Copper: Overnight, copper prices on both domestic and overseas markets climbed higher, with domestic refined copper import losses narrowing slightly. The price gap between US and London copper recovered from a discount to $138 per tonne. On the macro front, US initial jobless claims fell to 196,000, a decrease of 10,000 from the previous week, marking one of the lowest levels since 1969. Continuing claims also dropped to 1.73 million, the lowest since January 2024, indicating sustained strength and resilience in the US labor market. Geopolitically, Saudi Arabia proposed a two-week ceasefire plan to the Houthi rebels via Oman, though the Houthis responded cautiously and demanded a "final and comprehensive" solution. Domestically, China's Ministry of Commerce stated that Sino-US trade teams are maintaining close communication on issues such as tariff reductions. In terms of inventories, LME stocks rose by 1,750 tonnes to 255,900 tonnes, while COMEX copper inventories fell by 247 tonnes to 696,639 tonnes. The market has quickly digested the bearish impact of the Fed's rate decision. Additionally, the shift in the US-London copper price spread from a discount to recovery may signal ongoing policy debates regarding US refined copper, suggesting copper prices could remain rangebound at elevated levels.
Nickel & Stainless Steel: Overnight, LME nickel rose 0.71% to $16,265 per tonne, while SHFE nickel gained 0.7% to 123,740 yuan per tonne. LME inventories held steady at 278,790 tonnes, while SHFE warrants decreased by 763 tonnes to 93,931 tonnes. The LME 0-3 month cash-to-three-months spread remained negative, while imported nickel premiums rose by 50 yuan per tonne to 150 yuan per tonne. On the news front, Indonesia's Minister of Energy and Mineral Resources issued Decision No. 363.K/MB.01/MEM.B/2026, a second amendment to guidelines on benchmark price determination for metal minerals and coal sales, primarily adjusting the calculation formula for metal mineral sales benchmark prices (HPM). The revision lowers the nickel correction factor (CF) and cobalt factor for low-grade laterite ore. For example, with 1.2% nickel ore, the new HPM is set at $24.89 per wet metric tonne, down $20.08 from the previous formula's $44.97, a decline of roughly 45%, and lower than SMM's current actual ex-works price of $27 per wet tonne. Based on a 14% royalty rate, royalties for 1.2% nickel ore under the new HPM would be approximately $3.48 per wet tonne, versus about $3.78 per wet tonne based on actual transaction prices. This adjustment helps narrow the gap between HPM and market prices and reduces the tax burden on low-grade laterite mines. Since actual market prices were already below the previous HPM, the impact on HPAL smelters' actual raw material procurement costs is expected to be limited. Fundamentally, nickel ore prices, premiums, and sulfur prices have weakened month-on-month. Meanwhile, due to climate and electricity pressures, various segments of the supply chain may experience output reductions to varying degrees, with domestic nickel cathode, ferronickel, and nickel sulfate also showing declines. The benchmark price adjustment has limited actual impact, but quota pressures may gradually come to the forefront, and theoretical cost support could shift lower, warranting caution over macro disruptions.
Alumina, Aluminum & Aluminum Alloys: Overnight, alumina AO2701 settled at 2,698 yuan per tonne, up 0.56%, with open interest down 3,687 lots to 237,000 lots. LME aluminum closed at $3,290 per tonne, up 0.43%, with inventories declining by 1,000 tonnes to 243,600 tonnes. SHFE aluminum AL2610 closed at 24,400 yuan per tonne, up 0.74%, with open interest rising 16,852 lots to 267,000 lots. Aluminum alloy AD2611 settled at 23,770 yuan per tonne, up 1.17%, with open interest up 415 lots to 19,422 lots. In the spot market, SMM alumina prices eased to 2,673 yuan per tonne. Aluminum ingot spot premiums narrowed to 20 yuan per tonne. The A00 quote in Foshan rebounded to 24,390 yuan per tonne, while Wuxi A00 quoted a discount of 190 yuan per tonne. Aluminum rod processing fees held steady across most regions; 1A60 series wire rod processing fees were stable, 6/8 series were stable, and low-carbon 6/8 series rose by 26 yuan per tonne. Higher freight rates and crude oil prices have pushed up the landed cost of Guinean bauxite, amplifying expectations of production cuts at alumina capacity that had been operating near the cost line. While port bonded zone cargo has been redirected overseas and social inventories fell during the week, alumina plant inventories remain pressured, suggesting the price recovery is driven by expectations rather than actual supply-demand improvements. For aluminum, the bearish Fed decision has been priced in, and the market is undergoing a corrective rebound. With peak-season demand in mid-September falling short of expectations, spot premiums are unlikely to expand further, and there is a risk that aluminum rod inventory buildup could shift to ingot side pressures.
