Copper: Overnight, copper prices both domestically and internationally rose initially before retreating, with the spot import margin for refined copper remaining at a loss. Macroeconomic data showed that U.S. non-farm payrolls increased by 130,000 in January, significantly surpassing the market expectation of 65,000 and marking the largest gain since April 2025. The unemployment rate unexpectedly dipped to 4.3%, against expectations and the previous reading of 4.4%. Average hourly earnings rose 0.4% month-over-month, exceeding the forecast of 0.3% and the downwardly revised prior figure of 0.1%. The labor force participation rate edged up to 62.5%, better than anticipated. The stronger-than-expected U.S. jobs data has reduced the urgency for Federal Reserve interest rate cuts. On the demand side, downstream purchasing has slowed as many businesses begin holiday closures, leading to an accumulation of social inventories. Recent copper price movements have shown some correlation with overseas financial markets and precious metals, indicating that the current market logic remains dependent on financial attributes and sentiment. The overall outlook is viewed as cautiously bullish with fluctuations. Strategically, maintaining a buy-on-dips approach is advised. However, with the Spring Festival holiday approaching and potential geopolitical disruptions in overseas markets during the break, it is recommended to hold light positions over the holiday period.
Nickel & Stainless Steel: Overnight, LME nickel rose 2.93% to $18,065 per tonne, while SHFE nickel increased 2.3% to 140,310 yuan per tonne. Regarding inventories, LME stocks held steady at 285,750 tonnes, while SHFE warrant stocks decreased by 12 tonnes to 52,027 tonnes. In terms of premiums/discounts, the LME cash-to-3-month spread remained in negative territory, and the import nickel discount held at -50 yuan/tonne. News emerged that Tri Winarno, Director General of Minerals and Coal at the Indonesian Ministry of Energy and Mineral Resources (ESDM), revealed that approved nickel ore production quotas are between 260 million and 270 million tonnes, a significant reduction compared to last year's RKAB production target of 379 million tonnes. Fundamentally, nickel ore premiums are strengthening, and nickel pig iron (NPI) prices are oscillating at high levels. According to SMM data, nickel ore inventory indices for Indonesian pyrometallurgical and hydrometallurgical processes have declined, primarily due to monitoring system delays and new project ramp-ups, respectively. Coupled with expectations of tighter Indonesian quotas, concerns persist about potential tightness in raw material supply, pushing up cost support from the supply boundary. For stainless steel, weekly inventories are accumulating due to the February holiday effect, although supply-side maintenance is common. In the new energy sector, spot trading of nickel sulfate is relatively quiet due to the holiday, and production of ternary precursor materials is also expected to weaken sequentially. While seasonal demand has softened compared to the previous period, cost support remains solid, providing strong underlying price support. Combined with ongoing news-driven volatility from Indonesia, opportunities for light long positions near cost levels warrant attention. If visible inventories show significant drawdowns subsequently, it could provide further positive feedback for prices. Risks of overseas market disruptions remain during the holiday, so light positioning is recommended.
Alumina, Primary Aluminum & Aluminum Alloy: Overnight, alumina futures adjusted within a range, with the AO2605 contract closing at 2,818 yuan/tonne, with open interest decreasing by 6,579 lots to 306,000 lots. Primary aluminum futures edged lower, with the AL2603 contract closing at 23,555 yuan/tonne, down 0.08%, and open interest falling by 5,136 lots to 169,000 lots. Aluminum alloy futures were also slightly weaker, with the main AD2604 contract closing at 22,150 yuan/tonne, down 0.02%, and open interest decreasing by 1,131 lots to 13,218 lots. On the spot market, the SMM alumina price declined to 2,617 yuan/tonne. The spot discount for aluminum ingots widened to 190 yuan/tonne. Foshan A00 aluminum was quoted higher at 23,410 yuan/tonne, at a premium of 140 yuan/tonne over Wuxi A00. Aluminum billet processing fees held steady in most regions, increasing by 20-40 yuan/tonne in Nanchang and Wuxi. Processing fees for 1A60 aluminum rod held steady, while fees for 6-series and 8-series rods decreased by 34 yuan/tonne, and low-carbon aluminum rod fees increased by 34 yuan/tonne. Alumina futures gained against the trend, supported by rising overseas alumina prices and domestic primary aluminum smelters conducting early winter raw material stocking. However, pressure from accumulated social inventories and the deregistration of expiring warrants is significant, making it difficult for the alumina rally to sustain. Entering the final week before the holiday, processing plants are closing successively, keeping overall demand weak, and social inventories are beginning to accumulate at a faster pace. Market risk premiums are being unwound, leading to a lower price center and reduced volatility for aluminum. However, as the U.S.-Iran situation remains unresolved, related risk repricing should be monitored.
