Copper: Supply Concerns Resurface, Copper Prices Trend Higher 1. Macro Environment. U.S. non-farm payrolls for April surged by 115,000, significantly exceeding the market consensus of 65,000, while March figures were revised upward to 185,000. The unemployment rate held steady at 4.3%, but wage growth rose only 0.2% month-on-month, falling short of expectations. Chairman Powell's term concludes on May 15, though he will remain as a governor, with Kevin Warsh set to assume the chairmanship. The Senate is expected to commence confirmation hearings for his nomination as early as May 11. Geopolitically, the U.S. and Iran are locked in a complex stalemate of "fighting while talking" in the Strait of Hormuz, indicating diminishing patience on both sides and adding to future regional instability. However, financial market reactions suggest a prevailing belief that the U.S.-Iran conflict will not escalate further. Additionally, the U.S. Court of International Trade (CIT) ruled that the 10% universal tariffs imposed by former President Trump under Section 122 of the Trade Act of 1974 were unlawful, marking another significant setback for the Trump administration's trade agenda. 2. Fundamentals. Copper Concentrate: Domestic TC (Treatment and Refining Charges) quotes have declined again, reaching historically extreme lows, indicating that tightness in copper concentrate supply remains unresolved and continues to be a key supportive factor for current fundamentals. Refined Copper Production: Estimated electrolytic copper output for May is 1.1675 million tonnes, down 0.96% month-on-month but up 2.56% year-on-year. Imports: China's net imports of refined copper in March fell 22.72% year-on-year to 221,100 tonnes, with a cumulative year-on-year decrease 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 year-on-year increase of 9.72%. Inventory: As of May 8, global visible copper inventories increased by 16,000 tonnes from the previous count (April 30) to 1.254 million tonnes. Specifically, LME inventories decreased by 325 tonnes to 399,400 tonnes; COMEX inventories rose by 8,658 tonnes to 563,388 tonnes; domestic refined copper social inventories increased by 8,500 tonnes week-on-week to 251,500 tonnes, while bonded area inventories fell by 900 tonnes to 39,800 tonnes. Demand: Enterprises remain cautious towards high copper prices, with downstream procurement primarily driven by rigid demand. The pace of domestic inventory drawdown has slowed, indicating resilient overall consumption. 3. View. Copper prices are expected to continue their strong, high-level consolidation pattern, primarily based on a generally supportive macro backdrop and the assessment that tightness in the mining sector is materially transmitting to the smelting segment. Strategically, a cautiously bullish stance is recommended, but vigilance is warranted regarding the constraining effect of high LME inventories on overseas price upside; excessive chasing of highs should be avoided. On the macro front, the U.S.-Iran situation remains in a deadlock of "talks without a breakdown," with a low probability of extreme escalation. Pessimistic expectations for Fed rate cuts are nearing full pricing, potentially limiting further dollar strength and contributing to marginal improvement in macro sentiment. Fundamentally, sulfur shortage issues persist. Although the impact on supply is being downplayed due to sulfur inventories, as time progresses, supply contraction may transition from expectation to actual realization. Additionally, a significant reduction in China's imported concentrate, lower-than-expected domestic production, and domestic TC continuing to drop to extreme lows could squeeze smelter profit margins if domestic sulfuric acid prices decline concurrently, potentially leading to production cuts. Therefore, a strategy of cautious long positioning during consolidation is advised. A key risk lies in potential progress in U.S.-Iran negotiations, particularly regarding navigation in the Strait of Hormuz. Unexpected positive developments could alleviate sulfur shortage concerns, potentially triggering a short-term copper price correction towards the 100,000 yuan per tonne psychological level.
