Copper: Overnight, copper prices both domestically and internationally oscillated higher, with spot import margins for refined copper in China remaining slightly profitable. On the macro front, the US April CPI rose 3.8% year-on-year, exceeding market expectations of 3.7% and marking the highest level since May 2023. Core CPI increased 2.8% year-on-year, also surpassing the expected 2.7%, reaching its highest point since September 2025. The US-Iran conflict is transmitting inflationary pressures through energy, airfare, and transportation costs. Persistent inflation has further delayed market expectations for a Federal Reserve rate cut, making a cut within the year increasingly unlikely. However, the market remains attentive to the sustainability of inflation. US-Iran ceasefire negotiations have reached a serious impasse. Iran states that a prerequisite for talks with the US is ending hostilities and lifting the blockade. Former President Trump indicated no urgency to resolve the conflict, while the US Secretary of Defense affirmed the ceasefire agreement remains valid, and Trump could resume military action against Iran without congressional authorization. Inventory-wise, LME stocks decreased by 1,000 tonnes to 400,000 tonnes; Comex stocks increased by 1,113 tonnes to 565,186 tonnes; SHFE copper warehouse receipts fell by 470 tonnes to 88,547 tonnes; BC copper increased by 2,445 tonnes to 14,783 tonnes. On the demand side, enterprises remain cautious towards high copper prices, with downstream purchases primarily driven by rigid demand. The pace of domestic inventory drawdown has slowed, though overall consumption shows resilience. As previously noted, in a generally stable macro environment, market focus shifts to commodities significantly impacted by supply or demand. Recently, with extreme TC charges and the ongoing shortage of sulfur overseas affecting supply prospects, copper is once again viewed with a bullish bias. A strategy leaning towards long positions amid volatility is advised. A key risk is that if US-Iran negotiations, particularly regarding navigation through the Strait of Hormuz, make unexpectedly positive progress, it could alleviate the sulfur shortage, potentially leading to a rapid correction in copper prices.
Nickel & Stainless Steel: Overnight, LME nickel fell 1.71% to $18,925 per tonne, while SHFE nickel dropped 0.88% to 145,650 yuan per tonne. Inventory data shows LME stocks decreased by 66 tonnes to 276,774 tonnes, and SHFE warehouse receipts increased by 444 tonnes to 70,825 tonnes. In terms of premiums/discounts, the LME 0-3 month spread remained in negative territory; the import nickel premium/discount rose by 100 yuan per tonne to -500 yuan per tonne. On the supply side, one factor is the maintenance phase for some Indonesian mines due to quota issues. According to comprehensive foreign media reports including Bloomberg on May 11, 2026, facing the imminent exhaustion of domestic nickel ore production quotas, Indonesia's Ministry of Energy and Mineral Resources (ESDM) has explicitly required PT Weda Bay Nickel (WBN) to prioritize utilizing its approved 2026 production quota before seeking new approvals. WBN has submitted an RKAB amendment request to ESDM, hoping to increase capacity to meet the annual demand of approximately 100 million tonnes of nickel ore for its High-Pressure Acid Leach (HPAL) smelter within the park. However, ESDM is proceeding cautiously. The Secretary-General of the Mining Directorate emphasized that, per current regulations, companies can formally submit RKAB amendments in the second half of 2026, after which the government will conduct a comprehensive assessment before deciding on approval. Another factor is the earlier voluntary supply reduction from some Indonesian projects due to raw material supply and price pressures. Current sulfur supply and price pressures may potentially ease, but replenishment will require time. On the demand side, nickel consumption for ternary precursors, ternary materials, and stainless steel increased in May. However, Class I nickel inventory pressure remains significant recently, with weekly LME stocks rebounding and domestic social inventories continuing to rise. Short-term pressure persists, but long positions at low levels can still be considered, focusing on whether previous supply-side production cuts can drive inventory drawdowns.
