SMM News, March 31: In early trading, SHFE aluminum 2604 rose, with its center moving higher than the previous day. Affected by the rise in aluminum prices, shipment sentiment increased sharply today, with relatively ample spot circulation in the market, driving a wider spread in transaction premiums. Market transactions were mainly concentrated at discounts of 10 yuan/mt to the SMMA00 aluminum average price. Today, the shipment sentiment index in the east China market was 3.31, up 0.13 MoM; the purchasing sentiment index was 3.11, unchanged MoM. As aluminum futures prices continued to rise today, traders' bullish sentiment in the central China market recovered slightly from yesterday. Suppliers were fearful that excessively high inventory would cause prices to pull back, and bearish sentiment in the market surged. Quoted premiums fell all the way, but differentiation between large and small traders was significant, with major traders showing stronger willingness to hold prices firm. In the end, actual transaction prices in the central China market were around discounts of 10 yuan to 40 yuan to the central China price. Today, the shipment sentiment index in the central China market was 2.74, up 0.02 MoM; the purchasing sentiment index was 2.32, down 0.07 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 4,500 mt MoM today, with the main sources of the inventory buildup being Wuxi and Guangdong. In the short term, after the Chinese New Year, aluminum ingot inventory continued its seasonal inventory buildup. Affected by bullish market sentiment, premiums were expected to maintain a narrowing trend.

SMM News, March 31: Today, in Guangdong, spot premiums for #1 copper cathode against the front-month contract were reported at 140 yuan/mt for high-quality copper, up 10 yuan/mt from the previous trading day; 50 yuan/mt for standard-quality copper, up 10 yuan/mt from yesterday; and a discount of 10 yuan/mt for SX-EW copper, up 10 yuan/mt from yesterday. The average price of #1 copper cathode in Guangdong was 95,780 yuan/mt, up 555 yuan/mt from the previous trading day, while the average price of SX-EW copper was 95,675 yuan/mt, also up 555 yuan/mt from the previous trading day. Spot market: Today, Guangdong inventory continued its downward trend and has now declined for 11 consecutive working days. As a result, suppliers remained firmly bullish and continued to hold prices firm for shipments, but restocking interest from traders and end-user enterprises was weak at month-end, and market trading was expected to recover tomorrow. Today, procurement sentiment for copper cathode in Guangdong was 2.38, down 0.13 from the previous trading day, while shipment sentiment was 3.43, down 0.2 from the previous trading day (historical data is available in the database). Overall, market trading was sluggish at month-end, but spot premiums remained firm.

Precious metal prices strengthened today, and the spot-futures price spread between TD and the most-traded SHFE silver contract widened slightly. As month-end approached, many suppliers still held prices firm and were reluctant to sell. In the Shanghai market, during morning trading, mainstream quotations from suppliers of standard silver ingots were at premiums of 100-120 yuan/kg against TD, or at a premium of 30 yuan/kg against the SHFE silver 2604 contract, with transactions mainly driven by just-in-time procurement. Some smelters, concerned about a decline in premiums in April, proactively lowered premiums to 70-100 yuan/kg to sell off cargoes. It was understood that market quotations varied widely among different brands of circulating cargoes. Some non-registered brand silver ingots were sold off at reduced prices or with separated goods and invoices. Downstream buyers generally stayed on the sidelines and purchased cautiously, or made only limited just-in-time procurement. Actual transactions still mainly concluded after downstream bargaining and price cuts, and sluggish market trading conditions remained unchanged.

SMM Nickel News, March 31: Macro and market news: (1) The State Administration for Market Regulation issued a notice on further implementing the Anti-Unfair Competition Law of the People's Republic of China. The notice mentioned comprehensively addressing "involution-style" competition. It said various anti-unfair competition measures would be used in a coordinated manner to focus on preventing and curbing "involution-style" competition in key industries and sectors such as the platform economy, PV, lithium battery, and NEV. (2) Iran's parliamentary National Security Commission passed a bill proposing to charge fees on vessels transiting the Strait of Hormuz. The plan included implementing financial arrangements and a charging system in Iranian rial, and banning US and Israeli vessels from passing through the Strait of Hormuz. Spot market: On March 31, the SMM price of #1 refined nickel fell by 750 yuan/mt from the previous trading day. In terms of spot premiums, the average price premium of Jinchuan #1 refined nickel was 3,750 yuan/mt, down 1,000 yuan/mt from the previous trading day; the spot premiums for mainstream domestic brands of electrodeposited nickel were in the range of -800-400 yuan/mt. Futures market: The most-traded SHFE nickel contract (2605) continued to decline in early trading and closed the morning session at 134,370 yuan/mt, down 1.13%. Supply side, tightening in nickel ore has evolved into dual cost support from "ore + taxes," providing solid support for the bottom of nickel prices, but weak end-use demand and continued inventory accumulation still capped upside room for nickel prices. Nickel prices are expected to maintain a fluctuating trend in the short term, with the core trading range of the most-traded SHFE nickel contract at 133,000-143,000 yuan/mt.