Nickel & Stainless Steel: Raw Material Concerns Ease, Valuation Pulls Back 1. Supply: Indonesian nickel ore pricing has been adjusted, but calculated ore prices remain high and stable. Domestic port inventories are at their lowest level in five years for the same period. Market nickel pig iron transaction prices have moved up to 1,175 yuan per nickel point (CIF, duty-paid). Refined nickel production in May is estimated at 34,700 tonnes, down 6.5% month-on-month. Domestic nickel pig iron output is projected to fall 2% month-on-month to 27,000 nickel tonnes, while Indonesian production is forecast to drop 1% month-on-month to 129,400 nickel tonnes. Sulfate nickel production is expected to decrease 2% month-on-month to 34,845 nickel tonnes. 2. Demand: New Energy: Ternary precursor output in May is estimated to increase 6% month-on-month to 15,130 tonnes, while ternary material production is projected to rise 9% month-on-month to 87,920 tonnes, with medium-to-high nickel series showing larger gains. Lithium battery output is forecast to grow 7% month-on-month to 239.3 GWh, with ternary battery production up 6% month-on-month to 33.3 GWh. According to the CPCA, estimated wholesale sales of new energy passenger vehicles in China for April 2026 reached 1.22 million units, up 7% year-on-year and 7% month-on-month. Initial signs of industry recovery emerged in April, with high oil prices stimulating a shift in consumer demand from fuel vehicles to new energy vehicles both domestically and internationally. Increased supply of new and facelifted models at the Beijing Auto Show effectively met market demand. Robust overseas new energy sales amid high oil prices, coupled with Chinese brands' generational lead in product offerings and clear cost-performance advantages, also drove sustained export growth. Stainless Steel: Total social inventories across major national markets (89 warehouse caliber) stood at 1.145 million tonnes, up 2.1% week-on-week, with 300-series inventories increasing by 10,080 tonnes to 692,000 tonnes. Estimated May production schedules total 3.7806 million tonnes, up 0.89% month-on-month and 9.17% year-on-year. Breakdown: 200-series at 1.0575 million tonnes, down 4.6% month-on-month, up 8.34% year-on-year; 300-series at 2.0476 million tonnes, up 4.36% month-on-month, up 14.73% year-on-year; 400-series at 675,500 tonnes, down 0.15% month-on-month, down 3.79% year-on-year. Overseas stainless steel production is expected to remain flat month-on-month. Recent rapid price gains in stainless steel have significantly boosted mill profits. 3. Inventory: LME inventories increased by 1,392 tonnes week-on-week to 277,788 tonnes. SHFE nickel inventories rose by 502 tonnes to 71,686 tonnes, while social inventories grew by 622 tonnes to 101,260 tonnes. Bonded area inventories remained unchanged at 1,700 tonnes. 4. View: On the supply side, one factor is a specific mine entering maintenance due to quota-related issues; another is the previous raw material supply and price pressures leading to load reductions at some Indonesian projects, resulting in an active narrowing of supply. Currently, it appears that supplementary quotas may be finalized in the second half of the year, while current sulfur supply and price pressures are expected to potentially ease. The valuation premium in nickel prices driven by sulfur factors is gradually receding. On the demand side, May consumption of nickel in ternary precursors, ternary materials, and stainless steel has increased. However, Class I nickel inventory pressure remains significant recently, with LME inventories rising week-on-week and domestic social inventories continuing to accumulate. Short-term pressure persists, with attention focused on whether previous production cuts on the supply side can drive inventory drawdown.
Aluminum: Post-Holiday Stabilization, Range-Bound The first week after the May Day holiday saw alumina futures consolidating with a weak bias. As of the 8th, the main contract closed at 2,827 yuan/tonne, down 0.6% for the week. SHFE aluminum consolidated with a stronger bias, with the main contract closing at 24,445 yuan/tonne intra-week, up 0.1% weekly. Aluminum alloy prices also consolidated with strength, with the main contract closing at 22,915 yuan/tonne intra-week, up 0.02% weekly. 1. Supply: According to SMM, alumina operating rates increased by 0.4% week-on-week to 75.1%, as companies in Guangxi that experienced faults gradually resumed operations after maintenance. For primary aluminum, nearly 2.5 million tonnes of capacity at aluminum plants in Middle Eastern countries like Iran, Qatar, the UAE, and Bahrain have seen large-scale production cuts or shutdowns due to regional instability and facility damage. A 580,000-tonne plant in Mozambique halted operations due to unresolved power contract negotiations. Mt. Holly's 50,000 tonnes of idle capacity resumed in April and is expected to reach full production by the end of Q2. An Icelandic plant resumed at the end of April and is projected to reach full production by the end of July. Per SMM, China's metallurgical-grade alumina operating capacity in May is estimated to rise to 87 million tonnes, with output at 7.378 million tonnes, up 4.2% month-on-month and 1.2% year-on-year. Domestic primary aluminum operating capacity in May is expected to hold steady at 44.3 million tonnes, with production at 3.797 million tonnes, up 3.5% month-on-month and 1.8% year-on-year. The aluminum liquid ratio rebounded to 75.8%. 2. Demand: Holiday effects faded, but post-holiday downstream resumption was weaker than expected. The average operating rate of processing enterprises decreased by 0.4% from pre-holiday levels to 64.2% for the week. By segment: aluminum plate/sheet/strip operating rates fell 0.4% to 72.6%; aluminum cable operating rates declined 1% to 66.6%; aluminum extrusion operating rates dropped 0.4% to 56.1%; aluminum foil operating rates decreased 0.3% to 74.7%. Secondary aluminum alloy operating rates fell 0.7% to 57%. Aluminum billet processing fees held steady in Linyi, while rising by 50-70 yuan/tonne in Xinjiang, Baotou, Henan, Wuxi, and Guangdong. Aluminum rod processing fees remained stable in Shandong, Inner Mongolia, and Guangdong, but increased by 50 yuan/tonne in Henan. 