Alumina, Primary Aluminum & Aluminum Alloy: Overnight, alumina traded weaker, with the AO2609 contract closing at 2,776 yuan per tonne, down 1.35%. Open interest increased by 11,448 lots to 359,000 lots. Primary aluminum also traded weaker, with the overnight AL2606 contract closing at 24,640 yuan per tonne, down 0.02%. Open interest increased by 679 lots to 288,000 lots. Aluminum alloy traded weaker, with the overnight main AD2607 contract closing at 23,255 yuan per tonne, down 0.21%. Open interest increased by 117 lots to 13,296 lots. On the spot market, SMM alumina prices rose back to 2,680 yuan per tonne. The discount for aluminum ingot spot expanded to 120 yuan per tonne. Foshan A00 aluminum prices rose back to 24,330 yuan per tonne, at a 40 yuan per tonne discount to Wuxi A00. Aluminum billet processing fees remained stable in Baotou, Henan, and Linyi, while fees in Xinjiang, Nanchang, Guangdong, and Wuxi decreased by 20-50 yuan per tonne. Processing fees for 1A60 series aluminum rod increased by 25-50 yuan per tonne; fees for 6/8 series remained stable; low-carbon 6/8 series increased by 90 yuan per tonne. Post-holiday, maintenance capacity for alumina in Guangxi is gradually resuming, reapplying supply pressure. Downstream primary aluminum restocking is cautious, and the pre-holiday passive destocking logic has faded, leading prices back to weak consolidation. The momentum for domestic primary aluminum to follow international gains is insufficient, and the divergence between domestic and international markets has not narrowed but intensified. Overseas geopolitical risks have cooled, and the LME low-inventory logic persists. Domestically, post-holiday inventories continue to accumulate, downstream resumption of work has fallen short of expectations, and demand is beginning to show signs of the traditional off-season. Apart from sustained export demand for cables, production schedules for air conditioner aluminum foil and photovoltaic frames have started to decline in May. Traders are also reporting book losses, and overall willingness to take on goods has weakened. Macro sentiment is gradually calming. High aluminum prices lack sustained demand support, constrained at both tops and bottoms, entering a range-bound consolidation pattern. Focus on inventory drawdown signals and changes in export orders.
Industrial Silicon & Polysilicon: On the 12th, industrial silicon traded weaker. The main 2609 contract closed at 8,795 yuan per tonne, down 3.88% intraday. Open interest decreased by 39,071 lots to 361,100 lots. The Baichuan spot reference price for industrial silicon was 9,186 yuan per tonne, unchanged from the previous trading day. The lowest deliverable grade price rose back to 8,700 yuan per tonne, with the spot discount narrowing to 95 yuan per tonne. Polysilicon traded weaker. The main 2606 contract closed at 36,430 yuan per tonne, down 5.84% intraday. Open interest increased by 1,001 lots to 68,769 lots. The adjusted lowest deliverable standard is 34,000 yuan per tonne, with the spot discount narrowing to 2,430 yuan per tonne. Resumption of industrial silicon production in Southwest China is adding pressure, while downstream continues purchasing based on rigid demand, lacking excess inventory building and export orders to absorb the supply increase. Production cuts in the Northwest are fully priced in, and the expectation for resumption in the Southwest is clear, keeping downstream buying sentiment weak. New hedging positions entered the market at high levels, creating pressure for a correction from highs. Recently, several polysilicon companies released Q1 reports. With industry-wide losses deepening, downstream wafer pulling segments will adopt more cautious procurement strategies. Post-holiday, polysilicon plants are still primarily fulfilling previous orders, and the signing of large new orders has stalled due to disagreements. Currently, futures and spot markets lack coordinated volume and price movements. Spot prices struggle to follow futures gains. The futures market is gradually digesting sentiment, with the pace of correction converging towards spot prices becoming clearer.
Lithium Carbonate: Yesterday, the lithium carbonate futures 2609 contract rose 1.54% to 205,260 yuan per tonne, with intraday open interest decreasing by 3,218 lots to 537,000 lots. Spot prices: the average price for battery-grade lithium carbonate increased by 4,750 yuan per tonne to 200,000 yuan per tonne; industrial-grade lithium carbonate average price increased by 4,750 yuan per tonne to 195,500 yuan per tonne; battery-grade lithium hydroxide (coarse particle) increased by 4,500 yuan per tonne to 186,500 yuan per tonne. Warehouse receipts: inventory increased by 2,074 tonnes to 45,954 tonnes. Supply side: weekly production decreased by 134 tonnes week-on-week to 25,894 tonnes; May lithium carbonate production is estimated to increase 3.4% month-on-month to 113,780 tonnes; Chile's total lithium carbonate exports in April 2026 were 29,526 tonnes, up 3.40% month-on-month and 35.63% year-on-year, with exports to China at 22,956 tonnes, up 21.29% month-on-month and 47.66% year-on-year. Demand side: May production estimates: ternary materials up 9% month-on-month to 87,920 tonnes; lithium iron phosphate (LFP) up 8% month-on-month to 503,700 tonnes; lithium cobalt oxide up 23% month-on-month to 9,480 tonnes; lithium manganese oxide up 7% month-on-month to 13,000 tonnes; May lithium battery production is estimated to increase 7% month-on-month to 239.3 GWh, comprising ternary batteries up 6% to 33.3 GWh, LFP batteries up 7% to 196.4 GWh, and other batteries up 7% to 9.5 GWh. Inventory side: weekly social inventories decreased by 920 tonnes week-on-week to 102,673 tonnes. This includes downstream inventories down 1,634 tonnes to 40,568 tonnes, inventories in other segments up 750 tonnes to 43,310 tonnes, and upstream inventories down 36 tonnes to 18,795 tonnes. Supply shows a slight increase while demand accelerates, pulling weekly data back into a destocking pattern. Inventory turnover days have decreased significantly from 29.1 days to around 25.1 days. Short-term prices may continue to trade with a firm bias amid volatility, but caution is warranted regarding position-related disturbances.
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