Non-ferrous metals markets showed varied performance, with copper prices gaining strength on easing macro pressures while other metals faced mixed fundamentals.
Copper: Macro Easing Supports Firmer Prices
Macroeconomic conditions have turned marginally looser. The US June non-farm payrolls data showed only 57,000 new jobs, roughly half the market expectation of 113,000 and significantly lower than May's 129,000. Following the data release, market expectations for further Federal Reserve rate hikes cooled notably, leading to a sharp pullback in the US dollar index and a significant alleviation of macro pressure. On June 30, the US Department of Commerce submitted the annual Section 232 report on the national security investigation into the copper industry as scheduled. Market expectations are for a policy adjustment starting January 1, 2027, involving a 15% tariff on imported refined cathode copper, increasing to 30% in 2028. The report is now in the President's 90-day decision window. Influenced by poor employment data, the Fed has urgently cooled rate hike expectations. At the ECB annual conference, Fed Chair Warsh explicitly announced that the Fed would abandon forward guidance on interest rates, with future decisions relying entirely on real-time economic data. He noted that US inflation risks have decreased over the past four weeks, with inflation expectations trending downward, while reiterating the continuation of balance sheet reduction. Geopolitically, the US and Iran held indirect technical talks in Doha, Qatar, focusing on implementing a memorandum of understanding involving the return of frozen Iranian funds and security guarantees for the Strait of Hormuz. The Strait of Hormuz is currently under "limited navigation," but traffic volumes continue to recover modestly.
On the fundamental side, domestic TC (treatment and refining charges) quotes for copper concentrate have declined again, reaching historically extreme lows. This indicates that tightness in copper concentrate supply remains unresolved, continuing to be a strong supportive factor for the current fundamentals. Chilean miner AMSA and major domestic smelters finalized the mid-year long-term contract pricing mechanism on July 1, abandoning the traditional fixed TC model for the first time in favor of a "floor price + index-linked" pricing mechanism. For refined copper production, July's estimated output is 1.1661 million tonnes, up 1.8% month-on-month but down 0.7% year-on-year. Regarding imports, China's net refined copper imports in May increased 14.4% year-on-year to 296,200 tonnes, but the cumulative year-to-date figure is still down 17.81% year-on-year. May scrap copper imports fell 9.78% month-on-month to 191,000 metal tonnes, up 3.14% year-on-year, with cumulative imports up 7.11% year-on-year. Inventory-wise, as of July 2, global visible copper stocks decreased by 17,000 tonnes from the previous (25th) count to 1.169 million tonnes. LME stocks fell by 16,750 tonnes to 322,350 tonnes; Comex stocks increased by 7,187 tonnes to 606,626 tonnes; domestic refined copper social inventories dropped by 6,100 tonnes weekly to 199,900 tonnes, while bonded area inventories decreased by 1,300 tonnes to 39,700 tonnes. On the demand side, downstream consumers maintain essential procurement with weak willingness to stockpile at high prices.
From an analytical perspective, at the macro level, market concerns about Fed rate hikes have significantly cooled. The CME FedWatch tool shows a sharp drop in the probability of a September hike. The speech by the new Fed Chair at the ECB further confirmed a marginal softening of the hawkish stance. This macro easing and the retreat of the US dollar index have alleviated financial pressure on copper prices. However, it is important to note that the tariff report has been submitted but not yet implemented; policy uncertainty during the 90-day decision window will continue to cause sentiment fluctuations. For the week, although macro conditions have eased marginally, copper's rebound momentum remains relatively weak. A cautiously optimistic view is held for the week, focusing on whether copper prices can break above the resistance line and on downstream feedback to high copper prices.
Nickel & Stainless Steel: Improved Macro Sentiment, Fundamental Pressure Persists
On the supply side, the weekly premium for 1.6% nickel ore decreased by $2.5 per tonne to $3 per tonne. The weekly delivered price for 1.6% nickel ore fell by $5.6 per tonne to $70.10 per tonne, while the price for 1.2% ore remained flat. Based on the first HPM price for July, 1.2% and 1.6% nickel ore prices decreased by $2.13/tonne and $3.55/tonne, respectively. July refined nickel production is expected to increase 3.6% month-on-month to 35,000 tonnes. Domestic nickel pig iron (NPI) production is forecast to rise 4% month-on-month to 32,000 nickel tonnes, while Indonesian NPI output is projected to increase 1% to 128,000 nickel tonnes. Nickel sulfate production is anticipated to grow 1% month-on-month to 36,805 nickel tonnes.