3. Inventory: Exchange Inventories: In the first post-holiday week, alumina exchange inventories decreased by 3,633 tonnes week-on-week to 307,400 tonnes; SHFE aluminum inventories accumulated by 9,477 tonnes to 492,700 tonnes; LME aluminum inventories drew down by 8,825 tonnes to 358,200 tonnes. Social Inventories: Alumina social inventories increased by 15,000 tonnes week-on-week to 220,000 tonnes; aluminum ingot social inventories rose by 9,000 tonnes to 1.441 million tonnes; aluminum billet social inventories grew by 2,000 tonnes to 258,500 tonnes. 4. View: Post-holiday, the gradual recovery of alumina maintenance capacity in Guangxi has re-emerged as a supply pressure point. Downstream primary aluminum restocking remains cautious, and the pre-holiday passive destocking narrative has faded, with prices returning to weak consolidation. For primary aluminum, the post-holiday domestic market's follow-through on gains has been insufficient, and the divergence between domestic and overseas markets has not converged but rather intensified. Overseas geopolitical risks have cooled, while the LME low-inventory narrative persists. Domestically, post-holiday inventory accumulation continues, downstream resumption has fallen short of expectations, and demand is beginning to show early signs of the traditional off-season. Apart from sustained export热度 in the cable sector, production schedules for air-conditioning aluminum foil and PV frames have started to decline in May. Traders are also reporting book losses, with overall willingness to take on goods weakening. Macro sentiment is gradually stabilizing. High aluminum prices lack sustained demand承接, with both topside and downside constrained, entering a range-bound consolidation phase. Key focus points are signals of inventory drawdown and changes in export orders.
Industrial Silicon & Polysilicon: Conflicting Factors, Awaiting Change The first week after the May Day holiday saw industrial silicon futures consolidating with strength. On the 8th, the main contract 2609 closed at 9,020 yuan/tonne, up 2.56% for the week. Polysilicon prices rose initially then fell back, with the main contract 2606 closing at 38,540 yuan/tonne, up 0.42% weekly. Spot prices were steady to higher, with 553 (non-oxygen) holding steady at 8,800 yuan/tonne, 553 (oxygen) rising 100 yuan/tonne to 9,200 yuan/tonne, and 421 increasing 50 yuan/tonne to 9,500 yuan/tonne. 1. Supply: According to BaiChuan, weekly industrial silicon output increased by 330 tonnes week-on-week to 70,300 tonnes. The weekly operating furnace rate rose 0.25% to 25.25%, with the number of operating furnaces increasing by 2 to 201. In the Northwest region, Xinjiang held steady with 126 furnaces operating, totaling 161 operating furnaces in the Northwest. In the Southwest region, Yunnan remained stable with 9 furnaces operating, while Sichuan added 1 furnace, bringing the Southwest total to 13 operating furnaces. In other regions, Inner Mongolia added 1 furnace. 2. Demand: Polysilicon P-type prices held steady at 31,000 yuan/tonne, while N-type remained at 35,000 yuan/tonne. Post-holiday restocking demand was released early, but end-user price pressure remains unabated. Downstream procurement has turned cautious again, with light new order signing and a strong wait-and-see atmosphere. Weekly organic silicon prices increased by 200 yuan/tonne to 14,700-15,000 yuan/tonne. Monomer plants are producing according to planned schedules. Major producers are simultaneously holding back supply to support prices, leading to tight spot supply. As downstream raw material inventories are depleted and concerns about subsequent price hikes persist, May order signing is progressing relatively well. Weekly polysilicon output increased by 300 tonnes to 19,200 tonnes, while DMC weekly output fell by 1,000 tonnes to 40,500 tonnes. 3. Inventory: Exchange Inventories: Post-holiday, industrial silicon exchange inventories accumulated by 430 tonnes week-on-week to 139,100 tonnes; polysilicon exchange inventories increased by 100 tonnes to 46,100 tonnes. Social Inventories: Industrial silicon social inventories decreased by 10,300 tonnes week-on-week to 443,100 tonnes, with plant inventories down 10,300 tonnes to 258,600 tonnes. Huangpu port inventories fell by 500 tonnes to 56,000 tonnes; Tianjin port inventories held steady at 74,500 tonnes; Kunming port inventories remained unchanged at 54,000 tonnes. Polysilicon plant inventories increased by 9,000 tonnes week-on-week to 302,000 tonnes. 4. View: Influenced by the叠加 impact of news regarding production cuts at a major industrial silicon producer in Xinjiang due to an incident and adjustments to preferential electricity tariffs in Inner Mongolia, post-holiday speculative sentiment drove futures prices higher. However, the pricing-in of Northwest production cuts appears sufficient, and expectations for Southwest production resumption are clear. Post-holiday downstream goods acceptance sentiment remains weak. New hedging positions entered the market at high levels, increasing the pressure for a pullback after the rally. Related news provided more significant support to the polysilicon futures盘面 than to industrial silicon. Recent Q1 reports from several companies revealed widespread and deepening industry losses, which will likely lead to more cautious procurement strategies from downstream wafer pulling operations. Post-holiday, polysilicon plants are still primarily fulfilling previous orders, with significant new order signing stalling due to disagreements. Currently, futures and spot markets lack配合 in both volume and price, making it difficult for spot prices to follow the futures rally. As market情绪 is gradually digested, the likelihood of a pullback from highs becomes more apparent. Post-holiday, the market has entered a phase dominated by actual supply and demand realities. Attention turns to new industry conferences,等待 policy implementation, and signals of tangible demand improvement.
