Everbright Futures: Non-Ferrous Metals Daily Report for March 27

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Copper:

（Exhibit Pengda, professional qualification No.: F3013795; trading consulting qualification No.: Z0013582）

Overnight, copper prices inside and outside China fluctuated and weakened. The domestic spot refined copper import window has remained continuously open, but import profitability has declined. Regarding the Iran–U.S. conflict, Trump said that at the request of the Iranian government, the strike would be delayed to 8:00 PM on April 6 in U.S. Eastern time, and that the Iran–U.S. negotiations are ongoing and progress is very smooth. Although the claim that it is fake news is the opposite of this, nonetheless. In addition, under the impact of the Iran–U.S. conflict, U.S. Treasury auctions saw demand staying persistently weak. In terms of inventories, LME inventories fell by 350 tons to 359825 tons; Comex inventories increased by 939 tons to 534985 tons; SHFE copper warrants fell by 5670 tons to 246441 tons, while BC copper warrants remained at 13480 tons. On the demand side, after copper prices fell, downstream replenishment sentiment increased. The Iran talks and the trajectory of the conflict are still full of uncertainty, and the market keeps repricing the macro environment’s volatility, which also means that high market volatility is still present. However, macro headwinds at the margin have weakened, and fundamentals are gradually showing real support. Copper prices are expected to enter a “supported on the downside, lacking upside driving force” sideways bottoming phase. Strategically, it is recommended to shift from the previous cautious-to-bearish stance to range trading: gradually build long positions at key support levels, and watch how copper prices perform within the 90000~100000 yuan/ton range.

Nickel & Stainless Steel：

（Zhu Xi, professional qualification No.: F03109968; trading consulting qualification No.: Z0021609）

Overnight, LME nickel fell 1.04% to 17165 USD/ton, while SHFE nickel fell 0.73% to 135990 yuan/ton. In terms of inventories, LME inventories decreased by 216 tons to 282240 tons, and SHFE warrants decreased by 12 tons to 57593 tons. Looking at the exchange differentials (premium/discount), LME 0–3 month differentials remained negative; import nickel differentials continued to fall by 50 yuan/ton to a discount of 200 yuan/ton. Nickel ore prices have kept strengthening. Weekly nickel pig iron quotes and transaction prices, MHP, and the high-grade nickel pig discount all rose, while primary nickel in social inventory showed significant pressure. On the demand side, stainless steel mainstream market stainless steel 89 warehouse social total inventory was 1.1274 million tons, down 1.32% week-on-week. MHP supply-side disruptions happened, but auxiliary material costs rose somewhat, and the成交系数 (transaction coefficient) increased. In addition, March is expected to see a 19% month-on-month increase in ternary material output to 84360 tons. With Indonesia’s nickel ore quota tightening, supply-side disruptions returned. Given that the cost side has continued to strengthen, operations may still consider short-term long opportunities along the cost line; however, in the short term, you still need to pay attention to how overseas geopolitical factors and market sentiment affect prices, along with some expectations regarding additional quota supplements in July. Also, primary nickel inventory pressure is relatively large, which will weigh on nickel prices.

Alumina & Aluminum Electrolytic & Aluminum Alloy：

（Wang Heng, professional qualification No.: F3080733; trading consulting qualification No.: Z0020715）

Overnight, alumina fluctuated and traded slightly weak. AO2605 closed at 2917 yuan/ton, down 0.75%. Open interest increased by 1414 lots to 224,000 lots. Overnight, aluminum on the Shanghai exchange traded slightly strong. AL2605 closed at 23870 yuan/ton, up 0.51%, with open interest decreasing by 884 lots to 259,000 lots. Aluminum alloy traded slightly strong. Overnight, the main contract AD2604 closed at 22940 yuan/ton, up 0.5%. Open interest decreased by 264 lots to 11,968 lots. On the spot market, SMM alumina prices rebounded to 2773 yuan/ton. Spot aluminum ingot differentials (premium/discount) tightened to a discount of 110 yuan/ton. Foshan A00 quotes fell back to 23440 yuan/ton; versus Wuxi A00, the premium/discount widened to a discount of 90 yuan/ton. Processing fee for aluminum rods in Baotou, Henan, and Linyi remained stable, while in Xinjiang, Nanchang, Guangdong, and Wuxi they were increased by 20–50 yuan/ton. Processing fees for 1A60 rods remained stable, and processing fees for 6/8 series remained stable; processing fees for low-carbon aluminum rods were reduced by 273 yuan/ton. The logic supporting overseas raw material costs is gradually weakening. After domestic restart increments are released, coupled with large shipments of imported alumina soon arriving at ports, inventories face added pressure. Higher-than-normal premiums on the futures curve triggered faster warehouse warrant registrations; alumina lost momentum for further upside and shifted from strong to weak. Multiple oil fields in the Middle East were attacked. Energy pressure has entered a long-term logic, but the pace of aluminum smelter shutdowns has not formed a new supply shock. The market’s core contradiction has shifted from overseas geopolitical high premia to weaker realities of domestic inventory build-up and slower demand start, as well as the logic of a rebound in the copper-to-aluminum ratio upward repair. If geopolitics does not produce an unexpectedly adverse shock, near term aluminum prices are mainly expected to weaken and adjust. Watch the timing as the destocking turning point approaches, and stay alert to new geopolitical variables.

