**Nonferrous Metals Morning Review | May 19, 2026**
**Copper** Copper prices continued last week's pattern of fluctuating with a weak bias, primarily due to increasing pressure from persistently high U.S. Treasury yields. However, during U.S. trading hours, former President Trump's "TACO" remarks helped soothe market sentiment, with falling oil prices and bond yields providing macro support, leading to a slight rebound in copper prices. From a macro perspective, copper prices remained subdued during Asian hours, still under pressure from high interest rates. In the U.S. session, Trump's announcement to cancel a planned military strike against Iran scheduled for the following day (May 19) provided another dose of macro stability, offering support to copper prices.
Fundamentally, domestic spot inventories of electrolytic copper in China stood at 260.7 thousand tonnes on May 18, an increase of 4.4 thousand tonnes from May 11 and 3.0 thousand tonnes from May 14. As copper prices rose during the week, downstream buyers adopted a cautious, wait-and-see approach, leading to a decrease in procurement demand. While long-term fundamentals are supported by supply disruptions and demand narratives, short-term factors like elevated prices and challenging macro conditions are applying pressure. Overall, copper prices are beginning to react to sustained high U.S. Treasury yields. With macro headwinds and a slight dampening of actual short-term demand due to high prices, copper lacks upward momentum and is likely to remain range-bound in the near term.
**Aluminum** **Market View** Significant differences remain in U.S.-Iran negotiations, with risks of renewed conflict in the Middle East. However, Trump stated he has postponed military strikes, suggesting a high probability of reaching a deal with Iran, though the situation remains unclear. Domestically, the anti-overcapacity policy remains the main theme. Eight ministries, including the Ministry of Industry and Information Technology, issued the "Work Plan for Stable Growth in the Nonferrous Metals Industry (2025-2026)," which continues to use energy consumption and environmental standards to regulate capacity. The plan provides an overall production growth guidance of 1.5%. A sustained price uptrend would require visible improvement in actual supply and demand.
On the supply side, the global compound annual growth rate for primary aluminum from 2026 to 2030 is projected at only 0.8%. China is nearing its domestic capacity ceiling, while power supply issues in Europe and America have raised concerns about potential production cuts. However, based on power contracts for European and American smelters, apart from the Mozal smelter, the likelihood of significant cuts in 2026 is low. The Mozal smelter entered maintenance shutdown on March 15, with the reduction already realized. Domestically, Liaoning Zhongwang plans to gradually restart 300 thousand tonnes of capacity by the end of May. In Vietnam, the first phase (150 thousand tonnes) of the Chen Hongquan Metallurgy Company's primary aluminum project is expected to commence operation on July 2, 2026, contributing an estimated 75 thousand tonnes of incremental supply this year. Slovakia plans to restart the idled Slovalco smelter (200 thousand tonnes annual capacity), potentially as early as this summer. The 120 thousand tonnes Angolan Huatong primary aluminum project has started production. Overseas supply is beginning to materialize. Domestic primary aluminum smelting profits remain high, supporting steady supply growth, with weekly output at 869 thousand tonnes. Middle Eastern aluminum supply has been impacted by geopolitical tensions, with reductions reaching 2,068 thousand tonnes. Overseas supply growth for 2026 has been revised down by 1,475 thousand tonnes. At Rio Tinto's Tiwai Point smelter in New Zealand, approximately 186 workers staged intermittent strikes from May 4 to 10 due to failed labor negotiations, affecting 335 thousand tonnes of capacity.
On the demand side, combined domestic aluminum ingot and billet inventories decreased by 24 thousand tonnes to 1,661 thousand tonnes week-on-week. As the price spread between domestic and international aluminum widens, export profits for aluminum products have increased, accelerating exports in Q2. April's aluminum product exports confirmed a month-on-month increase, suggesting inventories may continue to decline. Domestic end-user demand from the photovoltaic sector has significantly underperformed expectations, with new installations in March down 56% year-on-year and module production down 26% year-on-year. Production schedules for white goods in May continue to show a year-on-year decline. Domestic sales of new energy vehicles are also down year-on-year, indicating domestic demand awaits recovery. Overseas LME inventories continue to draw down from low levels, with increasing canceled warrants, pointing to sustained tightness in global aluminum supply.
