Copper: Overnight, copper prices both domestically and internationally fluctuated and moved higher, with domestic refined copper spot imports maintaining a slight profit. On the macro front, the US April PPI rose 6% year-on-year and 1.4% month-on-month, both reaching the highest levels since 2022. The PPI recorded its eighth consecutive month of month-on-month increase, driven by rising energy and transportation costs, with service sector inflation hitting a four-year high. This persistent inflation has further delayed market expectations for a Federal Reserve rate cut, while expectations for a rate hike have somewhat intensified. Additionally, the US Senate approved Wash's appointment as Fed Chair. After taking office, Wash will undoubtedly face significant challenges regarding inflation and interest rate decisions. In terms of inventories, LME stocks decreased by 1,450 tonnes to 398,550 tonnes. On the demand side, companies remain cautious towards high-priced copper, with downstream purchases primarily driven by essential needs. As mentioned previously, in a generally stable macro environment, market focus shifts to commodities significantly impacted by supply or demand. Recently, with the extreme TC fees and ongoing sulfur shortages overseas fermenting, and the supply outlook becoming unstable, copper is once again being viewed as a bullish commodity. It is recommended to adopt a strategy of cautious optimism amidst fluctuations. The risk lies in potential US-Iran negotiations. If unexpected progress is made, particularly regarding navigation in the Strait of Hormuz, it would imply a mitigation of sulfur shortages, potentially leading to a rapid correction in copper prices.
Nickel & Stainless Steel: Overnight, LME nickel rose 1.27% to $19,165 per tonne, while SHFE nickel rose 0.88% to 147,440 yuan per tonne. Regarding inventories, LME stocks decreased by 996 tonnes to 275,778 tonnes, while SHFE warehouse receipts increased by 2,450 tonnes to 73,275 tonnes. Looking at spreads, the LME 0-3 month spread remained in negative territory; the import nickel premium/discount remained at -500 yuan per tonne. On the supply side, one factor is the maintenance phase for related 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 exhausting its approved existing production quota for 2026 before obtaining new approvals. Weda Bay has submitted a RKAB revision application to ESDM, hoping to increase capacity to meet the annual demand of approximately 100 million tonnes of nickel ore for its HPAL smelter within the park. However, ESDM is taking a cautious stance, with the Secretary-General of the Mining Directorate emphasizing that according to current regulations, companies can formally submit RKAB revisions in the second half of 2026, at which point the government will make a decision after a comprehensive assessment. On the other hand, previous raw material supply and price issues led to load reductions at some Indonesian projects, resulting in an active narrowing of the supply side. Current sulfur supply and price pressures may potentially ease, but replenishment will still require time. On the demand side, nickel consumption for ternary precursors, ternary materials, and stainless steel all increased in May. However, recent primary nickel inventory pressure remains significant, with weekly LME stocks rebounding and domestic social inventories continuing to increase. Short-term pressure remains high, but consideration can still be given to a strategy of buying on dips, monitoring whether previous production cuts on the supply side can drive inventory destocking.
Alumina, Primary Aluminum & Aluminum Alloy: Overnight, alumina fluctuated with a stronger bias, with AO2609 closing at 2,798 yuan per tonne, up 0.43%. Open interest increased by 3,887 lots to 353,000 lots. SHFE aluminum fluctuated with a stronger bias, with AL2606 closing overnight at 25,055 yuan per tonne, up 1.25%. Open interest increased by 837 lots to 291,000 lots. Aluminum alloy fluctuated with a stronger bias, with AD2606 closing overnight at 23,595 yuan per tonne, down 1.01%. Open interest increased by 322 lots to 13,915 lots. In the spot market, the SMM alumina price rose back to 2,686 yuan per tonne. The spot discount for aluminum ingots widened to 120 yuan per tonne. Foshan A00 quoted back up to 24,460 yuan per tonne, at a 90 yuan per tonne discount to Wuxi A00. Aluminum billet processing fees in Baotou, Henan, and Linyi held steady, while fees in Xinjiang, Nanchang, Guangdong, and Wuxi were lowered by 50-80 yuan per tonne. Aluminum rod 1A60 series processing fees held steady, 6/8 series processing fees held steady, while low-carbon 6/8 series fees were raised by 90-141 yuan per tonne. Post-holiday, maintenance capacity for alumina in Guangxi is gradually resuming, and supply pressure is re-emerging. Downstream primary aluminum replenishment is cautious, and the pre-holiday logic of passive destocking has faded, with prices returning to weak fluctuations. The domestic primary aluminum market's follow-through strength on gains is insufficient, and the divergence between domestic and international markets has not converged but intensified. Overseas geopolitical risks have cooled, while the LME low inventory logic persists. Domestically, holiday inventories continued to accumulate, downstream resumption of work fell short of expectations, and the demand side is beginning to show characteristics of the traditional off-season. Apart from sustained export heat in the cable sector, production schedules for air conditioner aluminum foil and photovoltaic frames began to decline in May. Traders are also seeing paper losses, and overall willingness to accept goods has weakened. Macro sentiment is gradually calming. High aluminum prices lack sustained demand support, constrained both at the top and bottom, entering a range-bound fluctuation pattern. Focus will be on inventory destocking signals and changes in export orders.
