Copper: Fed Rate Cut Expectations and BOJ Speculations Drive Price Volatility 1. Macro Factors: - The Fed cut rates by 25bps as expected and initiated short-term Treasury purchases. The dot plot suggests one more 25bps cut next year, signaling a slower pace than 2025. Chair Powell emphasized patience amid cooling but resilient labor markets. - Focus shifts to the upcoming Bank of Japan meeting, where a potential rate hike could unwind yen carry trades, pressuring global risk assets, especially USD-denominated ones. - Domestically, China’s Central Economic Work Conference is in focus.
2. Fundamentals: - Copper concentrate TC remains at historic lows, sustaining supply tightness. December refined copper output is estimated at 1.1688M tons (+5.96% MoM, +6.69% YoY), exacerbating concentrate shortages. - Net refined copper imports fell 31.56% YoY in October, while scrap imports rose 6.81% MoM. - Global visible inventories rose 18kt to 813kt as of Dec 12, with LME stocks up 3,350 tons and SHFE social inventories up 4,100 tons. Demand softened as high prices deterred downstream purchases, though export arbitrage opportunities emerged.
3. Outlook: - Copper prices hit record highs post-Fed but retreated sharply on Friday, reflecting misalignment with fundamentals. BOJ policy risks and seasonal inventory builds may drive further corrections.
Nickel & Stainless Steel: Weak Fundamentals Amid Policy Watch - Supply: Indonesia’s HPM prices dipped slightly. China’s refined nickel apparent consumption dropped 30.57% MoM in October. - Demand: Stainless steel exports now require licenses. December cold-rolled output is estimated at 1.4459M tons (+0.15% MoM), with mixed trends across series (200/400 up, 300 down). - Inventories: LME nickel stocks fell 312 tons, while SHFE and social stocks rose. - View: Nickel prices face downward pressure amid tepid demand and inventory builds, with overseas policy shifts key.
Alumina & Aluminum: Strong Run on Supply Constraints - Prices: Alumina futures fell 3.3% weekly; aluminum dipped 0.8%. - Supply: Alumina operating rates edged up to 79.62%. Domestic aluminum output rose 6.8% MoM in December. - Demand: High prices and environmental curbs lowered processing rates to 61.8%. - Inventories: Exchange stocks diverged (alumina +1,852 tons, aluminum -3,635 tons). Social aluminum ingot stocks fell 12kt. - View: Alumina faces downside risks, while aluminum benefits from shipping delays and macro tailwinds.
Industrial Silicon & Polysilicon: Divergence Amid News Flow - Prices: Silicon futures fell 4.2%; polysilicon rose 3.03%. Spot silicon prices eased. - Supply: Silicon output rose 970 tons weekly; polysilicon output dipped 140 tons. - Demand: Polysilicon prices held firm amid output cuts. Organic silicon demand weakened. - Inventories: Silicon stocks rose 6,895 tons; polysilicon surged 41.1kt. - View: Silicon lacks momentum; polysilicon’s paper/physical disconnect persists.
Lithium Carbonate: Mixed Signals Drive Choppy Trading - News: GFE revises futures rules; Zijin Mining’s 30kt lithium project launched. - Supply: Weekly output rose 59 tons to 21,998 tons. - Demand: Ternary and LFP output fell MoM. NEV sales dropped 17% YoY early December. - Inventories: Social stocks fell 2,133 tons to 111,469 tons. - View: Prices rallied on restocking but face volatility amid supply uncertainty.
Comments