- The three-month aluminum contract on the London Metal Exchange saw a slight increase, supported by reduced inventories and concerns over potential supply shortages. It briefly hit a one-week high during trading, but buyers remained extremely cautious following the historic plunge in June.
- The anticipated refined copper tariff policy from the White House did not materialize as expected, dampening bullish sentiment on tariffs. As a result, international copper prices fell across the board on Tuesday, with the metal market overall adopting a wait-and-see attitude.
- The latest U.S. exchange position data shows that speculators are reducing their long positions in copper, while there is a structural divergence within the non-ferrous sector. Zinc prices, driven by recent tight supply fundamentals, rose against the trend.
Supply Risks Reemerge, Supporting Aluminum Price Rebound
As of today's trading, the London Metal Exchange (LME) benchmark three-month aluminum contract AH1! rose 0.24% to $3,123 per ton, having earlier reached a one-week high of $3,136. Despite a 16% drop in June, marking the largest monthly decline since 2008, the ongoing reduction in exchange inventories and potential supply disruptions are providing technical support for aluminum prices, attracting some short-covering and driving capital inflows.
Cautious Consumer Attitude Limits Aluminum's Upside Potential
The most active aluminum contract ALI1! on the Shanghai Futures Exchange rose 0.46% to 22,940 yuan per ton, marking the fourth consecutive day of gains. However, research firm Sucden Financial noted that while the market has seen a moderate rebound, buyers remain wary after previous declines, lacking sustained momentum for higher bids. This reflects a preference among real businesses for on-demand purchasing rather than strategic restocking amid ongoing macroeconomic uncertainties.
Policy Expectations Unmet, Pressuring Copper Long Positions
In the copper market, LME copper CA1! fell 0.29%, and Shanghai Futures Exchange copper HG1! dropped 0.11%. The lack of an official announcement confirming last week's widely discussed White House refined copper tariff news disappointed bullish funds betting on tariffs, leading to profit-taking. Additionally, U.S. futures regulatory data shows speculators are reducing Comex copper long positions, indicating a shift in short-term risk appetite.
Fundamental Divergence Drives Base Metal Sector Trends
On Tuesday, most other base metals showed moderate fluctuations, with LME zinc ZNC1! slightly down 0.15%, lead LEAD1! up 0.13%, and nickel and tin also recording slight declines. In contrast, domestic Shanghai zinc stood out, rising 1.12% against the trend. Analysts pointed out that zinc's ability to outperform in a generally sluggish sector is mainly supported by recent tight supply at the mining and smelting ends, highlighting the divergence in trends within the sector due to differences in fundamental conditions.