On the raw material front, reports suggest Guinea may restrict bauxite exports, potentially limiting total 2026 exports to under 150 million tonnes, an 18% decrease from 2025's 183 million tonnes. This has not been officially confirmed. If true, it could support or increase imported bauxite prices. The weekly alumina market remains in surplus, with inventories continuing to accumulate, maintaining short-term fundamental oversupply pressure.
Overall, with the widening price spread boosting export profits, Q2 exports are accelerating, as confirmed by April's data, supporting continued inventory drawdowns. Overseas LME inventories are low and declining, indicating sustained supply tightness. The macro landscape is dominated by U.S.-Iran tensions; significant negotiation differences persist, and the risk of renewed conflict remains. However, Trump's postponement of strikes suggests a deal is likely, though the situation remains fluid. The aluminum market's focus will shift to verifying actual supply deficits (demand validation). The medium-term strategy for SHFE aluminum remains cautiously bullish, awaiting confirmation of export-driven demand transmission, while monitoring whether domestic inventory pressure eases and export channels remain smooth. Domestic policy expectations regarding PV industry capacity rationalization and potential bauxite export restrictions from Guinea support the market. Nearby futures prices have fallen below high marginal costs, limiting downside. Policy expectations could help stabilize prices, but if these fail to materialize, prices may face renewed pressure from oversupply.
**Key News** 1. **China's April Bauxite Imports at 19.74 Million Tonnes, Down 4.1% YoY:** According to the latest customs data, China imported 19.74 million tonnes of bauxite and its concentrates in April 2026, a year-on-year decrease of 4.1%. Cumulative imports for January-April reached 77.68 million tonnes, up 15.1% year-on-year. 2. **China's April Alumina Exports at 520 Thousand Tonnes, Up 96.6% YoY:** Customs data shows China exported 520 thousand tonnes of alumina in April 2026, a significant 96.6% increase year-on-year. Cumulative exports for January-April were 1.06 million tonnes, up 10.0% year-on-year. 3. **China's April Unwrought Aluminum and Aluminum Product Exports at 600 Thousand Tonnes, Up 15.3% YoY:** Customs data indicates exports of unwrought aluminum and aluminum products reached 600 thousand tonnes in April 2026, a 15.3% year-on-year increase. Cumulative exports for January-April were 2.05 million tonnes, up 8.9% year-on-year. Imports in April were 360 thousand tonnes, down 1.9% year-on-year, with cumulative January-April imports at 1.33 million tonnes, up 0.6% year-on-year.
**Zinc** **Market View** Significant differences remain in U.S.-Iran negotiations, with risks of renewed conflict in the Middle East. Trump has postponed military strikes, suggesting a high probability of a deal, though the situation remains unclear. Domestically, the anti-overcapacity policy remains the main theme, as outlined in the "Work Plan for Stable Growth in the Nonferrous Metals Industry (2025-2026)," targeting a 1.5% overall production growth. Price increases require visible improvement in actual supply and demand.
On the supply side, China imported 546 thousand tonnes of zinc ore and its concentrates in March 2026, up 52% year-on-year. Treatment charges (TCs) remain low, indicating continued tightness in concentrate supply. Overseas mines have revised down production guidance, reducing the full-year zinc mine supply increment. According to BaiChuan, May's zinc production schedule is expected to decrease by 6.5 thousand tonnes month-on-month. Peru has declared a state of energy emergency following a natural gas pipeline rupture that disrupted national supply. As a major global producer of nonferrous minerals, Peru accounts for over 10% of supply for several metals, including 11.5% for zinc. The energy constraints pose potential risks of restricted operations and forced capacity reductions at local mines. Glencore's Kazzinc plant has cut zinc and lead production following a fire, affecting 250-300 thousand tonnes of zinc capacity. Nexa's Cajamarquilla zinc-lead smelter in Peru, with 320 thousand tonnes of capacity, suffered a fire on May 13, leading to a temporary shutdown. The company stated there was no major impact, but a restart timeline is pending. Supply-side disruptions are frequent.
On the demand side, domestic inventories decreased by 2 thousand tonnes week-on-week to 232 thousand tonnes, a slight drawdown. Spot prices remain at a discount, continuously testing the strength of domestic demand. Monitoring spot premiums/discounts and inventory changes is key.
