High copper prices, ample supply, weak demand, inventory buildup, weak structure ↓ Falling copper prices, still ample supply, good demand, destocking, slightly stronger structure ↓ Fluctuating copper prices, relatively tight supply, demand fluctuating with copper prices, high probability of destocking, high probability of strengthening structure Q1 2026 has ended, and April trading days are also about to end. The above two sentences summarize SHFE copper futures and spot market performance. Note that this refers only to copper cathode supply, as China saw significant production increases in 2025. Despite continued ore tightness, production in 2026 has also remained fluctuating at highs, keeping copper cathode supply persistently ample. Demand side, although annual demand showed growth, when broken down to monthly or even daily levels, demand was significantly influenced by copper prices. Amid copper price fluctuations, secondary copper was the "active player" — when copper prices were high, secondary copper shipments increased, benefiting both supply and demand sides; when copper prices fell, secondary copper shipments decreased, reducing some raw material supply for both supply and demand. So recently the spot market appeared to have tight supply. Smelters began shifting to "high prices with high volumes" in shipments. Against the backdrop of continued destocking and concentrated smelter maintenance, can premiums "heat up"? The chart above shows that from a macro perspective, copper prices and Shanghai spot copper premiums exhibited a clear inverse correlation in recent years. However, from a detailed perspective, Shanghai spot copper premiums have recently shown signs of "picking up" under high copper prices. 1. Although inventory continued destocking, the current warrant-to-inventory ratio remained elevated (this indicator is highly correlated with structure). The SHFE copper near-month structure has not shown a sustained backwardation structure to provide guidance for future premiums. 2. Although copper prices returned to highs, overall secondary copper shipment sentiment remained subdued, providing limited supplementation to copper cathode production and consumption. Previously, the price difference between primary metal and scrap was inverted, which favored copper cathode consumption. During this process, non-registered supply supplementation was limited, and the price spread between non-registered and SX-EW copper also narrowed. Imported copper supplementation within the year decreased YoY compared to previous years. Taking DRC as an example, non-registered supply was also diverted. Overall, substitutes for registered copper cathode decreased. 3. Copper cathode supply itself is about to decrease in the coming months, with concentrated maintenance currently underway in the market. Social inventory is expected to further decline. As inventory decreases and the warrant-to-inventory ratio declines, the far-month structure has already shifted to backwardation. China's spot premiums are also expected to pick up in the near term. It has been observed that Guangdong spot premiums have been consistently higher than other regions nationwide for several consecutive days. Downstream buyers in Jiangsu, Zhejiang, Shanghai, and Anhui have recently tended to purchase from direct producers and traders with inventory who can issue invoices for the current month. Shanghai spot copper premiums are expected to see a small spike before the Labour Day holiday. After the holiday, as domestic supply decreases, premiums are expected to gradually firm up. However, the warrant-to-inventory ratio remains relatively high, and a sustained shift to backwardation in the structure still requires patience.

Nickel prices continued to rise sharply this week, with the market narrative shifting from last week's "fluctuating at highs after policy materialization" to "full fermentation of substantive supply-side shocks." Indonesia's Weda Bay nickel mine announced a May production halt for maintenance due to exhausted RKAB quotas, Huayou Cobalt's subsidiary Huafei Nickel & Cobalt announced partial production line shutdowns from May 1 due to sulfur shortages, and the continued blockade of the Strait of Hormuz in the Middle East deepened the sulfur supply crisis. The three supply-side shocks combined to push nickel price centers sharply higher. The most-traded SHFE nickel contract broke through the 150,000 yuan/mt mark this week, while LME nickel briefly surpassed $19,500/mt intraday. Spot market, SMM #1 refined nickel averaged 150,000 yuan/mt this week, up 5,000 yuan/mt WoW. Spot premiums remained low as futures surged rapidly, with Jinchuan nickel premiums declining to 1,300 yuan/mt. Domestic mainstream electrodeposited nickel maintained significant discounts, further highlighting the structural feature of "strong futures, weak spot" in supply-demand fundamentals. On the macro front, US-Iran negotiations reached a complete impasse this week, with expectations of prolonged geopolitical risks rising. The two sides diverged sharply on the Strait of Hormuz issue: Trump claimed Iran was "on the verge of collapse and requesting the strait be opened," demanding Iran hand over all enriched uranium; Iran emphasized its "absolute control" over the strait and demanded transit fees from passing vessels. Fed Chairman nominee Warsh explicitly refused to commit to interest rate cuts at last week's hearing, and the market continued to digest this stance this week — CME Fed Watch showed a 99% probability of rates remaining unchanged in April and only about 3% probability of a cumulative 25bp cut by June, with monetary easing expectations virtually disappearing. Inventory, Shanghai Bonded Zone inventory was approximately 1,700 mt this week, flat WoW. China's social inventory was approximately 101,000 mt, with an inventory buildup of approximately 3,200 mt WoW. Looking ahead, although persistently high domestic inventory continued to pressure prices, Indonesia's Q2 triple shock of "ore tightening + sulfur supply disruption + MHP production cuts" is accelerating from expectations toward reality. After the Labour Day holiday, the most-traded SHFE nickel contract is expected to trade in the range of 145,000-155,000 yuan/mt.