For almost four weeks, the war against Iran has kept the world on edge – a conflict that leaves deep marks not only geopolitically but also economically. Volatility and uncertainty in global markets are increasing daily.

After the Lantern Festival, the operating rate of copper cathode rod was the first to rebound continuously, driving a gradual recovery in downstream consumption and pushing social inventory to officially enter a destocking channel from mid-March. However, as copper prices have recently rebounded and risen, downstream procurement sentiment has become more cautious, the pace of destocking has slowed somewhat, and the growth in the operating rate of copper cathode rod has also narrowed accordingly. Operating Rates Rose First, and the Inventory Inflection Point Emerged as Expected After the Chinese New Year, copper prices pulled back in phases, effectively boosting downstream restocking willingness. According to SMM, the operating rate of copper cathode rod enterprises was the first to respond, showing a WoW upward trend for several consecutive weeks. As of the latest data, the operating rate of copper cathode rod enterprises further climbed to 83.17, reflecting the continued release of end-use demand. Driven by the continued rise in operating rates, downstream procurement gradually increased in volume, and rigid-demand orders were steadily placed. As a result, copper inventories in major regions nationwide ended their sustained inventory buildup on March 12, officially marking an inflection point in inventories. Thereafter, the degree of destocking increased week by week, and as of March 26, inventories had declined for three consecutive weeks. With inventories being digested rapidly, the increase in total inventories compared to the same period last year also gradually narrowed from the post-holiday high to 92,900 mt. By region, this round of destocking showed broad-based characteristics. Consumption in Guangdong recovered most notably, coupled with localized tightening on the supply side, and the pace of inventory decline was relatively fast, making it the first to establish a destocking trend; driven by downstream consumption, warehouse withdrawals in Shanghai continued to exceed warehouse inflows, and against the backdrop of normal arrivals of imported and domestic cargoes, inventory steadily pulled back; Jiangsu likewise benefited from the recovery in consumption, jointly driving the rapid drawdown of overall inventory. Copper Price Rebound Curbed Willingness to Chase Gains, Destocking Momentum Weakened Significantly Entering late March, market sentiment shifted. As copper prices rose, downstream enterprises became more cautious, and the previously more active procurement pace slowed down. As of March 30, copper inventories in major regions nationwide fell 13.81% WoW. Although the destocking trend continued, the single-week decline had narrowed from 14.54% in the previous week. Regional performance also diverged. In Shanghai, arrivals of imported and domestic cargoes were normal, downstream consumption continued to recover, and inventory steadily destocked; in Guangdong, consumption remained highly robust, and coupled with tight supply, the inventory decline was still considerable; however, in Jiangsu, affected by another rise in copper prices, downstream procurement turned more wait-and-see, the pace of destocking slowed markedly, reflecting that the restraining effect of rebounding prices on demand had begun to emerge. Meanwhile, the upward momentum in the operating rate of copper cathode rod cooled somewhat. SMM expected the operating rate of copper cathode rod to rise to 83.76% this week, up only 0.59 percentage points WoW, in contrast to the pattern of consecutive sharp increases in previous weeks, indicating insufficient willingness among downstream buyers to chase higher prices, with more shifting to just-in-time procurement and adopting a wait-and-see stance toward subsequent copper prices. Market Outlook: Short-Term Destocking Continues as Momentum Gradually Weakens Overall, supply side, imported cargoes continued to arrive, while arrivals of domestic cargoes were relatively limited due to maintenance and other factors, and the overall pattern of tight supply persisted; demand side was more heavily affected by fluctuations in copper prices, with downstream players holding a wait-and-see attitude toward subsequent price trends, making it difficult in the short term to replicate the intensity of the previous concentrated restocking. Social inventory is expected to continue destocking in the short term, but as copper prices remain at a relatively high level, downstream procurement is turning more rational, and destocking momentum is expected to weaken further. As for subsequent market direction, attention still needs to be paid to copper price trends and the actual fulfillment of end-user orders.