Everbright Futures: Non-Ferrous Metals Daily Report for April 7

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Copper: Inventory Replenishment Drives De-stocking, Copper Prices Remain Relatively Strong

(Reported by Dapeng Zhan, Qualification Number: F3013795; Trading Consultation Qualification Number: Z0013582)

1. Macro. The current market focus is on the evolving Middle East situation and data related to the US economy, employment, and inflation. Trump’s tough rhetoric makes it difficult to resolve the Strait of Hormuz shipping issue in the short term, and high oil prices will continue to reinforce inflation expectations and the resilience of the US dollar, putting pressure on copper prices. However, market has already priced in US-Iran conflicts repeatedly, and marginal news of peace talks could become a catalyst for new trading opportunities. The possibility of US-Iran shifting from full confrontation to limited control exists; if easing signals continue to be released, copper prices may continue to rebound emotionally. Additionally, the US Department of Labor’s March non-farm payroll data exceeded expectations, with 178k new jobs created, the highest since December 2024, and the unemployment rate fell from 4.4% to 4.3%. Average hourly earnings growth slowed from 0.4% to 0.2% month-on-month; March ISM Manufacturing PMI rose to 52.7, a new high since August 2022, but the price index climbed to a near four-year high. Manufacturing expansion, employment resilience, and imported inflation pressures coexist, making the Federal Reserve face a dilemma—likely to keep interest rates unchanged and maintain a wait-and-see stance.

2. Fundamentals. Regarding copper concentrate, domestic TC quotations have continued to decline, dropping to -77.91 this week, highlighting a renewed tightness in copper concentrate supply, which is a strong fundamental support factor. In terms of refined copper production, April estimated electrolytic copper output is 1.1731 million tons, down 2.7% month-on-month but up 4.2% year-on-year, with a slight decrease compared to March. Tight supply of copper concentrate and smelting losses may lead to more maintenance than expected. On imports, net copper refined imports in February decreased by 54.98% year-on-year to 125.3k tons, with a cumulative decline of 49.39%. Scrap copper imports in February decreased by 27.72% month-on-month to 167.9k tons, down 13.14% year-on-year, with a cumulative increase of 4.64%. As of April 2, global visible copper inventories decreased by 62k tons to 178k tons since the last report (26th); LME stocks increased by 4,625 tons to 364,450 tons; Comex stocks decreased by 1,755 tons to 533,255 tons; domestic refined copper social inventories declined by 60k tons to 367.4k tons, bonded zone stocks decreased by 0.51 million tons to 53.1k tons. On demand, after copper prices fell, downstream replenishment demand continued to rise, leading to rapid destocking of social inventories.

3. Views. The market remains focused on US-Iran conflict, and escalation casts a shadow over the global economic outlook. If controlled and orderly, the market shifts toward emotional recovery, with recent price adjustments reflecting geopolitical fluctuations. On the fundamentals side, domestic demand shows resilience, and copper prices’ decline has prompted significant downstream replenishment, accelerating social inventory reduction. The sharp drop in TC and resulting production cut expectations have not been overly priced in. Therefore, macro headwinds and fundamental support continue to compete, and copper prices are expected to remain volatile within a wide range. Strategy-wise, it is recommended to adopt a range-bound approach, taking advantage of low buy and high sell opportunities, but caution is needed as macro geopolitical risks could trigger a secondary dip.

Nickel & Stainless Steel: Rising Costs and Macro & Inventory Constraints

(Reported by Zhu Xi, Qualification Number: F03109968; Trading Consultation Qualification Number: Z0021609)

1. Supply: Indonesia nickel ore premium remains at $41/wet ton; Philippines 1.5% nickel ore premium fell by $1.5 to $12.5/ wet ton; Indonesia domestic nickel ore prices remain high. April refined nickel production is expected to increase by 2% month-on-month to 39,200 tons; domestic nickel pig iron output is expected to decrease by 27% to 28.4k tons; Indonesia nickel pig iron output is expected to decrease by 1% to 138,800 tons; Indonesia wet-process intermediate nickel products are estimated at 38k tons, up 16.92% MoM and 21.45% YoY; nickel sulfate production is expected to decrease by 1% to 34,640 tons.

