Copper: Overseas AI Concept Adjustment, Copper Prices Fluctuate and Weaken 1. Macro Environment. Overseas, the US April CPI year-on-year rose to 3.8%, exceeding the expected 3.7% and the previous 3.3%, reaching the highest level since June 2023. Month-on-month, it increased by 0.6%, while core CPI rose to 2.8% year-on-year. The April PPI released on Wednesday increased year-on-year to 6%, with final demand PPI rising 1.4% month-on-month, both significantly surpassing market expectations. The combination of higher-than-expected CPI and PPI indicates the US is facing a test of "secondary inflation," with shocks from energy and tariffs being transmitted to end consumer goods. Regarding economic data, April industrial output grew 0.7% month-on-month, a significant reversal from the previous -0.3% contraction, and capacity utilization recovered to 76.1%, showing economic repair momentum is better than at the end of Q1. However, the preliminary May University of Michigan Consumer Sentiment Index hit a record low of 48.2. For the Federal Reserve, the Senate officially confirmed Kevin Warsh as the new Fed Chair; Chair Powell's term ended on May 15th, but he remains as a Governor. Previously, Warsh advocated for maintaining Fed independence, showed a clear inclination towards rate cuts, and promoted balance sheet reduction, appearing slightly hawkish. Geopolitically, the Strait of Hormuz remains deadlocked, with the US threatening continued military action. However, Iran announced over the weekend it would open its stock market, potentially signaling further easing to the market. Domestically, the meeting between the heads of state of China and the US has concluded; domestic April monetary data showed overall accommodative financing conditions, providing necessary liquidity support for the real economy.
2. Fundamentals. For copper concentrate, domestic TC (Treatment and Refining Charges) quotes have fallen again to historically extreme lows, indicating persistent tightness in copper concentrate supply, which remains a strong supportive factor for current fundamentals. For refined copper production, May's estimated electrolytic copper output is 1.1675 million tonnes, down 0.96% month-on-month but up 2.56% year-on-year. Regarding imports, China's net refined copper imports in March fell 22.72% year-on-year to 221,100 tonnes, with a cumulative year-on-year decline of 40.36%; scrap copper imports in March increased 35.5% month-on-month to 227,600 metal tonnes, up 19.94% year-on-year, with a cumulative increase of 9.72%. For inventory, as of the 15th, global visible copper stocks decreased by 9,000 tonnes from the previous (8th) count to 1.245 million tonnes. Specifically, LME inventory fell by 3,675 tonnes to 395,725 tonnes; Comex inventory increased by 5,594 tonnes to 568,982 tonnes; domestic refined copper social inventory decreased by 8,200 tonnes weekly to 251,500 tonnes, while bonded area inventory fell by 2,500 tonnes to 39,800 tonnes.
3. View. Copper prices experienced a rapid adjustment, primarily due to a swift correction in overseas AI-related concepts, leading to cautious market sentiment. However, it's also evident that amid ongoing US-Iran geopolitical tensions and their potential negative impact on the global economy, the high premium given by copper supply-side disruptions alone faces significant market divergence. Additionally, it remains uncertain whether the new Fed Chair Warsh will maintain a hawkish stance, prompting market caution. However, supported by profits, the correction in overseas AI concepts may be limited, and the market had already priced in the new Fed Chair to some extent, suggesting macro negative impacts may be short-lived. With the Strait of Hormuz unlikely to resume normal traffic soon, overseas sulfur shortages persist. Over time, supply contraction may transition from expectation to reality. Coupled with extremely low domestic TC quotes and sustained inventory drawdowns, fundamental support remains solid. Overall, the extent of this round of correction may be limited, suggesting maintaining a strategy of buying on dips.
Nickel & Stainless Steel: Significant Inventory Pressure, Market Sentiment Weakens 1. Supply: Benchmark prices strengthened, but trading activity varied. The price for 1.2% laterite nickel ore fell $2/wet tonne weekly to $30.5/wet tonne, while 1.6% laterite nickel ore rose $3.3/wet tonne weekly to $79.3/wet tonne; domestic port inventories are at low levels for the same period in five years. On May 14th, high-grade nickel pig iron (NPI) from an Indonesian plant was sold at 1,160 yuan/nickel (CIF, tax included). May refined nickel output is expected to decrease 6.5% month-on-month to 34,700 tonnes; domestic NPI output is projected to fall 2% month-on-month to 27,000 nickel tonnes, while Indonesian output may drop 1% month-on-month to 129,400 nickel tonnes; nickel sulfate output is forecast to decline 2% month-on-month to 34,845 nickel tonnes.
