📌 Base Metal Fundamental Update

Advisory Bazaar Info Services

🔹 Copper

U.S. jobless claims recorded the sharpest drop in nearly four years, but later statistical errors were revealed. Trump called for lower oil prices to end the Russia-Ukraine war. Meanwhile, due to weak U.S. demand and oversupply, international crude oil continued to fall, with WTI crude closing down 1.03%, putting pressure on copper.

Fundamentals:

* Supply side: Reduced supply of imported and domestic copper.

* Demand side: Slight improvement in downstream buying as prices weakened.

* Inventory side: As of September 18, SMM data showed copper stocks in major Chinese regions fell by 5,300 mt from Monday to 148,900 mt.

➡️ Copper prices are likely to find support today.

🔹 Aluminum

* Supply side: Gradual release of replacement capacity leading to a slight production increase.

* Demand side: Overall recovery trend; auto sector maintaining steady growth, power sector outlook improving, slight recovery in construction.

* Processed products demand: Pre-“Double Festival” stockpiling continues, slowing down the pace of inventory buildup.

➡️ Limited supply increment and demand recovery trend provide strong downside support. In the short term, prices may consolidate at higher levels.

🔹 Lead

* Smelter inventories fell; after the delivery period, lead ingots returned to the market.

* Supply side: Primary lead smelters in North & Central China under maintenance/restart; Anhui secondary smelters remain under maintenance.

* Demand side: Some downstream stocking demand ahead of National Day holidays.

➡️ With smelter operations gradually resuming by end-September, supply may rise. In the short term, prices are expected to fluctuate at high levels.

🔹 Zinc

* LME zinc formed a bearish candlestick. After U.S. jobless claims data, markets expect more rate cuts.

* Funds side: Profit-taking pressure.

* Inventory: Tight LME zinc stocks providing support.

➡️ LME and SHFE zinc expected to remain range-bound today. Domestic inventory saw slight destocking, but surplus risk persists.

🔹 Tin

* Supply side: Tin ore supply in Yunnan continues to decline; several smelters under maintenance in September (bullish).

* Demand side:

• PV industry: Orders for tin bars fell after installation rush.

• Electronics: Weak demand due to off-season and high prices; only necessary orders placed.

• Other sectors (tinplate, chemicals): Stable demand, not exceeding expectations.