Nonferrous Metals Market Amid Bull and Bear Forces: Divergence and Choices
At present, the global nonferrous metals market is undergoing a complex structural adjustment. On the macro side, the Fed's hawkish policy stance, geopolitical disruptions, and swings in global growth expectations together form the external backdrop for pricing. On the industry side, the contradiction between supply-side disruptions and weak demand continues to evolve, and each metal is showing clear divergence. This article focuses on Shanghai aluminum, alumina, Shanghai nickel, lithium carbonate, Shanghai zinc, and Shanghai tin, and digs into their market logic and investment strategy.
Aluminum: A Tug-of-War Between Inventory Drawdown and Supply Pressure
Shanghai aluminum has recently been range-bound. The SMM A00 aluminum discount remains at 50 yuan/ton, while the alumina index edged up to 2,745.9 yuan/ton. The main Shanghai aluminum night session closed at 23,425 yuan/ton, down 1.47%. On fundamentals, domestic electrolytic aluminum operating capacity remains high, and primary aluminum output from January to June is expected to rise 2.2% year on year. Industry average profit is as high as 8,413 yuan/ton, with all capacity in the black, giving supply a continued expansion incentive.
Overseas, capacity in the Middle East has fallen by about 3 million tons, and overseas output has been sharply revised down, but not by as much as expected. If the Strait opens up, restarts could come quickly. On the demand side, domestic spot discounts have improved somewhat, and weekly inventories of ingots and billets have fallen by 66,000 tons, with a clear destocking trend now in place as expected. Overseas inventories have also eased, but canceled warrants and spot premiums have both come down, showing some relief in structural tightness. The operating rate of leading domestic downstream firms slipped slightly to 63.4%, but the rapid inventory drawdown pushed cumulative apparent demand up to +1.3%. Aluminum product export profits have eased slightly as the Shanghai-London ratio rebounded, and exports of unwrought aluminum and aluminum products rose 15% year on year in April-May.
For alumina, supply disruptions have been frequent. While they have not changed the overall surplus pattern, inventory growth has turned negative for the first time, spot prices have rebounded, and the market looks tighter at the margin. Falling freight rates may lower costs, but Guinea ore policy remains a key tail risk. Prices have risen while incremental capital inflows remain limited, so spot-futures opportunities are gradually emerging and selling pressure from producers may increase.
Nickel, Lithium Carbonate, Zinc, and Tin: Structural Opportunities Within Divergence
Shanghai nickel shows a pattern of inventories rising domestically while edging slightly lower overseas. Indonesian nickel ore supply is tight, ore prices remain firm, nickel pig iron prices have rebounded to 1,137 yuan per nickel point, and smelting margins have recovered. Stainless-steel mills are keeping output plans high, supporting demand. In new-energy applications, nickel sulfate is produced to order and inventories remain low. But high refined-nickel inventories are pressuring prices, and after Indonesia's refined nickel applied for Shanghai delivery brands, imports increased and created pressure on the domestic market.
The lithium carbonate market is characterized by a clear battle between bulls and bears. On the supply side, ore prices move with salt prices, and weekly output slipped slightly. On the demand side, cathode-material production schedules increased week on week and inventories began to draw down. Inventories are being reduced at traders and smelters, while downstream inventories rose. Smelting margins are healthy for own-mine feedstock, but buying external feedstock has become less profitable. Supply-side disruptions continue, and Dazhong Mining's 40,000-ton lithium carbonate project at Jigeshan has started, while the Jianxiawo mine has regained project land-use approval, fueling expectations of a restart this year.
Shanghai zinc is facing high overseas mine disruption rates, and expected mine supply growth has been revised down sharply, increasing raw-material pressure on smelters. Although sulfuric acid and minor metal prices are providing high-level support, overall returns are thin, some smelters are losing money, and maintenance-driven cuts are becoming more likely. On the demand side, high prices are suppressing consumption, end-market orders look off-season, and galvanizing firms are generally under loss pressure.
The Shanghai tin market has a sharp supply-demand contradiction. Myanmar's rainy season is expected to last until late August, keeping tin concentrate imports at low levels; Indonesia's resource-nationalism policy is intensifying, and expectations of restricted refined-tin exports are growing. Geopolitical disruptions in mining areas in the DRC keep recurring and could easily trigger price spikes. Domestic primary tin ore reserves are scarce, and recycled tin cannot fill the mining gap. In the medium to long term, supply elasticity is extremely low, while AI and new-energy demand is growing faster than supply, shifting the price center higher than in past cycles.
Conclusion and Strategy Outlook
Overall, the nonferrous metals market is in a complex mix of bullish and bearish forces. Aluminum clearly shows a destocking trend, but expectations of overseas restarts create pressure; nickel combines supply contraction with high inventories; lithium carbonate retains a supply-demand gap but remains highly contested; zinc and tin face supply constraints but weak demand.
In strategy terms, Shanghai aluminum can be considered for long positions near the lower end of the range, while watching restart progress and real-demand changes; alumina is best played as a swing trade, with focus on domestic and overseas policy moves; Shanghai nickel should be watched around the 130,000 yuan round-number support, with close tracking of Indonesian policy; lithium carbonate can be bought on dips within the range while avoiding short-term overtrading; Shanghai zinc should remain in a high-level oscillation view, with attention to macro uncertainty and supply-side disruptions; and Shanghai tin requires a medium- to long-term view on supply-demand contradictions, with trading opportunities coming from pulse-like supply shocks. Investors need to stay cautious and respond flexibly to market changes.
