Everbright Futures: Non-ferrous Metals Daily Report March 17

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Copper:

(Exhibition by Da Peng, Professional Qualification Number: F3013795; Trading Consultation Qualification Number: Z0013582)

Overnight, domestic and international copper prices fluctuated higher, opening the window for imported refined copper in China. On the macro front, the US-Iran conflict continues, with Trump hinting at attacks on the Hark Island oil facilities last night, calling for escort ships in Europe and other regions, but other US officials are more focused on market reassurance. US Treasury Secretary Yellen stated that the Strait of Hormuz faces supply challenges, and the US government tacitly allows Iranian oil tankers to pass to maintain global energy supply balance and prevent prices from soaring out of control. Domestically, a series of economic data released yesterday showed a rebound in consumption, a return to positive investment, and continued adjustments in the real estate sector; additionally, US-China trade talks are held in Paris. In terms of inventories, LME stocks decreased by 225 tons to 311,600 tons; COMEX stocks decreased by 1,708 tons to 535,028 tons; SHFE copper warehouse receipts increased by 7,935 tons to 322,998 tons, BC copper remains at 15,870 tons. The impact of the US-Iran conflict persists, and market concerns about geopolitical risks affecting the global economy are heightened. For copper, demand is expected to weaken, and liquidity concerns add pressure, but prices may fluctuate with changing situations. In the short term, focus on the support range of 90,000–100,000 yuan/ton. If domestic and foreign stockpiles decrease and spot discounts narrow, consider light long positions to capitalize on seasonal rebounds; however, if geopolitical tensions escalate, the market may continue to price in macro risks, and copper prices should remain cautious.

Nickel & Stainless Steel:

(朱希, Professional Qualification Number: F03109968; Trading Consultation Qualification Number: Z0021609)

Overnight, LME nickel rose 0.95% to $17,485/ton, SHFE nickel rose 0.37% to 136,900 yuan/ton. In terms of stocks, LME stocks decreased by 744 tons to 283,914 tons; SHFE warehouse receipts increased by 845 tons to 57,307 tons. Regarding premiums and discounts, LME 0-3 month backwardation remains negative; imported nickel premium/discount stays at +150 yuan/ton. Under the dual influence of tight nickel ore supply and rising shipping costs, nickel ore prices continue to strengthen, with weekly nickel pig iron prices and transaction prices also rising. However, primary nickel weekly social inventories have increased significantly, indicating pressure. Due to tightened Indonesian nickel ore quotas, supply-side disruptions are expected, with some anticipation of additional quotas in July. Despite large inventory pressures for primary nickel, current cost increases suggest short-term opportunities for long positions based on cost lines, but macro risks should be watched.

Oxide Aluminum & Electrolytic Aluminum & Aluminum Alloys:

(王珩, Professional Qualification Number: F3080733; Trading Consultation Qualification Number: Z0020715)

Overnight, oxide aluminum fluctuated mildly higher, with AO2605 closing at 2,989 yuan/ton, up 0.57%. Positions increased by 1,209 lots to 279,000 lots. Shanghai aluminum fluctuated mildly weaker, with AL2604 closing at 24,970 yuan/ton, down 0.48%, with positions increasing by 1,876 lots to 312,000 lots. Aluminum alloys also showed slight weakness, with AD2604 closing at 23,685 yuan/ton, down 0.13%. Positions increased by 6 lots to 5,389 lots. Spot prices for SMM oxide aluminum rebounded to 2,697 yuan/ton. Aluminum ingot spot discounts widened to 140 yuan/ton. Foshan A00 quotes fell back to 24,760 yuan/ton, with a discount of 30 yuan/ton to Wuxi A00; processing fees for aluminum rods in Baotou and Linyi remained stable, while prices in Xinjiang, Nanchang, Guangdong, and Wuxi increased by 170–250 yuan/ton; processing fees for 1A60 series aluminum rods remained stable, as did 6/8 series, while low-carbon aluminum rods decreased by 35 yuan/ton. Domestic oxide aluminum producers are reducing production or halting operations to cope with losses; overseas oxide aluminum raw materials are being sold at lower prices due to Strait blockages, narrowing the domestic-international price gap and restoring import margins. Rising freight costs support oxide aluminum, but accelerated warehouse receipt registration and inventory accumulation are causing a shift from strength to weakness. In electrolytic aluminum, Middle Eastern oxide aluminum inventories are bottoming out, with Bahrain Aluminum announcing a shift from suspension to production reduction on the 16th, potentially affecting UAE aluminum and increasing supply disruptions, prompting a risk-averse “aluminum rush” overseas. LME warehouse risks push up external prices, while domestic inventory accumulation and slow demand limit gains. Under the strong external and weak internal pattern, domestic funds await a turning point. Watch for aluminum rod leading the inventory reduction, with a near-term domestic rally possible.

