Everbright Futures: Non-ferrous Metals Daily Report March 24

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Copper:

(Exhibition by Da Peng, Professional Qualification Number: F3013795; Trading Consultation Qualification Number: Z0013582)

Overnight LME copper initially declined then rebounded; Shanghai copper opened higher and fluctuated with a slight upward bias. Domestic refined copper import windows remain open. The market continues to focus on the US-Iran conflict. After Trump issued a 48-hour ultimatum to strike Iranian power plants, financial markets once showed pessimism, and copper was no exception. However, Trump later changed his stance, delaying attacks on Iranian power plants and energy infrastructure by five days. This shift reversed the market’s downward trend. In terms of inventories, LME stocks increased by 5,125 tons to 347,475 tons; COMEX stocks decreased by 1,121 tons to 532,947 tons; SHFE copper warehouse receipts fell by 13,737 tons to 274,115 tons; BC copper warehouse receipts decreased by 1,050 tons to 14,086 tons. On the demand side, after copper prices fell, downstream replenishment surged, leading to rapid depletion of social inventories. The US-Iran conflict remains the focus, with crude oil and copper forming a seesaw effect. The conflict’s direction will continue to be a key factor in upcoming trading, implying high market volatility. However, after the rapid decline in copper prices released macro risks and fundamental contradictions accumulated earlier, it is expected to enter a “support below, lacking upward momentum” oscillation phase, with the core logic being that macro restrictions are gradually easing but not yet reversed, while fundamentals are substantively strengthening. Strategy-wise, it is recommended to shift from cautious bearishness to range trading, gradually building long positions at key support levels, and monitoring copper prices within the 90,000–100,000 yuan/ton range.

Nickel & Stainless Steel:

(朱希, Professional Qualification Number: F03109968; Trading Consultation Qualification Number: Z0021609)

Overnight LME nickel rose 1.87% to $17,200/ton; Shanghai nickel increased 0.71% to 134,990 yuan/ton. In terms of inventories, LME stocks decreased by 720 tons to 282,792 tons; SHFE warehouse receipts increased by 942 tons to 57,632 tons. Regarding contango, LME 0-3 month contango remains negative; imported nickel contango stays at a premium of 150 yuan/ton. Under the dual influence of tight nickel ore supply and rising shipping costs, nickel ore prices continue to strengthen. Meanwhile, weekly nickel pig iron prices and transaction prices have risen, but primary nickel shows significant pressure on the weekly social inventory. On the demand side, the main stainless steel markets in China have a total social inventory of 1.1274 million tons, down 1.32% week-on-week; disruptions in MHP supply, increased auxiliary material costs, and higher transaction coefficients are observed. Additionally, March’s ternary material production is expected to increase by 19% month-on-month to 84,360 tons. Indonesia’s tightening nickel ore quotas cause further supply disruptions. Given the ongoing cost increases, short-term trading can consider long positions based on cost lines, but attention should be paid to geopolitical and market sentiment impacts, as well as expectations for additional quotas in July. Large inventories of primary nickel also exert pressure on prices.

Aluminum & Aluminum Alloys:

(王珩, Professional Qualification Number: F3080733; Trading Consultation Qualification Number: Z0020715)

Overnight, aluminum oxide fluctuated weakly, with AO2605 closing at 3,021 yuan/ton, down 1.76%. Positions decreased by 5,855 lots to 241,000 lots. Shanghai aluminum fluctuated slightly stronger, with AL2605 closing at 23,750 yuan/ton, up 0.57%, with a reduction of 113 lots to 267,000 lots. Aluminum alloy fluctuated slightly stronger, with AD2604 closing at 22,750 yuan/ton, up 0.8%. Positions decreased by 66 lots to 4,508 lots. Spot prices for SMM aluminum oxide rebounded to 2,755 yuan/ton. Aluminum ingot spot discount narrowed to 150 yuan/ton. Foshan A00 prices fell back to 23,410 yuan/ton, with Wuxi A00 at a discount of 30 yuan/ton; aluminum rod processing fees in Linyi remained stable, while other regions raised by 50–150 yuan/ton; 1A60 series processing fees for aluminum rods increased by 50–100 yuan/ton; 6/8 series processing fees increased by 100 yuan/ton; low-carbon aluminum rods decreased by 700 yuan/ton. The support from overseas raw material costs is gradually weakening. After domestic capacity increases, combined with large incoming imports of aluminum oxide, inventories face pressure. The high premium on the futures market accelerates warehouse receipt registration, causing aluminum oxide to lose upward momentum and weaken. Multiple oil fields in the Middle East have been attacked, leading to long-term energy pressure, but aluminum plant shutdowns have not yet caused new supply shocks. The core market contradiction shifts from overseas geopolitical premiums to domestic inventory accumulation and slow demand recovery, along with the upward correction of the copper-aluminum ratio. If geopolitical tensions do not escalate unexpectedly, short-term aluminum prices are likely to weaken. Attention should be paid to potential turning points in destocking and new geopolitical variables.

