Copper: Overnight, copper prices both domestically and internationally rose with fluctuations, while the spot import of refined copper in China maintained a slight profit. On the macro front, the ceasefire negotiations between the US and Iran have reached a severe impasse. Iran stated that the US insists on "unreasonable demands," while former President Trump called Iran's response foolish and described the ceasefire agreement as "precarious." The public escalation of their differing stances has cast a significant shadow over the prospects for peace talks. Additionally, Chairman Powell's term is set to end on May 15, though he will remain as a governor, with Kevin Warsh expected to succeed him as the new chairman. The Senate could begin the confirmation vote on his nomination as early as May 11, making the new chairman's first official remarks a key focus. Domestically, the Q1 Monetary Policy Execution Report from the People's Bank of China indicates the continuation of an appropriately accommodative monetary policy, with close attention to the impact of imported inflation. China's April CPI rose by 1.2% year-on-year, with both the year-on-year and month-on-month increases in PPI expanding. Regarding inventories, LME stocks increased by 1,600 tonnes to 401,000 tonnes; Comex stocks rose by 679 tonnes to 564,073 tonnes; SHFE copper warehouse receipts fell by 1,851 tonnes to 88,077 tonnes, while BC copper increased by 523 tonnes to 12,338 tonnes. On the demand side, companies remain cautious towards high copper prices, with downstream purchases primarily driven by rigid demand. The pace of domestic inventory drawdown has slowed, though overall consumption shows resilience. Peru's energy crisis bill took effect on May 11, prioritizing residential electricity use while assigning the lowest priority to industrial/mining power consumption. Although this has not yet impacted mining operations, concerns about supply-side disruptions persist given Peru's status as the world's second-largest copper producer. This highlights that in a generally stable macro environment, market focus shifts to commodities significantly affected by supply or demand. Recent developments, including extreme TC fees and a shortage of sulfur overseas, have created supply uncertainty, leading to a renewed bullish view on copper. A strategy of cautious optimism with fluctuations is recommended. A key risk is that if US-Iran negotiations, particularly regarding navigation through the Strait of Hormuz, make unexpectedly positive progress, it could alleviate the sulfur shortage, potentially causing a rapid decline in copper prices.
Nickel & Stainless Steel: Overnight, LME nickel rose 1.64% to $19,255 per tonne, while SHFE nickel increased 0.83% to 148,250 yuan per tonne. Inventory-wise, LME stocks decreased by 948 tonnes to 276,840 tonnes, and SHFE warehouse receipts fell by 7 tonnes to 70,381 tonnes. In terms of premiums/discounts, the LME 0-3 month spread remained in negative territory, and the import nickel discount stood at -600 yuan per tonne. On the news front, Indonesian Energy and Mineral Resources Minister Bahlil Lahadalia postponed the implementation of mining royalty fees for commodities like copper, tin, nickel, gold, and silver to formulate a better plan. On the supply side, some Indonesian mines have entered maintenance due to quota issues, while other projects have reduced operations due to raw material supply and price pressures, leading to an active supply contraction. It is anticipated that supplementary quotas may be finalized in the second half of the year, and current pressures from sulfur supply and prices are expected to ease, causing the valuation-driven strength in nickel prices due to sulfur factors to gradually recede. On the demand side, nickel consumption for ternary precursors, ternary materials, and stainless steel increased in May. However, primary nickel inventory pressure remains significant recently, with weekly LME stocks rebounding and domestic social inventories continuing to rise. Short-term pressure persists; attention is on whether previous supply-side production cuts can drive inventory drawdowns.
Alumina, Electrolytic Aluminum & Aluminum Alloy: Overnight, alumina prices showed strength with fluctuations. AO2609 closed at 2,833 yuan per tonne, up 0.53%, with open interest increasing by 6,979 lots to 341,000 lots. SHFE aluminum also gained strength, with AL2606 closing at 24,690 yuan per tonne, up 0.57%, and open interest rising by 1,672 lots to 293,000 lots. Aluminum alloy prices strengthened as well, with the main contract AD2607 closing at 23,345 yuan per tonne, up 0.82%, and open interest increasing by 368 lots to 12,904 lots. Spot-wise, SMM alumina prices rose to 2,674 yuan per tonne. The discount for aluminum ingot spot expanded to 120 yuan per tonne. Foshan A00 prices increased to 24,250 yuan per tonne, trading at a 130-yuan discount to Wuxi A00. Aluminum billet processing fees remained stable in Baotou, Henan, Linyi, and Wuxi, while fees in Xinjiang, Nanchang, and Guangdong decreased by 30-50 yuan per tonne. Processing fees for aluminum rod 1A60 series held steady, as did those for 6/8 series, with low-carbon 6/8 series fees up by 181 yuan per tonne. Post-holiday, maintenance capacity for Guangxi alumina is gradually resuming, reapplying supply pressure. Downstream electrolytic aluminum restocking is cautious, and the pre-holiday passive destocking logic has faded, leading prices back to weak fluctuations. Domestic electrolytic aluminum's upward momentum is insufficient, with the divergence between domestic and international markets widening rather than converging. Overseas geopolitical risks have cooled, while the low LME inventory narrative persists. Domestically, post-holiday inventory accumulation continues, downstream resumption of work is below expectations, and demand is beginning to show signs of the traditional off-season. Except for sustained export demand in the cable sector, production schedules for air-conditioning aluminum foil and photovoltaic frames started to decline in May. Traders are also facing paper losses, leading to an overall weakening in purchasing willingness. As macro sentiment gradually stabilizes, high aluminum prices lack sustained demand support, constrained at both top and bottom, entering a range-bound fluctuation phase. Key focus points include signals of inventory drawdown and changes in export orders.
