Copper: (Zhan Dapeng, practitioner qualification number: F3013795; trading advisory qualification number: Z0013582) Overnight domestic and international copper prices moved lower in a volatile session, with domestic spot refined copper imports turning slightly profitable again, while the Comex-LME copper price spread narrowed to around $330 per ton. On the macro front, the U.S. September composite PMI preliminary reading climbed to 58.4, well above the expected 55.3, marking the highest level since July 2021. The services PMI rose to 58.7, beating the forecast of 55.8, while the manufacturing PMI jumped to 57, surpassing the 53.7 estimate and reaching its highest level since 2022. These figures indicate accelerating expansion in U.S. business activity driven by robust demand, though supply bottlenecks and cost pressures are also on the rise. Additionally, the U.S. 5-year yield briefly broke above the 5% threshold for the first time since 2007, closing at 4.997%, while the 10-year yield rose above 5.13% at one point before settling at 5.104%, both hitting their highest levels since July 2007. To stabilize the sell-off in Treasuries and the upward trend in yields, the U.S. Treasury announced another round of long-dated debt buyback operations, purchasing up to a combined face value of $6 billion in 20- to 30-year Treasuries. On inventories, LME stocks declined by 11,750 tons to 252,500 tons, Comex copper inventories increased by 413 tons to 687,687 tons, SHFE copper warrants fell by 1,717 tons to 19,088 tons, and BC copper warrants dropped by 3,776 tons. On the demand side, downstream buyers maintained just-in-time purchasing with weak willingness to stock up at high prices, but renewed tightness in spot supply has kept copper premiums elevated. Last night, U.S. Treasury yields continued to break higher, reinforcing market expectations of Fed tightening, which lifted the dollar index while stocks, bonds, and gold all weakened. Risk-averse capital flows prevented copper prices from pushing higher. Additionally, significant uncertainty remains over U.S. government tariffs on refined copper imports, which is the biggest risk factor in the current uptrend. If the policy announcement falls short of expectations, the impact on copper prices would be considerable. With the U.S. copper tariff decision approaching and the National Day holiday drawing near, it is prudent to maintain light positions both before and during the holiday period. Nickel & Stainless Steel: (Zhu Xi, practitioner qualification number: F03109968; trading advisory qualification number: Z0021609) Overnight, LME nickel fell 0.51% to $16,480 per ton, while SHFE nickel declined 0.9% to 125,020 yuan per ton. On inventories, LME stocks decreased by 30 tons to 278,598 tons, while SHFE warrants fell by 251 tons to 92,879 tons. On premiums, the LME 0-3 month spread remained negative, while imported nickel premiums held steady at 50 yuan per ton. On the news front, due to water shortages caused by drought linked to El Niño, nickel pig iron production at Indonesia's Morowali Industrial Park has been forced to cut output, with an estimated impact of around 100,000 tons. The park has an annual capacity of approximately 4.2 million tons and had previously warned that production could be reduced by 30% to 40% if water supplies did not improve. On fundamentals, nickel ore prices, premiums, and sulfur prices have weakened on a month-on-month basis, while production across the industrial chain may see varying degrees of cuts in September due to climate and power pressures. Domestic refined nickel, ferronickel, and nickel sulfate have also shown varying levels of decline. The benchmark price adjustment has a limited actual impact, mainly correcting deviations from the benchmark, but quota pressures are gradually becoming more prominent. Theoretical cost support may continue to shift lower, and the fundamental picture remains weak. However, in the short term, attention should be paid to the potential resonance of macro sentiment repair, while staying alert to climate and power issues. With the holiday approaching, investors should manage their positions carefully. Alumina, Electrolytic Aluminum & Aluminum Alloys: (Wang Heng, practitioner qualification number: F3080733; trading advisory qualification number: Z0020715) Overnight, alumina AO2701 closed at 2,700 yuan per ton, down 0.66%, with open interest increasing by 6,156 lots to 233,000 lots. Overnight, LME aluminum closed at $3,255 per ton, down 0.31%, with inventories declining by 750 tons to 241,700 tons. SHFE aluminum AL2611 closed at 24,230 yuan per ton, up 0.02%, with open interest rising by 2,100 lots to 289,000 lots. Aluminum alloy AD2611 closed at 23,680 yuan per ton, up 0.23%, with open interest declining by 462 lots to 18,487 lots. On the spot side, the SMM alumina price fell back to 261 yuan per ton, while aluminum ingot spot premiums widened to 20 yuan per ton. The Foshan A00 price retreated to 24,490 yuan per ton, while Wuxi A00 traded at a discount of 240 yuan per ton. Aluminum rod processing fees held steady across the board; 1A60 series processing fees were stable, 6/8 series processing fees remained unchanged, and low-carbon 6/8 series processing fees were cut by 3 yuan per ton. The latest long-term agreement quotes for Guinean ore stand at $72-74 per ton, with domestic alumina plants holding high raw material inventories, and both sides remain at odds over pricing. Alumina inventories rose significantly across all metrics, with plant operating rates recovering and plant-level stockpiles accumulating, while previously bonded-zone transit cargoes unloading at ports replenished port inventories. Rising costs are unable to reverse the continuous pressure on fundamentals. For electrolytic aluminum, the Fed rate hike overhang has been resolved, and macro impacts have temporarily faded. LME inventories have shifted from low-level stability