[SMM Aluminum Alloy Daily Review] Futures side, the most-traded aluminum alloy 2607 futures contract opened at 23,255 yuan/mt today before briefly rising to 23,380 yuan/mt, then gradually pulled back under pressure. The decline widened further in the afternoon session, with the intraday low touching 22,945 yuan/mt. Although there was a slight recovery near the close, it ultimately settled at 23,050 yuan/mt, down 405 yuan/mt from the previous trading day, a drop of 1.73%. Spot side, some enterprises followed with slight price cuts driven by weakening aluminum prices, while others maintained stable pricing and adopted a wait-and-see approach due to elevated costs and tight compliant supply sources. Supply-demand structure perspective, demand side performance remained mediocre, suppressing pr

Today, SMM battery-grade spot lithium carbonate prices fluctuated downward compared to the previous working day. Futures side, the lithium carbonate 2609 contract opened high today at 206,500 yuan/mt, quickly surging to the intraday high of 209,900 yuan/mt (up approximately 2.4%) after the opening, but then rapidly pulled back and fell below the average price line; it continued to fluctuate downward during the session, accelerating its decline to the intraday low of 195,000 yuan/mt around midday (down approximately 4.8%); it rebounded slightly in the afternoon, moving sideways around 200,000 yuan/mt, and ultimately closed down 1.87% at 202,000 yuan/mt, with open interest decreasing by 17,941 lots. Spot market, as prices fluctuated downward, downstream just-in-time procurement activities increased, upstream sentiment to hold prices firm and hold back from selling recovered, willingness to sell on spot orders weakened, and the volume of registered warrants delivered to futures for hedging continued to increase, with warrant volume rising to 49,000 lots as of today. Overall, market inquiries and actual transaction activity were active. This week, lithium carbonate production increased slightly, mainly due to continued steady production ramp-up from the salt lake and recycling segments. Transaction and inventory changes: upstream lithium chemical plants continued to slow down spot order shipments, while hedging registered warrant volumes increased. As lithium prices continued to fluctuate at highs, downstream and traders' purchase willingness weakened, leading to a slight inventory buildup at the upstream level this week. Downstream material plants, due to continuously rising prices, maintained weak spot order purchase willingness, with fewer opportunities to buy the dip this week, and enterprises mostly continued to consume earlier inventory and long-term contract and customer-supplied materials delivered at the beginning of the month. Trader side, as downstream found it difficult to purchase at levels above 200,000 yuan/mt, inventory continued to accumulate.

SMM, May 14: The most-traded SHFE lead 2026 contract opened at 16,635 yuan/mt during the session. After the opening, SHFE lead prices moved sideways within the range of 16,580-16,625 yuan/mt. In the afternoon, driven by gains on LME, lead prices edged up, touching a high of 16,675 yuan/mt. However, dragged down by continued social inventory buildup in China and weak downstream consumption, prices subsequently pulled back slightly, ultimately closing at 16,590 yuan/mt, posting a bearish candlestick with a decline of 25 yuan/mt, or 0.15%. With lead ingot inventory outside China continuing destocking and spot cargo in Southeast Asia remaining persistently tight, LME lead is expected to hold up well overall. Although spot lead prices in China received some support from the strengthening of LME lead, the upward momentum in prices remained relatively limited due to overall weak end-use demand. SMM expects SHFE lead prices to remain in the doldrums in the short term. Data source statement: Data other than publicly available information is derived from publicly available information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.

SMM, May 13: The most-traded SHFE lead 2026 contract opened at 16,540 yuan/mt. After the opening, SHFE lead prices moved sideways within the 16,530-16,580 yuan/mt range. In the afternoon, boosted by stronger LME lead prices and the entry of bullish funds, the market fluctuated upward, reaching a high of 16,655 yuan/mt. Gains narrowed slightly toward the close, ultimately settling at 16,615 yuan/mt, recording a bullish candlestick with a gain of 35 yuan/mt, or 0.21%. Currently, ongoing environmental protection checks in South China continue to intensify, leading to a phased contraction in regional secondary lead smelting supply, which provides fundamental support for lead prices. On the other hand, primary lead production remained stable with a slight increase. Additionally, as the delivery date approaches, suppliers have accelerated lead ingot warehousing for delivery, and social inventory continued its buildup trend, further suppressing upside room for lead prices. Overall, bullish and bearish factors are currently intertwined in the market, and lead prices are expected to remain in the doldrums in the short term. Data source statement: Data other than publicly available information is derived from publicly available information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.

