Copper:
Overnight, copper prices on both domestic and international exchanges traded with a weak bias, with domestic refined copper spot imports showing a small loss. On the geopolitical front, the US and Israeli leaders met, focusing on the Iran nuclear issue. Israel stated that the US did not exert pressure on them nor demand that they abandon military achievements in Lebanon or Gaza. Following the US-Israel meeting, market expectations for a ceasefire agreement between the US and Iran have increased. In terms of inventories, LME inventories fell by 4,200 tonnes to 268,775 tonnes; Comex inventories increased by 1,036 tonnes to 641,812 tonnes; SHFE copper warrants decreased by 100 tonnes to 26,924 tonnes, and BC warrants fell by 176 tonnes to 6,378 tonnes. The US-Iran conflict has been paused again, weakening risk aversion. However, despite sticky inflation, the probability of a rate hike at the July FOMC meeting is low, but uncertainties remain. The market awaits the FOMC decision. Additionally, recent anomalies in US stocks have raised concerns about market liquidity. For copper, the rapid decline in domestic and international inventories and the tightness in non-US regions due to US copper absorption provide strong support. However, frequent macro-level disturbances also suppress bullish sentiment, warranting a cautious approach.
Nickel & Stainless Steel:
Overnight, LME nickel fell 1.88% to $16,945 per tonne, while SHFE nickel dropped 1.15% to 130,040 yuan per tonne. In inventories, LME stocks increased by 180 tonnes to 267,522 tonnes, and SHFE warrants rose by 42 tonnes to 99,638 tonnes. For premiums/discounts, the LME 0-3 month premium/discount remained negative, while imported nickel premiums held steady at -200 yuan per tonne. On the policy front, on July 10, Tri Winarno, Director General of Minerals and Coal at Indonesia's Ministry of Energy and Mineral Resources, stated that the 2026 nickel ore RKAB quota will not increase significantly, with adjustments only focusing on meeting the needs of smelting facilities currently lacking nickel ore supply. According to the Indonesian Nickel Miners Association (APNI), nickel ore absorption reached 120.6 million tonnes in the first half of 2026, equivalent to 46.2% of the 2026 Work Plan and Budget (RKAB) production quota of 260-270 million tonnes. On the news front, the Indonesian government is attempting to overcome export barriers for mineral commodities caused by a lack of clear rules on restrictions for rare earth elements in exports. Duden Abdurrahman, head of the Indonesian Presidential Staff Office (KSP), has called for coordination among ministries, institutions, law enforcement officials, and industry players to resolve the issue. Export concerns may ease, and combined with a retreat in market sentiment, attention should be paid to inventory levels and whether subsequent quota releases will drive a new cycle for nickel prices.
Alumina, Electrolytic Aluminum & Aluminum Alloy:
Overnight, alumina traded with a firm bias, with AO2609 closing at 2,683 yuan per tonne, up 0.07%. Open interest increased by 111 lots to 290,000 lots. Overnight, LME aluminum closed at $3,147.5 per tonne, down 0.63%, with inventories falling by 1,975 tonnes to 269,300 tonnes. AL2609 closed at 23,445 yuan per tonne, up 0.99%, with open interest increasing by 8,907 lots to 260,000 lots. Aluminum alloy traded with a firm bias, with the main AD2609 contract closing at 23,140 yuan per tonne, up 0.85%, and open interest decreasing by 929 lots to 12,024 lots. On the spot front, SMM alumina prices fell to 2,708 yuan per tonne. Aluminum ingot spot prices remained flat. The Foshan A00 quote rebounded to 23,260 yuan per tonne, while the Wuxi A00 quote was at a discount of 70 yuan per tonne. Aluminum rod processing fees in most regions were stable, with Nanchang down 20 yuan per tonne. For aluminum rod 1A60 series, processing fees were stable; 6/8 series processing fees were stable; while low-carbon 6/8 series fees fell by 11 yuan per tonne. The release of new alumina capacity, combined with the gradual recovery of maintenance capacity, has increased pressure on inventory margins. Spot prices have continued to decline, and the market price has broken below the industry cost line, with support gradually emerging. Policy implementation for bauxite mines has increased import ore prices, and alumina is expected to continue low-level fluctuations in the short term. Market pricing for the Middle East situation has turned weaker. Domestic destocking provides a floor, and support has been reached. However, downside risks cannot be ignored, as the market is pricing in rate hikes again, tightening liquidity and slowing the pace of destocking. In the short term, aluminum prices will remain range-bound amid mixed factors.
