**Copper: Loose Narrative Persists, Maintaining Strong Trend** **Macro Factors**: Overseas, U.S. non-farm payrolls rose by 64,000 in November, exceeding market expectations, but October data was sharply revised downward. The unemployment rate climbed to 4.6%, the highest since 2021, confirming a cooling labor market. However, uncertainty remains over whether this will shift the Fed’s stance on a January rate cut. Meanwhile, U.S. November CPI rose 2.7% YoY, below the expected 3.1%, while core CPI increased 2.6% YoY, also below forecasts, signaling easing inflation. Fed Governor Waller noted potential for 50–100 bps rate cuts amid weaker employment and controlled inflation but emphasized a gradual approach. The Bank of Japan raised rates by 25 bps to 0.75%, a 30-year high, with markets reacting as "priced in."
**Fundamentals**: Copper concentrate TC remains at historic lows, sustaining supply concerns. Mysteel reports Chinese smelters and Antofagasta set 2026 benchmark TC at $0/ton and 0¢/lb. December refined copper output is estimated at 1.1688M tons, up 5.96% MoM and 6.69% YoY, exacerbating concentrate tightness. November refined copper net imports fell 58.16% YoY to 161,700 tons, while scrap imports rose 5.87% MoM to 208,100 metal tons. Global visible copper stocks rose 9,000 tons to 822,000 tons as of December 19, with LME stocks down 5,500 tons and SHFE stocks up 0.28M tons. High prices have dampened downstream buying, with exports gaining traction.
**Outlook**: The BoJ’s hike and Fed’s dovish tilt sustain a bullish macro backdrop, keeping copper near record highs. Low inventories and resilient demand provide support, but year-end seasonality may curb buying. A buy-on-dips strategy is advised, with resistance near prior highs.
**Nickel & Stainless Steel: Policy Implementation in Focus** **Supply**: Indonesian 1.2% nickel ore prices held at $22.5/wet ton, while 1.6% grades dipped slightly. NPI, MHP, and high-ice nickel spot prices edged down. **Demand**: Ternary material output fell 468 tons WoW. NEV retail sales dropped 4% YoY in early December, with penetration at 62.3%. Stainless steel inventories fell 2% WoW, with 300-series stocks down 1.8K tons. **Inventory**: LME stocks fell 1,248 tons, while SHFE stocks dropped 332 tons. **View**: Nickel price volatility was driven by Norilsk’s revised surplus forecast (240K tons for 2024) and Indonesia’s potential 2026 output cut. Caution is warranted amid policy uncertainties.
**Alumina & Aluminum: Inventory Pressure Caps Gains** **Prices**: Alumina futures rose 1.2% WoW, aluminum edged up 0.1%, and alloys gained 0.6%. **Supply**: Alumina operating rates ticked up 0.23% to 79.85%. December output is projected at 7.2M tons (-3.5% MoM), while aluminum output may hit 3.885M tons (+6.8% MoM). **Demand**: High prices and environmental curbs lowered processing rates by 0.3% to 61.5%. **Inventory**: Exchange alumina stocks fell 53K tons; aluminum stocks dropped 7,918 tons. Social stocks of aluminum ingots declined 6K tons. **Outlook**: Macro sentiment and steady de-stocking support prices, but year-end inventory builds may limit upside.
**Silicon & Polysilicon: Volatility Rises on Mixed Signals** **Prices**: Industrial silicon futures rose 3.02% WoW; polysilicon jumped 5.34%. **Supply**: Silicon output fell 2,070 tons WoW, with operating rates down 0.75%. **Demand**: Polysilicon prices firmed, but downstream resistance to high prices muted transactions. **Inventory**: Industrial silicon stocks rose 2,900 tons; polysilicon stocks surged 7,500 tons. **View**: Short-term strength persists on supply cuts, but polysilicon’s high premium warrants caution.
**Lithium Carbonate: Weak Restart Expectations** **Supply**: Weekly output edged up 47 tons to 22,045 tons. **Demand**: Ternary output fell 468 tons; LFP output dropped 2,083 tons. NEV sales dipped 4% YoY early December. **Inventory**: Stocks fell 1,044 tons, with downstream de-stocking notable. **Outlook**: CATL’s mine restart delay may buoy prices, but monitor restarts and 2024 demand validation.
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