Next week, due to the Qingming Festival in the Chinese market, SHFE will not conduct night session trading on the evening of April 3; outside China, due to Good Friday, exchanges including the LME will be closed for one day on April 3. In terms of macroeconomic data, key releases are expected to include China’s official manufacturing PMI for March, US ADP employment for March, US retail sales MoM for February, and US ISM manufacturing PMI for March. LME lead, current geopolitical tensions outside China remained prominent, shipping cycles lengthened, and crude oil prices rose, all of which had a significant impact on the base metal market. For lead, consumption in the Middle East was relatively stagnant, supply chains were disrupted, and transportation cycles for lead ingot and lead-acid batteries lengthened. Meanwhile, China’s lead ingot import arbitrage remained favorable, and overseas lead ingot continued to flow into the Chinese market. This week, LME lead ingot inventory fell by nearly 1 kt, and the LME Cash-3M contango narrowed to -$34.62/mt, providing support for lead prices. LME lead is expected to trade at $1,880-1,930/mt next week. SHFE lead, lead ingot inventory was destocked, including inventories at lead smelters and social warehouses, and lead prices showed signs of stabilizing after the decline. However, the lead ingot import window is currently open, while lead-acid batteries will enter the traditional off-season in April, limiting expectations for lead consumption. In addition, some secondary lead smelters recently resumed production and raised output, while new maintenance plans are also scheduled for April. With bullish and bearish factors coexisting in fundamentals, lead prices are expected to continue to fluctuate rangebound. If lead smelter maintenance is implemented as planned, lead prices may have a chance to rise relatively. The most-traded SHFE lead contract is expected to trade at 16,300-16,700 yuan/mt next week. Spot price forecast: 16,250-16,550 yuan/mt. With the traditional off-season for lead-acid batteries approaching in April, downstream enterprises mostly maintained purchasing as needed, with limited procurement enthusiasm. Supply side, both primary lead and secondary lead enterprises saw output increases, and imported lead continued to flow into China, so spot lead premium trading may be difficult to sustain for long.

The European Union has officially approved a €390 million bridge loan to support the operational turnaround and environmental compliance of Italy's Acciaierie d'Italia (ADI), formerly known as Ilva. The massive Taranto steelworks is currently running at a critically low annual production capacity of 1.5 to 1.8 million metric tons, relying solely on Blast Furnace No. 4 while Blast Furnaces No. 1 and No. 2 remain idled for extraordinary maintenance. The newly secured state-backed funding is aimed at restarting these idled furnaces, restoring essential coke oven gas treatments, and stabilizing the employment of thousands of workers currently under an extended extraordinary layoff scheme

[Overnight, LME Aluminum and SHFE Aluminum Edged Up Slightly, but Aluminum Prices Faced Short-Term Pressure at High Levels] Continued destocking in LME inventory provided bottom support for LME aluminum, but amid tightening fund liquidity and profit-taking by bulls, upward momentum remained insufficient, and the backwardation structure weakened somewhat. China’s social inventory rose to a high for the same period in nearly five years, and the inventory buildup cycle had yet to end, with high inventory and weak spot fundamentals jointly weighing on upward momentum. The divergence between domestic and overseas drivers continued, the SHFE/LME price ratio kept weakening, and prices were mainly under pressure in the short term.

[Australian Typhoons Continued to Disrupt, and Import TCs Kept Falling]: Weekly data showed that the average weekly domestic SMM Zn50 TC held flat at 1,550 yuan/mt in metal content, while the SMM Imported Zinc Concentrate Index fell $6.02/dmt MoM to $5.23/dmt...

[Price Review] During the week, silver prices remained in the doldrums. In China, the Ag (T+D) contract on the Shanghai Gold Exchange broke below the support level of 18,000 yuan/kg, while LBMA silver prices kept probing lower after falling below $75/oz. From a macro perspective, escalating geopolitical conflict in the Middle East pushed oil prices to repeated new highs, while intensifying inflation concerns significantly cooled expectations for US Fed interest rate cuts and delayed the timing of the first cut to year-end. The simultaneous strength in the US dollar index and US Treasury yields became the core factors suppressing silver prices. On Wednesday local time, the US Fed announced that it would keep interest rates unchanged. In the statement released that day, it noted that the impact of the Middle East situation on the US economy remained uncertain and that uncertainty surrounding the US economic outlook was still elevated. In addition, speculative demand and ETF holdings continued to decline, and market sentiment kept cooling. As for the gold/silver ratio, because silver posted a deeper decline, the ratio continued to rise. As of March 18, the LBMA gold/silver ratio had climbed to 63, a recent high. [Important Data] Bullish: US preliminary March one-year inflation expectations came in at 3.4%, above expectations and unchanged from the previous reading Bearish: US API crude oil inventory for the week ended March 13 increased by 6.556 million barrels, above expectations and the previous reading US EIA crude oil inventory for the week ended March 13 increased by 6.156 million barrels, above expectations and the previous reading Data and macro releases to watch next week include: Continued hawkishness from the US Fed, the ECB rate decision, US inflation/employment data, COMEX silver delivery, together with the Boao Forum and geopolitical risks On March 19, the FOMC kept rates unchanged at 3.50%–3.75%, raised its 2026 PCE forecast to 2.7%, and expectations for US Fed interest rate cuts cooled sharply. US-Iran Situation: As of March 19, the military strikes by the US and Israel against Iran had entered their 19th day, with high-intensity confrontation, no sign of a ceasefire, and the conflict spreading to multiple Gulf countries. In terms of the current impact on precious metals, financial suppression outweighed safe-haven demand. Against the backdrop of surging inflation expectations, the US dollar and US Treasury yields continued to rise, the timing of US Fed interest rate cuts was delayed, and silver prices were suppressed. [Price Forecast] Silver prices are expected to maintain a fluctuating trend in the doldrums amid the interplay between macro disruptions and fundamentals. On the macro front, caution is still warranted over the risk of continued US dollar strength and heightened volatility from any further escalation in the US-Iran conflict. On the fundamentals side, as PV export rush orders gradually approached their end, rigid demand for raw material procurement by silver nitrate enterprises declined in late March, weakening support from industrial demand. In China's spot market, as investment demand and rigid industrial demand softened, coupled with replenishment from imported silver ingots, circulating supply of silver ingots in the spot market became ample, and suppliers generally lowered spot premium quotes to facilitate transactions. The abnormally high spot premiums in China's spot market will come to an end. At the same time, profitability on imported silver ingots will also decline sharply, and spot premium quotes in actual spot silver ingot transactions are expected to return to rational levels.

[Macro Pressures Combined With High Inventory, SHFE Aluminum Remained Under Pressure at Elevated Levels in the Short Term] Continued destocking in LME inventory provided bottom support for LME aluminum, but amid tightening fund liquidity and profit-taking by bulls, upward momentum was insufficient, and the backwardation structure weakened somewhat. In China, social inventory rose to a high for the same period in nearly five years, and the inventory buildup cycle had not ended. High inventory and weak spot fundamentals jointly weighed on upward momentum. The divergence between domestic and overseas drivers continued, the SHFE/LME price ratio kept weakening, and SHFE aluminum fell below the key threshold of 25,000 yuan/mt, remaining mainly under pressure at elevated levels in the short term.