Copper: Overnight copper prices on both domestic and international exchanges initially rose but then fell back, with domestic refined copper spot imports remaining in a loss-making state. On the macro front, the U.S. July CPI data showed a moderate cooling, rising 3.4% year-on-year, slightly down from the previous month's 3.5%, marking the lowest level since March; the core CPI year-on-year growth rate narrowed from 2.6% to 2.5%, both in line with market expectations. This has temporarily eased market concerns about an unexpected rebound in inflation, but both the July CPI and core CPI remain significantly above the 2% target, and therefore cannot completely dispel market worries about the Federal Reserve raising interest rates in September. The current probability of a September rate hike remains around 45%. Internal divisions among Fed officials are widening, and the market is focused on the stance of Governor Waller, whose speech at the global central bank summit in late August will be particularly important and may provide direction for the September meeting. Domestically, the central bank's Q2 monetary policy report indicated that it will continue to implement a moderately accommodative monetary policy. On the inventory front, LME inventories fell by 2,425 tons to 212,125 tons; Comex inventories increased by 2,788 tons to 663,369 tons; SHFE copper warrants increased by 953 tons to 24,131 tons, while BC copper warrants decreased by 251 tons to 7,602 tons. On the demand side, downstream buyers are maintaining just-in-time procurement, with a weak willingness to stock up at high prices. LME has encountered resistance near its previous historical high, and the market is showing significant divergence. However, there has been no improvement in supply-side and inventory-side changes for copper. The premium of U.S. copper over LME copper remains relatively high, making it difficult to determine whether this upward trend has been completed. For now, the market is expected to maintain a relatively strong performance.
Nickel & Stainless Steel: Overnight, LME nickel rose 0.42% to $16,890 per ton, while SHFE nickel increased 0.18% to 128,760 yuan per ton. On the inventory front, LME inventories remained at 264,744 tons, and SHFE warrants decreased by 158 tons to 100,769 tons. In terms of premiums/discounts, the LME 0-3 month premium/discount remained negative; the import nickel premium/discount rose by 50 yuan per ton to 100 yuan per ton. On the news front, a Mysteel survey confirmed that PT Weda Bay Nickel (WBN) has been approved for an additional RKAB quota of approximately 25 million tons of nickel ore for the second half of 2026, bringing the total annual quota to around 37 million wet metric tons. Of this, about 15 million tons are designated as a special quota for new energy projects, directed towards high-pressure acid leaching (HPAL) operations. WBN's first-half quota was only 12 million tons, leading to a production halt after it was exhausted in May. With this additional allocation, the quota has now been raised to 37 million tons, still below the 2025 level of 42 million tons. Looking at the fundamentals, weekly inventories have increased. Regarding August production schedules, primary nickel and nickel sulfate are expected to decrease slightly month-on-month, while domestic and international nickel pig iron (NPI) and mixed hydroxide precipitate (MHP) are expected to increase. On the demand side, production schedules for new energy vehicles and stainless steel are both expected to increase month-on-month. The quota news has pushed prices into a weaker trend, and attention will be on the quota levels of other companies and the impact of macro sentiment.
Alumina & Electrolytic Aluminum & Aluminum Alloy: Overnight, alumina traded in a weak and volatile manner, with the AO2610 contract closing at 2,693 yuan per ton, down 0.81%. Open interest increased by 15,779 lots to 255,000 lots. Overnight, LME aluminum closed at $3,304 per ton, down 0.29%, with inventories decreasing by 1,700 tons to 251,700 tons. The AL2609 contract closed at 24,195 yuan per ton, down 0.62%, with open interest decreasing by 3,984 lots to 237,000 lots. Aluminum alloy traded weaker and volatile, with the main AD2610 contract closing at 23,420 yuan per ton, down 1.06%, with open interest decreasing by 128 lots to 19,724 lots. On the spot front, SMM alumina prices fell back to 2,692 yuan per ton. Aluminum ingot spot premiums/discounts fell to parity. The Foshan A00 quote rebounded to 24,490 yuan per ton, while the Wuxi A00 quote showed a discount of 120 yuan per ton. Aluminum rod processing fees for the 1A60 series were stable, while the 6/8 series were stable, and the low-carbon 6/8 series increased by 238 yuan per ton. Production resumptions and expansions are occurring simultaneously both domestically and internationally, with import arrivals remaining high, and social warehouse warrants are still accumulating. With the increase in long-term mine prices from Guinea and the rebound in coal prices due to disruptions in Shanxi, the cost center for alumina has risen. Coupled with new electrolytic aluminum projects building raw material inventories, inland aluminum smelters are increasing their intake of alumina from Southwest China. Current spot prices have not followed the futures upward trend, and the market is gradually bottoming out. For electrolytic aluminum, Trump's signals of a ceasefire have improved macro risk appetite, leading to a recovery in nonferrous metals. Inventories are declining both domestically and internationally, but the pace of destocking is slowing. Geopolitical premiums are facing two-way pressure, and aluminum prices are expected to trade in a range.
