Spot market prices for the Yangtze River Nonferrous Metals Network as of the morning session close on June 17th:

#1 Copper price reported at 105,650 yuan per ton, up 770 yuan; premium at 120 yuan per ton, down 10 yuan.

A00 Aluminum ingot price reported at 23,870 yuan per ton, up 70 yuan; discount at 60 yuan.

#0 Zinc price reported at 24,660 yuan per ton, down 80 yuan; #1 Zinc price at 24,560 yuan per ton, down 80 yuan.

#1 Lead ingot price reported at 16,525 yuan per ton, up 175 yuan.

#1 Nickel price reported at 136,550 yuan per ton, up 200 yuan.

#1 Tin price reported at 424,000 yuan per ton, up 1,750 yuan.

The global nonferrous metals market is currently undergoing a significant shift, moving from a focus on broader macroeconomic narratives back towards industry-specific fundamentals. The signing of a 14-point memorandum of understanding between the US and Iran has heightened expectations for the reopening of the Strait of Hormuz, leading directly to a decline in oil prices and a weakening US dollar index. This development has alleviated some of the heavy burdens of inflation and geopolitical risk that were weighing on the metals market. However, with the first interest rate meeting of the new Federal Reserve Chair, Warsh, approaching, the recovery in broader market sentiment remains measured. Faced with this complex interplay of macroeconomic and industry-specific factors, the nonferrous metals sector is displaying a notable pattern of divergence.

Copper Market Dynamics

The copper market is currently in a phase where positive macroeconomic factors and strong industry fundamentals are reinforcing each other. On the macro front, the implementation of the US-Iran agreement details has not only eased concerns about energy-driven inflation but has also spurred a recovery in market risk appetite. On the industry side, the supply-demand imbalance for copper remains acute. The combined impact of deeply negative Treatment and Refining Charges (TC/RC) for copper concentrate and sulfur shortages has severely compressed smelter profit margins. On the demand side, although traditional sectors like real estate and air conditioning production are entering their seasonal lull, the robust growth from AI computing infrastructure and the new energy transition is significantly highlighting the resilience of copper consumption. Coupled with the continued drawdown of domestic social inventories to low levels, copper prices are demonstrating strong resistance to declines and are expected to maintain high levels with significant volatility in the near term.

Aluminum Market Adjusting

In contrast, the aluminum market is in a critical phase of shedding the geopolitical risk premium that was previously priced in. As expectations for a ceasefire in the Middle East strengthen, there is anticipation that production capacity previously halted due to raw material shortages will gradually resume. This expectation of a marginal recovery in overseas supply is directly pressuring aluminum prices on international exchanges. Although LME aluminum inventories remain low and the widening price differential between domestic and international markets is opening up profitable export opportunities for Chinese aluminum producers, relatively high domestic social inventories and weakening seasonal demand are limiting the upside potential for aluminum prices. Currently, aluminum prices are more focused on finding a new supply-demand equilibrium, and near-term performance may be relatively weaker.

Zinc Market Under Pressure

The zinc market is facing a fierce contest between tightening global macro liquidity and tight fundamentals on the raw material side. On one hand, the Bank of Japan's interest rate hike and the impending Federal Reserve meeting are fueling expectations of marginally tighter global liquidity, which is putting downward pressure on zinc prices. On the other hand, the tight supply situation for zinc concentrate has not been fundamentally alleviated, with both import and domestic TC/RC turning negative, pushing some smelters into losses and thus providing solid support at the bottom for zinc prices. However, under the dual pressures of the traditional off-season and high inventories, zinc prices currently lack a clear driver for an upward breakout in the short term and are likely to fluctuate while searching for a bottom.

Outlook and Strategic Considerations

Looking ahead, the pricing logic for nonferrous metals has fully shifted towards a dual-driver model of "rate cut expectations + industry supply and demand." As the geopolitical risk premium is cleared, the Federal Reserve's policy path will become the core short-term variable. If Chair Warsh signals a dovish stance at the meeting, the nonferrous metals sector could see a broad-based valuation recovery. Conversely, the risk of a correction from elevated levels needs to be monitored.

In terms of strategy, investors are advised to adopt an approach of "focusing on copper, stabilizing positions in aluminum, and adopting a wait-and-see stance on zinc." The copper market has the most solid fundamental basis, making buying on dips the primary strategy, though caution is warranted regarding sentiment-driven volatility around the Fed decision, and position sizing should be managed carefully. The aluminum market should be approached with a range-trading mindset in the near term, with opportunities for tactical buying on dips potentially arising from increased export order volumes. The zinc market is constrained by the conflict between weak current demand and tight concentrate supply; a cautious, observant stance is recommended, waiting for greater clarity on macro sentiment and confirmation of downstream restocking signals before making significant moves.

Concluding Remarks

As the fog of macroeconomic uncertainty gradually lifts, nonferrous metals are facing a crucial test of their underlying fundamentals. The resilience of copper, the price discovery process in aluminum, and the tug-of-war in zinc are an authentic reflection of the current market landscape. Successfully navigating this divergent market environment requires aligning with industry trends and accurately timing macroeconomic shifts.