leading firms continue dual sales strategies, risking higher industry inventories. No clear bottoming signals have emerged, with prices likely to remain low. Monitor end-user demand and inventory drawdown after export rushes subside. Current policy expectations are largely priced in; beware of sharp corrections if policies disappoint.
Lithium Carbonate: Yesterday, lithium carbonate futures (2605) fell 7.97% to 157,200 yuan/ton. Spot battery-grade lithium carbonate averaged 163,000 yuan/ton, down 1,500 yuan/ton; industrial-grade averaged 159,500 yuan/ton, down 1,500 yuan/ton; battery-grade lithium hydroxide (coarse) fell 500 yuan/ton to 150,500 yuan/ton. Warrant stocks dropped by 19,746 tons due to concentrated deregistration, leaving 11,318 tons. Weekly production rose by 628 tons to 24,814 tons; April output is forecast to increase 4% monthly to 110,950 tons, with battery-grade up 4.17% to 81,190 tons and industrial-grade up 3.77% to 29,760 tons. April ternary material output is expected to fall 3.85% monthly to 80,970 tons, while LFP output may rise 5.53% to 450,000 tons. Social inventories of lithium carbonate increased by 616 tons weekly to 99,489 tons, with downstream stocks up 552 tons to 46,657 tons, other segments down 660 tons to 35,500 tons, and upstream stocks up 724 tons to 17,332 tons. News of a potential resumption of Zimbabwean lithium exports pressured futures prices; further policy developments need monitoring. Rising lithium ore prices reflect tight supply realities and expectations. Export suspensions from Zimbabwe may reduce supply in late April–May; prolonged restrictions would widen deficits, but resumption expectations could create tight present versus loose future conditions, risking price impacts from concentrated shipments. Amid high uncertainty, sustained high prices are unlikely. Note that rapid price gains could slow spot procurement, causing futures-spot divergence. Consider long opportunities on dips.
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