Spot #1 copper cathode in North China was quoted at parity to a premium of 80 yuan/mt against the front-month contract today, with the average premium unchanged from the previous trading day at 40 yuan/mt, and the average transaction price down 155 yuan/mt from the previous trading day to 100,470 yuan/mt.

At the start of this week, US nonfarm payrolls for February unexpectedly declined, and expectations for US Fed interest rate cuts rebounded somewhat, briefly boosting copper prices. Trump then signaled that tensions between the US and Iran might ease, sending oil prices lower and the US dollar weaker, which triggered a phased rebound in copper prices. However, after oil tankers in the Gulf region came under attack and Iran stated that it would continue to close the Strait of Hormuz, tensions in the Middle East escalated again. Rising crude oil prices lifted safe-haven sentiment, and the stronger US dollar index weighed on copper prices. At the same time, US February CPI came in line with expectations, and market bets on interest rate cuts within the year were scaled back markedly, weakening expectations for macro liquidity. In terms of positioning, bulls continued to reduce positions, and capital turned more cautious. Overall, macro uncertainty and repeated shifts in interest rate cut expectations remain intertwined, and copper prices are still likely to fluctuate rangebound in the short term. Fundamentals side, TC in the copper concentrates market was still falling. Recent mine tender prices pointed to a median of -$60/mt. For copper cathode, the inventory buildup showed a turning point, and the import window opened slightly. According to SMM, downstream operating activity was more active than expected, with active pricing below the copper price range of 100,000 yuan/mt. Looking ahead to next week, the macro logic is expected to remain unchanged, and geopolitical tensions are still expected to provide strong support to the US dollar, leaving significant short-term resistance for copper prices. However, fundamentals are supporting copper prices, which are expected to remain fluctuating near the range in the short term. LME copper is expected to fluctuate between $12,800/mt and $13,200/mt, and SHFE copper between 99,000 yuan/mt and 101,000 yuan/mt. In the spot market, as delivery approaches, spot market trading logic will fluctuate with the price spread between futures contracts and funding costs, and is expected to gradually rise next week. Spot prices against the SHFE copper 2604 contract are expected to range from a discount of 180 yuan/mt to a discount of 80 yuan/mt.

[SMM Aluminum Morning Meeting Summary: The SHFE/LME Price Ratio Continued to Weaken, and Aluminum Prices Were Expected to Fluctuate at Highs in the Short Term] Against the backdrop of continued tightening LME liquidity, LME aluminum still had upward momentum, with strong support from overseas prices, and the backwardation structure was expected to persist in the short term. China was in a phase of high inventory + weak fundamentals, and its upward momentum was clearly weaker than that outside China. Amid diverging domestic and external drivers, the SHFE/LME price ratio was expected to continue weakening, and aluminum prices were expected to continue fluctuating at highs in the short term.

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,044/mt. It touched a high of $13,063.5/mt in early trading, then the center moved lower to a low of $12,929/mt, and finally closed at $12,948.5/mt, down 0.77%. Trading volume came in at 17,000 lots, down 235 lots from the previous trading day; open interest stood at 304,000 lots, up 279 lots from the previous trading day, mainly reflecting an increase in bears' positions overall. Overnight, the most-traded SHFE copper 2604 contract opened at 101,240 yuan/mt. It touched a high of 101,240 yuan/mt at the open, then the center moved lower to a low of 100,560 yuan/mt, and finally closed at 100,860 yuan/mt, down 0.15%. Trading volume came in at 26,000 lots, down 62,000 lots from the previous trading day; open interest stood at 189,000 lots, down 3,320 lots from the previous trading day, mainly reflecting a reduction in bulls' positions overall.

SMM, March 12: The SHFE aluminum 03 contract opened today and fluctuated upward. High aluminum prices suppressed downstream demand, overall procurement demand remained weak, and market premiums continued to soften. Market premiums kept declining from the opening. Today’s mainstream transaction prices were concentrated at discounts of 20 yuan/mt to the average price. Today, the east China market’s shipments sentiment index was 3.32, up 0.05 MoM; the purchasing sentiment index was 2.57, down 0.09 MoM. With aluminum prices rising for consecutive days, traders and downstream processing enterprises in the central China market showed weak buying sentiment, while end-user clients were also less willing to pick up goods. Downstream plants faced inventory overhang, with costs and operating rates constrained, maintaining only limited restocking for rigid demand or suspending restocking altogether. Meanwhile, suppliers showed a strong willingness to sell but weak willingness to hold prices firm. Ultimately, actual mainstream transaction prices in the central China market were mostly around discounts of 10-20 yuan to the central China price. Today, the central China market’s shipments sentiment index was 2.67, up 0.02 MoM; the purchasing sentiment index was 2.32, down 0.02 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 7,500 mt MoM today, with the inventory buildup mainly coming from Guangdong and Gongyi. In the short term, aluminum ingot continued its post-Chinese New Year seasonal inventory buildup, and affected by bullish sentiment, premiums are expected to remain on a narrowing trend.

