Copper: Overnight, both domestic and international copper prices showed strength amid fluctuations, with the import arbitrage window for domestic refined copper closing. On the macro front, former U.S. President Trump has again applied the brakes on potential military strikes against Iran, citing ongoing serious negotiations. He indicated that leaders and allies from Qatar, Saudi Arabia, and the UAE believe an agreement will ultimately be reached, with the core stipulation being that Iran must not possess nuclear weapons. Domestically, economic data for April continues to show a divergence, with overall figures remaining weak, particularly in fixed asset investment and real estate investment. Inventory data shows LME stocks decreased by 2,325 tonnes to 393,400 tonnes; Comex stocks increased by 2,250 tonnes to 571,238 tonnes; SHFE copper warehouse receipts increased by 3,254 tonnes to 102,153 tonnes; BC copper stocks were maintained at 15,021 tonnes. The overseas AI sector experienced a rapid adjustment, temporarily weighing on market sentiment. However, it's evident that with the ongoing U.S.-Iran geopolitical tensions and their potential negative impact on the global economy, the market holds significant divergence, with copper currently commanding a high premium primarily due to supply-side disruptions. Additionally, the stance of the new Federal Reserve Chair, Walsh, remains uncertain, keeping the market cautious. Nevertheless, supported by profits, the adjustment in the overseas AI sector may be limited, and the market has largely priced in the new Fed Chair. Macro headwinds are likely short-term. However, with the Strait of Hormuz remaining difficult to navigate, the overseas sulfur shortage persists. Over time, supply contraction may move from expectation to reality. Coupled with extremely low domestic TC offers and ongoing inventory drawdowns, fundamental support remains solid. Overall, the room for price correction appears limited. A strategy of buying on dips is recommended.
Nickel & Stainless Steel: Overnight, LME nickel fell 0.13% to $18,555 per tonne, while SHFE nickel rose 0.42% to 142,660 yuan per tonne. Inventory-wise, LME stocks decreased by 216 tonnes to 275,562 tonnes, and SHFE warehouse receipts increased by 50 tonnes to 78,563 tonnes. In terms of premiums/discounts, the LME cash-to-3-months spread remained in negative territory; the import nickel discount was -350 yuan per tonne. According to sources, China's Tsingshan Group has requested nickel pig iron (NPI) producers in its Indonesia Weda Bay Industrial Park to reduce production in June to conserve electricity for aluminum production. This move signals the group's expansion into lighter metals is beginning to constrain its nickel business. On the supply side, issues include maintenance at related Indonesian mines due to quota problems. According to current regulations, companies can formally submit revised RKAB (Work Plan and Budget) applications in the second half of 2026, with government approval pending comprehensive assessment. Additionally, previous raw material supply and price issues led to reduced operational loads at some Indonesian projects, indicating active supply tightening. While current sulfur supply and price pressures may ease, replenishment will take time. On the demand side, nickel consumption in ternary precursors, ternary cathode materials, and stainless steel increased in May. However, primary nickel inventory pressure remains significant, with weekly LME stocks rebounding and domestic social inventories continuing to rise. Short-term pressure is still substantial, but positioning for long positions on dips can be considered. Monitor whether previous supply-side production cuts can drive inventory depletion.
Alumina, Electrolytic Aluminum & Aluminum Alloy: Overnight, alumina prices weakened slightly. The AO2609 contract closed at 2,710 yuan per tonne, down 1.02%, with open interest increasing by 14,858 lots to 389,000 lots. Aluminum prices strengthened. The AL2606 contract closed at 24,320 yuan per tonne, up 0.48%, with open interest decreasing by 2,092 lots to 248,000 lots. Aluminum alloy prices also strengthened. The main AD2607 contract closed at 23,025 yuan per tonne, up 0.59%, with open interest increasing by 138 lots to 14,632 lots. Spot-wise, SMM alumina prices retreated to 2,680 yuan per tonne. The spot discount for aluminum ingots widened to 180 yuan per tonne. Foshan A00 prices fell to 23,910 yuan per tonne, at a 130 yuan discount to Wuxi A00. Aluminum billet processing fees remained stable in Baotou, Henan, and Linyi, while fees in Xinjiang, Nanchang, Guangdong, and Wuxi increased by 30-180 yuan per tonne. Aluminum rod (1A60 series) processing fees were steady; fees for 6/8 series rods were stable, while low-carbon 6/8 series fees decreased by 310 yuan per tonne. Guinea mines remain cautious about shipments, with freight rates staying high, keeping CIF costs firm. In Guangxi, alumina capacity is resuming from maintenance alongside new capacity releases. However, downstream raw material inventories are high with low restocking意愿. The accumulation of alumina warehouse receipts is slower than the increase in spot supply, leading to a widening spot discount. Currently, alumina is supported by costs but lacks upward momentum, maintaining a weak, volatile trend. For electrolytic aluminum, domestic ingot inventories have shown a tentative拐点 towards depletion, aligning with low LME stocks. However, note that as the peak domestic demand season fades, terminal orders face marginal contraction pressure. Combined with the recent price rebound, this may negatively反馈 processing plant operating rates, potentially causing铝锭 inventory fluctuations. As macro risk premiums recede, the pace of inventory drawdown will become the core variable, requiring validation of its magnitude and sustainability.