Industrial Silicon & Polysilicon: On the 12th, industrial silicon traded stronger and volatile, with the main 2609 contract closing at 8,625 yuan per ton, up 0.17% for the day, with open interest decreasing by 5,461 lots to 164,000 lots. The Baichuan industrial silicon spot reference price was 9,089 yuan per ton, up 10 yuan per ton from the previous trading day. The lowest deliverable grade price fell back to 8,550 yuan per ton, with the spot discount widening to 75 yuan per ton. Polysilicon traded stronger and volatile, with the main 2609 contract closing at 38,190 yuan per ton, up 4.26%. Open interest decreased by 1,543 lots to 72,300 lots. The lowest deliverable grade price rebounded to 38,000 yuan per ton, with the spot premium widening to 80 yuan per ton. Large-scale furnace shutdowns occurred in Inner Mongolia, Gansu, and Sichuan, but the destocking pace under weak demand has been limited. In the short term, industrial silicon is expected to trade in a volatile manner, waiting for the recovery of downstream demand during the peak season. Currently, the dynamics of the polysilicon industry are the focus of the market. On one hand, Trump announced tariffs on polysilicon and its derivative products. On the other hand, the State Administration for Market Regulation is providing price compliance guidance for the photovoltaic industry, and eight major silicon material companies jointly signed a letter of initiative to strictly adhere to energy consumption standards and not sell below cost. The underlying pressure from fundamental divergence remains, with no significant increase in end-user production schedules for August and no substantial de-stocking of industry inventories. In the short term, polysilicon is in a period of volatile news that needs to be confirmed or refuted, with market sentiment still fluctuating. The risk of high price volatility persists, and caution is advised.
Lithium Carbonate: Yesterday, the lithium carbonate 2609 contract rose 2.97% to 149,700 yuan per ton, with open interest decreasing by 20,872 lots to 233,800 lots. The LC2701 contract rose 3.42% to 149,560 yuan per ton, with open interest increasing by 24,002 lots to 258,000 lots. In terms of spot prices, the average price of battery-grade lithium carbonate rose by 3,250 yuan per ton to 148,000 yuan per ton, and the average price of industrial-grade lithium carbonate rose by 3,250 yuan per ton to 143,000 yuan per ton. Battery-grade lithium hydroxide (coarse grain) rose by 3,000 yuan per ton to 136,250 yuan per ton. On the warrant front, warrant inventories increased by 2,550 tons to 35,101 tons yesterday. On the supply side, weekly production increased by 130 tons to 22,971 tons. Lithium carbonate production is expected to increase by 7% month-on-month to 112,000 tons in August. On the demand side, ternary material production is expected to increase by 5% to 93,840 tons, lithium iron phosphate production by 5% to 565,100 tons, lithium cobalt oxide production by 4% to 7,380 tons, and lithium manganese oxide production by 11% to 11,920 tons. Lithium battery production is expected to increase by 7% to 288.9 GWh. On the inventory front, large-sample weekly inventories decreased by 6,773 tons to 101,104 tons, with other sector inventories decreasing by 4,017 tons to 42,025 tons, smelter inventories increasing by 1,298 tons to 15,640 tons, and downstream inventories decreasing by 4,054 tons to 43,439 tons. The market is currently trading in a volatile and strong manner, possibly due to improved sentiment, but it is important to monitor whether spot and demand-side factors can provide further positive feedback to prices.
Disclaimer: This report is based on publicly available information. Our company makes no guarantees regarding the accuracy, reliability, or completeness of this information, nor does it guarantee that the information and recommendations contained herein will not change. We have strived to ensure the objectivity and fairness of the report's content, but the views, conclusions, and recommendations in the text are for reference only and do not constitute any promotion of specific products or businesses, nor do they constitute operational basis or recommendations for related varieties. Investors make their own investment decisions at their own risk, and this company and the authors are not liable.
Comments