Industrial Silicon & Polysilicon: On the 11th, industrial silicon prices showed strength with fluctuations. The main contract 2609 closed at 9,110 yuan per tonne, up 0.72% for the day, with open interest increasing by 29,769 lots to 400,000 lots. The Baichuan industrial silicon spot reference price was 9,186 yuan per tonne, up 7 yuan from the previous trading day. The price for the lowest deliverable grade rebounded to 8,700 yuan per tonne, with the spot discount widening to 410 yuan per tonne. Polysilicon prices weakened with fluctuations. The main contract 2606 closed at 38,215 yuan per tonne, down 4.63% for the day, with open interest increasing by 2,274 lots to 67,768 lots. The adjusted lowest deliverable standard price was 34,000 yuan per tonne, with the spot discount narrowing to 4,215 yuan per tonne. Post-holiday, the resumption of industrial silicon production in Southwest China has intensified pressure. Downstream purchases continue to be based on rigid demand, lacking excess stocking or export orders to absorb the supply increase. Influenced by factors such as environmental inspection teams entering regions, production cuts at major Xinjiang plants, and electricity price adjustments in Inner Mongolia, capital sentiment drove futures prices higher. However, Northwest production cuts are largely priced in, Southwest production resumption expectations are clear, and downstream purchasing sentiment remains weak. New hedging positions entered at higher levels on the futures market, increasing the pressure for a pullback. Recently, several polysilicon companies released Q1 reports, showing widespread and deepening industry losses, which will lead to more cautious purchasing strategies from downstream wafer producers. Post-holiday, polysilicon plants are still focused on fulfilling previous orders, with significant new order signings stalled due to disagreements. Currently, spot and futures markets lack coordination in volume and price, making it difficult for spot prices to follow the rise. The futures market is gradually digesting sentiment, with a clearer trend of convergence towards spot prices through pullbacks.
Lithium Carbonate: Yesterday, lithium carbonate futures 2609 rose 3.51% to 205,020 yuan per tonne, with daily open interest increasing by 27,414 lots to 540,700 lots. Regarding spot prices, the average price for battery-grade lithium carbonate rose by 1,250 yuan to 195,250 yuan per tonne, industrial-grade lithium carbonate rose by 1,250 yuan to 190,750 yuan per tonne, and battery-grade lithium hydroxide (coarse particles) increased by 1,500 yuan to 182,000 yuan per tonne. Warehouse receipt inventory decreased by 50 tonnes to 43,880 tonnes. On the news front, in April, new energy vehicle production and sales reached 1.32 million and 1.344 million units respectively, up 5.5% and 9.7% year-on-year. New energy vehicle sales accounted for 53.2% of total new vehicle sales. From January to April, new energy vehicle production and sales totaled 4.285 million and 4.304 million units respectively, with production down 3.2% year-on-year and sales up 0.1% year-on-year. New energy vehicle sales accounted for 45% of total new vehicle sales. In April, domestic sales of new energy vehicles were 914,000 units, up 3.7% month-on-month but down 10.8% year-on-year; new energy vehicle exports were 430,000 units, up 16% month-on-month and 110% year-on-year. On the supply side, weekly production decreased by 134 tonnes to 25,894 tonnes; May lithium carbonate production is expected to increase by 3.4% month-on-month to 113,780 tonnes; in April 2026, Chile's total lithium carbonate exports were 29,526 tonnes, up 3.40% month-on-month and 35.63% year-on-year, with exports to China at 22,956 tonnes, up 21.29% month-on-month and 47.66% year-on-year. On the demand side, May production of ternary materials is expected to increase by 9% month-on-month to 87,920 tonnes, lithium iron phosphate production by 8% to 503,700 tonnes, lithium cobalt oxide by 23% to 9,480 tonnes, and lithium manganese oxide by 7% to 13,000 tonnes; May lithium battery production is expected to increase by 7% month-on-month to 239.3 GWh, with ternary battery production up 6% to 33.3 GWh, lithium iron phosphate battery production up 7% to 196.4 GWh, and other batteries up 7% to 9.5 GWh. Regarding inventories, weekly social inventory decreased by 920 tonnes to 102,673 tonnes, with downstream inventory down 1,634 tonnes to 40,568 tonnes, inventory in other links up 750 tonnes to 43,310 tonnes, and upstream inventory down 36 tonnes to 18,795 tonnes. Supply saw a slight increase while demand accelerated somewhat, pulling weekly data back into a destocking trend. Inventory turnover days dropped significantly from 29.1 days to around 25.1 days. Short-term prices may continue to fluctuate with a bias towards strength, though caution is warranted regarding position-related disturbances.
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