Regarding demand, in the new energy vehicle sector, July ternary precursor output is estimated to increase 2% month-on-month to 95,870 tonnes; ternary cathode material production is expected to rise 3% to 89,690 tonnes; lithium battery production is forecast to grow 7% to 268.7 GWh, with ternary battery output also up 7%. According to the China Passenger Car Association, estimated wholesale sales of new energy passenger vehicles in June reached 1.51 million units, a year-on-year increase of 22%. For stainless steel, weekly futures prices were strong early in the week but weakened later, with the monthly spread narrowing to 15 yuan/tonne and premiums for deliverable grades weakening. Total social inventories of stainless steel across 89 major warehouses nationwide stood at 1.13 million tonnes, up 0.79% week-on-week. Inventories of 300-series stainless steel decreased by 5,557 tonnes to 694,000 tonnes. July stainless steel crude steel production is expected to decline 2% month-on-month, with 200-series output up 9%, 300-series down 9%, and 400-series down 3%.
Inventory data shows LME nickel stocks decreased by 186 tonnes during the week to 274,620 tonnes. SHFE nickel inventories increased by 1,573 tonnes to 101,622 tonnes, social inventories rose by 1,135 tonnes to 130,390 tonnes, while bonded area stocks remained at 2,700 tonnes.
Analytically, on June 30, 2026, Indonesia's Ministry of Energy and Mineral Resources (ESDM) did not announce an official increase in the total nickel ore RKAB quota for 2026 during a relevant meeting, with the base quota maintained at 260 million wet tonnes. New supplementary quotas await completion of the ESDM approval process. Macro sentiment improved during the week, leading to a slight rebound in nickel prices. Fundamentally, July production schedules show increases for domestic refined nickel, nickel pig iron, nickel sulfate, and Indonesian nickel pig iron. On the demand side, stainless steel output is expected to decline month-on-month, while ternary materials show growth. For the current nickel industry chain, inventory pressure remains the core issue. Additionally, nickel ore prices may continue to weaken, potentially reducing cost support. It is also worth noting that if quotas continue to be issued in the second half of the year, prices may remain under pressure.
Aluminum: Supply Divergence, Consolidation Continues
Alumina futures traded weakly within a range during the week. As of the 3rd, the main contract closed at 2,719 yuan/tonne, down 2.9% for the week. SHFE aluminum also traded weakly, with the main contract closing at 22,840 yuan/tonne, a weekly decline of 0.7%. Aluminum alloy futures showed relative strength, with the main contract closing at 22,780 yuan/tonne, down 0.66% for the week.
On the supply side, according to SMM data, the weekly operating rate for alumina decreased by 0.23% to 74.26%, with weekly output down 5,000 tonnes to 1.687 million tonnes. In addition to production limit pressures faced by Shanxi producers due to red mud environmental controls, a Guizhou alumina plant underwent boiler line switching and equipment maintenance starting July 1. Overseas, EGA's Al Taweelah alumina plant is expected to resume operations in Q3 and gradually ramp up to full capacity. For primary aluminum, the weekly operating rate increased by 0.08% to 98.63%, with weekly output up 800 tonnes to 875,600 tonnes. The weekly proportion of molten aluminum output rose by 0.02% to 77.44%.
Demand is being affected by deepening seasonal weakness, with operating rates in the processing sector continuing to adjust downward. The average operating rate for processing enterprises decreased by 0.4% weekly to 62.6%. By segment: aluminum sheet and plate operating rate fell 0.6% to 70%; aluminum cable and conductor operating rate dropped 0.4% to 69%; aluminum profile operating rate declined 0.7% to 53.7%; aluminum foil operating rate decreased 0.4% to 71.7%; and recycled aluminum alloy operating rate fell 0.5% to 51.8%. Aluminum billet processing fees were stable in Baotou, increased by 40-80 yuan/tonne in Henan and Linyi, and decreased by 50-90 yuan/tonne in other regions. Aluminum rod processing fees were stable in Henan but increased by 50-100 yuan/tonne across all other regions.