Industrial Silicon & Polycrystalline Silicon:

(王珩, Professional Qualification Number: F3080733; Trading Consultation Qualification Number: Z0020715)

On the 23rd, industrial silicon fluctuated slightly stronger, with the main contract 2605 closing at 8,575 yuan/ton, up 1.84%, with positions reduced by 14,351 lots to 231,000 lots. Baichuan industrial silicon spot reference price was 9,155 yuan/ton, down 1.7%. The lowest delivery grade price rebounded to 8,800 yuan/ton; spot premium rose to 225 yuan/ton. Polycrystalline silicon weakened, ending near the daily limit down, with the main contract 2605 closing at 35,435 yuan/ton, down 8.12%, with positions reduced by 1,305 lots to 32,015 lots. Baichuan N-type polycrystalline silicon price fell to 43,250 yuan/ton; lowest delivery grade silicon price also fell to 43,250 yuan/ton; spot premium widened to 7,815 yuan/ton. Production in northern and southern regions of industrial silicon is gradually resuming. Support from rising petroleum coke and electricity costs remains, but market pessimism has shifted the pricing focus. Mild supply release and cost support keep industrial silicon stable with slight adjustments, with low probability of sharp declines. The polycrystalline silicon market remains lackluster, with spot prices unable to reverse ongoing discounts. Futures prices still cover major manufacturers’ cash costs. As large producers resume production and supply gradually increases, supply-demand imbalance worsens. Inventory pressure may re-emerge, with warehouse receipts acting as a buffer. Without clear policy support, the market is unlikely to trend strongly, mainly operating at a bottom. Caution is advised; wait for signals of policy and demand resonance.

Lithium Carbonate:

(朱希, Professional Qualification Number: F03109968; Trading Consultation Qualification Number: Z0021609)

Yesterday, lithium carbonate futures 2605 rose 1.02% to 149,040 yuan/ton. Spot prices: battery-grade lithium carbonate fell 2,500 yuan/ton to 146,500 yuan/ton; industrial-grade fell 2,500 yuan/ton to 143,500 yuan/ton; crude lithium hydroxide (coarse particles) dropped 3,500 yuan/ton to 138,500 yuan/ton. Warehouse receipts decreased by 781 tons to 33,537 tons. On the supply side, weekly production increased by 760 tons to 24,186 tons; March lithium carbonate production is expected to increase by 28% month-on-month to 106,390 tons. On the demand side, March ternary material output is expected to rise 19% to 84,360 tons; lithium iron phosphate (LFP) production increased 24% to 430,000 tons. Inventory data shows weekly social lithium carbonate stocks decreased by 86 tons to 98,873 tons, with downstream stocks up 458 tons to 46,105 tons, upstream stocks down 860 tons to 36,160 tons, and upstream stocks up 316 tons to 16,608 tons. The delayed demand data currently has limited positive impact, with weekly depletion slowing significantly and spot downstream inventories rising. Short-term price surges may reduce downstream procurement enthusiasm. However, recent geopolitical tensions have strengthened long-term energy substitution logic, and concerns over overseas resource supply have re-emerged. Short-term, watch for potential lithium mine supply gaps; long-term, the price center remains upward. Consider low-level accumulation strategies.