CITIC Construction Investment Futures: April 7th Industrial Products Morning Report

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Copper: Domestic Inventory Reduction Accelerates, Copper Prices Fluctuate at High Levels

Main Shanghai copper futures closed flat at 96,250 yuan before the holiday, while LME copper slightly declined to $5.60 per pound on Monday.

Macro neutral. Iran refused a temporary ceasefire, responded to the US truce proposal with 10 conditions, Trump pressured with a deadline, and Middle East conflicts repeatedly disturbed market expectations.

Fundamentally neutral leaning bullish. Before the holiday, global exchanges and domestic bonded copper inventories decreased by 63k tons to 63k tons, mainly due to a significant domestic inventory reduction of 66.5k tons, with the inventory depletion rate increasing, supporting copper prices.

Overall, the ongoing Middle East tensions bring demand uncertainty, combined with a relatively strong fundamental support, and it is expected that copper prices will remain volatile and consolidating, awaiting more macro guidance. Today, Shanghai copper main contract is around 95.7k to 97.2k yuan per ton. Strategy-wise, focus on short-term trading within this range.

Important Notice

All information in this report is sourced from publicly available data. CITIC Construction Investment Futures strives for accuracy and reliability but makes no guarantees regarding the accuracy or completeness of this information. Investment based on this is at your own risk. This report does not constitute personal investment advice and does not consider individual clients’ specific investment goals, financial situations, or needs. Clients should consider whether any opinions or suggestions in this report are suitable for their particular circumstances. (Yu Luyan / Z0023596, for reference only)

Nickel & Stainless Steel:

On the macro front, geopolitical tensions have increased market uncertainty, but expectations for a ceasefire related to this week’s conflicts have strengthened, possibly restoring market sentiment.

Indonesia’s nickel export tax plan has been delayed, temporarily easing market concerns. Currently, intermediate raw material circulation is tight, and sulfur prices are expected to rise due to Middle East tensions. MHP quotes are between 90-92 USD, providing some support for nickel prices. Indonesia’s RKAB approval is slow; about 160 million tons of nickel ore quotas have been approved, still below the government’s target of 260-270 million tons. From Q2 2026, companies will use new quotas, which may tighten supply expectations. Additionally, the rainy season in Indonesia may impact local smelting capacity. For nickel pig iron, costs are rising, but downstream acceptance of high-priced sources is limited, leading to weak profit transmission, and short-term prices may stabilize or strengthen. For nickel sulfate, weak market demand may pressure prices.

For stainless steel, supply growth remains high, but demand is weak. Weekly inventory at Mysteel increased by 2.25%, indicating poor fundamentals, though upstream costs remain supported. Prices are expected to fluctuate.

Shanghai Nickel 2605 reference range: 130,000–145,000 yuan/ton. SS2605 reference range: 13,800–14,800 yuan/ton. Operation strategy: buy on dips.

Important Notice: This information is produced by the research and development team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures aims for accuracy but makes no guarantees. Trading is at your own risk. This does not constitute personal trading advice and does not consider individual client needs. Clients should assess whether the opinions or suggestions are suitable for their specific circumstances. (Liu Jiaqing / Futures Trading Consulting Practitioner, Z0022848, for reference only)

Polycrystalline Silicon:

Prices for polycrystalline silicon futures continue to decline, mainly due to ongoing industry chain feedback pressure, leading to high inventory levels that are difficult to clear. From a supply-demand perspective, we expect global polysilicon production in April to reach 99.7k tons, with a silicon consumption of 0.19 tons/GW, equivalent to about 52.47 GW of production. However, the production capacity in downstream segments (silicon wafers to modules) is preliminarily estimated to be less than 50 GW, partly because the export tax rebate for photovoltaic products was canceled starting April 1, which will further reduce downstream utilization.

Based on this, we estimate that global polysilicon inventory in April will reach about 515,000 tons, nearly five months of stock, exerting continued downward pressure on prices. From the inventory structure, explicit inventories are still increasing, while hidden inventories are decreasing, indicating downstream consumption of existing raw materials and insufficient procurement demand for polysilicon. However, based on current consumption rates of hidden inventories, we preliminarily expect that by late May, hidden inventories will fall to about one month of safety stock, at which point restocking demand may emerge, providing some support for prices.

PS2605 is expected to trade between 30,000–38,000 yuan/ton. Operation: wait and see.

Important Notice: This information is produced by the research and development team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This does not constitute personal trading advice and does not consider individual client needs. Clients should assess whether the opinions or suggestions are suitable for their specific circumstances. (Liu Jiaqing / Futures Trading Consulting Practitioner, Z0022848, for reference only)

Aluminum:

Last week, spot prices remained stable, while futures prices fell sharply, and the basis narrowed significantly. As new capacity in southern regions begins to come online steadily, market expectations of ample spot supply have increased, and the sharp decline in futures has led to the outflow of warehouse receipts. Spot prices weakened, and with the weakness in the non-ferrous sector, some aluminum longs took profits and exited. The cost support logic has not changed; on one hand, the specific measures for Guinea’s export quotas have not yet been implemented, and on the other hand, the potential impact of tight fuel supply in Australia on future mine production remains uncertain. Therefore, long-term contracts still have room for speculation, while near-month contracts are temporarily under supply pressure and weak. Operation-wise, the 09 contract can be bought on dips.

The 09 contract for aluminum is expected to trade between 2,800–3,100 yuan/ton, with a focus on buying dips.