Lithium Carbonate: Demand-Driven Return to Destocking 1. Supply: Weekly output decreased by 134 tonnes week-on-week to 25,894 tonnes. Spodumene-based production fell by 379 tonnes to 14,950 tonnes; lepidolite-based production increased by 34 tonnes to 3,301 tonnes; salt lake-based production rose by 135 tonnes to 4,655 tonnes; and recycling-based production grew by 76 tonnes to 2,988 tonnes. May lithium carbonate production is estimated at 113,780 tonnes, up 3.4% month-on-month. Breakdown: spodumene-based output projected to increase by 950 tonnes to 66,000 tonnes; lepidolite-based output expected to rise by 900 tonnes to 14,330 tonnes; salt lake-based output forecast to grow by 500 tonnes to 20,390 tonnes; recycling-based output anticipated to increase by 1,400 tonnes to 13,060 tonnes. May lithium hydroxide production is estimated at 30,420 tonnes, down 2% month-on-month, comprising 27,470 tonnes from smelting (down 2% MoM) and 2,950 tonnes from causticization (up 2% MoM). 2. Demand: May production estimates: ternary materials at 87,920 tonnes, up 9% month-on-month; lithium iron phosphate (LFP) at 503,700 tonnes, up 8% MoM; lithium cobalt oxide at 9,480 tonnes, up 23% MoM; lithium manganese oxide at 13,000 tonnes, up 7% MoM. May lithium battery output is forecast at 239.3 GWh, up 7% MoM, including ternary batteries at 33.3 GWh (up 6% MoM), LFP batteries at 196.4 GWh (up 7% MoM), and other batteries at 9.5 GWh (up 7% MoM). New Energy Vehicles: Based on preliminary monthly data from the CPCA, estimated wholesale sales of new energy passenger vehicles in China for April 2026 reached 1.22 million units, up 7% year-on-year and 7% month-on-month. Initial signs of industry recovery emerged in April, with high oil prices刺激 a shift in consumer demand from fuel vehicles to new energy vehicles both domestically and internationally. Increased supply of new and facelifted models at the Beijing Auto Show effectively met market demand. Robust overseas new energy sales amid high oil prices, coupled with Chinese brands' generational lead in product offerings and clear cost-performance advantages, also drove sustained export growth. Energy Storage: According to the Grand East Times智库 energy storage database, the weighted average price for energy storage EPC中标 projects in April 2026 was 1.00 yuan/Wh; for energy storage systems it was 0.53 yuan/Wh; and for battery cells it was 0.40 yuan/Wh. 3. Inventory: Weekly social inventories decreased by 920 tonnes week-on-week to 102,673 tonnes. Downstream inventories fell by 1,634 tonnes to 40,568 tonnes; inventories in other segments increased by 750 tonnes to 43,310 tonnes; upstream inventories decreased by 36 tonnes to 18,795 tonnes. 4. View: Supply remained largely flat, while demand increased significantly, pulling weekly data back into a destocking rhythm. Inventory turnover days dropped noticeably from 29.1 days to around 25.1 days. Over the weekend, a certain institution下调 battery production schedules, though they still showed a month-on-month increase of 10%. Against the backdrop of stronger oil prices, sales of new energy vehicles and the number of electric heavy-duty trucks put into operation have both increased. For energy storage, April招标 volumes remained substantial, though中标 activity showed some lag. Current prices are encountering the key 200,000 yuan/tonne level. A breakthrough requires a catalyst,等待 a共振 moment, but持仓扰动 should be monitored.
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