CITIC Securities Futures: Industrial Commodities Morning Report March 24

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Copper: Market News Disrupts, Copper Prices Slightly Rebound

On Monday evening, the main Shanghai copper futures rose over 2% to 94,840 yuan, and London copper rebounded to around $12,236.
Macro neutral. Overnight news disruptions: Trump claimed US-Iran relations improved, but Iran has not confirmed; no improvement in rate cut expectations this year, limiting copper price rebound.
Fundamentally neutral to slightly bullish. Yesterday, SHFE copper warehouse receipts decreased by 13,700 tons, and LME copper stocks increased by 5,125 tons to 34,700 tons. Recently, copper prices have been weak, prompting downstream inventory replenishment. According to SMM, East China copper social inventory decreased by about 41,600 tons last weekend, and the rising rate of inventory reduction provides some support for prices.
Overall, the decline in copper prices has driven significant inventory reduction, but geopolitical factors keep macro sentiment weak. Macro and fundamentals are not resonating, so short-term rebound potential is limited; watch geopolitical developments. Today, Shanghai copper main contract is expected to operate between 93,500 and 96,200 yuan/ton. Strategy: short-term wait-and-see or range-bound trading.
Important Notice
All information in this report is sourced from publicly available data. CITIC Construction Investment Futures strives for accuracy and reliability but makes no guarantees regarding the accuracy or completeness of this information. Trading based on this is at your own risk. This report does not constitute personal investment advice and does not consider individual clients’ specific investment goals, financial situations, or needs. Clients should consider whether any opinions or suggestions in this report are suitable for their particular circumstances. (Yu Luyan / Z0023596, for reference only)

Nickel & Stainless Steel:

On macro front, geopolitical tensions have raised concerns about stagflation, leading to a sharp decline across major assets. However, as US statements have eased tensions, market fears have slightly abated. Currently, raw material intermediates are somewhat tight, supporting nickel prices. GreenMei’s smelting plants recently halted production for maintenance due to Indonesia’s Eid al-Fitr, possibly tightening MHP supply. Meanwhile, sulfur prices are expected to rise due to Middle East tensions; Indonesia Nickel Industry Forum estimates sulfur stock for HPAL usable in about a few weeks to a month. These factors may keep MHP prices relatively strong. Downstream sentiment remains cautious; spot nickel transactions are subdued, with inventories accumulating. Indonesian policies are tightening, and with the transition period for RKAB ending soon, recent nickel ore quota releases should be monitored. Although costs for nickel pig iron are rising, limited downstream acceptance of high-priced sources hampers profit transmission, so short-term nickel pig iron prices may stabilize. For stainless steel, spot transactions are moderate; increased supply may continue to pressure prices, with inventory buildup risks persisting.

Nickel & Stainless Steel Range Trading: SHFE Nickel 2605 between 125,000-145,000 yuan/ton. SS2605 between 13,500-14,500 yuan/ton.

Important Notice: This information is produced by the research team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures aims for accuracy but makes no guarantees. Trading is at your own risk. This is not personal investment advice and does not consider individual client circumstances. (Liu Jiaqí / Z0022848, for reference only)

Polycrystalline Silicon:

Polycrystalline silicon futures prices broke downward, hitting the limit down at the close yesterday. Our estimates suggest futures prices may have fallen below mainstream production costs, reflecting market pessimism about future demand. On one hand, downstream production remains low; from April 1, export tax rebates for PV and other sectors will be canceled, potentially worsening demand. On the other hand, silicon material producers face high inventory pressures; industry-wide inventories are nearly six months, with silicon producers holding about four months’ worth. As a result, many silicon producers are selling at low prices to clear stock. Weak demand and high inventories have recently led some producers to consider resuming production, further depressing market sentiment.
PS2605 is expected to trade between 32,000 and 45,000 yuan/ton. Currently, it’s advisable to stay on the sidelines.

