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Copper: (Zhan Dapeng, Practitioner License No.: F3013795; Trading Advisory License No.: Z0013582) Overnight, copper prices at home and abroad fluctuated higher, with domestic refined copper spot imports showing a small profit, and the Comex-LME copper price spread at around $100 per ton.
On the macroeconomic front, in the face of turbulence in the French bond market, Bessent said he expects France's issues will not spill over, but acknowledged observing safe-haven capital flowing into US Treasuries.
According to sources, oil price transmission has exceeded expectations, and the Bank of Japan is expected to hold steady at its policy meeting concluding on October 30, with the earliest possible rate hike in December.
On the geopolitical front, Qatari media reported on October 20 that Qatar and Pakistan submitted a compromise proposal to the United States and Iran, which received preliminary approval from both sides.
Domestically, the National Development and Reform Commission held a press conference on October 20, stating that pragmatic and effective incremental policies should be introduced in a timely manner.
On the inventory side, LME inventory increased by 1,625 tons to 233,800 tons; Comex copper inventory increased by 181 tons to 718,387 tons; SHFE copper warrants decreased by 2,443 tons to 32,967 tons, and BC copper warrants decreased by 900 tons to 2,054 tons.
On the demand side, domestic supply improved marginally, but enterprises remain cautious about stocking up at high prices, and the spot premium continued to decline.
Influenced by rumors of a compromise plan in the Iran-US negotiations, oil prices plunged sharply, and market risk aversion receded somewhat, driving copper prices higher last night.
However, the market focus remains on the US copper import tariff policy, and the White House has yet to make a final decision. US copper maintains a premium structure of around $0-200 per ton relative to LME copper, which has weakened the marginal arbitrage benefits of refined copper trade, but the premium structure also means US copper will not flow out significantly.
In addition, the LME has approved Owensboro in the United States as a qualified delivery location for copper, which may help ease the LME copper squeeze pressure.
Overall, the macroeconomic disturbance to copper has weakened marginally, and the market focus is on potential expectation changes in fundamentals brought about by the US refined copper tariff policy. Before the policy becomes clear, a range-bound pattern should be expected.
Nickel & Stainless Steel: (Zhu Xi, Practitioner License No.: F03109968; Trading Advisory License No.: Z0021609) Overnight, LME nickel rose 1.38% to $15,815 per ton, and Shanghai nickel rose 1.47% to 119,240 yuan per ton.
On the inventory side, LME inventory increased by 756 tons to 280,866 tons, and SHFE warrants decreased by 955 tons to 91,983 tons.
In terms of premiums and discounts, the LME 0-3 month premium/discount remained negative; the imported nickel premium/discount remained at 250 yuan per ton.
On the news front, Indonesian Deputy Minister for Downstreaming and Energy Transition, who also serves as Minister of Energy and Mineral Resources, Bahlil Lahadalia, stated that the government has no plans to restrict nickel ore production, but is instead formulating regulatory policies targeting oversupply of refined nickel products.
The International Nickel Study Group (INSG) stated that the global nickel market will maintain a small surplus of 19,000 tons in 2026, reversing previous shortage forecasts, and expects the nickel surplus to expand to 70,000 tons in 2027, with demand reaching 4 million tons and production rising to 4.07 million tons.
From a fundamental perspective, nickel ore prices, premiums, and sulfur prices weakened month-on-month, while due to climate and power pressures, some segments of the industrial chain saw production cuts in October, but the current cuts have not been much reflected in inventories.
Quota increments and weakening theoretical cost support pressure remain, and short-term range-bound trading at low levels is likely, but attention should be paid to supply-side production cut variables, Indonesian policy, and vigilance against macroeconomic disturbances.
Alumina & Electrolytic Aluminum & Aluminum Alloy: (Wang Heng, Practitioner License No.: F3080733; Trading Advisory License No.: Z0020715) Overnight, alumina AO2701 closed at 2,638 yuan per ton, up 0.38%. Open interest decreased by 6,947 lots to 270,000 lots.
Overnight LME closed at $3,002.5 per ton, down 0.46%, with inventory decreasing by 150 tons to 236,200 tons.
Shanghai aluminum AL2611 closed at 22,975 yuan per ton, down 0.11%, with open interest increasing by 4,540 lots to 240,000 lots.
Aluminum alloy AD2612 closed at 22,695 yuan per ton, down 0.48%. Open interest increased by 151 lots to 21,435 lots; on the spot side, SMM alumina prices fell back to 2,654 yuan per ton.
Aluminum ingot spot premium expanded to 290 yuan per ton. Foshan A00 quotes fell to 23,460 yuan per ton, at a discount of 60 yuan per ton to Wuxi A00.
Aluminum billet processing fees were stable in most regions, with Xinjiang, Nanchang, Guangdong, and Baotou上调 by 10-50 yuan per ton; aluminum rod 1A60 series processing fees were lowered by 50 yuan per ton, and low-carbon 6/8 series were lowered by 147 yuan per ton.
Guangxi's full-production projects that started feeding materials at the end of September began to form significant increments in October, combined with recent declines in several ore sea freight rates, the cost support line shifted further downward, and alumina's rhythm shifted from bottoming out to seeking a bottom.
