Copper: LME Absence, Shanghai Copper Breaks Through 100,000 Yuan/ton Macroeconomic factors. Overseas, the US Q3 real GDP grew significantly by 4.3%, the fastest pace in two years, driven by strong household consumption expenditure. However, the US PCE price index annualized quarter-on-quarter was 2.9%, in line with expectations but higher than the previous value of 2.6%, which somewhat suppresses expectations for future Fed rate cuts. But Trump stated that he hopes the next Fed Chair will cut rates when the economy and markets are performing well, rather than "killing the rally" prematurely due to inflation concerns; he personally still urges rate cuts and may have a preference regarding the Fed Chair appointment. Additionally, US initial jobless claims for the week of December 20 fell to 214,000, compared to expectations and the previous value of 224,000, indicating the labor market still shows no significant pressure. The Japanese government plans to introduce the largest initial budget in history for the 2026 fiscal year, totaling approximately 122.3 trillion yen, a 6.3% increase from the 2025 fiscal year, with budget growth far exceeding the current inflation level.
Fundamentals. For copper concentrate, domestic TC offers remain at historically low levels, sustaining concerns about tight copper concentrate supply, which serves as a strong fundamental support factor. According to Mysteel, on December 19, representatives from Chinese copper smelters and Antofagasta finalized the 2026 copper concentrate long-term contract processing fee Benchmark at $0/ton and 0 cents/lb. Regarding refined copper production, estimated electrolytic copper output for December is 1.1688 million tons, up 5.96% month-on-month and 6.69% year-on-year. Smelters typically push for higher output in December, which undoubtedly highlights the tight concentrate situation. For imports, China's net refined copper imports in November fell 58.16% year-on-year to 161,700 tons, with cumulative imports down 11.14% year-on-year; November scrap copper imports increased 5.87% month-on-month to 208,100 metal tons, up 19.94% year-on-year, with cumulative imports up 3.51% year-on-year. Inventory-wise, as of December 26, global visible copper inventories increased by 43,000 tons from the previous (19th) count to 865,000 tons. Specifically, LME inventories decreased by 2,650 tons to 157,750 tons; Comex inventories increased by 18,813 tons to 438,118 tons; domestic refined copper social inventories increased weekly by 27,800 tons to 193,600 tons, while bonded area inventories decreased by 1,200 tons to 75,400 tons. On the demand side, as copper prices rise again, downstream companies have turned cautious in procurement, with transactions mainly for rigid demand. Furthermore, the export window has opened, prompting some smelters to actively prepare for exports.
View. During the week, supported by Fed rate cut expectations and bond purchase support, the macroeconomic atmosphere remained warm. Within the context of a loose narrative structure, copper maintained a strong trend. Ultimately, amid the absence of LME trading around Christmas, the Shanghai copper main contract broke through 100,000 yuan/ton, opening up room for imagination regarding future prices. Fundamentally, low inventories and resilient demand continue to provide underlying support. However, high prices may suppress some physical buying interest, and as the year-end approaches, downstream demand may enter a seasonal slowdown narrative, with the market potentially entering an inventory accumulation phase. Over the next week or two, the extremely optimistic sentiment exhibited in the precious metals market may continue to spill over into the nonferrous metals market. Copper prices will engage in intense博弈 between high sentiment and现实 constraints, and should generally be treated as震荡偏向上涨. Strategically, it is recommended to maintain a buying-on-dips approach but avoid excessive chasing of highs. After LME trading resumes, monitor whether it follows the upward move, and pay attention to position management.
Nickel & Stainless Steel: Monitor Policy Implementation Supply: Indonesia's 1.2% nickel ore domestic trade price held steady at $22.5/wet ton; the 1.6% domestic trade price held steady at $51.8/wet ton. Indonesia's nickel ore premium/discount held steady at $25.5/wet ton; Philippines nickel ore held steady at $8.0/wet ton. For nickel pig iron (NPI), inquiries from steel mills and traders increased activity. The transaction price for high-grade NPI rose, with some small-lot transactions concluded at 925-930 yuan/Ni (ex-factory/port, tax included). An Indonesian plant concluded a transaction for January delivery high-grade NPI at 920 yuan/Ni (CIF, tax included). A special steel mill's purchase price for high-grade NPI was 930 yuan/Ni (delivered to plant, tax included). MHP and high-ice nickel spot weekly average prices rose, trading activity increased, sulfuric nickel costs strengthened, and sulfuric nickel immediate profits turned to losses.