Overall, risks of renewed Middle East conflict persist, but Trump's postponement of strikes increases the chance of a deal. Supply disruptions are frequent, with fires affecting Glencore and Nexa operations. Simultaneously, Peru's energy emergency poses risks to mine production. The Strait of Hormuz remains closed; a prolonged blockade could exacerbate the energy crisis, impacting global industrial production and increasing potential downside risks to global nonferrous metal supply. Zinc prices are expected to trade with a firm, volatile bias.
**Key News** 1. **Two Earthquakes in Liuzhou, Guangxi, Temporarily Have No Impact on Zinc Production:** On May 18, a magnitude 5.2 earthquake occurred in Liunan District, Liuzhou City, Guangxi, followed by a magnitude 3.3 quake. Guangxi is a key zinc raw material supply region. According to SMM, the earthquakes have had no impact on zinc smelter production so far; operations are normal. 2. **LME to Adjust Daily Price Limits for Lead and Zinc:** LME confirmed it will lower the daily outright price movement limit for lead and zinc contracts from 15% to 12% across all trading platforms, effective June 8. 3. **Trilogy's Arctic Copper-Zinc Project Granted FAST-41 Status:** Trilogy Metals announced its flagship Arctic copper-zinc-lead-gold-silver project in Alaska's Ambler Mining District has been formally included in the FAST-41 federal permitting program. The project is a 50/50 joint venture with Australia's South32 via Ambler Metals. The FAST-41 program, established in 2025, aims to streamline approvals for critical infrastructure and mineral projects. Trilogy's CEO called this a major milestone. Inclusion initiates a 60-day coordination period to develop a permitting schedule, tracked publicly.
**Tin** **Market View** Significant differences remain in U.S.-Iran negotiations, with risks of renewed conflict in the Middle East. Trump has postponed military strikes, suggesting a high probability of a deal, though the situation remains unclear. Domestically, the anti-overcapacity policy remains the main theme, as outlined in the "Work Plan for Stable Growth in the Nonferrous Metals Industry (2025-2026)," targeting a 1.5% overall production growth. Price increases require visible improvement in actual supply and demand.
On the supply side, global mine supply disruptions persist, with focus on the Democratic Republic of Congo (DRC), Indonesia, Myanmar, and Peru. An explosion at an explosives factory in Bangkang, Wa State, which supplied part of the Man Xiang mine, may affect Wa State's resumption of operations. April customs clearance data at the Menglian port showed a month-on-month decline. Concerns over DRC supply will persist due to local conflict uncertainty. Indonesian exports faced a temporary disruption in April due to permit renewals but are expected to recover month-on-month in May. Peru's energy emergency following a natural gas pipeline rupture poses potential risks of restricted operations and forced capacity reductions at local mines. Peru accounts for over 10% of supply for several metals, including 11.4% for tin.
On the demand side, domestic social inventories decreased by 59 tonnes week-on-week to 10,754 tonnes. Spot prices remain at a premium, indicating continued industrial support, and testing demand strength.
Overall, Middle East tensions and Peru's energy emergency pose supply risks. The Strait of Hormuz remains closed, potentially exacerbating global energy and industrial supply chain issues, supporting tin prices. The global refined tin market remains in deficit. Once Middle East tensions ease, demand from new quality productive forces is expected to accelerate. A medium-to-long-term strategy of buying on dips remains viable.
**Key News** 1. **Cornish Metals Secures £52 Million Financing for UK's South Crofty Tin Mine:** Cornish Metals announced a secured credit facility of approximately £52 million with the UK National Wealth Fund and Vision Blue Resources to support the ongoing development of its wholly-owned South Crofty tin project. This follows a recent $210 million Nordic bond issuance, providing ample funding. Part of the funds will be held in escrow, with the remainder for underground development, shaft refurbishment, surface facilities, and operations. 2. **Trinity Metals Plans US IPO to Raise $200 Million for Tin-Tungsten-Tantalum Expansion:** Rwanda's Trinity Metals Group plans a NYSE listing within 12-18 months to raise $1-2 billion to accelerate expansion of its tin, tungsten, and tantalum mines and advance lithium projects. The company consolidated several artisanal mining sites into industrial operations, quadrupling output. It plans to invest $150 million over three years in processing plants, including a $50 million plant at the Nyakabingo tungsten mine (Africa's largest) to boost recovery rates. It aims to increase monthly tin and tungsten production to around 300 tonnes each within 3-5 years. Products are supplied to markets in Europe, America, and Thailand.
