Caixin Futures: Easing tensions in the Middle East boost market sentiment, leading to a widespread rebound in non-ferrous metals

(1) Copper prices showed a strong performance today. On the geopolitical front, Trump stated that talks between the US and Iran were effective, and proposed to suspend military strikes for 5 days. Israel claimed the Iranian speaker was involved, but Iran's Foreign Ministry, speaker, and multiple parties firmly denied it, calling the US actions psychological warfare. Iran also released footage of attacks on US military bases. Despite this, market sentiment has rebounded significantly, with copper prices recovering. From a fundamental perspective, downstream demand has picked up due to the copper price correction, procurement willingness has increased, and inventory continues to decline.(2) Aluminum prices showed a strong performance today. On the geopolitical front, Trump stated that talks between the US and Iran were effective, and proposed to suspend military strikes for 5 days. Israel claimed the Iranian speaker was involved, but Iran's Foreign Ministry, speaker, and multiple parties firmly denied it, calling the US actions psychological warfare. Iran also released footage of attacks on US military bases. Despite this, market sentiment has rebounded significantly, with non-ferrous metal prices recovering. Fundamentally, the threat to passage through the Strait of Hormuz remains unresolved, causing two-way disruptions to raw material imports and product exports for aluminum companies in the region, putting pressure on the stability of the global aluminum supply chain. With macroeconomic recovery and solid fundamentals, Shanghai aluminum prices remain supported.(3) Zinc prices showed a strong performance today. On the geopolitical front, Trump stated that talks between the US and Iran were effective, and proposed to suspend military strikes for 5 days. Israel claimed the Iranian speaker was involved, but Iran's Foreign Ministry, speaker, and multiple parties firmly denied it, calling the US actions psychological warfare. Iran also released footage of attacks on US military bases. Despite this, market sentiment has rebounded significantly, with zinc prices recovering. On the fundamental side, downstream demand has picked up due to the zinc price correction, procurement willingness has increased, SMM zinc ingot inventories continue to decline, supporting zinc prices. It is anticipated that zinc prices will mainly fluctuate in the short term.(4) Precious metals: On the geopolitical front, Trump stated that talks between the US and Iran were effective, and proposed to suspend military strikes for 5 days. Israel claimed the Iranian speaker was involved, but Iran's Foreign Ministry, speaker, and multiple parties firmly denied it, calling the US actions psychological warfare. Iran also released footage of attacks on US military bases. Despite this, market sentiment has rebounded significantly, with the price of the main gold contract closing back to 977.28 yuan/gram and silver prices returning above 17,000 yuan/kilogram. Further attention should be paid to developments regarding the Federal Reserve and geopolitical relations. In the absence of fundamental changes in the geopolitical situation, precious metals will likely continue their weak performance. If the war draws to a close, prices may recover.(5) Lithium carbonate: WTI crude oil fell sharply after touching $100/barrel. There has been no substantive change in the geopolitical situation, mainly due to Trump revising his previous remarks and reducing the risk of irrational escalation. As Middle East sentiment improved, lithium carbonate led non-ferrous metals in a rebound: the May contract reduced positions, the July and September contracts increased positions, futures prices rose above the 60-day moving average, and the bottom range has gradually become clearer.