Copper: Overnight, both domestic and international copper prices rose amid volatility, hitting new record highs. On the macro front, reports suggest that Wall Street broadly believes the Fed's December meeting, despite hawkish signals such as rare internal dissent and emphasis on data dependency, did not shift its dovish stance. Domestically, China's November CPI rose 0.7% YoY, the highest since March 2024, while PPI declines widened slightly. Market focus remains on the upcoming Central Economic Work Conference. Inventory-wise, LME copper stocks increased by 875 tons to 165,850 tons; COMEX copper warrants rose by 1,934 tons to 405,786 tons; SHFE copper warrants climbed 2,530 tons to 31,460 tons; and BC copper stocks grew by 1,237 tons to 6,166 tons. The Fed's short-term bond purchases to support liquidity and expectations of ending balance sheet reduction drove copper's rebound overnight. However, attention may shift to potential rate hikes by the Bank of Japan, which could introduce macro volatility. Overall, copper maintains fundamental (inventory) support amid short-term macro fluctuations, warranting cautious optimism.
Nickel & Stainless Steel: LME nickel fell 0.44% overnight to $14,610/ton, while SHFE nickel dropped 0.33% to ¥115,840/ton. LME inventories decreased by 240 tons to 252,852 tons, and SHFE warrants declined by 296 tons to 33,939 tons. LME 0-3M spreads remained negative, while import nickel premiums held at ¥400/ton. Nickel ore domestic prices dipped slightly, but premiums stayed stable. In the nickel-iron-stainless steel chain, nickel-iron prices edged higher with stronger raw material support, while stainless steel weekly inventories saw minor drawdowns, though upside remains limited. In the new energy sector, tight raw materials provided a floor, but ternary precursor output fell MoM in December, pressuring finished goods. Primary nickel warrant inventories declined slightly, but December output rose MoM. Watch for marginal inventory shifts; short-term volatility may persist amid macro and overseas policy developments.
Alumina, Aluminum & Aluminum Alloy: Overnight, alumina weakened slightly, with AO2601 closing at ¥2,441/ton (-1.97%), while SHFE aluminum strengthened (AL2601: ¥22,175/ton, +0.82%). Aluminum alloy also gained (AD2601: ¥2,130/ton, +0.86%). SMM alumina spot prices fell to ¥2,804/ton, and aluminum ingot discounts narrowed to ¥60/ton. Foshan A00 prices rebounded to ¥21,780/ton, with a ¥110/ton discount to Wuxi A00. Aluminum bar processing fees were steady in Baotou, Henan, and Linyi but dropped ¥10–70/ton in Xinjiang, Guangdong, Nanchang, and Wuxi. Aluminum rod processing fees held firm, while low-carbon rods rose ¥104/ton. Post-environmental inspections, domestic mines resumed operations, and Australian miners accelerated shipments ahead of the rainy season. Ore supply surged, but alumina output remained high, sustaining inventory pressure. Aluminum followed copper’s rally to new highs, supported by steady year-end demand and seasonal logistics bottlenecks in Xinjiang. However, follow-through strength may wane as fundamentals turn less supportive. Monitor downstream restocking sentiment.
Industrial Silicon & Polysilicon: Industrial silicon edged up on the 11th (SI2601: ¥8,285/ton, +0.06%), with spot prices steady at ¥9,580/ton. #421 silicon (lowest deliverable grade) fell to ¥8,850/ton, narrowing the premium to ¥565/ton. Polysilicon strengthened (PC2605: ¥55,765/ton, +1.32%), with N-type silicon prices flat at ¥52,350/ton. Industrial silicon output cuts lagged demand declines, keeping trading focused on hedging or backlog orders. The solar chain maintained high inventories and reduced production, though price cuts haven’t spread upstream. Slow warrant growth and high open interest supported near-month contracts, while state stockpiling rumors added bullish sentiment. Polysilicon’s uptrend persists.
Lithium Carbonate: LC2605 surged 3.97% to ¥98,880/ton. Battery-grade carbonate spot rose ¥800/ton to ¥93,500/ton, industrial-grade gained ¥750/ton to ¥91,000/ton, and battery-grade hydroxide (coarse) added ¥400/ton to ¥82,330/ton. Warrants increased by 1,070 tons to 14,750 tons. Weekly output rose 59 tons to 21,998 tons (spodumene-based +260 tons to 13,744 tons; lepidolite-based -200 tons to 2,876 tons; salt lake-based -15 tons to 3,075 tons; recycling +14 tons to 2,303 tons). December output is forecast up 3% MoM to 98,210 tons. Demand-wise, ternary cathode output may drop 7% MoM to 78,280 tons, and LFP output could dip 1% to 410k tons. Weekly inventories fell 2,133 tons to 111,469 tons (downstream -957 tons to 42,738 tons; other +430 tons to 49,570 tons; upstream -1,606 tons to 19,161 tons). Social inventories continued to decline, and overseas supply disruptions fueled bullish sentiment. However, latent supply expansions warrant caution.
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