2. Demand: In new energy, April’s ternary precursor production is expected to decline by 3% MoM to 82,710 tons, with a slight decrease in 5-series and larger drops in high-nickel series; ternary material production is expected to decrease by 4% to 80,970 tons, with 5-series and high-nickel series falling more, while 6-series slightly increases; lithium battery production is expected to increase by 4% MoM to 219 GWh, with ternary batteries up 4% to 31 GWh; according to CAAM data, wholesale sales of new energy passenger vehicles in China in March 2026 are estimated at 1.12 million units, flat YoY, up 55% MoM from February. In stainless steel, the main markets’ total social inventory is 125.3k tons, up 2.25% week-on-week; 300 series inventory decreased by 0.6 million tons to 690k tons; daily production plans for April are 3.6847 million tons, down 0.4% MoM but up 5.2% YoY, including 200 series at 1.1262 million tons (+1.36% MoM, +11.25% YoY), 300 series at 1.8967 million tons (-0.22% MoM, +3.97% YoY), 400 series at 0.6618 million tons (-3.75% MoM, -0.62% YoY). Product prices are weaker than raw materials, with declining theoretical profits.

3. Inventories: LME stocks decreased by 78 tons this week to 281,496 tons; Shanghai nickel stocks increased by 1,285 tons to 65,764 tons; social inventories increased by 1,785 tons to 91,593 tons; bonded zone stocks remain at 1,700 tons.

4. Views: Nickel ore prices remain high but face significant pressure from primary nickel stocks. Indonesia’s quota tightening and raw material disruptions, along with ongoing cost increases, suggest short-term opportunities for short-term long positions based on cost levels. However, overseas geopolitical risks and market sentiment need close monitoring. There is also anticipation of additional quotas in July, but primary nickel stocks are under pressure, which could weigh on prices. Watch for changes in primary nickel inventories for potential positive feedback.

Alumina & Aluminum & Aluminum Alloys: High Support at Elevated Levels, External Strength, Internal Weakness

(Reported by Wang Heng, Qualification Number: F3080733; Trading Consultation Qualification Number: Z0020715)

Weekly, alumina futures weakened, closing at 2,741 yuan/ton on the 3rd, down 6.5% for the week. Shanghai aluminum fluctuated mildly stronger, closing at 24,660 yuan/ton, up 3% week-on-week. Aluminum alloys also showed a mild upward trend, closing at 23,580 yuan/ton, up 2.7%.

1. Supply: According to SMM, alumina operating rates decreased by 0.23% to 76.2%. In Shandong and Shanxi, load reductions occurred; Guangxi’s capacity utilization declined due to new capacity. For electrolytic aluminum, ongoing Middle East conflicts, Iran’s continued preventive production cuts, Qatar’s 40% production halt, Bahrain’s shutdown of three lines, and attacks on UAE aluminum plants have affected supply. Mozambique’s 580k-ton capacity aluminum plant halted due to power contract issues; Mt. Holly’s 50k-ton capacity is expected to resume full operation by late April to end-Q2; Iceland’s aluminum plant is expected to restart by late April and operate at full capacity through July. Domestic and Indonesian projects are ramping up, with April’s capacity utilization for metallurgical-grade alumina rising to 86.63 million tons, producing 7.14 million tons (down 2.2% MoM, up 0.6% YoY); electrolytic aluminum capacity is expected to rise to 44.30 million tons, with 3.69 million tons produced (down 2.2% MoM, up 2.3% YoY), and alumina-to-aluminum ratio improving to 75.5%.

2. Demand: April’s demand cycle further recovers, with processing enterprises’ average operating rate up 1.2% to 65.2%. Breakdown: aluminum sheet and strip at 73% (+2%), aluminum wire at 67.6% (+1.6%), aluminum profiles at 60.5% (+1.5%), aluminum foil at 75% (+1.4%). Recycled aluminum alloy remains steady at 59.5%. Aluminum rod processing fees in Baotou, Linyi, Xinjiang, Henan, Wuxi, Guangdong are down 20-150 yuan/ton; aluminum rod processing fees across the board are down 100-150 yuan/ton.

