Copper: On Tuesday night, the main Shanghai copper contract fluctuated and closed higher at 103,540 yuan per ton, while LME copper experienced a slight correction to $13,142. Macro factors are neutral. Although the core CPI increase for December 2025 in the US under Trump remained at 2.6%, lower than expectations, the Federal Reserve maintained a relatively hawkish stance, resulting in limited improvement in interest rate cut expectations. Consequently, copper prices initially strengthened before weakening. Fundamentals are neutral. Yesterday, copper warehouse receipts on the SHFE increased by 5,505 tons to 122,100 tons, while LME copper inventories accumulated by 4,325 tons to 141,500 tons. Chile's copper concentrate exports to China in December 2025 were approximately 751,000 tons, showing a sequential improvement but still remaining relatively low. Overall, recent market sentiment has been relatively positive. Coupled with strong fundamentals and pre-holiday stocking support, copper prices are expected to maintain high-level fluctuations. However, caution is warranted against the risk of a correction due to profit-taking pressure from previous gains. Today, the main Shanghai copper contract is expected to trade within a reference range of 102,500 - 105,000 yuan/ton. Strategically, short-term range trading is advised, with careful position management. Nickel & Stainless Steel: Nickel prices continue to trade at high levels, driven by market concerns over policy uncertainty in Indonesia. News-wise, the Indonesian government indicated that the RKAB quota for 2026 is still under calculation, aiming to match supply with demand, which has partially alleviated market worries. Currently, nickel prices continue to fluctuate alongside the broader non-ferrous metals sector. As a previously undervalued variety, volatility remains high until Indonesian policies become clearer. For trading, a wait-and-see approach is recommended for nickel and stainless steel. The Shanghai nickel 2602 contract reference range is 130,000 - 160,000 yuan/ton. The SS2603 reference range is 13,500 - 14,300 yuan/ton. Polysilicon: Influenced by a downturn in market sentiment, polysilicon prices remain sluggish. From a fundamental perspective, data from InfoLink shows that global polysilicon production schedules for January are expected to drop to around 110,000 tons. The short-term cancellation of export tax rebates for downstream photovoltaic products might spur some front-loaded exports, but the transmission of this effect to polysilicon demand is expected to be relatively limited. With both supply and demand weak, polysilicon inventories are anticipated to continue accumulating. The PS2605 contract is expected to trade within a range of 43,000 - 53,000 yuan/ton. Trading strategy suggests holding short positions. Alumina: Alumina prices weakened overnight, with spot prices dipping slightly. Yesterday, the 05 contract fell significantly; technically, it faces resistance from multiple moving averages, and open interest for the contract began to decline. Fundamentally, supply-side maintenance and new capacity additions coexist, resulting in an overall supply surplus, with volumes slightly rebounding to around 96 million tons. As futures prices continue to decline, the basis (futures-spot spread) has converged somewhat. Currently, imported ore prices have seen some decline, leading to a reduction in production costs for alumina enterprises. Warehouse receipt numbers are slowly rising again, suggesting that fundamental pressures will once again weigh on prices. The alumina 05 contract is expected to trade within a range of 2,500 - 2,800 yuan/ton. Continue holding short positions. US core inflation slowed more than expected, with the December core CPI growth rate below forecasts, rising 2.6% year-on-year, matching the lowest level in nearly five years. The headline CPI increased 2.7% year-on-year, meeting expectations. In the short term, US inflationary pressures appear manageable, paving the way for potential rate cuts this year. Fundamentally, as aluminum prices remain high, overall buyer purchasing sentiment is weak, with some holders offering discounts to sell. Downstream processing and end-consumption segments are purchasing on a need-to basis, while production cuts and shutdowns are showing a noticeable increase. On Wednesday, aluminum ingot inventories in mainstream consumption areas increased by 7,000 tons week-on-week, with Wuxi being the primary location for inventory accumulation, indicating that high prices are not being smoothly passed through to end-users. Technically, divergence between bulls and bears has intensified around the 25,000 level, suggesting a wait-and-see approach in the short term. The Shanghai aluminum 02 contract is expected to trade within a range of 24,500 - 25,200 yuan/ton. Adopt a temporary wait-and-see stance. Zinc: Zinc prices showed strength overnight. Macro-wise, the mild US December CPI data has heightened expectations for interest rate cuts. Fundamentally, the decline in domestic Treatment Charges (TC) shows signs of slowing. According to BaiChuan YingFu research, low-end TC quotes were around 1,100 yuan this week, with little willingness to accept prices below 1,000. On the supply side, influenced by the resumption of production in January at smelters in Yunnan (which have a high proportion of self-owned mines), monthly zinc ingot output is expected to increase sequentially. On the demand side, the ferrous metals sector remains sluggish, providing limited boost to operating rates in primary processing like galvanizing. Overall, there are no new significant developments. Short-term funds seeking catch-up gains have flowed in, increasing positions, but two attempts to break higher have failed. Zinc prices are expected to mainly fluctuate at high levels. For trading, consider taking profits on previous long positions in Shanghai zinc. The main contract is expected to trade around 24,000 - 25,000 yuan/ton. Lead: Shanghai lead prices strengthened overnight. Fundamentally, on the supply side, for primary lead, TCs remain under pressure, although adjustments to maintenance schedules at primary smelters have slightly eased regional tightness. For secondary lead, scrap battery output is expected to decline, coupled with transportation constraints, leading to increased price support intentions among recyclers; secondary lead smelting profits have also declined, but the potential lifting of environmental controls in Anhui suggests overall secondary supply changes may be limited. On the consumption side, influenced by new national standards, end-consumers' willingness to accept new vehicle models has decreased, intensifying the already weak seasonal sentiment. In the spot market, social inventories saw a slight increase after the holiday, but absolute levels remain low. Overall, with both supply and demand weak, lead prices are expected to trade within a range. For trading, adopt a range-trading strategy for Shanghai lead. The main contract is expected to trade around 16,800 - 17,800 yuan/ton. Aluminum Alloy: Aluminum alloy prices strengthened overnight. Macro-wise, the mild US December CPI data has heightened expectations for interest rate cuts. Fundamentally, on the raw material front, the beginning of the year coincides with the off-season for scrap aluminum recycling; however, alloy price increases have also boosted smelting profits. On the supply-demand front, inventories at large manufacturers are accumulating, while small and medium-sized factories still have order backlogs; downstream demand orders have declined sequentially, with spot transactions primarily driven by traders. Regarding spreads, the AD-AL main contract price difference has slightly increased, with Baotai's offer holding steady at 23,500. Overall, spot performance is average; monitor whether it can follow Shanghai aluminum to form a breakout. For trading, adopt a wait-and-see stance on aluminum alloy. The main contract is expected to trade around 23,000 - 24,000 yuan/ton. Precious Metals: The year-on-year increase in the US December CPI was largely in line with expectations. Combined with comments from Fed official Moussalem suggesting little reason for further near-term monetary policy easing, the rally in precious metals has slowed, with only silver continuing its strong performance. The fundamental support for precious metals remains solid, including persistent geopolitical risks, recent further tensions in US-Iran relations, and the ongoing development of the criminal investigation into Fed Chair Powell, which has intensified market concerns about Fed independence. Additionally, the market awaits an upcoming Supreme Court ruling on tariffs. Overall, previous positive factors have been partially digested, leading to a slight slowdown in the precious metals rally. The market awaits further guidance from news on tariffs and geopolitics. Given that precious metal prices are already at high levels with significant volatility, short-term risk management remains essential.
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