Copper: Overnight, both domestic and international copper prices rose in tandem. The import window for domestic refined copper opened, maintaining a slight profit margin. On the macro front, US ADP employment for April increased by 109,000, hitting a 15-month high and surpassing the expected 99,000, indicating resilience in the job market, although manufacturing employment remained somewhat sluggish. Positive news emerged from US-Iran negotiations, with reports of productive dialogue over the past 24 hours and Iran agreeing not to possess nuclear weapons, suggesting a potential agreement is likely. Domestically, China's April RatingDog Services PMI rose to 52.6, indicating accelerated expansion, with new orders growing for the 40th consecutive month. Inventory-wise, LME stocks decreased by 950 tons to 397,725 tons; Comex stocks increased by 1,492 tons to 561,072 tons; SHFE copper warehouse receipts fell by 3,665 tons to 92,999 tons; BC copper warehouse receipts dropped by 528 tons to 10,911 tons. The easing tone in US-Iran talks and continued improvement in macro sentiment have boosted market risk appetite, supporting stronger copper prices. However, from a fundamental perspective, while domestic inventory drawdowns provide support, high overseas stocks remain a constraint. Previous concerns about sulfur shortages causing supply disruptions may diminish if a US-Iran deal is reached, potentially reducing the bullish fundamental impact. The situation regarding navigation through the Strait of Hormuz warrants monitoring. Driven by macro factors, copper prices are expected to maintain a strong, high-level consolidation pattern in the short term, with buying on dips being the primary strategy. Attention should be paid to whether previous highs can be tested and sustainably broken.
Nickel & Stainless Steel: Overnight, LME nickel fell 2.22% to $19,200 per ton, while SHFE nickel dropped 2.68% to 149,440 yuan per ton. Regarding inventories, LME stocks decreased by 24 tons to 276,864 tons, while SHFE warehouse receipts increased by 216 tons to 69,875 tons. Looking at spreads, the LME 0-3 month spread remained in negative territory; the import nickel spread held at -350 yuan per ton. On the news front, Indonesian Finance Minister Purbaya Yudhi Sadewa stated that the government plans to impose export taxes and windfall taxes on commodities like coal and nickel to alleviate the burden of increasing state budget subsidies. Adjustments to Indonesian nickel ore benchmark prices and taxes are pushing up costs. Recently, procurement prices for high-grade nickel pig iron by steel mills have moved up to 1,150 yuan per nickel point (delivered, tax-inclusive). Stainless steel costs are being further solidified. Increased enthusiasm for taking delivery in the stainless steel market is driving inventory drawdowns and lifting the price center. However, May production schedules for 300-series stainless steel are projected to increase by approximately 3.8% month-on-month. Supply-side production cuts are gradually materializing. Current pressure from sulfur supply and prices may potentially ease. It is important to note that primary nickel inventory pressure remains significant. Therefore, if supply-side reductions further drive inventory drawdowns, this could subsequently provide positive feedback to prices. Concurrently, at this stage, policy measures are largely implemented. Subsequent focus should be on absolute price levels and whether supplementary quotas might be issued around July.
Alumina, Primary Aluminum & Aluminum Alloy: Overnight, alumina prices showed strength, with the AO2609 contract closing at 2,876 yuan per ton, up 1.13%. Open interest increased by 8,246 lots to 299,000 lots. Primary aluminum prices weakened, with the AL2606 contract closing at 24,500 yuan per ton overnight, down 0.77%. Open interest decreased by 468 lots to 293,000 lots. Aluminum alloy prices also weakened, with the main AD2606 contract closing at 22,985 yuan per ton overnight, down 1.03%. Open interest decreased by 31 lots to 7,611 lots. On the spot market, the SMM alumina price retreated to 2,674 yuan per ton. The spot discount for aluminum ingots narrowed to 90 yuan per ton. Foshan A00 aluminum was quoted higher at 24,330 yuan per ton, at a discount of 190 yuan per ton to Wuxi A00. Aluminum billet processing fees held steady in most regions, with increases of 20-50 yuan per ton in Xinjiang, Baotou, and Guangdong. Aluminum rod processing fees for the 1A60 series were stable; fees for the 6/8 series held steady, while low-carbon 6/8 series fees increased by 167 yuan per ton. Alumina capacity undergoing maintenance in Guangxi is set to gradually resume production, coupled with the ramp-up of previously新增 capacity. After short-term disruptions fade, supply is expected to return to a looser state. Simultaneously, rising cost support from the ore side, high social inventories, warehouse receipt pressure, and near-month delivery pressures suggest alumina will experience wide fluctuations, likely resuming a weak consolidation pattern after encountering resistance during rebounds. For primary aluminum, the unresolved back-and-forth in US-Iran negotiations during the holiday, combined with various external news affecting energy and metal markets, created volatility. Overseas manufacturing data showed a mild recovery, improving macro risk appetite. Post-holiday, SHFE aluminum opened higher, influenced by external market premiums, showing short-term catch-up gains. Affected by the holiday, the pace of domestic demand recovery will be influenced by the speed of post-holiday work resumption. Following concentrated arrivals, aluminum ingot inventories continued their accumulation trend, with a high probability of the inventory drawdown拐点 being delayed. LME aluminum finds support at high levels due to inventory drawdowns and supply disruptions. Aluminum prices are expected to maintain high-level consolidation, with the pattern of clear upper and lower constraints continuing, and increased volatility in domestic-international spreads. A sustained trend awaits the materialization of the inventory drawdown拐点. It is recommended to closely track aluminum ingot inventory performance and the speed of downstream work resumption after the holiday.