Geopolitical tensions in the Middle East are escalating, and oil prices are expected to remain high this week. Additionally, some Middle Eastern countries’ public infrastructure has been affected again; UAE’s Emirates Global Aluminium announced the full shutdown of Al Taweelah, and Bahrain Aluminum’s capacity will be about 30%, with affected capacity exceeding 3 million tons, and the impact lasting longer than expected. The LME cash premium has risen to a near 10-year high. On the domestic front, fundamentals have marginally improved; after last week’s price correction, downstream procurement intentions have improved, and social inventories are slowing in growth. Last week, the weekly operating rate of major downstream aluminum processing companies increased by 1.2 percentage points to 65.2%. Overall, the market remains in a bullish macro environment but with some caution, expecting aluminum prices to fluctuate upward.

Shanghai Aluminum 05 contract: 24,500–25,500 yuan/ton, mainly buy on dips.

Important Notice: This information is produced by the research and development team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This does not constitute personal trading advice and does not consider individual client needs. Clients should assess whether the opinions or suggestions are suitable for their specific circumstances. (Wang Xianwei / Futures Trading Consulting Practitioner, Z0015983)

Zinc: On the macro front, over the weekend, Trump issued an ultimatum to Iran again, but on Monday, official media reported that the US and Iran are expected to reach an agreement on a ceasefire, and Japanese and Korean stock markets performed reasonably well. COMEX metals showed a bullish trend. Fundamentally, early April domestic treatment charges (TC) for non-ferrous metals were collectively lowered, with weekly quotes down by 200; imported treatment charges remained subdued, with non-ferrous prices lowered to -14.5, and imported ore difficult to replenish. According to preliminary statistics from Baichuan Yingfu, refinery increments in April are about 20k tons month-on-month. Since early April, sulfuric acid prices have risen rapidly, and smelting profits have recovered. Demand-side, early-stage operating rates have improved, but downstream procurement has cooled as prices rise. Overall, fundamentals show limited improvement; market participants are waiting for the end of the ultimatum and the Middle East situation to clarify, and are not considering chasing high prices. Operation-wise, Shanghai zinc remains on hold, with the main contract trading around 23,000–24,000 yuan/ton.

Lead: From a fundamental perspective, on the supply side, primary lead ore remains tight but has slightly improved; domestic treatment charges have slightly increased. According to Baichuan Yingfu, due to optimistic sulfuric acid outlook, refineries in Henan and Hunan have resumed operations, but primary spot lead remains mainly at a discount. Recycled lead scrap prices have stabilized, but recycling companies are reluctant to sell, and current refinery profits are still poor, keeping smelters operating at low levels. On the demand side, downstream lead-acid battery manufacturers are gradually resuming work, with moderate orders from large and medium-sized factories. Overall, supply and demand are both weak, and under macro guidance, lead prices are expected to fluctuate at low levels. Operation-wise, trade within the range, with the main contract around 16,000–17,000 yuan/ton.

Risk Warning: This information is produced by the research and development team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This does not constitute personal trading advice and does not consider individual client needs. Clients should assess whether the opinions or suggestions are suitable for their specific circumstances.

Wang Xianwei / Futures Trading Consulting Practitioner, Z0015983

Aluminum Alloy: On the macro front, over the weekend, Trump issued an ultimatum to Iran again, but on Monday, official media reported that the US and Iran are expected to reach an agreement on a ceasefire, Japanese and Korean stock markets performed reasonably well, and COMEX metals showed a bullish trend. Fundamentally, raw material procurement in Anhui and Hubei has slowed, with reverse invoicing halted, and scrap aluminum inventories are tightening, supported by raw material costs; supply and demand are relatively stable, with production fluctuating little across regions, and smelting profits narrowing as scrap aluminum prices rise. Downstream enterprises are stabilizing orders, and inventories are still decreasing. Overall, spot prices are supported, and the Middle East situation benefits both supply disruption and macro sentiment, strengthening alloy support. Operation-wise, buy on dips for aluminum alloy, with the main contract trading around 23,000–24,000 yuan/ton.

Risk Warning: This information is produced by the research and development team of the futures company. All data is from publicly available sources. CITIC Construction Investment Futures strives for accuracy but makes no guarantees. Trading is at your own risk. This does not constitute personal trading advice and does not consider individual client needs. Clients should assess whether the opinions or suggestions are suitable for their specific circumstances.

Wang Xianwei / Futures Trading Consulting Practitioner, Z0015983

Precious Metals: Precious metals fluctuate narrowly and generally weaken, mainly due to high uncertainty in the US-Iran conflict process. Trump’s ultimatum to Iran regarding opening the strait was extended yesterday, with increased pressure on Iran’s infrastructure, but Iran refused to negotiate under threat and prioritized national defense, rejecting the temporary ceasefire and opening the strait. The risk of conflict escalation remains, putting pressure on precious metals. However, US ISM non-manufacturing PMI was below expectations, easing dollar strength and providing some support to precious metals prices. Overall, the uncertain direction of US-Iran tensions short-term pressures metals, but stagflation risks support medium- to long-term stability.

Operation-wise, consider buying on dips. Shanghai Gold 2606: 990–1,070 yuan/gram; Shanghai Silver 2606: 17,000–19,500 yuan/kilogram; Guang Platinum 2606: 500–550 yuan/gram; Guang Palladium 2606: 370–410 yuan/gram.

Important Notice

All information in this report is sourced from publicly available data. CITIC Construction Investment Futures strives for accuracy but makes no guarantees regarding the accuracy or completeness of this information. Investment is at your own risk. This report does not constitute personal investment advice and does not consider individual clients’ specific goals, financial situations, or needs. Clients should evaluate whether any opinions or suggestions are suitable for their particular circumstances. (Wang Yanqing / Z0014569)