[SMM Weekly Review] This week (March 23–March 27), platinum prices rose first and then fell back. On the GFEX in China, the most-traded platinum futures contract PT2606 opened at 487.1 yuan/gram and closed at 493.05 yuan/gram, down 23.5 yuan/gram from the previous week's settlement price, a decline of 4.53%. The highest price during the week was 518.85 yuan/gram, and the lowest price during the week was 437.25 yuan/gram; the most-traded palladium contract PD2606 opened at 355 yuan/gram and closed at 358.2 yuan/gram, down 16.15 yuan/gram from the previous week's settlement price, a decline of 4.31%. The highest price during the week was 380.65 yuan/gram, and the lowest price during the week was 321.15 yuan/gram. In futures trading, the most-traded platinum contract PT2606 posted total weekly trading volume of 46,314 lots, total turnover of 22.397 billion yuan, and open interest of 16,467 lots, with open interest down 2,049 lots WoW. The most-traded palladium contract PD2606 posted total weekly trading volume of 24,537 lots, total turnover of 8.71 billion yuan, and open interest of 7,356 lots, with open interest down 492 lots WoW. Recently, as geopolitical conflict in the Middle East persisted, the precious metals market as a whole entered a stagflation panic mode. The specific logic was that the US-Iran conflict exceeded expectations, pushing up oil prices and thereby triggering concerns over imported inflation in the US, which in turn delayed the pace of interest rate cuts. Regarding the US-Iran conflict, on March 26, Trump announced a 10-day extension of the deadline for Iran's energy facilities; according to Iran's Tasnim News Agency, informed sources said Iran had concluded that the US negotiation statement was a "deception" project, with three real objectives under its cover: first, to deceive the international community by fabricating a posture of peace; second, to suppress global oil prices; third, to buy preparation time for an aggressive ground invasion launched from southern Iran. Regarding the independence of the US Fed, the US Department of Justice admitted that its investigation into Powell lacked evidence. On tariffs, after the US reciprocal tariff was overturned by the Supreme Court, policy uncertainty increased, and the Trump administration was seeking a more solid legal basis to reconstruct the tariff system: in the short term, using Section 122 temporary tariffs to fill the tariff-rate vacuum, and in the medium and long term, planning to rely on Sections 232 and 301 to maintain a high-tariff framework. In addition, the ruling that the tariffs were illegal triggered pressure for massive tax refunds, exacerbating the US fiscal burden and reinforcing expectations for a weaker US dollar. Supply side, Eskom will raise electricity prices by 8% for two consecutive years in the future, and recently frequent announcements of breakdowns in negotiations with the mine side have led some miners to shut down their international operations, triggering concerns over supply disruptions in platinum and palladium. In addition, continue to monitor changes in the US dollar index, which involve the relative strength of currencies such as the euro and the yen. Watch for details on the new manager announced by the LME. Monitor the latest changes in the Middle East political situation. The precious metals sector mainly benefited from the interplay between policy and the political environment under the US Fed's midterm election time window. Strategy-wise, a strategic bullish view on precious metals was still maintained, and pullbacks were seen as opportunities to build long positions for the medium and long-term. In the short term, as the risk of escalation in the Middle East conflict has not been eliminated, the strength of any rebound may remain limited, and prices may fluctuate at lows. Under high volatility in platinum and palladium, attention should be paid to position control. Due to the discontinuity between domestic and overseas market trading, the opening prices of platinum and palladium often refer to overseas night session conditions, and investors should pay attention to trading prices in international markets and stay alert to opening gaps.