3. Inventories: Exchange stocks saw alumina increase by 15k tons to 299k tons; Shanghai aluminum stocks increased by 15.5k tons to 470k tons; LME stocks decreased by 8,925 tons to 412k tons. Social inventories: alumina increased by 20,000 tons to 237k tons; aluminum ingots increased by 3,800 tons to 1,387,000 tons; aluminum rods decreased by 19.5k tons to 322k tons.

4. Views: Market sentiment on supply reduction from some mines has weakened. Domestic alumina inventory is slightly declining amid increased production and imported alumina arrivals. The risk of inventory buildup and spot-futures divergence exists as domestic alumina production resumes and imports increase. Although Trump’s recent tariff reduction on aluminum limits some upside, geopolitical risks remain key variables. Middle East production cuts and Strait of Hormuz shipping conditions dominate external risks. If production cuts exceed expectations, London aluminum prices could rise further, supporting Shanghai aluminum; if geopolitical tensions ease, risk premiums may decline, restoring the Shanghai-LME ratio. The impact of the Qingming holiday on downstream operating rates is limited; focus remains on whether alumina inventories will enter a destocking cycle in mid-April. Marginal demand recovery after the holiday is crucial for domestic aluminum price breakthroughs.

Industrial Silicon & Polycrystalline Silicon: Converging Futures and Spot, Bottom Not Yet Seen

(Reported by Wang Heng, Qualification Number: F3080733; Trading Consultation Qualification Number: Z0020715)

Weekly, industrial silicon futures weakened, with the main contract 2605 closing at 8,285 yuan/ton, down 3.94%. Polycrystalline silicon also declined, with the main contract 2605 at 33,770 yuan/ton, down 5.35%. Spot prices remain stable but slightly weak, with off-gas oxygen at 8,800 yuan/ton and on-gas oxygen at 9,000 yuan/ton; 421 grade lowered by 150 yuan to 9,450 yuan/ton.

1. Supply: According to Baichuan, weekly industrial silicon output decreased by 1,270 tons to 68.6k tons; furnace start-up rate fell by 1.01% to 24.62%, with 8 fewer furnaces operating (196 total). In Northwest China, Xinjiang shut down 3 furnaces, Gansu 2, Ningxia 1; total 160 silicon furnaces in operation. In Southwest China, Yunnan shut down 3 furnaces; total 11 furnaces operating. Other regions saw one new furnace in Northeast China; no other changes.

2. Demand: Polycrystalline silicon P-type prices lowered by 1,000 yuan to 32k yuan/ton; N-type lowered by 2,750 yuan to 36.75k yuan/ton. Due to high inventory and pricing divergence, downstream continues to push prices upward, with limited on-demand procurement. New orders for crystalline silicon have stagnated; leading and secondary enterprises’ structural differences widen, and industry continues to adopt price reduction and promotional strategies. Organic silicon prices remain stable at 14,000-14,300 yuan/ton. The upcoming Jinan conference may lead some producers to hold prices, awaiting new production reduction plans. Cost increases and reduction implementation may lift the price center. Weekly polycrystalline silicon output decreased by 100 tons to 19.3k tons; DMC output increased by 1,200 tons to 44.1k tons.

3. Inventories: Exchange stocks: industrial silicon increased by 1,180 tons to 112.6k tons; polycrystalline silicon increased by 4,700 tons to 34.7k tons. Social inventories: industrial silicon increased by 10,350 tons to 443.4k tons; factory stocks increased by 8,850 tons to 258.4k tons. Huangpu Port stable at 56.5k tons; Tianjin Port increased by 1,500 tons to 74.5k tons; Kunming Port stable at 54k tons. Weekly polycrystalline silicon destocking of 51.6k tons.

