🔔 Base Fundamental Update
Advisory Bazaar Info Services
🔶 Copper
Macro Front:
According to Trump, the U.S. has conducted airstrikes on three major nuclear sites in Iran, while Iran emphasized that technical knowledge cannot be destroyed. Houthi rebels have once again warned of attacks on U.S. ships. Due to this instability, copper prices have seen a surge.
Fundamentals:
The price spread in futures contracts has widened and warrant withdrawals have occurred. Due to the semi-annual settlement, a drop in premium is expected. Amid global economic uncertainty, copper prices are expected to find support at lower levels.
🔷 Aluminum
Macro Level:
There are disagreements among Fed officials regarding interest rate cuts, while geopolitical tensions continue to support bullish market sentiment.
Fundamental Level:
Domestic primary aluminum production capacity remains stable. Supply of liquid aluminum remains high, while casting ingot supply continues to be tight.
Demand Side:
Most downstream sectors are in the traditional off-season. Due to significant production cuts in central India, local demand has weakened. Demand has dropped in the PV (photovoltaic) and home appliances sectors, while the wire and cable sector has reduced output after completing the delivery period.
Inventory:
Destocking has slowed, but low inventory levels are still supporting prices.
Overall:
Aluminum prices are supported by inventory levels, but weak seasonal demand and potential drop in spot premium may limit gains.
🔶 Lead
Macro Level:
The Israel-Iran conflict has impacted global energy markets, bringing volatility to non-ferrous metals.
By the end of June, maintenance activities in primary lead units have increased, leading to a decline in production.
Demand Side:
Due to mid-year settlement, many lead-acid battery companies have postponed purchases. Downstream companies remain cautious due to high prices.
Near-Term Outlook:
Both supply and demand are likely to remain weak. Some companies are expected to resume production in July, which could lead to price fluctuations at higher levels.
🔷 Zinc
On Friday, a bullish lower shadow candlestick formed in LME zinc, but the 20/40-day moving averages remained as resistance levels.
Macro Sentiment:
U.S. inflation expectations are rising, and the Fed’s cautious stance is creating market uncertainty.
Mild gains were also seen in SHFE zinc. However, domestic consumption is gradually declining, and inventories are increasing.
Today’s Outlook:
SHFE zinc is expected to fluctuate within a limited range.
🔶 Nickel
Near-Term Outlook:
Nickel prices are expected to remain range-bound between 118,000–123,000 yuan/ton. If Indonesia tightens its nickel ore policy, short-term bullish momentum may arise.
Medium- to Long-Term Outlook:
Oversupply issues are likely to persist, while no significant demand growth is expected, limiting long-term price strength.
Conclusion:
Geopolitical tensions and the Fed’s interest rate policy have increased volatility in base metals. Copper and aluminum are receiving limited support, while lead and zinc continue to face weak demand. Nickel prices are expected to remain range-bound unless a new supply or demand-side shock occurs.