Industrial Silicon & Polysilicon: On the 18th, industrial silicon prices weakened. The main 2609 contract closed at 8,445 yuan per tonne, down 1.34% for the session, with open interest increasing by 8,105 lots to 306,000 lots. The Baichuan industrial silicon spot reference price was 9,161 yuan per tonne, down 25 yuan from the previous day. The price of the lowest deliverable grade fell to 8,650 yuan per tonne, with the spot premium narrowing to 205 yuan. Polysilicon prices also weakened. The main 2606 contract closed at 36,930 yuan per tonne, down 1.23% for the session, with open interest decreasing by 3,603 lots to 49,498 lots. The adjusted lowest deliverable grade standard is 34,000 yuan per tonne, with a spot discount of 2,930 yuan. With power line maintenance completed at新疆 power stations, two idled silicon plants are set to resume production. A plant in Leshan, Sichuan, will also gradually restart 3-4 furnaces as profits turn positive. Downstream acceptance of high prices is poor, preventing集中 restocking. High inventories are depleting slowly, and warehouse receipt pressure persists, with only arbitrageurs actively selling. Industrial silicon prices are supported by costs but trending slightly lower. For polysilicon, new内蒙古产能 is coming online alongside西南 wet season restarts. Long-delayed terminal bidding is gradually picking up volume. Seasonally, production schedules from wafers to modules improved in May. With both supply and demand increasing, polysilicon pricing hinges on marginal博弈 variables. Recent industry conference news is frequent, and the market continues to trade on expectations of energy consumption policies. Capital flows still reflect反内卷 and energy指标 drivers. Polysilicon is in a wide range, with关注 volatility potentially increasing.
Lithium Carbonate: Yesterday, the lithium carbonate futures 2609 contract rose 0.67% to 192,180 yuan per tonne, with open interest increasing by 8,384 lots to 467,000 lots. Spot-wise, the average price for battery-grade lithium carbonate fell by 500 yuan to 191,500 yuan per tonne. Industrial-grade lithium carbonate held steady at 187,500 yuan per tonne. Battery-grade lithium hydroxide (coarse particle) fell by 750 yuan to 178,000 yuan per tonne. Warehouse receipts increased by 1,165 tonnes to 51,804 tonnes. Market news: The government of Nasarawa State, Nigeria, announced an immediate shutdown order for Lideal Mines Company (a lithium矿 linked to Tianhua Xinneng and Jiuling) in the Endo community, demanding complete撤离 of equipment and personnel. In a May 18, 2026 announcement, Mineral Resources Ltd. of Australia announced the restart of its wholly-owned Bald Hill lithium mine in Western Australia. The mine has an annual capacity of 165,000 tonnes of spodumene concentrate, with preparations expected to start in late May, mining in June, and first concentrate production in July. On the supply side, weekly production increased by 122 tonnes to 26,016 tonnes. May lithium carbonate production is forecast 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. Exports to China were 22,956 tonnes, up 21.29% month-on-month and 47.66% year-on-year. Demand side: May production forecasts show ternary cathode material up 9% month-on-month to 87,920 tonnes; lithium iron phosphate (LFP) up 8% to 503,700 tonnes; lithium cobalt oxide up 23% to 9,480 tonnes; lithium manganate up 7% to 13,000 tonnes. May lithium battery production is forecast to increase 7% month-on-month to 239.3 GWh,其中 ternary battery output up 6% to 33.3 GWh, LFP battery output up 7% to 196.4 GWh, and other batteries up 7% to 9.5 GWh. Inventory: Weekly social inventories decreased by 1,255 tonnes to 101,418 tonnes. Downstream inventories fell by 3,421 tonnes to 37,147 tonnes; inventories in other segments increased by 1,870 tonnes to 45,180 tonnes; upstream inventories increased by 296 tonnes to 19,091 tonnes. At current price levels, prices are susceptible to news of "demand负反馈," "supply resumption," and "inventory builds." Last week's decline in open interest drove期货 prices lower. Although现货 trading activity improved after the price drop, the overall volume fell short of expectations, and restocking momentum remains insufficient. Inventory metrics may be adjusted this week. While absolute inventory levels are rising overall, weekly data still shows a short-term destocking trend, with social inventory days of cover continuing a slight decline. Short-term prices are likely to consolidate. Consider关注 short-term long opportunities on dips,等待 new catalysts. Also, monitor whether江西 projects resume operations.
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