back to a destocking rhythm. Domestically, driven by tight Xinjiang sheet transportation and pre-holiday restocking by downstream buyers, aluminum ingot destocking has accelerated this week. Supported by multiple positives, aluminum prices are running firm. Attention should be paid to downstream holiday shutdown schedules and the pace of aluminum ingot destocking. Industrial Silicon & Polysilicon: (Wang Heng, practitioner qualification number: F3080733; trading advisory qualification number: Z0020715) On the 23rd, industrial silicon traded with a firm bias, with the main contract 2611 closing at 8,555 yuan per ton, up 0.94% on the day, with open interest declining by 16,654 lots to 337,200 lots. The Baichuan industrial silicon spot reference price was 9,207 yuan per ton, down 4 yuan per ton from the previous trading day. The lowest deliverable grade price fell back to 8,750 yuan per ton, with the spot premium narrowing to 215 yuan per ton. Polysilicon traded with a weak bias, with the main contract 2611 closing at 37,090 yuan per ton, down 1.44% on the day, with open interest declining by 5,782 lots to 101,500 lots. The lowest deliverable grade price retreated slightly to 39,500 yuan per ton, with the spot premium narrowing to 2,265 yuan per ton. In the southwest, silicon plants are beginning to schedule month-end production halts following electricity price increases, while large-scale furnaces in the northwest continue to ramp up output, offsetting some of the reductions, suggesting actual cuts may still fall short of expectations. Polysilicon production cut rumors continue to intensify, with multiple polysilicon plants facing suspended or reduced supply requests from customers. The trading logic for industrial silicon has shifted from major producer cuts to demand deterioration, with the market facing downward pressure in line with spot corrections. Polysilicon production cut expectations are rising, but major producers have not yet reduced output. Downstream wafer plants are adopting a cautious restocking approach, with no intention or action to stock up before the holiday, and they are beginning to shift purchases toward lower-priced silicon materials held by futures-spot arbitrageurs. Currently, spot market inventory held by arbitrageurs is being digested while polysilicon plant inventories continue to rise, concentrating inventory pressure upstream. Both long and short positions in the polysilicon market are being handled cautiously, as the market awaits new meeting dynamics and actual production cut confirmations. Lithium Carbonate: (Zhu Xi, practitioner qualification number: F03109968; trading advisory qualification number: Z0021609) Yesterday, lithium carbonate futures contract 2701 fell 3.2% to 128,900 yuan per ton, with open interest rising by 9,615 lots to 436,000 lots. On spot prices, the average price of battery-grade lithium carbonate rose 750 yuan per ton to 135,200 yuan per ton, while industrial-grade lithium carbonate rose 750 yuan per ton to 131,600 yuan per ton. Battery-grade lithium hydroxide (coarse grain) fell 500 yuan per ton to 123,500 yuan per ton. On warrants, inventory declined by 1,523 tons to 34,335 tons. On the news front, Dadong Times Think Tank (TD) completed a monthly survey of 41 major battery companies and their upstream and downstream supply chains. Combined with October pre-production plans and existing orders, it estimates that total Chinese lithium battery output across the entire market (energy storage + power + consumer) for October will be approximately 345 GWh, up 3.9% month-on-month. Battery manufacturer A is expected to produce 107.4 GWh, battery manufacturer B is expected to produce 38.75 GWh, and battery manufacturer C is expected to produce 19.1 GWh. For October 2026, global market production of power, energy storage, and consumer battery types is estimated at around 362 GWh, up 4.6% month-on-month. On the supply side, weekly lithium carbonate output increased by 224 tons to 27,889 tons, with September production expected to rise 10% month-on-month to 128,517 tons. On the demand side, September ternary material production is expected to decline 5% to 86,450 tons, lithium iron phosphate production is expected to rise 6% to 612,000 tons, lithium cobalt oxide production is expected to rise 6% to 7,420 tons, and lithium manganese oxide production is expected to rise 7% to 11,487 tons. Lithium battery production is expected to rise 7% to 314.5 GWh. On inventories, weekly stockpiles fell 6,155 tons to 158,280 tons, with upstream stocks declining by 1,060 tons to 33,736 tons, cathode plant inventories rising by 3,025 tons to 43,886 tons, trader inventories falling by 8,947 tons to 61,503 tons, and cell manufacturers and others seeing inventories rise by 827 tons to 19,155 tons. Spot basis and warrant conditions remain supportive, and prices have rebounded slightly recently. However, news disruptions persist, with most attention focused on demand uncertainty, and yesterday's session saw prices fall along with increasing open interest. With the holiday approaching, investors should manage their positions carefully. Disclaimer: This report's information is sourced from public data. Our company makes no guarantees regarding its accuracy, reliability, or completeness, nor does it guarantee that the information and recommendations contained herein will not change. We strive for objectivity and fairness in the report's content, but the views, conclusions, and recommendations expressed are for reference only and do not constitute promotion of any specific product or business, nor do they serve as a basis or recommendation for trading any related instruments. Investment decisions made by investors based on this report are solely their own responsibility, and neither the company nor the authors bear any liability. Everbright Futures account opening via Sina's cooperation platform is safe, fast, and reliable.
Comments