2. Demand: For new energy, May ternary precursor output is expected to increase 6% month-on-month to 91,530 tonnes; ternary material output is projected to rise 9% month-on-month to 87,920 tonnes, with weekly output up 397 tonnes to 18,938 tonnes and weekly inventory up 404 tonnes to 19,912 tonnes. According to the China Passenger Car Association, from May 1st to 10th, national passenger vehicle manufacturers' new energy wholesale volume was 193,000 units, down 16% year-on-year but up 23% from the previous month; retail volume was 226,000 units, down 13% year-on-year but up 27% from the previous month. For stainless steel, total social inventory in mainstream markets (89 warehouse caliber) was 1.135 million tonnes, down 0.9% weekly, with 300 series inventory increasing by 2,979 tonnes to 689,000 tonnes. May production scheduling is estimated at 3.7806 million tonnes, up 0.89% month-on-month and 9.17% year-on-year, including: 200 series at 1.0575 million tonnes, down 4.6% month-on-month but up 8.34% year-on-year; 300 series at 2.0476 million tonnes, up 4.36% month-on-month and 14.73% year-on-year; 400 series at 675,500 tonnes, down 0.15% month-on-month and 3.79% year-on-year. May overseas stainless steel output is expected to remain flat month-on-month; weekly profits weakened.
3. Inventory: Weekly LME inventory decreased by 2,010 tonnes to 275,778 tonnes; SHFE nickel inventory increased by 8,203 tonnes to 79,889 tonnes, social inventory rose by 10,317 tonnes to 111,577 tonnes, while bonded area inventory remained at 1,700 tonnes.
4. View: New data from Indonesia's Ministry of Energy and Mineral Resources (ESDM) shows the May second-phase nickel ore HMA (Harga Mineral Acuan) rose sharply by over a thousand dollars month-on-month, indicating the wave of ore price increases continues. The reference price for the second phase in May 2026 is set at $18,849.29/wet tonne, up $1,047.15 from the first phase, directly driving up benchmark selling prices (HPM) for all grades covering MC30% and MC35% specifications. On the supply side, issues include maintenance phases for related Indonesian mines due to quota problems. The Indonesian ESDM has explicitly required PT Weda Bay Nickel to prioritize exhausting its approved 2026 production quota before obtaining new approvals. Weda Bay has submitted an RKAB revision application to ESDM, but ESDM indicated companies can formally submit RKAB revisions in the second half of 2026, after which the government will comprehensively assess before deciding on approval. Additionally, previous raw material supply and price issues led to reduced operations at some Indonesian projects, resulting in active supply-side narrowing. Current sulfur supply and price pressures may ease but require time to replenish. On the demand side, May consumption of nickel for ternary precursors, ternary materials, and stainless steel increased. However, primary nickel inventory pressure remains significant recently, with notable increases in domestic stocks. Market sentiment fluctuations combined with inventory pressure suggest short-term prices will continue to fluctuate. Given cost-side resilience, focus on short-term low-buy opportunities and monitor whether previous supply-side reductions can drive inventory drawdowns.
Aluminum: Initial Inventory Drawdown, Support Remains Strong Alumina futures fluctuated weakly during the week, with the main contract closing at 2,727 yuan/tonne as of the 15th, down 3.5% weekly. SHFE aluminum fluctuated weakly, with the main contract closing at 24,360 yuan/tonne, down 0.3% weekly. Aluminum alloy fluctuated stronger, with the main contract closing at 23,050 yuan/tonne, up 0.59% weekly.
1. Supply: According to SMM, weekly alumina operating rates increased 0.4% to 75.6%, as Guangxi-based enterprises gradually resumed production after equipment failures led to maintenance. For electrolytic aluminum, aluminum plants in Iran, Qatar, the UAE, Bahrain, and other Middle Eastern countries have seen large-scale production cuts or shutdowns of nearly 2.5 million tonnes due to turmoil and facility damage; a Mozambique plant with 580,000 tonnes capacity shut down due to unresolved power contracts; the Mt. Holly plant's 50,000 tonnes idle capacity resumed in April and is expected to reach full production by end-Q2; an Iceland plant resumed at end-April and is expected to reach full production by end-July. Per SMM, May domestic metallurgical-grade alumina operating capacity is expected to rise to 87 million tonnes, with output of 7.378 million tonnes, up 4.2% month-on-month and 1.2% year-on-year; May domestic electrolytic aluminum operating capacity is expected to hold steady at 44.3 million tonnes, with output of 3.797 million tonnes, up 3.5% month-on-month and 1.8% year-on-year; the aluminum liquid ratio recovered to 75.8%.