Industrial Silicon & Polysilicon: On the 11th, industrial silicon futures were slightly weaker, with the main 2605 contract closing at 8,370 yuan/tonne, down 0.48% on the day, while open interest increased by 4,377 lots to 308,000 lots. The Baichuan spot reference price for industrial silicon was 9,458 yuan/tonne, unchanged from the previous session. The price for the lowest deliverable grade held steady at 8,850 yuan/tonne, with the spot premium widening to 480 yuan/tonne. Polysilicon futures were firmer, with the main 2605 contract closing at 49,180 yuan/tonne, up 0.34% on the day, while open interest decreased by 304 lots to 38,313 lots. The Baichuan price for N-type polysilicon for premium redoping was 53,650 yuan/tonne. The price for the lowest deliverable polysilicon grade was also 53,650 yuan/tonne, with the spot premium narrowing to 4,470 yuan/tonne. Yunnan producers are delivering the final batch of pre-holiday orders this week before commencing comprehensive production cuts, while output reductions continue in Xinjiang. Spot traders are actively selling, but downstream stockpiling is concluding, leaving little impetus for price increases before the holiday. New orders in the polysilicon market have stalled ahead of the holiday, with wafer prices negotiated on a case-by-case basis. Apart from module traders selling at discounts due to funding pressures, other segments have stabilized amidst sluggish transactions. Driven by fund repatriation logic before the holiday, polysilicon futures remain weak, with market focus shifting to post-holiday expectations and sentiment.
Lithium Carbonate: Yesterday, the lithium carbonate futures 2605 contract surged 9.18% to 150,260 yuan/tonne. Spot prices also rose: the average price for battery-grade lithium carbonate increased by 2,000 yuan/tonne to 138,000 yuan/tonne, industrial-grade lithium carbonate rose by 2,000 yuan/tonne to 134,500 yuan/tonne, and battery-grade lithium hydroxide (coarse particle) increased by 750 yuan/tonne to 134,500 yuan/tonne. Warrant inventory decreased by 10 tonnes yesterday to 35,527 tonnes. Data from the China Association of Automobile Manufacturers showed stable operation in China's auto industry in January 2026. January production and sales reached 2.45 million and 2.346 million vehicles respectively, with output up 0.01% year-on-year and sales down 3.2% year-on-year. The new energy vehicle market operated steadily, with production and sales of 1.041 million and 945,000 units respectively, up 2.5% and 0.1% year-on-year. The commercial vehicle sector continued its positive trend, with both production and sales achieving double-digit year-on-year growth in January. Auto exports maintained growth, with new energy vehicle exports surging 100% year-on-year to 302,000 units. Wang Fang, Chief Scientist at the China Automotive Technology and Research Center, recently stated at an industry conference that the draft for comment period for GB/T "Solid-state batteries for electric vehicles - Part 1: Terminology and classification" ended on February 28, 2026, after the draft was completed in December 2025. Verification testing is scheduled from January to February 2026 to refine methods and confirm indicators, with review, approval, and official publication expected in April and July 2026 respectively. On the supply side, weekly production fell by 825 tonnes sequentially to 20,744 tonnes. February scheduled production for battery-grade lithium carbonate dropped 17.6% month-on-month to 58,835 tonnes, while industrial-grade carbonate output fell 12.7% to 23,095 tonnes. Demand-side, February schedules for ternary precursor materials decreased 14.6% month-on-month to 69,250 tonnes, and lithium iron phosphate (LFP) cathode material schedules fell 10.7% to 354,000 tonnes. Social inventories of lithium carbonate decreased by 2,019 tonnes week-on-week to 105,463 tonnes. Inventories at downstream users increased by 3,058 tonnes to 43,657 tonnes, inventories in other segments fell by 4,430 tonnes to 43,450 tonnes, and upstream producer inventories decreased by 647 tonnes to 18,356 tonnes. Negative sentiment from news flow has weakened, coupled with bullish expectations for post-holiday demand, driving the rapid price strengthening. It is important to note that, based on recent spot and futures trading volumes, downstream Spring Festival stockpiling is largely complete, with some strategic inventory already in place. If prices remain strong in the short term, a divergence between futures and spot prices could re-emerge. January shipment data from Chile showed a significant sequential increase, but this is attributed to pre-holiday advanced shipments and is likely unsustainable in volume. Substantial supply pressure on the domestic market may materialize after the holiday. Simultaneously, domestic production will gradually resume in March, shifting pressure to the demand side and whether it can exceed expectations. A continued decline in post-holiday inventory levels could become a significant bullish factor. Prices are expected to experience wide fluctuations in the short term.
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