Copper prices moved higher overnight both on domestic and international exchanges, with domestic refined copper spot imports remaining in a loss position. On the macro front, the US Conference Board consumer confidence index for August slipped to 89.4, the lowest level since January this year and marking a seven-month trough. Meanwhile, the University of Michigan's August consumer sentiment index declined for the first time in three months, with consumers increasingly worried about deteriorating business conditions and rising inflation. On the geopolitical side, US-Iran negotiations have reportedly made significant headway, with media suggesting the two sides have reached a consensus on the terms of a ceasefire agreement, including free navigation through the Strait of Hormuz. In terms of inventories, LME stocks fell by 1,525 tonnes to 238,725 tonnes, Comex inventories rose by 918 tonnes to 676,110 tonnes, SHFE copper warrants dropped by 2,484 tonnes to 38,619 tonnes, and BC copper warrants declined by 126 tonnes to 8,147 tonnes. On the demand side, downstream buyers continue to procure on a just-in-time basis, with weak appetite for building inventories at elevated prices. The return of LME inventory declines and the recovery in swap rates suggest the market's concerns over a potential LME squeeze have not been fully dispelled, keeping the copper price outlook leaning firm. However, heightened vigilance is required regarding potential abnormal market fluctuations around the implementation of the Section 232 tariff policy.
Nickel and stainless steel saw LME nickel edge up 0.21% overnight to $17,050 per tonne, while SHFE nickel slipped 0.02% to 129,640 yuan per tonne. Inventory data showed LME stocks increasing by 120 tonnes to 268,608 tonnes, while SHFE warrants decreased by 54 tonnes to 101,800 tonnes. On the premium front, the LME 0-3 month spread remained in negative territory, and imported nickel premiums held steady at minus 50 yuan per tonne. On the news front, Indonesia's Coordinating Minister for Economic Affairs Airlangga stated that no export or windfall taxes will be imposed on coal and nickel this year, with next year's policy yet to be discussed in detail. On August 19, ESDM Director General Tri Winarno indicated that approvals have begun for multiple proposed revisions to the 2026 coal and nickel work plans and budgets (RKAB), with around a dozen nickel companies and several dozen coal companies having received approval for the revised 2026 RKAB. Earlier on August 13, the Indonesian Nickel Miners Association (APNI) stated that the Ministry of Energy and Mineral Resources (ESDM) has officially confirmed that the 2026 nickel ore RKAB quota will not be increased—the government will only selectively approve additional nickel ore production quotas as a strategic buffer for smelters with low raw material inventories. Weekly inventory performance has been divergent, with overseas destocking pressure mounting while domestic inventories are declining at a relatively rapid pace. With concerns over quota release upside capped by cost support from below, nickel is likely to remain rangebound in the short term, with attention focused on the pace of quota releases and macro sentiment.
Alumina showed a weak-to-consolidating trend overnight, with the AO2610 contract closing at 2,664 yuan per tonne, down 1%. Open interest declined by 10,174 lots to 240,000 lots. LME aluminum settled at $3,238 per tonne overnight, up 0.29%, with inventories drawing down 100 tonnes to 246,800 tonnes. The AL2610 contract closed at 23,975 yuan per tonne, up 0.74%, with open interest down 3,433 lots to 265,000 lots. Aluminum alloys strengthened slightly, with the main AD2610 contract closing at 23,265 yuan per tonne, up 0.52%, and open interest falling by 1,413 lots to 15,579 lots. On the spot front, the SMM alumina price eased to 2,679 yuan per tonne. Aluminum ingot spot prices held steady at parity. Foshan A00 quotes retreated to 23,900 yuan per tonne, while Wuxi A00 showed a discount of 170 yuan per tonne. Aluminum rod processing fees remained steady in Baotou, Henan, and Linyi, while other regions saw cuts of 10-20 yuan per tonne; processing fees for 1A60 series aluminum rods held flat, as did 6/8 series, while low-carbon 6/8 series rose by 144 yuan per tonne. Alumina is exhibiting strength overseas but weakness domestically, with domestic maintenance capacity resuming production, Indonesian policy curbing output expansion, and Middle East shipping issues creating premium demand for bagged alumina. Short-term overseas strength is lending some sentiment support to the domestic market, and inventory data is showing slight destocking as a positive signal. However, the overall oversupply pattern remains unchanged, with divergence between mining quotes and accepted prices, and the market has yet to break out of its low-level trading range. For electrolytic aluminum, market expectations for a Fed rate cut in September have cooled somewhat, and macro sentiment is relatively optimistic. In domestic East China, sustained arrivals are keeping discounts from narrowing, with holders controlling supply and selling slowly while downstream buyers are making modest restocking at lower prices. No clear inflection point for the peak season has emerged yet, with sustained destocking providing support for electrolytic aluminum, but accelerated overseas capacity restarts and a weak consumption season are capping upside. Key focus remains on the sustainability of destocking and signals of downstream peak-season restocking.