Driven by recovering risk appetite and China's peak demand season, copper prices both in China and abroad bottomed out since late March. However, as SHFE copper returned to the 100,000 level, the tug-of-war between longs and shorts increased, and futures prices shifted to range-bound consolidation. After the Labour Day holiday, copper prices quickly resumed their upward momentum. Today, prices opened higher with a gap and continued to rise, with SHFE copper just one step away from the record high set at the end of January, while LME copper hit a new closing high. What is fueling such strong confidence behind this rally? Deepening Ore-Side Vulnerability Intensifies Supply Disruption Concerns Since the suspension of First Quantum's Cobre Panama copper mine at the end of 2023, spot TC for copper concentrates in China has been caught in an endless downward spiral. Falling from around $80/dmt at the end of 2023, it largely dropped to single-digit levels and moved sideways in 2024. Entering 2025, it further plunged into negative territory, mainly due to successive production disruptions at world-class copper mines including Ivanhoe Mines' Kakula, Codelco's El Teniente, and Freeport's Grasberg mine in Indonesia. Entering 2026, global major copper ore supply growth remained limited, and the ore tightness showed no improvement. The latest data showed that spot TC for copper concentrates in China had fallen below -$90/dmt. With long-term contract TC at zero and spot TC declines accelerating, domestic smelters' production profits mainly relied on surging sulphuric acid prices and firm by-product prices of gold, silver, and other metals to compensate. It was reported that current sulphuric acid revenue could already cover smelters' procurement costs for copper concentrates and part of the processing costs, enabling domestic smelters to maintain relatively high operating rates, and the ore tightness had not yet notably transmitted to the smelting side. It is worth noting that sulphuric acid is not only a by-product of pyrometallurgy but also a core production material for SX-EW copper. For every 1 mt of copper produced, 5–6 mt of sulphuric acid is consumed. Sulphuric acid costs account for 40%–50% of total SX-EW copper production costs, and SX-EW copper production accounts for approximately 20% of global mine copper production. Since the beginning of this year, sulphuric acid prices surged sharply due to multiple factors, and ex-China sulphuric acid supply was periodically disrupted, raising concerns that copper supply in some countries could be affected. Focusing on the reasons behind the sulphuric acid price surge: on one hand, since the escalation of the Middle East conflict on February 28, shipping through the Strait of Hormuz has been broadly restricted and has recently faced a dual blockade by Iran and the US. Sulphur exports from the Middle East have been impacted, with the DRC and Zambia being the most concentrated SX-EW copper producing regions that are highly dependent on sulphur imports from the Middle East. As sulphur supply has been constrained, sulphuric acid prices have naturally risen in tandem, not only raising local SX-EW copper production costs but also potentially triggering further production cuts if the Strait of Hormuz blockade continues and sulphur disruption risks escalate. On the other hand, to prioritise domestic spring ploughing phosphate fertiliser production and support new energy industry expansion, China has imposed a phased ban on sulphuric acid exports according to industry sources. Chile has a relatively high dependence on Chinese sulphuric acid, with SX-EW copper accounting for around 20% of its output, and the market is also concerned that Chile's SX-EW copper production may be affected. In addition, against the backdrop of an already fragile copper ore supply, frequent news shocks from outside China recently have undoubtedly intensified market concerns. Last week, market rumours suggested that the full restart of Indonesia's Grasberg copper-gold mine, which declared force majeure in September last year, had been delayed by one year, driving SHFE copper sharply higher in the afternoon of 8 May. However, according to the latest update from Freeport-McMoRan, the company still expects Indonesia's Grasberg copper-gold mine to fully resume production by the end of 2027, reaffirming the plan outlined last month and refuting reports that production resumptions could be delayed to 2028. Furthermore, yesterday Peru declared an emergency energy decree due to a natural gas pipeline explosion. Peru's copper production reached 2.63 million mt in metal content last year, ranking third globally. Copper mining and smelting are relatively sensitive to power stability, and the market is concerned that Peru's energy strain may disrupt local copper supply. Overall, China's copper cathode production remains relatively stable, but some major global miners lowered their full-year production guidance in Q1, the ore tightness persists, sulphuric acid supply — a core raw material for ex-China SX-EW copper — is constrained, and there are multiple supply disruption themes on the copper supply side, which can easily boost copper prices once the macro front stabilises. Global Copper Visible Inventory Divergence: China Destocking Provides Support Last year, driven by the US government's threat to impose additional tariffs on imported copper, global copper continued to flow into the US, causing COMEX copper inventories to accumulate continuously while copper inventories in non-US regions remained low, providing sustained support for copper prices. In February this year, the US Supreme Court struck down most of the tariff measures introduced by the Trump administration in 2025. The Trump administration subsequently turned to Section 122 of the Trade Act of 1974 to push new global tariff policies. On 7 May, the US Court of International Trade issued a ruling stating that the legal basis for imposing a 10% global import tariff was invalid. The tug-of-war between US courts and the Trump administration over tariffs has continued recently, but the market has certain expectations that the US may subsequently impose additional tariffs on imported copper. Under such expectations, the price spread between COMEX copper and LME copper has shown a slight strengthening trend recently, meaning copper in LME warehouses still has the potential to flow to the US. Specifically, COMEX copper inventories have continued to rebound since mid-April, rising from around 590,000 mt to the latest 620,000 mt, again hitting a multi-year high. Correspondingly, LME copper inventories pulled back from around 400,000 mt in mid-April, declining to 397,700 mt on 6 May. They have rebounded with fluctuations recently, but overall inventories have not exceeded the over-12-year high set in mid-April. SHFE copper inventories fell for the eighth consecutive week, currently dropping to 181,300 mt, the lowest since the beginning of the year. Data source: Webstock Inc. Overall, on the macro front, there are currently disagreements in US-Iran negotiations, but both sides continue the ceasefire with no recent signs of escalation in conflict. Energy prices pulled back from late April levels, inflation concerns eased somewhat, the US dollar index was in the doldrums, and combined with the AI boom lifting global stock markets, market risk appetite was moderate, providing a fertile ground for copper prices to strengthen. Focusing on copper's own fundamentals, inventories outside China remained elevated, but significant prior destocking of China inventories provided support. The ore tightness was difficult to reverse, and supply-side narratives were abundant, meaning copper prices may still hold up well. However, it is worth noting that the Middle East situation remains the biggest macro variable, and the policy path following the Fed Chairman's power transition also deserves close attention. (Webstock Composite)