Industrial Silicon & Polysilicon:
On the 28th, industrial silicon traded with a weak bias, with the main 2609 contract closing at 8,185 yuan per tonne, down 1.56% for the day, and open interest increasing by 19,388 lots to 278,700 lots. The Bai Chuan industrial silicon spot reference price was 9,086 yuan per tonne, down 7 yuan per tonne from the previous trading day. The lowest deliverable grade price fell to 8,550 yuan per tonne, with the spot premium expanding to 400 yuan per tonne. Polysilicon traded with a weak bias, with the main 2609 contract closing at 32,625 yuan per tonne, down 2.97% for the day, and open interest increasing by 8,073 lots to 125,000 lots. The lowest deliverable grade price fell to 33,085 yuan per tonne, with the spot discount shifting to a premium of 390 yuan per tonne. Production in the Yili region of Xinjiang is gradually resuming, offsetting production shutdown news from Sichuan and Inner Mongolia, causing the market to fall again. The market is currently suppressed by high inventories and weak demand, and a rebound requires new production cut news. Major polysilicon companies are gradually ramping up production, with inventory pressure concentrating on silicon material makers and traders. The market has largely priced in energy consumption limits, and lacking new signals, polysilicon will continue to fluctuate in the short term.
Lithium Carbonate:
Yesterday, lithium carbonate futures 2609 fell 1.75% to 143,480 yuan per tonne, with open interest decreasing by 5,649 lots to 348,000 lots. LC2701 fell 1.53% to 141,200 yuan per tonne, with open interest increasing by 1,524 lots to 150,000 lots. On the spot price front, the average price of battery-grade lithium carbonate fell by 1,000 yuan to 145,500 yuan per tonne, and the average price of industrial-grade lithium carbonate fell by 1,000 yuan per tonne to 141,000 yuan per tonne. Battery-grade lithium hydroxide (coarse particles) fell by 1,250 yuan per tonne to 133,000 yuan per tonne. In terms of warrants, warrant inventory decreased by 140 tonnes to 38,278 tonnes yesterday. On the news front, on July 27, Yichun Tendering Network released the "Public Participation Announcement for the Environmental Impact Assessment of the Jiangxi Yifeng County Zunkouli-Fengxin County Jianxiawo Lithium Mine Mining Project," with the environmental assessment for the lithium mine project of Yichun Times New Energy Mining Co., Ltd. entering the public participation phase. Recently, the Puna Plateau in Catamarca Province, Argentina, experienced historic blizzards, strong winds, and extreme low temperatures. SMM believes that the short-term impact will first be seen in personnel shifts, production auxiliary material replenishment, equipment maintenance, and finished product transportation. In China, several lithium salt plants have announced maintenance shutdowns from August to September, with August output affected by a total of 9,000-9,500 tonnes and September by about 2,500 tonnes. IGO maintains its FY2027 production guidance of 1.55-1.75 million tonnes. On the supply side, weekly output fell by 680 tonnes to 23,868 tonnes, with spodumene-based lithium output falling by 995 tonnes to 12,509 tonnes, lepidolite-based lithium output increasing by 200 tonnes to 2,745 tonnes, brine-based lithium output increasing by 150 tonnes to 5,269 tonnes, and recycling-based lithium output decreasing by 35 tonnes to 3,345 tonnes. On the demand side, July ternary material production plans increased by 3% month-on-month to 89,690 tonnes, lithium iron phosphate by 7% to 536,850 tonnes, lithium cobalt oxide by 3% to 7,740 tonnes, and lithium manganese oxide by a decrease of 1% to 10,770 tonnes. Lithium battery production plans increased by 7% month-on-month, with domestic production up 7% and overseas up 4%. Domestically, ternary power battery production plans increased by 7% month-on-month, lithium iron phosphate power batteries by 9%, and lithium iron phosphate storage batteries by 4%. On the inventory side, large-sample weekly inventories fell by 5,341 tonnes to 114,326 tonnes, and small-sample inventories fell by 2,726 tonnes to 86,911 tonnes. By the large-sample metric, other segment inventories fell by 4,425 tonnes to 50,327 tonnes, smelter inventories increased by 18 tonnes to 13,291 tonnes, and downstream inventories decreased by 934 tonnes to 50,708 tonnes. The previously concentrated bearish sentiment is gradually being absorbed, and the market's trading logic may shift from pricing distant weak expectations to pricing near-term strong realities. However, caution is still needed regarding position fluctuations. Although the current basis has strengthened compared to before, the transaction price performance remains weak, providing no clear positive feedback for prices.
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