The daily report on non-ferrous metals from Everbright Futures, dated June 24, provides an analysis of key industrial metals including copper, nickel, stainless steel, alumina, aluminum, silicon, polysilicon, and lithium carbonate.
Copper
Overnight, both domestic and international copper prices exhibited a weak and volatile trend, with China's refined copper spot imports showing a slight profit. On the macroeconomic front, the preliminary U.S. Composite PMI for June rose to 52.2, surpassing the previous figure of 51.5 and the expected 52.1, marking a five-month high. The preliminary readings for both U.S. manufacturing and services PMI in June exceeded expectations and prior values, indicating continued expansion in U.S. business activity. Geopolitically, former President Trump stated that Iran has conceded to keep the Strait of Hormuz open and has accepted "the highest level" of inspections, suggesting a continued easing of tensions in the Middle East. The situation regarding navigation through the Strait of Hormuz warrants ongoing attention. On the demand side, the approaching off-season has led to weaker restocking intentions among downstream users. Amid significant volatility in overseas financial markets, copper prices are maintaining a pattern of weak fluctuations. As previously noted, the Federal Reserve's hawkish expectations have set the tone for interest rates and liquidity over the next one to two months. The inclination towards a U.S.-Iran ceasefire has alleviated concerns over a potential sulfur shortage, but the open navigation of the Strait of Hormuz also implies continued global economic recovery. Concurrently, the rapid drawdown of LME and domestic social inventories has prevented a complete bearish turn for copper. A fragile balance between bulls and bears persists within a narrow range, awaiting further catalysts from macroeconomic or fundamental factors. Additionally, the narrowing price gap between Comex and LME has reduced the incentive for traders to hoard inventory, as the market awaits the U.S. decision on copper tariffs scheduled for June 30.
Nickel & Stainless Steel
Overnight, LME nickel fell 2.71% to $17,230 per tonne, while SHFE nickel dropped 2.21% to 131,230 yuan per tonne. Inventory-wise, LME stocks decreased by 54 tonnes to 276,138 tonnes, while SHFE warehouse receipts increased by 499 tonnes to 94,768 tonnes. In terms of premiums/discounts, the LME 0-3 month spread remained in negative territory, and the import nickel discount held steady at -300 yuan per tonne. Supply is showing signs of proactive contraction. On one hand, an Indonesian mine has entered a maintenance phase due to quota issues, with attention focused on the quota situation for the second half of the year. On the other hand, following the recent policy adjustment to HPM, nickel ore and sulfur prices have led to reduced operational loads at some Indonesian projects. However, a potential easing of sulfur supply could subsequently boost capacity utilization rates for these projects. While supply is contracting in a sustained and segmented manner, overall production scheduling for June indicates that reductions are more pronounced in nickel pig iron and, to a lesser extent, refined nickel, while other categories show increases. Simultaneously, inventory pressure for primary nickel continues to build. On the demand side, production schedules for June suggest ternary cathode materials will remain flat month-on-month, while nickel consumption in stainless steel is expected to see a slight decline. Currently, inventory pressure remains the core issue within the nickel industry chain. Short-term focus should be on the impact of macroeconomic co-movements, while industry-specific attention should be on Indonesian quotas.
Alumina, Primary Aluminum & Aluminum Alloy
Overnight, alumina prices showed slight strength, with the AO2609 contract settling at 2,864 yuan per tonne, up 0.17%. Open interest increased by 1,034 lots to 285,000 lots. Aluminum prices were weak, with LME aluminum settling at $3,252 per tonne overnight, down 0.21%, and inventories decreasing by 2,075 tonnes to 312,000 tonnes. The AL2607 contract settled at 23,425 yuan per tonne, down 1.47%, with open interest rising by 25,731 lots to 287,000 lots. Aluminum alloy prices were also weak, with the main AD2608 contract settling at 23,095 yuan per tonne overnight, down 1.07%. Open interest decreased by 122 lots to 16,396 lots. In the spot market, SMM's alumina price rose to 2,745 yuan per tonne. The discount for aluminum ingot spot prices narrowed to 50 yuan per tonne. Foshan A00 aluminum was quoted lower at 23,770 yuan per tonne, at a 30 yuan per tonne discount to Wuxi A00. Aluminum billet processing fees remained stable in most regions, with increases of 20-100 yuan per tonne in Baotou and Wuxi. Processing fees for 1A60 series aluminum rod held steady, as did those for 6/8 series, while fees for low-carbon 6/8 series decreased by 53 yuan per tonne. The alumina futures market continues to price in policy factors related to Guinea, with no signs of a pullback, and has additionally factored in actual supply disruptions in China due to environmental rectifications. However, a significant cancellation of warehouse receipts is adding sustained pressure to spot inventories. Alumina has found some support at current levels, and the market awaits the finalization of Guinea's policies for clearer directional guidance. For primary aluminum, following the Federal Reserve's decision to hold rates steady and the fading of geopolitical risk premiums, market expectations have shifted, and prices are seeking a new equilibrium. A supply gap persists overseas, while domestic social inventories continue to draw down at an accelerated pace. After retreating alongside the pullback in macroeconomic premiums before the holiday, aluminum prices have room to rally again post-holiday, driven by stronger-than-expected inventory drawdowns. The key focus will be on downstream restocking enthusiasm.