This week, nickel prices first fell and then rose, moving sideways amid a tug-of-war between macro fluctuations and supply-side policy. Early in the week, affected by a stronger US dollar and risk-off sentiment across global commodities, LME nickel once fell below the key $17,000 level. It then rebounded on easing tensions in the Middle East and policy expectations that Indonesia planned to impose a nickel export tax. As of Friday's close, the weekly price of the most-traded SHFE nickel contract rose 3%, while the LME nickel 3M contract gained 2.4% WoW. In the spot market, the average SMM price of #1 refined nickel was 138,030 yuan/mt this week, up 1,100 yuan/mt WoW. The average Jinchuan nickel premium was 5,900 yuan/mt this week, down 1,600 yuan/mt WoW. Premiums for mainstream electrodeposited nickel brands in China ranged from -600-400 yuan/mt. Nickel plate premiums fell notably this week, and sluggish demand led to poor trading in the spot market. On the macro front, geopolitical risks continued to weigh on market risk appetite this week. According to US media reports, the US Department of Defense was formulating a "decisive lethal strike" military plan against Iran, which could include the deployment of ground forces and large-scale airstrikes. Although news of a ceasefire window had emerged earlier, risk-off sentiment did not truly fade. China's macro policy maintained a positive tone, and the pro-growth signals released at the Boao Forum boosted market confidence. Inventory side, Shanghai Bonded Zone inventory was about 1,700 mt this week, with destocking of 500 mt WoW. China's social inventory was about 90,000 mt, with an inventory buildup of about 1,300 mt WoW. Nickel prices are expected to remain in a tug-of-war between "strong cost support" and "weak actual demand" in the short term. The core trading range of the most-traded SHFE nickel contract is expected at 133,000-143,000 yuan/mt. Cost-floor support provided by Indonesian policy remains solid, but macro pressure and weak demand will limit upside room.

[Mixed Bullish and Bearish Factors in the Market, SHFE and LME Zinc Prices Rose] At the beginning of the week, LME zinc continued last week's downward fluctuation trend; subsequently, the US dollar index dropped back slightly from its highs, and LME zinc rose; however, the ongoing escalation of the Middle East conflict, coupled with the renewed strength of the US dollar index, constrained the upside room for zinc prices, and the center of LME zinc gradually pulled back......

This week, the macro market still repeatedly traded around the Middle East situation and expectations for the US Fed. At the beginning of the week, tensions among the US, Israel, and Iran eased slightly, the US dollar pulled back, and risk appetite recovered temporarily, allowing copper prices to stop falling and rebound at one point. However, Iran later denied progress in the relevant negotiations, geopolitical tensions tightened again, international oil prices rose sharply, and market concerns over supply disruptions in the Strait of Hormuz resurfaced, with safe-haven sentiment rebounding accordingly and weighing on copper prices. Market bets on major central banks cutting interest rates this year were pushed back significantly, and expectations for macro liquidity weakened at the margin. Overall, this week’s copper price logic still centered on the repeated tug-of-war among geopolitical risks, oil prices, the US dollar, and interest rate cut expectations. Before macro uncertainty eases materially, copper prices will likely remain in the doldrums with rangebound fluctuations in the short term. Fundamentally, the logic of ore supply tightness continued. On March 25, Mitsubishi Materials announced that it will cease part of the copper concentrates processing business at the Onahama smelter in 2027, and explicitly mentioned the sharp deterioration in TC/RCs and pressure on smelting profits, further confirming the current reality of tight copper concentrates supply and continued damage to profitability on the smelting side. Global exchange copper inventories remained high, but demand in China had already started, and the pace of destocking in China’s social inventory exceeded market expectations. Supported by the opening of the import window and domestic demand, inventories outside China showed signs of flowing back into China. Looking ahead to next week, the macro theme is expected to remain largely unchanged. If the Middle East situation does not ease substantially, elevated oil prices and a relatively strong US dollar will likely continue to weigh on copper prices, and short-term resistance will remain; however, ore supply tightness, worsening smelting profits, and domestic demand will still provide some support for copper prices. Therefore, copper prices are expected to continue to fluctuate rangebound within a narrow range next week, with LME copper expected at $12,000-12,500/mt and SHFE copper expected at 93,000-96,500 yuan/mt. In the spot market, as imported cargoes arrive one after another, the pace of domestic inventory destocking may slow down. Although inventories are still being drawn down, spot premiums are expected to find it difficult to rise sharply due to the relatively high inventory base. Spot prices against the SHFE copper front-month contract are expected at a discount of 120 yuan/mt to a discount of 20 yuan/mt.

[SMM Zinc Morning Meeting Summary: US Dollar Index Strengthened, LME Zinc Center Remained at a Low Level]: Overnight, LME zinc opened at $3,078/mt. After the opening, LME zinc fluctuated downward, hitting a low of $3,044.5/mt. It then rebounded rapidly and touched an intraday high of $3,118.5/mt. Subsequently, LME zinc kept pulling back from the high level and finally closed down at $3,073.5/mt, down $75/mt, a decrease of 0.24%, while trading volume increased to 11,961 lots...