2. Demand: Downstream resumption of work is weak, with significant sector divergence. Weekly average operating rates for processing enterprises held steady at 64.2%. By sector: aluminum plate/sheet operating rates held at 72.6%; aluminum cable operating rates increased 0.4% to 67%; aluminum profile operating rates rose 0.8% to 56.9%; aluminum foil operating rates decreased 0.4% to 74.3%. Secondary aluminum alloy operating rates fell 0.6% to 56.4%. Aluminum billet processing fees were mostly stable, with Baotou down 50 yuan/tonne and Wuxi up 50 yuan/tonne; aluminum rod processing fees increased 50-100 yuan/tonne across the board.
3. Inventory: For exchange inventory, alumina weekly inventory accumulated by 4,123 tonnes to 311,500 tonnes; SHFE aluminum weekly inventory accumulated by 16,148 tonnes to 508,900 tonnes; LME weekly inventory drew down by 9,275 tonnes to 346,500 tonnes. For social inventory, alumina weekly inventory accumulated by 125,000 tonnes to 345,000 tonnes; aluminum ingot weekly inventory drew down by 13,000 tonnes to 1,428,000 tonnes (Note: original says 142.8 tonnes, likely typo for '万' ten thousand); aluminum billet weekly inventory drew down by 24,500 tonnes to 234,000 tonnes.
4. View: Guinea mines remain观望 (observing/waiting) on shipments, freight rates stay high, and CIF costs remain firm. Resumption of Guangxi alumina maintenance capacity coupled with concentrated new releases, but downstream raw material inventories are high with low restocking意愿 (willingness). Alumina warehouse receipt accumulation速度 (speed) is weaker than the increase in spot circulating supply, and spot discounts have begun to widen. Currently, alumina has cost support but lacks upward momentum, maintaining a weak fluctuation rhythm. For electrolytic aluminum, domestic aluminum ingots show initial signs of inventory drawdown拐点 (inflection point), resonating with low LME inventories and helping lift the aluminum price运行重心 (operational center). Spot discount structures are修复 (repairing). However, it's important to note that after the peak domestic demand season fades,终端订单 (end-order) face marginal contraction pressure. Coupled with price increases, this may form some negative feedback on processing开工 (operating rates). The magnitude and sustainability of inventory drawdown仍需验证 (still need verification). As macro risk premiums recede, the inventory drawdown节奏 (pace) will become the core subsequent variable.
Industrial Silicon & Polysilicon: Marginal Game, Wide Fluctuations Industrial silicon futures fluctuated weakly during the week, with the main contract 2609 closing at 8,480 yuan/tonne on the 15th, down 5.99% weekly; polysilicon fluctuated weakly, with the main contract 2606 closing at 37,025 yuan/tonne, down 3.93% weekly. Spot prices held steady across the board, with不通氧553 (non-oxygen 553) stable at 8,800 yuan/tonne,通氧553 (oxygenated 553) stable at 9,200 yuan/tonne, and 421 stable at 9,500 yuan/tonne.
1. Supply: According to BaiChuan, weekly industrial silicon output fell by 1,800 tonnes to 68,100 tonnes, with weekly operating rates up 1.13% to 24.12% and the number of operating furnaces increasing by 9 to 192. In the Northwest, Xinjiang added 6 furnaces, Gansu newly started 5, while Shaanxi and Ningxia each shut down 1, totaling 151 operating furnaces in the Northwest. In the Southwest, Sichuan newly started 1 furnace, Yunnan held steady with 10 operating, totaling 15 operating furnaces in the Southwest. In other regions, Northeast China shut down 1 furnace.
2. Demand: Polysilicon P-type held steady at 31,000 yuan/tonne, N-type held at 35,000 yuan/tonne. Downstream wafers and cells restocked based on刚性需求 (rigid demand), but终端需求疲软 (end-demand is weak). Module sales both domestically and abroad weakened,终端压价态势不减 (end-user price pressure continues), downstream采购回归谨慎 (procurement has turned cautious), and market观望氛围浓厚 (wait-and-see sentiment is strong). Organic silicon weekly prices increased 100 yuan/tonne to 14,800-15,100 yuan/tonne. Monomer producers reduced output as planned while simultaneously惜售挺价 (holding back sales to support prices), leading to tight现货流通供应 (spot circulating supply). As下游原料库存见底 (downstream raw material inventories bottom out) and concerns about subsequent price increases arise, May order推进良好 (progress is good), with monomer producer预售单 (pre-sale orders) scheduled into June. Weekly polysilicon output fell 120 tonnes to 19,100 tonnes; DMC weekly output increased 800 tonnes to 44,200 tonnes.
