The following is a summary of the nonferrous metals market, covering copper, nickel, stainless steel, alumina, electrolytic aluminum, aluminum alloy, industrial silicon, polysilicon, and lithium carbonate.
Copper: Overnight, both domestic and international copper prices fluctuated with a stronger bias. Domestic refined copper spot imports showed a slight loss, while the Comex-LME copper price spread widened to around $258 per tonne. On the macroeconomic front, U.S. pending home sales in September fell 4% month-on-month, marking the largest single-month decline in over three years and hitting the lowest level since 2014; listed housing supply rose to the highest since March 2020. Federal Reserve voter Hammack stated that inflationary pressures have spread beyond the energy sector, with AI investment and tariffs pushing up costs; to prevent high inflation from becoming entrenched in the economy, the Fed should consider smaller but more frequent rate adjustments rather than waiting for inflation pressures to build before taking larger action. Geopolitically, according to Xinhua, Houthi forces launched four military operations within 24 hours against airports and energy facilities in Saudi Arabia; Saudi Arabia faces a crisis of escalating conflict in Yemen. On the inventory front, LME copper inventories fell 1,750 tonnes to 231,275 tonnes; Comex copper inventories rose 424 tonnes to 713,778 tonnes; SHFE copper warrants increased 500 tonnes to 8,785 tonnes, while BC copper warrants fell 600 tonnes to 3,679 tonnes. On the demand side, downstream buyers maintained just-in-time purchasing, with weak willingness to stock up at high prices. Spot premiums remained at elevated levels but declined significantly compared to pre-holiday levels. The White House has yet to make a final decision on tariffs for U.S. refined copper imports, and U.S. copper continues to maintain a premium structure of around $200 per tonne relative to LME copper. This has reduced the marginal benefit of refined copper trade arbitrage, but the premium structure also prevents U.S. copper from flowing out significantly. Before this pattern breaks, the copper inventory shortage in non-U.S. regions will keep copper prices in a rangebound trajectory. Once the pattern shifts, a trend may also emerge. Therefore, before policy clarity, a rangebound view is appropriate.
Nickel & Stainless Steel: Overnight, LME nickel fell 0.45% to $15,630 per tonne, while SHFE nickel dropped 0.4% to 118,160 yuan per tonne. On the inventory front, LME inventories decreased by 636 tonnes to 282,228 tonnes, and SHFE warrants decreased by 703 tonnes to 93,356 tonnes. In terms of premiums/discounts, the LME 0-3 month spread remained in negative territory; the imported nickel premium/discount held at 200 yuan per tonne. In terms of news, on October 6, Indonesia's Ministry of Energy and Mineral Resources (ESDM) stated that the 2027 Work Plan and Budget (RKAB) evaluation will be faster than in 2026 and promised a fair decision on nickel ore production quotas. The target is to issue the 2027 nickel ore RKAB before the regulatory deadline, avoiding evaluation delays to the maximum extent and striving for early completion. On October 7, Indonesia's Coordinating Minister for Downstreaming and Energy Transition, who also serves as Minister of Energy and Mineral Resources, stated that the government plans to further tighten the moratorium on new nickel smelters producing semi-finished products, even though the relevant moratorium policy has already been stipulated in Government Regulation No. 28 of 2025. Under current regulations, the application period for a one-year RKAB is from October 1 to November 15 each year. This year's cumulative nickel ore production quota is 260 million to 270 million metric tonnes, a significant decline from last year's actual production of 320 million metric tonnes. The Ministry of Energy and Mineral Resources predicts that actual nickel ore production for the full year will reach approximately 290 million metric tonnes, exceeding the upper limit of the 2026 RKAB quota. On October 8, Indonesian President Prabowo Subianto traveled to Central Halmahera in North Maluku province to launch downstreaming projects worth a total of $10.2 billion (approximately 180 trillion Indonesian rupiah) at PT Indonesia Weda Bay Industrial Park (IWIP). From a fundamental perspective, nickel ore prices, premiums, and sulfur prices weakened month-on-month. Due to climate and power pressures, some segments of the industrial chain experienced production cuts in October, but the current cuts have not yet been significantly reflected in inventory data. The pressures from quota increases and weakening theoretical cost support remain, and short-term prices may trade in a low range. However, attention should be paid to supply-side production cut variables, Indonesian policy, and macroeconomic disturbances.
Alumina, Electrolytic Aluminum & Aluminum Alloy: Overnight, alumina AO2701 closed at 2,666 yuan per tonne, down 1.15%. Open interest increased by 15,468 lots to 238,000 lots. Overnight LME closed at $3,052.5 per tonne, up 0.13%, with inventories declining 250 tonnes to 238,600 tonnes. SHFE aluminum AL2611 closed at 23,490 yuan per tonne, down 0.4%, with open interest decreasing by 6,027 lots to 245,000 lots. Aluminum alloy AD2612 closed at 23,105 yuan per tonne, down 0.96%. Open interest increased by 498 lots to 18,602 lots. On the spot side, SMM alumina prices fell back to 2,668 yuan per tonne. Aluminum ingot spot premiums stood at 60 yuan per tonne. Foshan A00 quotes fell back to 23,970 yuan per tonne, while Wuxi A00 quoted at a discount of 110 yuan per tonne. Aluminum billet processing fees remained stable in most regions, with Xinjiang, Nanchang, Guangdong, and Wuxi下调30-80 yuan per tonne; aluminum rod 1A60 series processing fees held steady, 6/8 series processing fees held steady, and low-carbon 6/8 series increased by 129 yuan per tonne. Several mines are advancing long-term contract negotiations for next year, continuously providing support for forward alumina costs. Domestic alumina plants continue to draw down raw material stockpiles and will face pressure from new long-term contract price increases ahead. The current futures price is close to the cash cost of high-cost regions such as Shanxi, placing alumina valuations at a support level. The strong dollar and high interest rate environment weigh on nonferrous valuations. Combined with the fading Middle East risk premium and accelerating resumption of Middle East smelters, it is evident that LME bullish sentiment cooled noticeably during the Chinese holiday period, and the LME destocking pace has gradually stalled. Meanwhile, domestic September demand recovery fell short of expectations, and the market is also lowering its expectations for October demand. The current downside support for aluminum prices remains relatively solid, and given diverging overseas sentiment, the likelihood of a sharp rally is relatively low. Post-holiday aluminum ingot arrivals and downstream resumption pace are observation points for short-term aluminum price performance.