4. Views: No significant reduction in supply-side policies after March’s industry meeting; some suppliers have loosened price support, resuming price cuts. The Strait of Hormuz closure hampers exports and raw material imports, with regional shutdowns limiting upside. Cost pressures limit sharp declines but rebound remains weak. Major producers have abandoned expansion plans; Xinjiang and Ningxia plants are fully halted. Existing inventory from prior capacity releases remains high, with no substantial relief. Export rebates for PV are canceled; domestic large-scale projects are still to start in May. Both domestic and international demand are shrinking. The Shanghai Futures Exchange’s capacity expansion for polycrystalline silicon delivery products and the futures’ relative premium over industry’s minimum cash cost suggest some upward potential, with inventories likely shifting to warehouse receipts. The long inventory digestion cycle and price-inactive spot market sustain bearish sentiment, with ongoing warehouse registration exerting spot-futures convergence pressure. Focus on policies for industrial silicon reduction, actual implementation of large-scale polycrystalline silicon plant shutdowns, and risks of further inventory accumulation and price drops exceeding expectations.

Lithium Carbonate: Potential Risks at the Resource End Continue to Evolve

(Reported by Zhu Xi, Qualification Number: F03109968; Trading Consultation Qualification Number: Z0021609)

1. Supply: Weekly output increased by 556 tons to 25,370 tons; spodumene lithium increased by 180 tons to 15,494 tons; lepidolite lithium increased by 140 tons to 3,367 tons; salt lake lithium increased by 100 tons to 3,815 tons; recycled lithium increased by 136 tons to 2,694 tons. In April, lithium carbonate production is expected to increase by 4% MoM to 110,950 tons, with spodumene lithium up 1.6% to 65,100 tons, lepidolite lithium up 3.6% to 14,800 tons, salt lake lithium up 8.1% to 18,690 tons, and recycled lithium up 12.4% to 12,360 tons.

2. Demand: Weekly production of ternary materials increased by 226 tons to 18,286 tons, with inventory up 286 tons to 19,278 tons; lithium iron phosphate (LFP) weekly output increased by 2,924 tons to 104,900 tons, with inventory up 5,879 tons to 113,613 tons. In April, ternary material output is expected to decline by 4% to 80,970 tons, with 5-series and high-nickel series falling more, 6-series slightly rising; LFP production is expected to increase by 6% to 450k tons; cobalt lithium production to decrease by 6% to 8,320 tons; manganese lithium to increase by 14% to 12,160 tons. Lithium battery output is expected to grow by 4% to 219 GWh, with ternary batteries up 4% to 31 GWh, LFP batteries up 4% to 179.2 GWh, and other batteries down 6% to 8.9 GWh. Terminal demand, according to CAAM, in March 2026, wholesale new energy vehicle sales are estimated at 1.12 million units, flat YoY, up 55% MoM from February. According to Energy Storage Network, the bid prices for lithium storage EPC from March 23-29 ranged from 0.706 to 1.299 yuan/Wh, averaging 1.044 yuan/Wh, slightly below the previous average of 1.057 yuan/Wh; 2-hour lithium storage EPC bid prices ranged from 0.960 to 1.299 yuan/Wh, averaging 1.158 yuan/Wh, down from 1.168 yuan/Wh; 4-hour lithium storage EPC bid prices ranged from 0.706 to 0.810 yuan/Wh, averaging 0.758 yuan/Wh, down from 0.829 yuan/Wh.

3. Inventories: Weekly social inventories decreased by 860 tons to 100,349 tons, with downstream stocks down 464 tons to 46,193 tons; other inventories increased by 520 tons to 36,020 tons; upstream inventories increased by 804 tons to 18,136 tons.

4. Views: Focus on supply-side disruptions this week: on one hand, the policy on Zimbabwe lithium mine exports remains uncertain, with potential reductions expected in late April to May if restrictions persist; on the other hand, Australia’s lithium supply faces potential geopolitical risks, with attention on whether production will be reduced. On the vehicle side, increased charging capacity and gradual recovery in late March saw wholesale new energy vehicle sales flat YoY. On energy storage, high production levels continue, but bid prices have slightly declined. Currently, spot procurement and inventory rhythms suggest that rapid price increases may slow spot trading, causing some divergence between spot and futures. Continue to monitor low-buy opportunities in the future.