[Dragged Down by Strong Supply and Weak Demand, Magnesium Prices Fell] Magnesium prices were in the doldrums today. Producers' quotes remained firm in the morning session, but some producers cut prices for shipments in the afternoon, with low-priced supplies increasing. Downstream wait-and-see sentiment was strong, with buyers making just-in-time procurement only, and the market showed a pattern of strong supply and weak demand.

[SMM SHFE Tin Brief: Warm Macro Sentiment and Weak Trading Volume Offset Each Other, SHFE Tin Retreated after Rapid Rise and Closed at 423,000]

Lithium carbonate production slightly declined this week, mainly due to maintenance on production lines at some spodumene-based enterprises, while production from other raw material sources remained stable with a slight increase. In terms of market transactions and inventory changes: upstream lithium chemical plants saw a slight slowdown in spot order shipments, downstream players and traders showed weakened purchase willingness, and combined with the successive commencement of long-term contract deliveries, inventory exhibited a slight destocking trend this week. On the downstream material plants side, as prices rose significantly, spot order purchase willingness remained persistently weak, with consumption still primarily relying on earlier inventory and long-term contract and customer-supplied materials delivered at the beginning of the month. On the trader side, due to sluggish downstream purchases, inventory continued to accumulate.

Today, SMM battery-grade spot lithium carbonate price rose significantly compared to the previous working day. Futures side, the lithium carbonate 2609 contract opened high today at 191,500 yuan/mt, briefly pulled back to 191,000 yuan/mt after the opening before quickly rallying, stabilizing above the 193,000 yuan/mt level in the morning session. Around midday, bulls continuously increased open interest, driving prices to accelerate upward. In the afternoon session, prices fluctuated at highs with an upward bias, further surging to 199,600 yuan/mt near the close, ultimately settling at 199,400 yuan/mt, up 7.31%, with open interest increasing by 21,281 lots.

[Magnesium Market Consolidated at Lows and Stabilized Early in the Week, with Magnesium Prices Trading Within a Range] Driven by restocking ahead of the Labour Day holiday, downstream purchasing recovered, low-priced supplies in the market were quickly cleared, and magnesium producers showed a stronger willingness to hold prices firm and raised their quotations.