**Nickel** **Market View** The SHFE nickel main contract rose 0.42% yesterday, closing at 142,660 yuan/tonne. Jinchuan nickel premium increased by 50 yuan to 1,550 yuan/tonne, while import nickel discount held at -250 yuan/tonne. LME nickel 3-month discount widened to -192.57 dollars/tonne.
On the raw material front, although some Chinese vessels have been released recently, no U.S.-Iran agreement has been reached, and the Strait of Hormuz remains closed, sustaining sulfur supply risks. Indonesian laterite nickel ore prices for pyrometallurgical use saw a slight increase.
On the supply side, Reuters reported that Indonesian pyrometallurgical nickel production lines are reducing output to provide power for primary aluminum production. According to Mysteel survey data from 9 sample projects, Indonesian nickel intermediate product (MHP) output in April 2026 was 27.2 thousand tonnes of nickel metal, down 16.31% month-on-month and 13.07% year-on-year. Further declines in Indonesian MHP output are expected in May. China's refined nickel production in April 2026 was 35,250 tonnes, down 5.59% month-on-month and 3.29% year-on-year, showing signs of reduction. Overall nickel supply pressure is showing signs of easing.
On the inventory front, according to SteelHome data, visible domestic inventories increased by 8,567 tonnes last week to 106,792 tonnes, maintaining high spot pressure for refined nickel.
In summary, raw material disruptions are not fully resolved. If sulfur prices remain elevated or rise further, cost support for nickel remains strong. On the supply side, with hydrometallurgical line reductions materializing and refined nickel output showing slight cuts, overall supply pressure is expected to moderate. However, significant spot oversupply pressure persists, as reflected by weekly inventory builds exceeding 8,000 tonnes, indicating a severely oversupplied refined nickel market. Until further production cuts occur, nickel prices are likely to remain weak, trading near cost levels.
**Key News & Data** 1. **Corun (600478.SH) Reports Progress on Battery Technologies:** The company stated it has made positive progress in nickel-zinc batteries, solid/semi-solid batteries, and related materials, achieving pilot-scale production, sample delivery, or batch supply. 2. **Tsingshan Requests NPI Output Cuts in Indonesia to Power Aluminum:** Three informed sources revealed that China's Tsingshan Group has requested nickel pig iron (NPI) producers in the Weda Bay Industrial Park in Indonesia to reduce output in June to conserve electricity for aluminum production. This move highlights the group's expansion into light metals beginning to squeeze its nickel business. Sources said Tsingshan made the request last week, adding that rising aluminum prices have increased profit margins for the power-intensive metal, leading the company to prioritize aluminum production. Tsingshan holds shares in the park's power plant. The adjustment will divert power from 22 NPI plants (some owned by Tsingshan) within the park to its sole aluminum smelter, a joint venture with Xin Feng.
**Stainless Steel** **Market View** The stainless steel main contract closed at 14,600 yuan/tonne yesterday, down 0.71%. Open interest decreased by 3,600 lots to 56,102 lots; warehouse receipts decreased by 173 tonnes to 70,356 tonnes.
On the raw material front, recent market reports indicate Indonesian pyrometallurgical lines may reduce output to provide power for aluminum. The delivered price of Indonesian high-grade nickel pig iron remained at 1,155 yuan/Ni point yesterday, keeping nickel iron prices elevated and providing strong cost support for stainless steel.
On the supply side, a recent MIIT notice mentioned standardizing equipment construction for stainless steel enterprises. The number and capacity of alloy melting induction furnaces must match the requirements of electric arc or converter furnace processes, preventing misuse of "alloy melting" to add steelmaking capacity. This may slow future stainless steel capacity expansion. April stainless steel output fell 1.29% year-on-year, but 300-series output rose 7.55%. The May production schedule shows a 0.89% month-on-month increase and a 9.17% year-on-year increase, maintaining supply pressure.
On the demand side, traditional demand from real estate and infrastructure remains relatively weak, and the current period is a seasonal low for stainless steel demand, resulting in generally subdued performance. Overseas demand was relatively weak in Q1, with exports declining significantly.