Exchange inventory data shows alumina stocks increased by 18,900 tonnes weekly to 151,800 tonnes. SHFE aluminum inventories decreased by 6,972 tonnes to 505,900 tonnes. LME aluminum stocks fell by 6,450 tonnes to 298,800 tonnes. Social inventory figures indicate alumina stocks rose by 31,000 tonnes weekly to 860,000 tonnes. Aluminum ingot social inventories decreased by 75,000 tonnes to 1.13 million tonnes. Aluminum billet social stocks fell by 10,000 tonnes to 130,000 tonnes.
Analytically, during the week, expectations for increased supply from overseas producer EGA strengthened. Domestically, the combined pressure from new capacity ramp-ups in Guangxi and warrant cancellations weighed on the spot market. Following the short-term disappointment of policy expectations related to Guinea, market sentiment premiums receded quickly, leading to alumina's weak, range-bound performance. For primary aluminum, Fed rate hike expectations created macro-systematic pressure, while expectations for the release of accumulated aluminum stocks in the Middle East also heated up, becoming the primary resistance above aluminum prices. As aluminum prices have fallen below pre-Middle East conflict levels and the market has shown a pattern of stronger spot and weaker futures, fundamentals do not support a further deep decline. Smooth inventory drawdowns both domestically and internationally reflect strong downstream willingness to restock at low prices. However, current absolute levels of social inventories remain higher than the same period in previous years. Coupled with narrowing export margins, short-term upward momentum appears insufficient. Aluminum is expected to continue its consolidation and adjustment rhythm, following sentiment to repair and stage a catch-up rally. Key focuses will be whether the market's latest pricing of a delayed Fed rate hike is accurate and whether the smooth aluminum ingot destocking trend can be maintained.
Industrial Silicon & Polysilicon: High Inventories, Awaiting a Bottom
Industrial silicon futures traded with relative strength within a range during the week. On the 3rd, the main contract 2609 closed at 8,360 yuan/tonne, up 0.06% weekly. Polysilicon futures also showed relative strength, with the main contract 2609 closing at 35,760 yuan/tonne, a weekly gain of 2.92%. Spot prices were stable to slightly lower. Non-oxygenated 553 grade fell by 50 yuan/tonne to 8,900 yuan/tonne, oxygenated 553 held steady at 9,100 yuan/tonne, and 421 grade was stable at 9,500 yuan/tonne.
On the supply side, according to BaiChuan data, weekly industrial silicon production increased by 2,370 tonnes to 85,600 tonnes. The weekly furnace operating rate rose by 1.38% to 32.7%, with the number of operating furnaces increasing by 11 to 260. In the Northwest region, Xinjiang shut down 4 furnaces and Ningxia shut down 1, leaving a total of 158 furnaces operating in the Northwest. In the Southwest, Sichuan held steady with 35 operating furnaces, while Yunnan started 11 new furnaces, bringing the Southwest total to 71 operating furnaces. In other regions, Inner Mongolia started 5 new furnaces.
Regarding demand, P-type polysilicon prices held steady at 29,500 yuan/tonne, N-type at 32,200 yuan/tonne, and N-type mixed material at 30,000 yuan/tonne. New order transactions in the market showed no significant increase. Downstream wafer producers have insufficient inventory, and with spot prices falling near cost support levels, a stalemate has emerged. Weekly organic silicon prices fell to 13,000-13,100 yuan/tonne. At the end of June, producers significantly reduced prices to liquidate inventory for fund repatriation, but new orders in July have been scarce. The market awaits the latest production restriction guidance from this month's industry coordination meeting; the 40% production cut stipulated in the previous major meeting may serve as a benchmark consideration. Weekly polysilicon production increased by 580 tonnes to 21,100 tonnes, while DMC output fell by 1,000 tonnes to 38,800 tonnes.