[SMM Zinc Morning Comment: China’s Zinc Ingot Continued Destocking on Thursday, and the Center of SHFE Zinc Edged Higher] Overnight, the most-traded SHFE zinc 2605 contract opened at 23,100 yuan/mt. After the opening, SHFE zinc fluctuated upward, touching a high of 23,340 yuan/mt near the beginning of the session. It then slowly pulled back amid fluctuations to around the daily average line, hitting a low of 23,070 yuan/mt, and finally closed up at 23,170 yuan/mt..

Silver has seen one of the sharpest pullbacks in recent years within just a few weeks. From the high of US$97.30 on March 2, the price fell to US$61.21 by March 23, losing around 37%. For the market, this was an abrupt break from the previous momentum.

Dalian iron ore was generally weak today. The most-traded contract, I2605, finally closed at 806.5 yuan/mt, down 1.83% from the previous trading session. Spot prices fell by about 10-15 yuan from the previous trading day. Traders actively offered quotes, while steel mills mainly made inquiries and purchases based on rigid demand, with cautious inquiries; overall, the spot market trading atmosphere was average. According to the latest SMM survey data, hot metal daily average production reached 2.4049 million mt this week, an increase of 15,000 mt WoW, with demand showing a steady improvement. In terms of supply, some iron ore originally planned for shipment to the Middle East began to be redirected to the Chinese market, including some ore grades used for direct reduced iron (DRI), increasing market supply options and putting some pressure on prices. From a macro perspective, the situation in the Middle East remained tense, and the escalation of war triggered a sharp rise in energy prices, driving up global inflationary pressure. Expectations for US dollar interest rate cuts weakened significantly, leading to a certain pullback in commodity prices, including iron ore prices. Overall, iron ore prices faced strong resistance in the short term, but downside room was limited, and the market is expected to continue moving in a sideways range.

Today, the most-traded BC copper 2604 contract opened at the intraday low of 82,550 yuan/mt, then fluctuated upward in early trading. After the daytime session opened, the center of copper prices surged in a straight line to a high of 85,250 yuan/mt, then moved in wide swings and finally closed at 84,610 yuan/mt, up 1.22%. Open interest stood at 4,302 lots, down 643 lots from the previous trading day, while trading volume reached 3,695 lots, indicating bears reduced positions. On the macro front, the US Department of Justice admitted it lacked evidence for its investigation into Powell, and his term is expected to be extended; coupled with renewed market expectations for easing tensions in the Middle East and somewhat alleviated inflation concerns, the US dollar weakened, and multiple positive factors jointly boosted copper prices. Fundamentally, on the supply side, arrivals of both domestic and imported cargoes were steady, with ample market circulation; on the demand side, affected by rising copper prices, downstream purchasing sentiment pulled back, with procurement maintained only for rigid demand. The SHFE copper 2604 contract closed at 95,550 yuan/mt. Based on the BC copper 2604 contract at 84,610 yuan/mt, its after-tax price was 95,609 yuan/mt. The price spread between the SHFE copper 2604 contract and BC copper was -59, with the spread inverting again.

SMM Morning Meeting Summary: Overnight, LME copper opened at $12,016.5/mt. After dipping to $11,955.5/mt in early trading, its center rose sharply to a high of $12,160/mt, and then continued to hover at highs, finally closing at $12,092.5/mt, down 1.05%. Trading volume reached 23,000 lots, open interest stood at 293,000 lots, up 406 lots from the previous trading day, mainly reflecting increased short positions overall. Overnight, the most-traded SHFE copper 2605 contract opened at 93,600 yuan/mt and touched a low of 93,480 yuan/mt at the open. Its center then moved higher to a high of 94,990 yuan/mt, after which copper prices maintained a fluctuating trend at highs, finally closing at 94,670 yuan/mt, up 0.17%. Trading volume reached 51,000 lots, open interest stood at 198,000 lots, down 533 lots from the previous trading day, mainly reflecting reduced short positions throughout the day.