After the holiday, aluminum ingot destocking exceeded seasonal patterns, dropping to a ten-year low, combined with persistently tight warrants, the November-December spread widened, and the back structure deepened further.
However, due to continuous pressure on non-ferrous valuations before the late-October FOMC, short-term aluminum prices are still treated with a range-bound rhythm.
Attention should be paid to changes in Federal Reserve rate hike expectations, overseas production resumption pace, and the slope of domestic aluminum ingot destocking.
Industrial Silicon & Polysilicon: (Wang Heng, Practitioner License No.: F3080733; Trading Advisory License No.: Z0020715) On the 20th, industrial silicon fluctuated weakly, with the main 2611 contract closing at 8,460 yuan per ton, down 2.65% during the day, and open interest decreasing by 18,236 lots to 110,000 lots.
Baichuan industrial silicon spot reference price was 9,246 yuan per ton, stable compared to the previous trading day. The lowest deliverable price remained stable at 8,800 yuan per ton, and the spot premium expanded to 340 yuan per ton.
Polysilicon fluctuated strongly, with the main 2611 contract closing at 34,760 yuan per ton, up 0.07% during the day. Open interest decreased by 5,557 lots to 55,577 lots; the lowest deliverable price was raised to 39,480 yuan per ton, and the spot premium expanded to 4,720 yuan per ton.
On the cost side, silicon coal declined, northern production increases continued to offset southwestern production cuts, combined with simultaneous contraction in demand from three sectors, low-priced supply from spot-futures traders was gradually digested, and spot-futures procurement continued to decline, becoming the dominant marginal negative feedback, making it difficult for industrial silicon to recover significantly in the short term.
After the closed-door meeting of polysilicon leaders, production cuts at silicon material plants accelerated, with unexpected production cuts in Qinghai.
Spot price support strengthened somewhat, but effective spot transactions were scarce, and the futures market had already priced in production cut expectations in advance, so after the cuts materialized, it became a case of good news exhausted.
If polysilicon continues to fluctuate at the bottom, it may attract some hedging buying, but marginal demand is declining, and there is room for upward correction but difficult to see a reversal.
If inventories continue to accumulate, the high basis structure may become further extreme.
Lithium Carbonate: (Zhu Xi, Practitioner License No.: F03109968; Trading Advisory License No.: Z0021609) Yesterday, lithium carbonate futures 2701 rose 1.15% to 100,520 yuan per ton, with daily open interest increasing by 11,279 lots to 430,000 lots.
On the spot price side, the average price of battery-grade lithium carbonate fell 600 yuan per ton to 102,350 yuan per ton, the average price of industrial-grade lithium carbonate fell 600 yuan per ton to 98,850 yuan per ton, and battery-grade lithium hydroxide (coarse particles) remained at 93,750 yuan per ton.
On the warrant side, yesterday's warrant inventory decreased by 380 tons to 23,172 tons.
According to Mysteel, China's spodumene imports in September 2026 were 970,100 tons, up 7.0% month-on-month. Of this, 112,000 tons of spodumene raw ore were imported from South Africa, down 49.6% month-on-month; 446,000 tons were imported from Australia, up 36.7% month-on-month and 28.5% year-on-year; 136,000 tons were imported from Zimbabwe, up 83.0% month-on-month; and 190,000 tons were imported from Nigeria, up 40.1% month-on-month.
According to SMM, China imported 28,826 tons of lithium carbonate in September, down 5% month-on-month and up 47% year-on-year. Of this, 18,521 tons were imported from Chile, accounting for 64% of total imports; 7,607 tons were imported from Argentina, accounting for 26% of total imports; the two countries together accounted for about 90%, and the import source structure remained stable.
China imported 14,154 tons of lithium sulfate in September, up 61% month-on-month and 163% year-on-year.
On the supply side, weekly lithium carbonate production increased by 191 tons to 26,086 tons, and October lithium carbonate production is expected to decrease by 370 tons month-on-month to 118,071 tons.
On the demand side, October ternary material production is expected to increase 3% month-on-month to 84,110 tons, lithium iron phosphate production is expected to increase 4% month-on-month to 640,000 tons, lithium cobalt oxide production is expected to decrease 9% month-on-month to 5,760 tons, and lithium manganese oxide production is expected to decrease 6% month-on-month to 10,400 tons; lithium battery production is expected to increase 6% month-on-month to 320.4 GWh.
On the inventory side, weekly inventory decreased by 5,145 tons month-on-month to 134,372 tons, of which upstream increased by 773 tons month-on-month to 32,115 tons, cathode plants decreased by 3,343 tons month-on-month to 39,609 tons, traders decreased by 3,275 tons month-on-month to 41,950 tons, and battery cell plants and others increased by 700 tons month-on-month to 20,698 tons.
Macro sentiment is gradually being digested, and market sentiment is recovering.
From a fundamental perspective, weekly data still shows continuous destocking, but the pace has slowed month-on-month, and there remains downside risk in production scheduling, weakening the strong reality; while export tax rebate policy adjustments and China-EU negotiations drag down forward export consumption expectations, reinforcing weak expectations.
Attention should be paid to warrant inventory, market sentiment, lithium mining stock performance, and year-end supply-side disturbance risks.
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