[Tianjin Zinc Ingot Spot Premiums Rose, Contract Rollover Pricing This Week]: Spot premiums in Tianjin rose this week, up 35 yuan/mt WoW. As of Friday, ordinary brands were quoted at a discount of 0-120 yuan/mt against the 2606 contract, premium brands were quoted at a premium of 10 yuan/mt against the 2606 contract, and Tianjin was quoted at a discount of 70 yuan/mt against Shanghai. The price spread between Shanghai and Tianjin widened, with contract rollover pricing this week.

[Last Trading Week Before the Holiday: Spot Premiums Edged Up] Ningbo spot premiums edged up this week, with the weekly average price up 10 yuan/mt WoW. As of Thursday, Ningbo spot prices were quoted at a discount of 20 yuan/mt against the 2606 contract, with a Shanghai premium of 20 yuan/mt.

[SMM Shanghai Spot Copper] Looking ahead to the post-holiday period, demand side, enterprises are still primarily making just-in-time procurement, and demand is unlikely to see significant increases after the holiday. In addition, some downstream processing enterprises prefer to purchase directly from smelters to ensure bill compliance, diverting some spot demand from the trading market. Supply side, first, diesel shortages in Africa have hindered transportation and logistics, delaying the pace of imported cargo arrivals at ports, resulting in tight imported copper supply in the short term; second, according to SMM, five smelters in China are expected to enter maintenance in May, which will also reduce domestic spot copper circulation. Overall, against the backdrop of tightened spot circulation caused by hindered imports and domestic maintenance, suppliers have a strong willingness to hold prices firm, and Shanghai spot copper premiums are expected to hold up well after the holiday.

SMM Nickel News, April 30: Macro and market news: (1) The US Fed kept the benchmark interest rate unchanged at 3.5%-3.75%, in line with market expectations, marking the third consecutive hold this year. Fed Chairman Powell said inflation triggered by tariffs is expected to pull back over the next two quarters. (2) US President Trump said on April 29 that the US and Iran were negotiating by phone, while emphasizing that Iran must clearly commit to completely abandoning nuclear weapons. He will continue the maritime blockade on Iran until Iran agrees to a deal that addresses US concerns over Iran's nuclear program. Spot market: On April 30, SMM #1 refined nickel prices fell 900 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 1,350 yuan/mt, up 50 yuan/mt from the previous trading day; domestic mainstream brand electrodeposited nickel premiums ranged from -800-100 yuan/mt. Futures market: The most-traded SHFE nickel 2606 contract moved sideways during the session, closing at 150,540 yuan/mt in the morning session, down 0.02%. Indonesia's tightening quota policy continued to strengthen, the sulphur supply crisis intensified, MHP production was hampered, and sulphur prices continued to rise amid tight supply, providing strong cost support. Combined with recent news of production halts and production cuts at Indonesian smelters, nickel prices held up well. The most-traded SHFE nickel contract is expected to trade in the range of 140,000-150,000 yuan/mt.