As of this Thursday, the average SMM battery-grade nickel sulphate price rose WoW. Demand side, some producers recently began making inquiries, and procurement sentiment improved somewhat, but as downstream orders remained unclear, they still took a wait-and-see attitude toward high-priced nickel salt. Supply side, due to uncertainty in Indonesian MHP supply recently, some producers expected raw material costs to rise and raised their offers accordingly. Looking ahead, Q2 is about to begin. Attention should be paid to support from the raw material side for nickel sulphate prices. Inventory side, this week the inventory index at upstream nickel salt smelters remained at 4.7 days, the inventory index at downstream precursor plants fell from 7.4 days to 7.1 days, and the inventory index at integrated enterprises declined from 7 days to 6.8 days. In terms of buyer-seller balance, this week the Willingness to Sell Sentiment Factor at upstream nickel salt smelters remained at 1.8, the procurement sentiment factor at downstream precursor plants remained at 2.7, transaction sentiment recovered slightly, and the sentiment factor at integrated enterprises remained at 2.4. (Historical data is available in the database.)

Geopolitical tensions, and concerns about fiscal policy and central banks, have driven the gold price to where it is today.

SMM, March 11: SHFE aluminum 2603 strengthened in early trading, with the price center rising sharply from the previous trading day. Market sentiment for shipments increased, and buying sentiment also improved, but high aluminum prices suppressed downstream demand, leaving overall procurement demand still weak. Market premiums continued to decline from the opening. Today’s mainstream transaction prices were concentrated at discounts of 20 yuan/mt to the average price. Today, the east China market shipment sentiment index was 3.27, up 0.08 MoM; the buying sentiment index was 2.66, up 0.13 MoM. Recently, the SHFE aluminum front-month contract fluctuated widely and rose sharply today. Buying sentiment among downstream processing enterprises in central China weakened, but traders’ bullish purchase sentiment provided slight support. Overall market trading volume declined from the previous two days, with a wait-and-see mood still dominating. In the end, the actual transaction price range in the central China market was around parity with the central China price to a discount of 20 yuan against the central China price. Today, the central China market shipment sentiment index was 2.64, up 0.06 MoM; the buying sentiment index was 2.34, down 0.08 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 2,500 mt MoM today, with Guangdong as the main source of the inventory buildup. In the short term, after the Chinese New Year, aluminum ingot continued its seasonal inventory buildup. Affected by bullish market sentiment, premiums are expected to remain on a narrowing trend.

[SMM Aluminum Morning Briefing: Middle East Situation Remains Deadlocked, Aluminum Prices Hold Up Well] Overall, macro geopolitical risks are providing support at the bottom of prices, while the continued buildup in China’s social inventory is weighing on aluminum prices. However, the geopolitical situation in the Middle East remains unclear. If the conflict persists, expectations for tighter global aluminum supply will remain strong, and aluminum prices will still have solid upward momentum. In the short term, aluminum prices are still expected to hold up well.

[Spot Silicon Metal Prices Probe Higher as Market Transactions Remain Stagnant; Polysilicon Price Trend Declines]: On the supply side, production release from silicon metal capacity that resumed production in early March increased total silicon metal supply compared with early March. Recently, there have been scattered production resumptions in Southwest China, but these have not yet become widespread, so their impact on supply growth has been very limited. On the cost side, spot prices of silicon coal and electrodes have remained temporarily stable recently, while petroleum coke prices rose slightly. Coupled with higher gasoline prices, road transport freight rates were raised slightly, providing relatively strong cost support for silicon metal. On the demand side, performance has mainly remained stable recently. During the week, spot silicon metal transactions were stagnant, inventory in the intermediate segment stayed at a high level, and downstream demand was weak, so silicon metal prices had limited room to rise or fall and were mainly range-bound in consolidation.