Copper: LME and domestic copper prices weakened overnight, with the spot import arbitrage window for refined copper in China closing. On the macro front, a Federal Reserve Governor reiterated the need for 100 basis points of interest rate cuts by 2026, despite improvements in the labor market, and expressed a preference for acting sooner. Although Nvidia reported better-than-expected results, market concerns about AI persisted, dragging down the Nasdaq and further dampening market sentiment. Regarding inventories, LME copper stocks increased by 3,950 tonnes to 259,600 tonnes; COMEX copper stocks rose by 9.98 tonnes to 545,267 tonnes; SHFE copper warehouse receipts increased by 1,413 tonnes to 289,219 tonnes, while BC copper warehouse receipts remained at 14,218 tonnes. On the demand side, focus is on post-holiday work resumption. AI-related worries and U.S. stock market volatility are weighing on sentiment. There remains a short-term risk of a secondary price pullback, driven by a potential cooldown in macro sentiment combined with inventory build-up pressure. However, the core drivers for higher copper prices – the supply gap caused by insufficient global copper mining capital expenditure, and demand growth from new energy and AI computing infrastructure – have not fundamentally changed. Therefore, any significant price correction due to weaker macro conditions and near-term fundamentals could present a golden window for establishing long-term long positions.
Nickel & Stainless Steel: LME nickel fell 1.75% overnight to $17,730 per tonne, while SHFE nickel dropped 1.25% to 139,100 yuan per tonne. Inventories showed LME stocks increasing by 1,698 tonnes to 289,506 tonnes, while SHFE warehouse receipts decreased by 19 tonnes to 53,158 tonnes. The LME 0-3 month backwardation remained negative; the import premium for nickel held steady at 50 yuan/tonne. Prior to the holiday, it was revealed that approved nickel ore production quotas were significantly reduced compared to the previous year's RKAB target. Reports indicate production cuts at an Indonesian nickel pig iron plant due to tight ore supply and furnace maintenance, estimated at 30,000-40,000 physical tonnes per month. Fundamentally, nickel ore premiums have strengthened again, with post-holiday offers reported in a range. Data shows declining nickel ore inventory indices for Indonesian pyrometallurgical and hydrometallurgical projects, attributed to monitoring system delays and new project ramp-ups. Coupled with expectations for tighter Indonesian quotas, concerns about resource supply tightness persist, pushing up cost support levels. While demand has weakened sequentially, cost support remains solid. Given ongoing disruptions from Indonesian news, opportunities for lightly testing long positions near cost levels warrant attention. A significant drawdown in visible inventories could provide further positive price feedback. Caution is advised regarding overseas macro risks.
Alumina, Primary Aluminum & Aluminum Alloy: Alumina prices weakened overnight. The AO2605 contract closed at 2,747 yuan/tonne, down 3.55%, with open interest increasing by 41,221 lots to 381,000 lots. Primary aluminum prices also weakened; the AL2604 contract closed at 23,780 yuan/tonne, down 0.34%, with open interest decreasing by 411 lots to 252,000 lots. Aluminum alloy prices trended lower; the main AD2604 contract closed at 22,670 yuan/tonne, down 0.24%, with open interest down 407 lots to 8,923 lots. On the spot market, SMM's alumina price stopped falling and rose to 2,620 yuan/tonne. The spot discount for aluminum ingots narrowed. Offers in Foshan adjusted lower, while aluminum billet processing fees were mostly stable. Rising overseas alumina prices, combined with winter raw material stocking by domestic aluminum smelters, supported the counter-trend rise in alumina futures. However, high social inventories and pressure from expiring warehouse receipt cancellations continue to cap gains. Escalating U.S.-Iran tensions and renewed tariff announcements have introduced volatility into overseas macro sentiment. Post-holiday, SHFE aluminum may see short-term catch-up gains, but overall upside is limited. The extent of the subsequent price rebound will depend on the level of aluminum ingot inventory accumulation; accumulation exceeding expectations could suppress the rebound pace. Monitor overseas news disruptions, post-holiday downstream work resumption progress, and the pace of aluminum ingot inventory build-up.
Industrial Silicon & Polysilicon: Industrial silicon prices weakened on the 26th. The main SI2605 contract closed at 83,405 yuan/tonne, down 1.3% for the day, with open interest increasing by 11,364 lots to 325,000 lots. The spot reference price held steady. The polysilicon market also weakened. The main SI2605 contract closed at 46,315 yuan/tonne, down 2.59%, with open interest up 1,633 lots to 39,925 lots. N-type polysilicon prices declined. Production in Yunnan concluded before the holiday, with full production halts expected post-holiday. A major plant in Xinjiang faces restart pressures. Industrial silicon supply has narrative support, but limited demand constrains significant price increases. Pre-holiday, new polysilicon orders stalled, and wafer prices stabilized amid僵持transactions. Post-holiday market focus shifts to peak season demand expectations and awaits clearer policy signals. Short-term weakness is expected, with risks of further correction if policy or demand expectations disappoint.
Lithium Carbonate: The lithium carbonate futures contract LC2605 rose 3.47% yesterday to 173,660 yuan/tonne. Spot prices increased: battery-grade lithium carbonate average price rose by 11,250 yuan/tonne to 173,000 yuan/tonne; industrial-grade average rose by 11,250 yuan/tonne to 169,500 yuan/tonne; battery-grade lithium hydroxide (coarse particle) increased by 10,000 yuan/tonne to 163,000 yuan/tonne. Warehouse receipt inventory decreased by 74 tonnes to 38,451 tonnes. On the supply side, production from Feb 12-26 increased compared to the previous period. However, full-month February production is forecast to decline significantly across all raw material sources. Demand-side production schedules for ternary materials and lithium iron phosphate also showed sequential declines. Social inventory of lithium carbonate decreased week-on-week. Concerns over exports from Zimbabwe led to a gap-up opening yesterday; exports are currently paused, but policy details and duration remain unclear. Short-term pressure may come from a significant sequential increase in Chilean shipments and potential gradual recovery in domestic production, testing whether demand can exceed expectations. Medium-term impacts on actual supply, considering shipping cycles, could be felt from mid-to-late April or May onwards.
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