Important Notice: This information is produced by the research team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This is not personal investment advice and does not consider individual client circumstances. (Liu Jiaqí / Z0022848, for reference only)

Aluminum:
Overnight futures slightly declined, spot prices slightly rose. Due to hurricane impacts, Rio Tinto’s two bauxite mines in Australia temporarily shut down, with total capacity about 30 million tons. The weather impact is expected to be short-term and limited in effect. Guinea announced plans to reduce bauxite exports in early April to support prices and protect small miners. With ore prices above $70/ton, all Guinean mines remain profitable, providing price support near 2,850 yuan. The current policy measures are unclear, and further upward movement lacks solid logic; pressure around 3,100 yuan remains. Short-term, alumina prices are expected to fluctuate at high levels.
Alumina 05 contract range: 2,850-3,150 yuan/ton, mainly buy on dips.
Market reports indicate US-Iran negotiations are ongoing; risk sentiment temporarily eased but Iran has not confirmed, and tensions persist with continued restrictions in the Strait of Hormuz. Inflation pressures remain, and Fed’s future monetary policy remains uncertain. Long-term oil shortages have suppressed demand in some Asian countries. Overall, macro remains bearish until Middle East production cuts expand. Domestic fundamentals slightly improve as aluminum prices decline, improving downstream procurement; spot inventories have shown signs of turning. Short-term, mixed signals, mainly sideways for SHFE aluminum.
SHFE aluminum 05 contract range: 22,500-24,500 yuan/ton, mainly wait-and-see.

Important Notice: This information is sourced from publicly available data. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This is not personal investment advice and does not consider individual client circumstances. (Wang Xianwei / Z0015983)

Zinc:
Overnight zinc prices showed slight strength and volatility. On macro front, Iran-US tensions saw conflicting news: US and Israel claimed reconciliation, but Iran denied, and actual conflicts continue, keeping macro sentiment cautious. On the fundamentals, domestic TC (Treatment Charge) differences are large; overall, April is expected to remain stable. Import mineral supply remains limited; SMM reports TC falling to around $5. Meanwhile, some smelters plan maintenance in April, with no significant reduction yet. Downstream, low prices have boosted procurement, with social inventories dropping nearly 10,000 tons yesterday. Spot zinc is somewhat supported at low prices, but macro sentiment remains limited, and zinc prices stay low.
Operation: Wait-and-see for SHFE zinc, main contract range: 22,000-23,500 yuan/ton.

Lead:
Overnight lead prices showed slight strength and volatility. On the supply side, primary lead concentrate supply slightly improved; TC has rebounded, but the overall remains in backwardation. According to Baichuan Yingfu, some smelters in Yunnan plan to restart next week; previously restarted smelters remain operational, with incremental supply. Recycled lead prices have softened; after falling, recycled lead smelting profits further shrank, keeping smelters operating at low levels. Downstream, lead-acid battery manufacturers are gradually resuming work; large and medium factories are near full capacity. Overall, supply and demand are both weak, and macro guidance suggests lead prices will mainly fluctuate at low levels.
Operation: Range trading for SHFE lead, main contract around 16,000-17,000 yuan/ton.

Risk Warning: This information is produced by the research team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This is not personal investment advice and does not consider individual client circumstances.

Aluminum Alloy:
Overnight alloy prices showed a slight upward trend. Due to Iran-US tensions, conflicting news emerged: US and Israel claimed reconciliation, but Iran denied, and conflicts continue, keeping macro sentiment cautious. Raw material prices, recycled aluminum quotes, declined slightly; supply remains stable, but costs may rise further due to taxes, supporting prices. Production increased slightly this week, and downstream orders improved. Spot support remains, but macro sentiment exerts pressure.
Operation: Wait-and-see for aluminum alloy, main contract range: 22,000-23,500 yuan/ton.

Risk Warning: This information is produced by the research team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This is not personal investment advice and does not consider individual client circumstances.

Precious Metals:
Precious metals experienced large fluctuations. During Asian trading hours, liquidity concerns caused a broad decline, but in Europe, Trump’s signals of easing tensions led to a strong rebound. Yesterday, global equity markets plunged, liquidity fears drove selling in precious metals. During European hours, Trump claimed a “constructive” dialogue with Iran, halting attacks for five days, easing tensions and boosting metals. Iran refuted Trump’s claims, and with Fed officials emphasizing inflation risks and possible rate hikes, metals remained under pressure. Overall, whether Iran tensions will continue to ease remains uncertain; prices may fluctuate sharply short-term, but stagflation risks provide long-term support.
Operation: Stay on the sidelines short-term; consider long positions after market stabilizes.
SHFE Gold 2606: 950-1020 yuan/gram
SHFE Silver 2606: 16,000-18,500 yuan/kilogram
GOLD Platinum 2606: 460-510 yuan/gram
Palladium 2606: 320-370 yuan/gram

Important Notice: This information is sourced from publicly available data. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This is not personal investment advice and does not consider individual client circumstances. (Wang Yanqing / Z0014569)