Industrial Silicon & Polycrystalline Silicon:

(王珩, Professional Qualification Number: F3080733; Trading Consultation Qualification Number: Z0020715)

On the 16th, industrial silicon fluctuated mildly weaker, with main contract 2605 closing at 8,685 yuan/ton, down 0.23%. Positions decreased by 1,623 lots to 237,000 lots. Baichuan industrial silicon spot reference price remained steady at 9,313 yuan/ton. The lowest delivery grade price rebounded to 8,800 yuan/ton, with spot premium at 115 yuan/ton. Polycrystalline silicon also showed slight weakness, with main contract 2605 at 41,705 yuan/ton, down 4.03%, with positions increasing by 189 lots to 34,646 lots. Baichuan N-type polycrystalline silicon price fell to 46,000 yuan/ton; lowest delivery grade silicon price also at 46,000 yuan/ton, with spot premium expanding to 4,295 yuan/ton. Production resumption in Xinjiang is hindered, with structural offset from limited southwestern production; rising costs from petroleum coke raw materials and increased electricity prices in Xinjiang support prices. Downstream demand remains cautious, with limited willingness to stockpile. The market shows narrow fluctuations, with spot prices stabilizing at lows. Actual transactions for polycrystalline silicon continue to trend lower. Major factories plan to restart in March, easing supply tightness, with inventory shifting to warehouse receipts to reduce backlog. Downstream wafer procurement remains weak, so short-term polycrystalline silicon prices are expected to fluctuate at the bottom. Market awaits policy signals after the Two Sessions to see if photovoltaic anti-inflation policies can trigger bullish sentiment.

Lithium Carbonate:

(朱希, Professional Qualification Number: F03109968; Trading Consultation Qualification Number: Z0021609)

Yesterday, lithium carbonate futures 2605 rose 1.75% to 159,620 yuan/ton. Spot prices for battery-grade lithium carbonate fell 2,500 yuan/ton to 156,500 yuan/ton; industrial-grade lithium carbonate also fell 2,500 yuan/ton to 153,000 yuan/ton; crude lithium hydroxide (coarse particles) dropped 1,500 yuan/ton to 149,500 yuan/ton. Warehouse receipts decreased by 10 tons to 36,393 tons. According to Jinshi Futures on March 16, all lithium concentrate exports in Zimbabwe have been suspended, though mining operations continue normally. Local lithium miners are submitting new export license applications under new regulations, with approval expected in 2–4 weeks. The export suspension is a policy adjustment to regulate lithium resource exports and promote local processing. Industry insiders say short-term exports are unaffected, and exports may gradually resume after new licenses are granted. On the supply side, weekly production increased by 836 tons to 23,426 tons, including spodumene lithium increased by 620 tons to 14,534 tons, lepidolite lithium increased by 105 tons to 2,937 tons, salt lake lithium increased by 20 tons to 3,495 tons, and recycled lithium increased by 91 tons to 3,460 tons; March lithium carbonate output is expected to increase by 28% to 106,390 tons. On the demand side, weekly ternary material production increased by 406 tons to 16,924 tons, with inventory up 208 tons to 18,019 tons; lithium iron phosphate (LFP) weekly production increased by 5,050 tons to 101,725 tons, with inventory up 5,251 tons to 105,780 tons; March ternary material production is expected to rise 19% to 84,360 tons, and LFP production up 24% to 430,000 tons. On the inventory side, weekly social lithium carbonate inventory decreased by 414 tons to 98,959 tons, with downstream inventory up 1,890 tons to 45,647 tons, and upstream inventory down 1,120 tons to 37,020 tons, and upstream inventory down 1,184 tons to 16,292 tons. Production data shows inventory reduction as expected, with total inventory turnover days decreasing to 27.8 days. The decline in absolute inventory levels and increasing downstream stocking coefficients support prices. However, the market currently shows no obvious contradictions, leading to short-term volatility. More confirmed bullish signals are needed to push prices higher, but buying on dips remains feasible.