Silicon Metal & Polysilicon：

（Wang Heng, professional qualification No.: F3080733; trading consulting qualification No.: Z0020715）

On the 26th, silicon metal traded slightly strong in a fluctuating manner. The main contract 2605 closed at 8735 yuan/ton, with an intraday gain of 0.58%, and open interest decreased by 2435 lots to 229,600 lots. BaiChuan’s spot silicon metal reference price was 9155 yuan/ton, steady versus the previous trading day. The minimum delivery-grade price rebounded to 8800 yuan/ton, and the spot premium expanded to 65 yuan/ton. Polysilicon traded slightly weak. The main contract 2605 closed at 35540 yuan/ton, with an intraday drop of 2.78%, and open interest increased by 631 lots to 33,451 lots. BaiChuan’s N-type re-purchased silicon feedstock price fell to 39750 yuan/ton; the minimum delivery-grade silicon feedstock price also fell to 39750 yuan/ton, and the spot premium expanded to 4210 yuan/ton. Slow production restarts in silicon metal regions north and south of the country are underway; the support logic from petroleum coke and electricity-cost increases remains, but under bearish market sentiment the pricing focus has deviated somewhat. With supply releasing moderately and cost providing a backstop, silicon metal is mainly expected to hold steady with minor adjustments, and the probability of a big drop is lower. The polysilicon market has little good news; the spot side cannot reverse the continued practice of price concessions to move inventory. Currently, the futures curve still covers major manufacturers’ cash costs. As major manufacturers’ restarts approach and supply volume gradually shifts from reduction to release, it will further aggravate the imbalance between supply and demand. In the next phase, with social inventories once again turning back toward accumulation pressure, the angle of warehouse warrants easing accumulated inventory remains. If there is no clear positive catalyst from policy, the market may have difficulty producing a sustained trend-driven行情, and trading will mainly be based on a bottoming-run logic. It is suggested to take a light position and stay on the sidelines, waiting for signals of policy and demand to move in sync.

Lithium Carbonate：

（Zhu Xi, professional qualification No.: F03109968; trading consulting qualification No.: Z0021609）

Yesterday, lithium carbonate futures 2605 fell 0.64% to 157220 yuan/ton. In terms of spot prices: the average battery-grade lithium carbonate price rose by 4000 yuan/ton to 156500 yuan/ton; the average industrial-grade lithium carbonate price rose by 4000 yuan/ton to 153500 yuan/ton; battery-grade lithium hydroxide (coarse particles) rose by 4000 yuan/ton to 145000 yuan/ton. For warehouse receipts, yesterday warehouse receipt inventory decreased by 709 tons to 30751 tons. On the supply side, weekly production data rose by 628 tons month-on-month to 24814 tons; March is expected to see lithium carbonate output rise month-on-month by 28% to 106390 tons. On the demand side, in March ternary material output is expected to rise month-on-month by 19% to 84360 tons; lithium iron phosphate output is expected to rise month-on-month by 24% to 430,000 tons. On the inventory side, weekly social lithium carbonate inventory rose month-on-month by 616 tons to 99489 tons. Of this, downstream inventories rose month-on-month by 552 tons to 46657 tons, and other segments decreased by 660 tons to 35500 tons. Upstream inventories increased month-on-month by 724 tons to 17332 tons. Lagging demand data is temporarily unable to provide strong support; high-frequency data shows weekly inventories turning into a mild accumulation trend. Meanwhile, spot downstream inventory levels have rebounded relatively significantly. Therefore, if spot prices rise sharply in the short term, downstream procurement activity may weaken. However, with concerns about overseas resource supply surfacing again, in the short term you still need to watch whether there will be any shortage in lithium ore supply. In the medium to long term, the upward shift in the price center of gravity will not change, so it is still possible to consider buying on dips.

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责任编辑：李铁民