3. Inventory: For exchange inventory, industrial silicon weekly inventory accumulated by 6,870 tonnes to 146,800 tonnes; polysilicon weekly inventory drew down by 300 tonnes to 45,800 tonnes. For social inventory, industrial silicon weekly inventory accumulated by 10,000 tonnes to 426,300 tonnes, with plant inventory drawing down by 1,000 tonnes to 235,800 tonnes. Huangpu Port inventory accumulated by 100 tonnes to 59,000 tonnes; Tianjin Port accumulated by 100 tonnes to 77,000 tonnes; Kunming Port held steady at 54,500 tonnes. Polysilicon plant inventory accumulated by 6,000 tonnes weekly to 313,000 tonnes.
4. View: Entering late May, as Xinjiang power station line maintenance concludes, two maintenance-shutdown silicon plants will陆续回归复产 (gradually resume production). Leshan, Sichuan silicon plants will also gradually restart 3-4 furnaces after profits turn positive. Downstream acceptance of high prices is poor, making集中补库 (concentrated restocking) difficult. High inventory levels are消化缓慢 (drawing down slowly), warehouse receipt pressure persists, with only期现商 (arbitrageurs) actively selling. Industrial silicon prices are supported by costs, with the center窄幅下移 (narrowly shifting lower). For polysilicon, with内蒙古新产能投放 (Inner Mongolia new capacity coming online) and西南丰水复产落地 (Southwest wet season production resumption materializing), the long-delayed终端招标 (end-user bidding) is gradually gaining volume. Affected by seasonal factors, May production scheduling from wafers to modules has increased. Under供需双增 (both supply and demand increasing), polysilicon博弈边际变量逻辑 (the logic revolves around博弈 marginal variables). Recent industry conference news is frequent, and the market continues to trade expectations of energy consumption policy announcements. Capital remains driven by反内卷 (anti-involution) and能耗指标 (energy consumption indicators). Polysilicon has entered a phase of宽幅震荡 (wide fluctuations);关注波动性走高节奏 (monitor the节奏 of volatility increases).
Lithium Carbonate: News Influences Sentiment, Fundamentals Remain Strong 1. Supply: Weekly output increased by 122 tonnes to 26,016 tonnes. Lithium extraction from spodumene increased 37 tonnes to 14,987 tonnes; from lepidolite decreased 66 tonnes to 3,235 tonnes; from salt lakes increased 140 tonnes to 4,795 tonnes; from recycling increased 11 tonnes to 2,999 tonnes. May lithium carbonate output is expected to increase 3.4% month-on-month to 113,780 tonnes.
2. Demand: Weekly ternary material output increased 397 tonnes to 18,938 tonnes, with weekly inventory up 404 tonnes to 19,912 tonnes; weekly lithium iron phosphate (LFP) output increased 390 tonnes to 111,750 tonnes, with weekly inventory up 1,640 tonnes to 134,490 tonnes. May ternary material output is expected to increase 9% month-on-month to 87,920 tonnes; May LFP output is projected to rise 8% month-on-month to 504,000 tonnes. For new energy vehicles, according to the China Passenger Car Association, from May 1st to 10th, national passenger vehicle manufacturers' new energy wholesale volume was 193,000 units, down 16% year-on-year but up 23% from the previous month; retail volume was 226,000 units, down 13% year-on-year but up 27% from the previous month. For energy storage, in April's new招标项目 (bidding projects) for new-type energy storage,新增招标 (new bidding) for储能EPC/PC (含设备) (energy storage EPC/PC including equipment),储能系统 (energy storage systems), and储能电芯 (energy storage cells) reached 27.2 GW / 85.3 GWh, up 132% year-on-year, hitting a monthly high.
3. Inventory: Weekly social inventory decreased by 1,255 tonnes to 101,418 tonnes. Downstream inventory fell 3,421 tonnes to 37,147 tonnes; inventory in other links increased 1,870 tonnes to 45,180 tonnes; upstream inventory rose 296 tonnes to 19,091 tonnes.
4. View: From a cost perspective, at current price levels, lithium carbonate valuation is relatively high, making it susceptible to news about "demand负反馈 (negative feedback)," "supply复产 (resumption)," or "inventory increases." Declining open interest has driven期货价格回落 (futures prices down). Although现货成交活跃度 (spot trading activity) improved somewhat after the price drop, the overall volume fell short of expectations, and补库动力 (restocking动力) has not been fully体现 (embodied). Inventory calibers will be adjusted; overall performance shows absolute inventory levels rising, but weekly data短期仍在去库的节奏中 (short-term is still in a destocking rhythm), with social inventory turnover days continuing to decline slightly week-on-week. Short-term prices are expected to remain震荡整理 (fluctuating and consolidating). It is suggested to关注短期低多机会 (focus on short-term low-buy opportunities) and await new catalysts. Also, monitor whether Jiangxi projects resume production.
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