Industrial silicon traded on the weak side on August 25, with the main 2611 contract closing at 8,775 yuan per tonne, up 1.09% intraday, with open interest rising by 7,027 lots to 304,500 lots. The Baichuan industrial silicon spot reference price stood at 9,179 yuan per tonne, flat from the previous trading day. The lowest deliverable grade price rebounded to 8,700 yuan per tonne, with the spot premium narrowing to 10 yuan per tonne. Polysilicon also traded weaker, with the main 2611 contract closing at 37,155 yuan per tonne, down 1.85% intraday, and open interest rising by 1,032 lots to 113,600 lots. The lowest deliverable grade price slipped slightly to 39,980 yuan per tonne, with the spot premium widening to 2,780 yuan per tonne. A major Xinjiang producer has planned large-scale furnace shutdowns, and another major producer has announced a halt in quotations, prompting some silicon plants to re-enter the market for high-level hedging. With production cut news having been digested for nearly two weeks, downstream acceptance of price increases remains limited. The market has largely priced in these factors, warranting caution against pullback pressure once the positive news is realized. As downstream wafer manufacturers have previously consumed raw material inventories in concentrated batches, silicon material plants have seen a small volume of actual transaction closures, with futures-spot traders gaining preference due to pricing advantages. This round of procurement involves small-batch replenishment, still far from the industry's anticipated large-scale recovery. Battery cell and module segments have limited capacity to absorb high-priced raw materials, resulting in a standoff with prices quoted but no transactions, and significant resistance to price increase transmission. In the short term, polysilicon is in the early stages of price restructuring, with the market lacking clear direction; attention should be paid to whether actual transaction volumes can continue to build into scale inventories.
Lithium carbonate futures saw the 2701 contract plunge 6.09% to 150,280 yuan per tonne yesterday, with open interest down 4,912 lots to 354,000 lots. On the spot price front, the average battery-grade lithium carbonate price fell 3,500 yuan per tonne to 157,000 yuan per tonne, while industrial-grade lithium carbonate dropped 3,500 yuan per tonne to 152,000 yuan per tonne. Battery-grade lithium hydroxide (coarse particle) declined 4,500 yuan per tonne to 144,000 yuan per tonne. On the warrant front, warehouse receipts increased by 650 tonnes to 41,940 tonnes yesterday. On the news front, TD, a think tank, completed a monthly survey of 38 major battery companies and upstream/downstream supply chain players. Based on cross-calculations of September production plans and on-hand orders, it is estimated that total China lithium battery market output (energy storage + power + consumer) for September will be around 332 GWh, up 9.2% month-on-month. Battery A is expected to produce 110.2 GWh, Battery B 40.9 GWh, and Battery C 18.9 GWh. Global production of power, energy storage, and consumer batteries for September 2026 is estimated at around 346 GWh, up 9.1% month-on-month. On the supply side, weekly production decreased by 145 tonnes to 23,007 tonnes, with August lithium carbonate production expected to increase by 7% month-on-month to 113,000 tonnes. On the demand side, ternary material production is expected to increase by 5% to 93,840 tonnes, lithium iron phosphate by 5% to 565,100 tonnes, lithium cobalt oxide by 4% to 7,380 tonnes, and lithium manganese oxide by 11% to 11,920 tonnes. Lithium battery production is expected to grow by 7% to 288.9 GWh. On the inventory front, large-sample weekly inventories fell by 7,516 tonnes to 86,392 tonnes, with other segments down 2,598 tonnes to 39,392 tonnes, smelter inventories down 2,936 tonnes to 11,486 tonnes, and downstream inventories down 1,981 tonnes to 35,515 tonnes. The current fundamental picture remains one of rapid destocking, with market sentiment and news flow causing repeated disruptions and heightened futures price volatility. The basis and warrant situation on the spot side remain contradictory; attention should be paid to whether Zimbabwean supply increases materialize in September, while remaining vigilant against market sentiment swings.
Comments