Industrial Silicon & Polysilicon
On the 23rd, industrial silicon prices were weak and volatile. The main SI2609 contract settled at 8,505 yuan per tonne, down 0.29% on the day, with open interest increasing by 3,173 lots to 272,900 lots. The Baichuan spot reference price for industrial silicon was 9,143 yuan per tonne, down 18 yuan from the previous session. The price for the lowest deliverable grade fell to 8,600 yuan per tonne, widening the spot premium to 200 yuan per tonne. Polysilicon prices were also weak, with the main PC2609 contract settling at 35,800 yuan per tonne, down 0.5% on the day, and open interest rising by 924 lots to 105,800 lots. The standard for the lowest deliverable grade was lowered to 35,985 yuan per tonne, widening the spot premium to 840 yuan per tonne. Industrial silicon producers in Sichuan have resumed operations, primarily producing grades like 551 and 421 with oxygen content. The price spread between high and low-grade products in the market has narrowed. With no concentrated pre-holiday restocking by downstream users before the Dragon Boat Festival, coupled with plans for accelerated production resumption in southwestern China after the holiday, industrial silicon inventories are expected to face marginal upward pressure, limiting upside potential. For polysilicon, a large influx of hedging positions has led to a significant increase in warehouse receipts. Following the conclusion of the photovoltaic inspection meeting and the failure of production restriction expectations to materialize, the market has returned to a pattern of weak volatility. It is noted that news-driven volatility may still recur. Speculation persists regarding the timing and intensity of energy consumption policies, as well as potential anti-internal competition measures. Such influences tend to be amplified when prices are near bottom ranges, warranting caution against significant market fluctuations.
Lithium Carbonate
Yesterday, the lithium carbonate futures LC2609 contract rose 0.78% to 157,220 yuan per tonne, with open interest increasing by 2,517 lots to 449,800 lots. In the spot market, the average price for battery-grade lithium carbonate increased by 1,500 yuan per tonne to 158,500 yuan per tonne. The average price for industrial-grade lithium carbonate rose by 1,500 yuan per tonne to 154,500 yuan per tonne. The price for battery-grade lithium hydroxide (coarse particles) increased by 1,250 yuan per tonne to 144,750 yuan per tonne. Regarding warehouse receipts, inventory increased by 45 tonnes yesterday to 50,460 tonnes. On the supply side, weekly production increased by 85 tonnes week-on-week to 26,429 tonnes. June's lithium carbonate production is estimated to have increased by 2.6% month-on-month to 116,275 tonnes. On the demand side, according to SMM data, June production is forecasted to be flat month-on-month for ternary cathode materials at 88,990 tonnes, while lithium iron phosphate (LFP) cathode material production is expected to grow 3% month-on-month to 504,150 tonnes. Cobalt acid lithium production is projected to increase 3% month-on-month to 8,250 tonnes, while lithium manganate production is estimated to decline 2% month-on-month to 10,780 tonnes. Based on production schedules from other institutions, cathode material output in June is expected to increase 6.5% month-on-month, while battery cell production is forecasted to rise 6.2%. According to market statistics, global lithium-ion battery production is anticipated to increase 8.9% month-on-month. Regarding inventories, large-sample inventories decreased by 1,412 tonnes week-on-week to 132,991 tonnes, while small-sample inventories fell by 957 tonnes week-on-week to 97,829 tonnes. Using the large-sample口径, inventories in other segments decreased by 1,485 tonnes week-on-week to 69,874 tonnes, smelter inventories dropped by 121 tonnes to 16,494 tonnes, while downstream inventories increased by 194 tonnes to 46,623 tonnes. Temporarily excluding the potential impact of the resumption of the Jianxiawo mine, an assessment of the supply-demand balance suggests the short-term pace of inventory drawdown may exhibit a "fast then slow" characteristic due to shipping cycles for Zimbabwean lithium ore. Attention should be paid to short-term support levels and the co-movement between equities and commodities.
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