Industrial Silicon & Polysilicon: On the 6th, industrial silicon prices showed strength, with the main 2609 contract closing at 8,925 yuan per ton, up 2.06% on the day. Open interest increased significantly by 38,170 lots to 312,000 lots. The Baichuan spot reference price for industrial silicon was 9,161 yuan per ton, up 41 yuan per ton from the last trading day before the holiday. The price for the lowest deliverable grade fell to 8,500 yuan per ton, widening the spot discount to 425 yuan per ton. Polysilicon prices also strengthened, with the main 2606 contract closing at 39,080 yuan per ton, up 1.07% on the day. Open interest increased by 2,287 lots to 65,309 lots. Baichuan prices for N-type polysilicon mixed packages and granular silicon fell to 34,000 yuan per ton. After adjustment, the lowest deliverable standard price was 34,000 yuan per ton, widening the spot discount to 5,080 yuan per ton. Before the holiday, both industrial silicon and polysilicon futures saw significant position reductions. During the holiday, overseas news lacked clear positive catalysts. Post-holiday, industrial silicon faces supply pressure, while demand is unlikely to see substantial improvement. Downstream purchasing remains need-based, lacking excess stocking or export orders to absorb the supply increase. With inventories steadily accumulating and electricity cost centers potentially adjusting downward, industrial silicon is expected to trade weakly, though extreme low prices may find temporary cost support. Before the holiday, polysilicon downstream procurement was cautious, with only module traders selling at lower prices due to funding pressures. Post-holiday, the market remains in a stalemate between high inventories and weak demand, with significant price negotiation differences between upstream and downstream players and weak large new order signing. Spot price increases face significant resistance, offering new hedging appeal in the medium valuation range for futures. Current policy expectations appear largely priced in. Be cautious of correction risks if demand falls short of expectations. The potential for significant rebounds will heavily depend on the implementation of post-holiday supportive policies, acceleration of terminal project bidding, and breakthroughs in new order price negotiations. Strict position control is advised, and chasing short-term rebounds should be done cautiously.
Lithium Carbonate: Yesterday, the lithium carbonate futures 2609 contract rose 7.31% to 199,400 yuan per ton. Daily open interest increased by 21,281 lots to 511,000 lots. Regarding spot prices, the average price for battery-grade lithium carbonate increased by 10,000 yuan per ton to 187,500 yuan per ton. The average price for industrial-grade lithium carbonate increased by 10,000 yuan per ton to 183,000 yuan per ton. The price for battery-grade lithium hydroxide (coarse particle) increased by 10,000 yuan per ton to 174,500 yuan per ton. Warehouse receipt inventory increased by 1,029 tons yesterday to 39,041 tons. On the supply side, weekly production increased by 234 tons week-on-week to 25,947 tons. May lithium carbonate production is projected to increase by 3.4% month-on-month to 113,780 tons. On the demand side, according to SMM data, May production schedules for ternary cathode materials are expected to grow 9% month-on-month to 87,920 tons; lithium iron phosphate (LFP) production is projected to grow 8% month-on-month to 503,700 tons; lithium battery production schedules are expected to grow 7% month-on-month to 239.3 GWh. Regarding inventories, weekly inventories increased by 123 tons week-on-week to 103,593 tons. This included a decrease of 2,295 tons in downstream inventories to 42,202 tons, an increase of 468 tons in upstream inventories to 18,831 tons, and an increase of 1,950 tons in 'other' inventories to 42,560 tons. Based on the projected supply-demand balance for the year, despite ongoing disruptions on the resource side, the impact on full-year supply volume is limited. Strengthening prices could also incentivize additional lithium extraction from alternative sources for supplementation, but the price center may have already shifted higher. Projections from the current expected supply-demand balance suggest May-June might see a return to inventory drawdowns, while July-October could shift to inventory accumulation due to supply increases. November-December requires monitoring to see if demand exceeds expectations ahead of the year-end export rush. Short-term focus should be on: Firstly, potential mine shutdowns in Jiangxi due to permit renewals, and whether this leads to reduced operating rates at lithium salt plants or affects the restart of other projects remains to be seen. Secondly, the suspension of shipments from Zimbabwe may cause temporary supply-demand mismatches. The first batches are expected to gradually resume arrival after mid-June, with the impact on lithium extraction increments likely felt in July. Market volatility has subsided since March. Short-term prices are expected to trade with a strengthening bias within a consolidative pattern.
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