Copper: On Wednesday evening, the main Shanghai copper contract retreated to 103,660 yuan per ton, while LME copper traded around $13,311 per ton. Macro conditions remain neutral. The U.S. November PPI and core PPI both rose 3% year-on-year, exceeding expectations and leading to a slight downward revision in rate cut expectations. However, U.S. retail sales grew 0.6% month-on-month in November, indicating continued economic resilience. Fundamentals are also neutral. Shanghai Futures Exchange copper warehouse receipts increased by 27,000 tons to 149,000 tons yesterday, while LME copper inventories rose by 75 tons to 141,600 tons. With copper prices holding at high levels, end-user orders remain sluggish, and weak consumption continues to drag, leading to a sustained inventory buildup. Overall, supported by warm macro sentiment, relatively strong fundamentals, and pre-holiday restocking, copper prices are expected to maintain high-level volatility. Market participants should monitor the effectiveness of resistance near previous highs and remain cautious of correction risks from earlier profit-taking pressure. The main Shanghai copper contract is expected to trade within a range of 102,500 - 104,500 yuan per ton today. Strategically, short-term range trading is advised, with careful position management. Nickel & Stainless Steel: On the news front, Indonesia's Ministry of Energy and Mineral Resources adjusted the 2026 nickel ore RKAB quota to 250-260 million tons. The confirmation of this positive news provided a short-term boost to nickel prices. Looking ahead, however, the nickel market lacks further supply-demand contradictions, as quota tightening expectations had largely been priced in previously. In the short term, focus will be on the overall sentiment in the non-ferrous metals sector; over the medium to long term, attention should be paid to potential supplementary changes to Indonesia's RKAB quotas. For trading, a wait-and-see approach is recommended for nickel and stainless steel. The Shanghai nickel 2602 contract is expected to trade in the range of 140,000 - 165,000 yuan/ton. The stainless steel SS2603 contract is expected in the range of 14,000 - 15,000 yuan/ton. Polysilicon: Influenced by a pullback in market sentiment, polysilicon prices continue to be weak. From a fundamental perspective, data from InfoLink shows that global polysilicon production scheduling is expected to drop to around 110,000 tons in January. The short-term potential for a rush to export due to the cancellation of PV export tax rebates may offer some support, but its transmission to polysilicon demand is expected to be relatively limited. Amid weak supply and demand, polysilicon inventories are anticipated to continue accumulating. The PS2605 contract is projected to trade between 43,000 - 53,000 yuan/ton. Trading strategy suggests holding short positions. Aluminum: Alumina prices weakened overnight, with spot prices dipping slightly. The May contract opened higher but closed lower yesterday, facing technical pressure from multiple moving averages, while open interest saw a small increase. While the broader strength in non-ferrous metals provides some sentiment support, weak fundamentals continue to exert upward pressure. The supply side sees a mix of maintenance shutdowns and new capacity coming online, resulting in an overall surplus, with supply edging up to around 96 million tons. As futures prices continue to decline, the futures-spot spread has narrowed, but trading volume remains low, with downstream buyers adopting a strong wait-and-see stance. Imported ore prices have retreated somewhat, leading to a reduction in production costs for alumina plants, and the market expects further weakness in spot prices. Warehouse receipt numbers are slowly rising again, suggesting fundamental pressures will once again weigh on prices. The alumina 05 contract is expected to trade in the range of 2,500 - 2,800 yuan/ton. Holding short positions is recommended. The U.S. Supreme Court again failed to rule on the case regarding former President Trump's tariff policies, leading to a slight decline in U.S. stocks. Rising energy costs pushed the U.S. November PPI up 3% year-on-year, while the core PPI month-on-month reading was below expectations. Diverging views within the Fed regarding the pace of interest rate cuts have slightly cooled macro sentiment. Fundamentally, as aluminum prices remain high, holders are showing increased willingness to sell, leading to looser market circulation. Downstream processors and end-users exhibit strong aversion to high prices, with an aluminum rod processor in Guangxi commencing maintenance shutdowns; instances of production cuts and shutdowns in primary processing are increasing. On Wednesday, aluminum ingot inventories in major consumption areas increased by 3,500 tons week-on-week, with Wuxi being the primary location