With expectations of further declines in Indonesian NPI output and sustained high prices, stainless steel cost support remains strong. Supply-side pressure persists with the May schedule showing a slight month-on-month dip but a significant year-on-year increase for the 300-series. Demand remains stable domestically but weak overseas. As stainless steel's own supply pressure increases and the market returns to a balanced or loose state, prices may revert to cost-based pricing, primarily following raw material price movements. Medium-to-long-term, stricter capacity expansion requirements may gradually alleviate overcapacity issues.
**Key News & Data** 1. **MIIT Issues Revised Steel Capacity Replacement Measures:** Key revisions include: Increasing the national replacement ratio for ironmaking and steelmaking to no less than 1.5:1 (1.25:1 for mergers & acquisitions). Phasing out capacity swaps between different enterprises over a 2-year transition period; post-transition, capacity transfer is only allowed via substantive M&A. Setting a 24-month validity period for replacement plans. Standardizing equipment construction for stainless steel enterprises to prevent misuse of "alloy melting" induction furnaces to add capacity. Supporting high-end, green development (e.g., hydrogen metallurgy, EAFs) with differentiated replacement ratios. Strengthening policy coordination with other ministries on environmental impact assessments, emissions permits, energy conservation reviews, and carbon emission evaluations.
**Lithium Carbonate** **Market View** The lithium carbonate main contract rose 0.67% yesterday, closing at 192,180 yuan/tonne. Open interest increased by 8,384 lots to 466,957 lots; warehouse receipts increased by 1,165 tonnes to 51,804 tonnes. Spotwise, battery-grade lithium carbonate prices fell by 1,300 yuan to 190,800 yuan/tonne, while industrial-grade prices fell by 500 yuan to 187,500 yuan/tonne.
On the supply side, Mineral Resources (MinRes) decided to restart its Bald Hill lithium mine in Western Australia. The mine has an annual capacity equivalent to 140 thousand tonnes of SC6 spodumene concentrate (~17.5 thousand tonnes LCE). High prices are stimulating positive supply responses.
On the demand side, power battery end-user demand is recovering, while energy storage battery demand maintains high growth rates.
On the inventory front, warehouse receipts increased significantly again by 1,165 tonnes yesterday. Visible inventories in intermediate links continue to grow rapidly, casting doubt on the destocking trend.
Since late April, the main bullish logic for lithium carbonate has been expectations of delayed shipments from Zimbabwean mines due to an export ban and ongoing downstream capacity expansion, leading to forecasts of sustained, large-scale destocking in May-June and a gradual tightening of the spot supply-demand balance. However, if hidden inventory levels are as high as rumored, easing supply pressure could lead to price adjustments at current high levels. The issue of hidden inventories is casting doubt on current visible stock levels and the destocking trend; the market awaits subsequent inventory adjustments. Medium-to-long-term, with clear demand expansion expectations, focus is on whether sustained supply surprises stimulated by high prices could reverse the gradually tightening long-term lithium resource outlook.
**Key News & Data** 1. **MinRes Plans Restart of Bald Hill Lithium Mine in WA:** Benefiting from a sustained and significant recovery in spodumene prices, MinRes decided to restart its Bald Hill lithium mine, which was placed on care and maintenance in November 2024. The mine has a resource of 58.1 million tonnes at 0.94% Li2O. It is designed to produce 165 thousand dry metric tonnes per year of 5.1% Li2O spodumene concentrate (~140 thousand dmt SC6 equivalent). MinRes stated it can safely and efficiently resume production using existing stockpiles, owned equipment, and an established workforce. Site preparation is set for late May, with mining and crushing resuming in June and first concentrate production in July. First shipments are expected from Port of Esperance in Q1 FY2027, with full capacity reached in Q2. Restart costs (including working capital) are estimated at ~A$20 million in Q4 FY2026, with FY2027 production guidance to be released in August. 2. **Thacker Pass Lithium Project Nears Engineering Completion, Procurement Over 70%:** Lithium Americas reported that detailed engineering for the Thacker Pass lithium project is nearing completion, with procurement over 70% complete. Over 75% of structural steel from the UAE has been transshipped via Jeddah, Saudi Arabia, or delivered to site. Major long-lead items like transformers, reactors, and steam turbine components have arrived. Over 1,300 workers are on site, peaking above 2,000. As of March 31, the company had capitalized $1.3 billion in construction and project-related costs. The project is expected to produce 40,000 tonnes of lithium carbonate annually, sufficient for ~800,000 EVs, far exceeding the output of the currently operational U.S. brine operation, Albemarle's Silver Peak.
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