Industrial Silicon & Polysilicon: On the 12th, industrial silicon fluctuated with a stronger bias, with the main 2611 contract closing at 8,695 yuan per tonne, up 0.99% intraday, and open interest decreasing by 14,861 lots to 191,000 lots. The Baichuan industrial silicon spot reference price was 9,232 yuan per tonne, up 25 yuan per tonne from the previous trading day. The lowest deliverable price held steady at 8,750 yuan per tonne, and the spot premium narrowed to 90 yuan per tonne. Polysilicon fluctuated with a weaker bias, with the main 2611 contract closing at 35,200 yuan per tonne, down 2.75% intraday. Open interest increased by 1,709 lots to 83,254 million lots; the lowest deliverable price fell slightly to 39,480 yuan per tonne, and the spot premium widened to 3,755 yuan per tonne. At the end of September, silicon plants in Southwest China began arranging production halts, while sporadic restarts of large furnaces in Northwest China provided some offset, and actual October production cuts may fall short of expectations. If large-scale polysilicon production curtailment is confirmed near mid-month, industrial silicon may face the risk of demand collapse. Polysilicon material plant inventories increased further, and spot premiums rose again. October large orders have not yet been signed, with only some wafer manufacturers with low raw material inventories and overseas traceability orders expressing limited purchasing interest. Most wafer plants still have one to two months of operating inventory, and post-holiday restocking is unlikely to exceed expectations. Polysilicon has found bottom support, but an upward inflection point has not yet emerged. Key factors to track include whether new signals emerge from energy consumption and other policies, post-holiday downstream resumption and industrial chain bargaining, and whether the pace and magnitude of October silicon material plant production cuts can achieve actual destocking.
Lithium Carbonate: Yesterday, lithium carbonate futures 2701 fell 11.79% to 104,740 yuan per tonne, with daily open interest increasing by 7,401 lots to 429,000 lots. On the spot price side, the average price of battery-grade lithium carbonate fell 6,950 yuan per tonne to 115,400 yuan per tonne, the average price of industrial-grade lithium carbonate fell 6,950 yuan per tonne to 111,900 yuan per tonne, and battery-grade lithium hydroxide (coarse particles) fell 6,500 yuan per tonne to 106,000 yuan per tonne. On the warrant front, warrant inventories decreased by 3 tonnes yesterday to 30,677 tonnes. In terms of news, on October 12, the Ministry of Finance issued an announcement adjusting export tax rebate policies for certain products. Starting April 1, 2027, the VAT export tax rebate rate for new energy vehicles will be reduced from 13% to 9%. Starting April 1, 2027, VAT export tax rebates for electronic cigarette devices and other products will be canceled. According to Mysteel, on October 12, 2026, Albemarle's 15,000-tonne ore auction final transaction price was 10,123.00 CNY/dmt on a tax-inclusive basis, with a grade of 5.31% and moisture of 10.9%. Converted to SC6 on a tax-inclusive basis, this equals 11,438.42 CNY/dmt. On October 11, Jiangte Motor announced that the company recently received a Review Opinion Letter from the National Mine Safety Administration regarding the safety facility design for the 3 million tonne/year mining project at the Qiankeng lithium mine in Yifeng County, Jiangxi Province. The safety facility design received approval in principle. On the supply side, weekly lithium carbonate production decreased by 699 tonnes to 25,895 tonnes, and October lithium carbonate production is expected to decrease by 370 tonnes month-on-month to 118,071 tonnes. On the demand side, October ternary material production is expected to increase 3% month-on-month to 84,110 tonnes, lithium iron phosphate production is expected to increase 4% month-on-month to 640,000 tonnes, lithium cobalt oxide production is expected to decrease 9% month-on-month to 5,760 tonnes, and lithium manganese oxide production is expected to decrease 6% month-on-month to 10,400 tonnes; lithium battery production is expected to increase 6% month-on-month to 320.4 GWh. On the inventory side, weekly inventories decreased by 9,260 tonnes month-on-month to 139,517 tonnes, of which upstream increased 201 tonnes to 31,342 tonnes, cathode plants decreased 8,347 tonnes to 42,952 tonnes, traders decreased 1,445 tonnes to 45,225 tonnes, and battery cell plants and others increased 331 tonnes to 19,998 tonnes. In the short term, based on the monthly balance, October destocking may accelerate compared to last month. However, current market sentiment is weak, macroeconomic disturbances continue, and from a fundamental perspective, the strong reality is being repeatedly weakened while weak expectations are being reinforced, leading to rapid price declines. From a medium-term perspective, price stabilization or rebound may depend more on short-term mismatches caused by supply-side disruptions, such as stringent policies in Zimbabwe and production halts at projects in Jiangxi. A rally would require a revision of demand expectations, and if negative feedback emerges, prices will continue to decline.
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