Industrial Silicon & Polysilicon: On the 13th, industrial silicon fluctuated with a weaker bias, with the main contract 2609 closing at 8,715 yuan per tonne, down 2.41% on the day. Open interest decreased by 33,834 lots to 327,000 lots. The Baichuan industrial silicon spot reference price was 9,186 yuan per tonne, unchanged from the previous trading day. The price for the lowest deliverable grade rose back to 8,700 yuan per tonne, with the spot discount narrowing to 15 yuan per tonne. Polysilicon fluctuated with a stronger bias, with the main contract 2606 closing at 37,190 yuan per tonne, up 0.15% on the day. Open interest decreased by 5,759 lots to 63,010 lots. The adjusted standard for the lowest deliverable grade was 34,000 yuan per tonne, with the spot discount widening to 3,190 yuan per tonne. Resumption of production in southwest China's industrial silicon sector is adding pressure. Downstream continues to purchase based on rigid demand, lacking excess stockpiling and export orders to digest the supply increase. Price reductions in northwest China have been fully priced in, while the expectation for resumption in the southwest is clear, yet downstream buying sentiment remains weak. New hedging positions entered the market at high levels on the futures board, creating pressure for a correction from highs. Recently, several polysilicon companies released their Q1 reports. With industry-wide losses generally worsening, downstream wafer pulling end's procurement strategies will become more cautious. Post-holiday, silicon material plants are still mainly fulfilling previous orders, and the signing of large new orders has stalled due to disagreements. Currently, spot and futures lack coordination in both volume and price. It is difficult for spot prices to follow the rise, and the futures market is gradually digesting sentiment, with a clearer rhythm of correction converging towards spot prices.
Lithium Carbonate: Yesterday, lithium carbonate futures 2609 fell 1.87% to 201,960 yuan per tonne, with daily open interest decreasing by 17,941 lots to 519,500 lots. Regarding spot prices, the average price for battery-grade lithium carbonate rose by 500 yuan per tonne to 200,500 yuan per tonne. The average price for industrial-grade lithium carbonate rose by 500 yuan per tonne to 196,000 yuan per tonne. Battery-grade lithium hydroxide (coarse particles) rose by 500 yuan per tonne to 186,700 yuan per tonne. Regarding warehouse receipts, warehouse receipt inventory increased by 1,766 tonnes yesterday to 47,720 tonnes. On the news front, Yahua Group stated on an interactive platform on May 13th that the company has completed export procedures for its Zimbabwean lithium concentrate and has initiated shipments. The company's lithium sulfate plant project is underway and is expected to be completed next year. On the 12th, Indonesian Finance Minister Purbaia stated in Jakarta that given rising international oil prices due to Middle East tensions and the increasing burden of energy imports, Indonesia is accelerating its energy consumption structure transformation and plans to launch a new round of electric vehicle subsidy policies starting June 2026. On the supply side, weekly production decreased by 134 tonnes week-on-week to 25,894 tonnes. May lithium carbonate production is estimated to increase by 3.4% month-on-month to 113,780 tonnes. In April 2026, Chile's total lithium carbonate exports 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. On the demand side, May production of ternary materials is estimated to increase by 9% month-on-month to 87,920 tonnes; lithium iron phosphate production is estimated to increase by 8% month-on-month to 503,700 tonnes; lithium cobalt oxide production is estimated to increase by 23% month-on-month to 9,480 tonnes; lithium manganese oxide production is estimated to increase by 7% month-on-month to 13,000 tonnes. May lithium battery production is estimated to increase by 7% month-on-month to 239.3 GWh, with ternary battery production up 6% month-on-month to 33.3 GWh, lithium iron phosphate battery production up 7% month-on-month to 196.4 GWh, and other battery production up 7% month-on-month to 9.5 GWh. Regarding inventories, weekly social inventories decreased by 920 tonnes week-on-week to 102,673 tonnes. Downstream inventories decreased by 1,634 tonnes week-on-week to 40,568 tonnes, inventories in other segments increased by 750 tonnes week-on-week to 43,310 tonnes, and upstream inventories decreased by 36 tonnes week-on-week to 18,795 tonnes. Yesterday, market news speculation led to a correction in futures prices, and spot trading activity improved somewhat. However, this does not change the weekly data's return to a destocking rhythm, with inventory turnover days significantly decreasing. Short-term prices are still expected to show strength amidst fluctuations, and caution is needed regarding position disturbances.
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