for inventory accumulation. The pass-through of high prices to end-users remains challenging. Against the backdrop of cooling market sentiment and persistently weak fundamentals, resistance around the 25,000 yuan/ton level remains significant. The Shanghai aluminum 02 contract is expected to trade between 24,500 - 25,200 yuan/ton. A temporary wait-and-see approach is advised. Zinc: Zinc prices showed strength in overnight trading. Macro-wise, better-than-expected U.S. November PPI and retail sales data created a mixed macro sentiment. Fundamentally, the decline in domestic Treatment Charges (TC) shows signs of slowing. According to BaiChuan YingFu research, weekly TC offers saw lows around 1,100 yuan, with little acceptance below 1,000 yuan; overseas offers followed the downward trend. Recent narrowing of the import price spread has led to a slight increase in imported material availability. On the supply side, influenced by the restart of smelters with high self-sufficiency ratios in Yunnan province in January, zinc ingot output is expected to increase month-on-month. Demand-wise, the weak performance in the ferrous sector offers limited support for galvanizing and other primary processing operations. Overall, as the broad rally in non-ferrous metals shows signs of divergence, watch to see if follow-up funds can drive a breakthrough above key psychological levels. Trading strategy suggests taking profits on rallies for Shanghai zinc, with the main contract expected around 24,500 - 25,500 yuan/ton. Lead: Shanghai lead prices showed strength overnight. Fundamentally, on the supply side, for primary lead, TCs remain under pressure, although adjustments to smelter maintenance plans have slightly eased regional tightness. For secondary lead, expectations of lower scrap battery output, coupled with transport restrictions, have increased recyclers' price support intentions. Secondary lead smelting profits have also declined, but the potential lifting of environmental controls in Anhui province suggests overall secondary supply changes will be limited. On the consumption side, impacted by new national standards, end-consumer acceptance of new vehicle models has decreased, intensifying the usual seasonal lull. In the spot market, social inventories saw a slight increase after the holiday but remain at relatively low absolute levels. Overall, with both supply and demand weak, lead prices are expected to trade range-bound. Trading strategy suggests range trading for Shanghai lead, with the main contract expected around 17,000 - 18,000 yuan/ton. Aluminum Alloy: Aluminum alloy prices showed strength overnight. Macro conditions mirror other metals, with mixed sentiment from strong U.S. data. Fundamentally, on the raw material side, the beginning of the year coincides with a seasonal lull in scrap aluminum recycling, although soaring alloy prices have correspondingly boosted smelting profits. On the supply-demand side, production orders vary between large and small factories, downstream demand orders have declined month-on-month, and spot transactions are still primarily driven by traders. Regarding spreads, the AD-AL main contract spread has stabilized at low levels, with Baotai's offer rising to 23,600 yuan. Overall, spot performance is mediocre; watch to see if it can follow Shanghai aluminum in achieving a breakout. Trading strategy suggests a wait-and-see approach for aluminum alloy, with the main contract expected around 23,000 - 24,000 yuan/ton. Precious Metals: Precious metals showed divergent performances. Gold and platinum edged higher, silver continued its strong breakout, while palladium closed lower, showing relative weakness. Price movements are still primarily driven by optimistic sentiment and speculative funds, with volatility remaining significant. Current market concerns about the perceived weakening of the Federal Reserve's independence, along with the stimulus from the unresolved U.S. Supreme Court decision on Trump's tariffs, are providing support for precious metal prices. However, stronger-than-expected U.S. retail sales indicate signs of a resilient U.S. economy, while the elevated PPI data keeps inflation concerns alive, cooling rate cut expectations and thereby exerting pressure on precious metals. Currently, all precious metal prices are at high levels and remain sensitive to marginal changes in news flow, implying continued price volatility risks. Emphasis on position management and risk control is crucial. For trading, long-term gold long positions can be held; silver, platinum, and palladium are suggested for temporary观望. The Shanghai gold 2604 contract reference range is 1010-1060 yuan/gram. The Shanghai silver 2604 contract reference range is 22,000-24,500 yuan/kilogram. The Guangplatinum 2606 reference range is 600-650 yuan/gram. The Guangpalladium 2606 reference range is 460-510 yuan/gram.
Comments