Caixin Futures Nonferrous Metals and New Energy Sector Market Overview: Macro Bullishness vs. Fundamentals, Divergence in Product Trends

⑴ During the Spring Festival holiday, the US Supreme Court ruled that Trump’s global tariff policy was illegal. However, the ruling only restricts the president from imposing tariffs through the International Emergency Economic Powers Act and does not completely strip the president of the power to levy tariffs. Trump had previously imposed additional tariffs on products such as copper, steel, and aluminum based on other trade laws, which are not affected. Coupled with the escalation of US-Iran military confrontation, the macro environment provides support for copper prices. It is worth noting that there is still a high degree of uncertainty regarding the Federal Reserve's rate cut path. Due to insufficient reasons for a rate cut, subsequent policies may lean towards tightening. In addition, with a weak fundamental outlook, prices may find it difficult to continue rising.⑵ Last Friday, the US Supreme Court overturned Trump’s emergency tariff order, after which Trump announced the implementation of a new comprehensive tariff policy, and the uncertainty of the tariff plan continues. On the fundamentals side, both supply and demand for zinc ingots are weak during the off-season, and short-term fluctuations are expected to dominate.⑶ In terms of precious metals, on the 20th local time, the US Supreme Court ruled Trump’s global tariff policy illegal. However, the ruling only restricts the president from imposing tariffs through the International Emergency Economic Powers Act and does not completely strip the president of the power to levy tariffs. After the Supreme Court decision was announced, Trump announced the imposition of “global import tariffs,” which will continue to provide medium-term support for precious metals. Currently, the proportion of registered silver warehouse receipts remains at a low level, providing short-term support for silver prices. Silver prices may continue to fluctuate sharply in the future, and traders need to strictly control their positions.⑷ Regarding alumina, the market remained relatively stable during the Spring Festival, with a slight decline in the pre-holiday alumina operating rate, indicating marginal improvement in supply. After the holiday, attention should be paid to the intensity of new production and production cuts. However, due to limited demand growth and the export window not yet open, overall inventory continues to accumulate, and the industry remains oversupplied. In the short term, it is still recommended to treat the market as range-bound, while in the medium to long term, pay attention to potential low-buying opportunities.⑸ For aluminum and cast aluminum, the strong performance of LME aluminum during the Spring Festival holiday led to a slight increase in Shanghai aluminum after the holiday. With a generally bullish macro environment both domestically and internationally, positive demand expectations, and tightening supply expectations, the medium- to long-term upward outlook for Shanghai aluminum and cast aluminum remains unchanged. In the short to medium term, it is recommended to wait for a pullback to go long. On the supply side, keep an eye on overseas developments, while on the demand side, closely monitor the intensity of downstream procurement after domestic resumption of work and the pace of inventory reduction.⑹ Regarding lithium carbonate, there has been a lot of positive news recently, with significant capital inflows after the holiday. Zimbabwe has banned all exports of raw minerals and lithium concentrates, and the electronic trading price has risen by more than 10,000 points compared to 3 p.m. In the short term, a buy-on-dip strategy is recommended. Going forward, it is necessary to focus on the realization of demand expectations and the pace of inventory changes. In addition, be alert to unexpected changes on the supply side and in the macro environment.