Industrial Silicon & Polysilicon: On September 17, industrial silicon traded with a weak tone. The main 2611 contract closed at 8,445 yuan per tonne, down 0.18% on the day, with open interest up 9,986 lots to 342,000 lots. Baichuan's reference price for industrial silicon stood at 9,211 yuan per tonne, down 18 yuan per tonne from the prior session. The lowest deliverable grade price fell to 8,750 yuan per tonne, with spot premiums narrowing to 345 yuan per tonne. Polysilicon also traded softly, with the main 2611 contract closing at 36,490 yuan per tonne, down 0.82%, and open interest down 237 lots to 107,700 lots. The lowest deliverable grade price dipped slightly to 39,680 yuan per tonne, with spot premiums widening to 3,050 yuan per tonne. With the Xinjiang major plant completing production cuts at its eastern base and an Inner Mongolia plant that previously halted production resuming operations, the market is pricing in both longer-than-expected shutdowns at major plants and lower-than-expected actual production cuts for September. Although silicon plants are holding back sales and supporting prices this week, frequent polysilicon production cut announcements for Q4, coupled with declining procurement from silicon material plants, have fueled concerns over weakening demand. Industrial silicon remains rangebound with limited upside or downside. For polysilicon, the strong expectation of output cuts continues to clash with weak actual conditions. Large-volume orders stalled in September, with only a few wafer makers with low raw material inventories and overseas traceability orders showing limited purchasing interest. Most wafer plants still hold about two months of production inventory, and silicon material inventory pressure continues to accumulate. The inflection point for polysilicon has yet to emerge, and the key focus remains on the actual implementation of production cuts, with caution advised over potential disappointment in downstream wafer restocking during the peak season.
Lithium Carbonate: Yesterday, the lithium carbonate 2701 contract rose 3.8% to 131,180 yuan per tonne, with open interest down 1,647 lots to 416,000 lots. In the spot market, battery-grade lithium carbonate prices rose by 1,000 yuan per tonne to 133,200 yuan per tonne, while industrial-grade lithium carbonate gained 1,000 yuan per tonne to 129,200 yuan per tonne. Battery-grade lithium hydroxide (coarse particle) fell by 3,750 yuan per tonne to 120,250 yuan per tonne. Warrant inventories decreased by 1,932 tonnes to 43,583 tonnes. On the news front, the Ya'an Economic and Technological Development Zone Management Committee recently published the first public notice of the environmental impact assessment for CATL's Ya'an lithium salt production base project. The project involves a total investment of 1.4 billion yuan and plans to build annual production capacity of approximately 40,000 tonnes of lithium carbonate, 30,000 tonnes of monobasic lithium phosphate, and 130,000 tonnes of sodium sulfate. This notice represents only the initial phase of the environmental assessment process, indicating the project is still in the early stage of public disclosure for environmental information. The notice does not disclose construction timelines, funding sources, raw material supply plans, or expected start-up dates, nor does it imply that the project has received environmental approval or officially commenced construction. On the supply side, weekly lithium carbonate production increased by 224 tonnes to 27,889 tonnes, with spodumene-based output up 74 tonnes to 14,387 tonnes, lepidolite-based output down 75 tonnes to 3,312 tonnes, salt lake output up 295 tonnes to 6,288 tonnes, recycling-based output down 80 tonnes to 2,975 tonnes, and lithium slag-based output up 10 tonnes to 927 tonnes. September lithium carbonate production is expected to rise 10% month-on-month to 128,517 tonnes. On the demand side, September ternary material production is projected to fall 5% to 86,450 tonnes, lithium iron phosphate production to rise 6% to 612,000 tonnes, lithium cobalt oxide production to gain 6% to 7,420 tonnes, and lithium manganese oxide production to increase 7% to 11,487 tonnes. Total lithium battery production is expected to grow 7% to 314.5 GWh. On the inventory front, weekly inventories declined by 6,155 tonnes to 158,280 tonnes, with upstream stocks down 1,060 tonnes to 33,736 tonnes, cathode material plants up 3,025 tonnes to 43,886 tonnes, traders down 8,947 tonnes to 61,503 tonnes, and cell makers and others up 827 tonnes to 19,155 tonnes. With macro factors settled, the basis has continued to strengthen from a fundamental perspective, and warrant inventories have shown consecutive outflows recently. It is worth monitoring the scale and sustainability of these trends, as spot prices may offer support. A short-term oversold rebound is possible, but the opening of further upside space will require greater fundamental catalysts and changes in expectations.
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