Exchange inventory data shows industrial silicon stocks decreased by 605 tonnes weekly to 158,500 tonnes, while polysilicon inventories increased by 11,500 tonnes to 50,500 tonnes. Social inventory figures indicate industrial silicon stocks rose by 10,000 tonnes weekly to 464,000 tonnes, with plant inventories increasing by 10,000 tonnes to 265,600 tonnes. Inventories at Huangpu Port remained stable at 62,000 tonnes, Tianjin Port at 81,500 tonnes, and Kunming Port at 54,900 tonnes. Polysilicon plant inventories increased by 900 tonnes weekly to 282,100 tonnes.
Analytically, entering July, electricity prices in Baoshan, Yunnan, dropped to 0.28 yuan/kWh. Combined with government subsidies and previously locked-in hedging positions, the pace of local production resumption has accelerated significantly. Downstream, the organic silicon sector awaits a new round of industry production control instructions. A sudden maintenance event at the polysilicon base in Xining, Qinghai, has abruptly increased marginal pressure on industrial silicon. Three new energy consumption limit standards for the photovoltaic sector have been released, with the transition period compressed to six months. However, high inventory pressure across the industry remains unresolved. While inventory is being digested at the module end, stocks are still accumulating for wafers and cells, and polysilicon inventory has shifted from decline to increase. The industry has re-entered a pattern of weak reality versus strong expectations. In the short term, polysilicon remains in a bottoming adjustment phase within its cycle, awaiting policy signals to align with market momentum.
Lithium Carbonate: Initial Stabilization, Focus on Supply-Demand Gap
On the supply side, weekly production decreased by 30 tonnes to 26,399 tonnes. Production from spodumene sources fell by 27 tonnes to 15,418 tonnes, output from lepidolite sources increased by 20 tonnes to 3,160 tonnes, production from salt lake sources decreased by 30 tonnes to 4,600 tonnes, and output from recycling sources rose by 7 tonnes to 3,221 tonnes. July lithium carbonate production is expected to increase by 0.1% month-on-month to 115,410 tonnes.
Regarding demand, weekly data shows ternary cathode material production decreased by 117 tonnes to 19,501 tonnes, with weekly inventories down 221 tonnes to 19,809 tonnes. Lithium iron phosphate (LFP) cathode production increased by 1,240 tonnes to 118,710 tonnes, with weekly inventories down 2,054 tonnes to 138,846 tonnes. For July, ternary cathode output is forecast to increase 3% month-on-month to 89,690 tonnes, LFP cathode production is expected to rise 7% to 536,800 tonnes, lithium cobalt oxide output is projected to grow 3% to 7,740 tonnes, and lithium manganese oxide production is estimated to decline 1% to 10,770 tonnes. Lithium battery production is anticipated to increase 7% to 268.7 GWh, with both ternary and LFP battery output up 7%, and other battery types up 1%.
Inventory data indicates large-sample inventories decreased by 2,155 tonnes week-on-week to 127,804 tonnes, while small-sample inventories fell by 1,239 tonnes to 94,573 tonnes. Based on the large-sample口径, inventories in other segments decreased by 3,417 tonnes to 62,762 tonnes, smelter inventories fell by 1,905 tonnes to 13,590 tonnes, while downstream inventories increased by 3,167 tonnes to 51,452 tonnes.
Analytically, at the start of the week, news related to the resumption of production at Jianxiawo陆续传出, coupled with stimulus from July production schedules, helped prices stabilize and rebound, with a weekly price increase exceeding 12%. Fundamentally, the short-term矛盾 exposed by warrants and basis差 has eased somewhat. Based on production schedules, July may see a destocking of around 14,000 tonnes, with the short-term destocking pace potentially accelerating gradually. However, vigilance is needed for the medium term regarding supply increases from the Jianxiawo resumption and集中到港 of Zimbabwean lithium ore, which could lead to a逐月递减 in the monthly destocking level in Q3. Furthermore, according to statistics from ICC Xinluo Information, approximately 2 million tonnes of new cathode material capacity is expected to be completed and begin集中调试爬坡 in Q3 2026. Attention should be paid to whether the ramp-up progress of this new cathode material capacity can offset marginal supply increases. The current price has rebounded from around 145,000 yuan/tonne to 168,000 yuan/tonne, already partially pricing in known positive factors. Short-term price upside requires more stimulus, and it is recommended to monitor whether the现货 market can provide further positive feedback.
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