**Copper**: Overnight, both domestic and international copper prices fluctuated narrowly, with China's refined copper imports remaining at a loss. Macro-wise, Fed officials continue to diverge on 2024 rate cut expectations, but market focus lies on whether the incoming Fed chair can maintain monetary policy independence. Domestically, China's LPR remained unchanged for the seventh consecutive month. According to Mysteel, on Dec. 19, Chinese copper smelters and Antofagasta finalized the 2026 copper concentrate TC/RC benchmark at $0/ton and 0¢/lb. Inventory-wise, LME stocks fell 2,650 tons to 157,750 tons; Comex stocks rose 4,247 tons to 423,556 tons; SHFE copper warrants increased 2,803 tons to 48,542 tons, while BC copper warrants held at 1,053 tons. Demand-wise, higher copper prices prompted cautious downstream procurement, with transactions driven by rigid demand. The BOJ’s rate hike was seen as a "done deal," causing minimal market ripple. Coupled with Fed rate cut expectations and bond-buying support, macro sentiment remains warm, keeping copper prices firm. Fundamentally, low inventories and resilient demand provide support, but high prices may curb physical buying. As year-end approaches, downstream demand may enter a seasonal lull. Strategically, buying on dips is advised, but chasing rallies is discouraged.
**Nickel & Stainless Steel**: Overnight, LME nickel rose 2.42% to $15,260/ton, while SHFE nickel gained 2.82% to ¥122,130/ton. LME stocks dropped 162 tons to 254,388 tons; SHFE warrants rose 1,320 tons to 38,922 tons. LME 0-3M backwardation stayed negative; import nickel premiums held at ¥400/ton. Indonesia’s nickel mining association revealed that 2026 nickel ore output under the RKAB plan may drop sharply to ~250M tons from 379M tons in 2025. APNI noted that the government plans to revise nickel pricing formulas in early 2026, potentially pricing by-products like cobalt separately. Nickel ore domestic prices and premiums were stable. NPI prices dipped slightly, while stainless steel supply tightened, with weekly inventories declining notably. Rising prices improved spot market sentiment. Weakness in new energy costs and demand dragged precursor prices lower, with ternary precursor output falling MoM in December. Domestic social inventories edged up, while LME stocks declined. News-driven nickel price gains warrant caution amid implementation uncertainties.
**Alumina, Primary Aluminum & Aluminum Alloy**: Overnight, alumina edged up, with AO2601 rising 0.56% to ¥2,515/ton (open interest down 5,828 lots to 145k). Primary aluminum (AL2602) dipped 0.47% to ¥22,135/ton (OI down 2,842 lots to 311k). Aluminum alloy (AD2602) fell 0.35% to ¥21,225/ton (OI down 429 lots to 16,755). SMM alumina spot prices dropped to ¥2,754/ton. Aluminum ingot discounts widened to ¥170/ton; Foshan A00 rebounded to ¥21,860/ton, at a ¥70/ton discount to Wuxi. Aluminum rod processing fees were mostly steady, with Baotou, Henan, Nanchang, and Wuxi down ¥20–80/ton. Aluminum bar (1A60) and 6/8-series processing fees held firm, while low-carbon bars rose ¥128/ton. Increased ore shipments and mine restorations supported near-term supply. Xinjiang warehouse receipts flowed out as arbitrage faded, while rising alumina imports pressured spot prices. Alumina’s downtrend converged with futures, narrowing spot premiums. Xinjiang shipment delays may lead to concentrated arrivals, raising inventory risks. Post-macro sentiment digestion, aluminum’s upside appears limited, likely consolidating at highs.
**Industrial Silicon & Polysilicon**: On Dec. 22, industrial silicon dipped, with SI2605 down 0.52% to ¥8,595/ton (OI up 11,733 lots to 222k). BaiChuan’s spot reference price held at ¥9,593/ton. #421 (lowest deliverable grade) fell to ¥8,850/ton, with spot premiums widening to ¥255/ton. Polysilicon (PC2605) dropped 2.1% to ¥58,845/ton (OI down 4,238 lots to 135k). N-type polysilicon rose slightly to ¥52,400/ton, with spot discounts to futures narrowing to ¥6,445/ton. Northwest producers saw new maintenance, but locked-in forward sales eased pressure. Year-end environmental curbs may further tighten supply, supporting industrial silicon. Polysilicon faces inventory overhangs versus stockpiling news, sustaining divergence. Spot offers surged but lacked transactions, prompting some platforms to hold prices steady. Exchange position limits cooled speculation, triggering a minor pullback, but high premiums persist amid zero new warrants.
**Lithium Carbonate**: LC2605 surged 3.98% to ¥114,380/ton. Battery-grade carbonate spot prices rose ¥1,350/ton to ¥99,000/ton; industrial-grade gained ¥1,300/ton to ¥96,350/ton. Battery-grade hydroxide (coarse) added ¥1,200/ton to ¥87,480/ton. Warrant stocks rose 900 tons to 16,411 tons. Weekly output climbed 47 tons to 22,045 tons: spodumene-based output up 60 tons to 13,804 tons; lepidolite-based down 50 tons to 2,826 tons; salt lake-based up 20 tons to 3,095 tons; recycling-based up 17 tons to 2,320 tons. Demand-side, ternary cathode output fell 468 tons to 17,845 tons (stocks down 433 tons to 18,091 tons); LFP output dropped 2,083 tons to 92,061 tons (stocks down 1,387 tons to 102,271 tons). CPCA data showed Dec. 1–14 passenger vehicle retail sales at 764k units (-24% YoY, +2% MoM); NEV sales at 476k units (-4% YoY, +1% MoM), with penetration at 62.3%. CNESA reported 3.51GW/11.18GWh of new energy storage deployments in Nov. 2025 (-22%/-7% YoY, +81%/+180% MoM). Weekly inventories fell 1,044 tons to 110,425 tons (downstream -1,253 tons to 41,485 tons; other segments +1,280 tons to 50,850 tons; upstream -1,071 tons to 18,090 tons). Weak near-term mine operations bolstered sentiment, with strong demand expectations potentially spurring restocking. Monitor resumption pace, output cuts, warrant trends, and 2026 demand validation amid position volatility.
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