During the early trading session, the nonferrous metals sector continued its strong performance from the previous night, displaying an independent market trend characterized by "ignoring geopolitical disturbances and returning to industrial fundamentals." Despite the deadlock in U.S.-Iran negotiations and the ongoing navigation risks in the Strait of Hormuz, the market did not fall into panic selling. Instead, driven by multiple hard constraints on the supply side, metals such as copper, aluminum, and tin collectively strengthened. This indicates that the current pricing logic in the metal market has shifted decisively from short-term geopolitical games to long-term supply-demand imbalances.
**Copper: Supply "Hard Constraints" Establish an Upward Trend** Copper prices broke through the $13,900 per ton mark yesterday, coming within a step of the historical high. The market has now developed an "immunity" to the U.S.-Iran situation, with capital focus entirely on supply-side tightness. Fluctuating expectations regarding the resumption of operations at Indonesia's Grasberg copper mine, combined with operational challenges in Chilean mining areas, continue to keep mine supply tight. More critically, the Middle East situation has created a gap in global sulfur and sulfuric acid supply, posing a substantial threat to major producing countries like the Democratic Republic of the Congo, which rely on hydrometallurgy. This could theoretically impact up to about 8% of global mined copper supply. On the demand side, sustained inventory drawdowns in China, coupled with long-term support from AI computing infrastructure and energy transition, have essentially established a one-way upward trend for copper prices. Spot and futures copper prices are expected to rise significantly today, with a reference trading range of 105,000 to 108,500 yuan per ton.
**Aluminum: Geopolitical Premium Fades, Industrial Logic Takes Over** Although the U.S.-Iran situation has pushed up oil prices, aluminum prices have not simply followed energy cost fluctuations but have charted their own strong course. The effective closure of the Strait of Hormuz has halted electrolytic aluminum capacity in the Middle East, fueling ongoing concerns about supply shortages. While high domestic social inventories exert some downward pressure on prices, strong bottom support for aluminum prices is provided by high smelting profits and improving macroeconomic sentiment. However, considering the subdued downstream demand during the traditional off-season, aluminum prices still face resistance in breaking previous highs. Prices are expected to maintain a high-range consolidation today, with a reference range of 24,500 to 25,200 yuan per ton.
**Zinc, Lead, Tin, Nickel: Divergent Trends Amid Supply Disruptions** Zinc prices are strongly influenced by mine-side shortages and increased maintenance at domestic smelters in May, leading to intense expectations of supply contraction. However, constrained by weak downstream demand in the off-season, prices are likely to maintain high-range consolidation in the short term, with a reference range of 24,100 to 24,800 yuan per ton. The lead market shows a "busier-than-usual off-season," with tight scrap battery raw materials pushing up the cost of secondary lead. Coupled with the improving macroeconomic environment, lead prices are expected to consolidate with a bullish bias today, within a reference range of 16,500 to 16,800 yuan per ton.
Nickel and tin have shown more remarkable performance. Nickel prices, catalyzed by the sudden shutdown of a leading Indonesian smelter and rising costs for hydrometallurgical raw materials, have become a leading gainer. Prices are expected to maintain a high-range trend today, with a reference range of 146,000 to 149,800 yuan per ton. Tin prices benefit from slower-than-expected resumption of operations in Myanmar and export controls in Indonesia. Global visible inventories have dropped to historically low levels, and combined with demand driven by AI servers, spot tin prices are expected to challenge the 440,000 yuan per ton threshold today.
**Outlook and Strategic Recommendations** Overall, the nonferrous metals sector has established a consolidation-with-bullish-bias tone. In the short term, investors are advised to closely monitor the U.S. April CPI inflation data released at 20:30 Beijing time tonight. If inflation data falls below expectations, it will further reinforce expectations of a Federal Reserve rate cut, providing macroeconomic support for metal prices.
At the industrial level, it is essential to closely track substantive changes on the supply side: first, the subsequent impact of the Middle East situation on sulfur transportation and navigation through the Strait of Hormuz; second, capacity releases and policy changes in resource countries like Indonesia and Peru; third, whether the pace of domestic inventory drawdowns can continue to confirm demand recovery. In terms of operations, a strategy of buying on dips is recommended, while remaining alert to potential phased pullback risks at high price levels. However, excessive bearishness is unnecessary; instead, focus on seizing the structural opportunities arising from supply shortages.
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