Demand: In new energy, weekly ternary materials production decreased by 119 tons week-on-week to 17,726 tons, while inventory decreased by 89 tons to 18,002 tons. According to the CPCA, from December 1-21, national passenger vehicle manufacturers' new energy wholesale volume was 782,000 units, down 10% compared to the same period last December and down 12% from the previous month. The penetration rate for new energy wholesale by manufacturers reached 60.1%. Cumulative wholesale volume year-to-date reached 14.538 million units, up 25% year-on-year. For stainless steel, spot prices mostly rose during the week. Total social inventories in mainstream national markets (89 warehouse caliber) were 1.005 million tons, down 3.55% week-on-week, with the 300 series decreasing by 37,000 tons to 630,000 tons. December crude steel production schedule was 3.2857 million tons, down 5.02% month-on-month and 4.55% year-on-year. Breakdown: 200 series 958,000 tons, down 3.72% MoM, down 2.31% YoY; 300 series 1.7147 million tons, down 4.41% MoM, down 7.62% YoY; 400 series 613,000 tons, down 8.56% MoM, up 1.24% YoY. Weekly prices strengthened slightly, and weekly profits recovered rapidly.
Inventory: LME inventories increased by 1,146 tons during the week to 255,696 tons; Shanghai nickel inventories decreased by 300 tons to 37,527 tons; social inventories decreased by 846 tons to 58,364 tons; bonded area inventories remained at 2,200 tons.
View: On the news front, the Indonesian Nickel Miners Association revealed that the nickel ore production target proposed in the 2026 Work Plan and Budget might be approximately 250 million tons, a significant decrease from the 379 million ton target in the 2025 RKAB. APNI disclosed that the Ministry of Energy and Mineral Resources plans to revise the mineral benchmark price calculation formula for nickel commodities early in 2026. A key focus of this revision is that the government will begin pricing associated nickel minerals (such as cobalt) as independent minerals and impose royalties on them. Fundamentally, domestic nickel ore prices and premiums operated largely steadily. Weekly NPI transaction prices rose. Contraction in stainless steel supply coupled with price strength led to accelerated inventory drawdowns. Raw material prices were stronger than finished products, sulfuric nickel theoretical profits turned negative, nickel, cobalt, and lithium prices all strengthened, demand weakened, and end-users faced cost pressures. For primary nickel, domestic social inventories saw a slight drawdown, while LME inventories accumulated. News provided a boost to nickel prices, but the actual implementation situation is unknown; monitor market sentiment.
Alumina, Electrolytic Aluminum & Aluminum Alloy: Macro-Micro Divergence Suppresses Further Gains Alumina futures震荡偏强, with the main contract closing at 2,793 yuan/ton as of the 26th, a weekly gain of 11.7%. Shanghai aluminum震荡偏强, with the main contract closing at 22,405 yuan/ton for the week, a weekly gain of 1%. Aluminum alloy震荡偏强, with the main contract closing at 21,390 yuan/ton for the week, a weekly gain of 0.73%.
Supply: According to SMM, the weekly operating rate for alumina held steady at 79.85%. Maintenance ended in Guizhou and Guangxi, leading to a recovery in operations, while mines in Henan remain under environmental inspection. For electrolytic aluminum, production ramped up in Indonesia. Domestic technical upgrade projects in Xinjiang and Inner Mongolia gradually started pot operations towards year-end, keeping daily electrolytic aluminum output elevated. SMM estimates that domestic metallurgical-grade alumina operating capacity will drop to 88.69 million tons in December, with output of 7.2 million tons, down 3.5% month-on-month and 1.6% year-on-year. Domestic electrolytic aluminum operating capacity is expected to rise to 44.1 million tons in December, with output of 3.885 million tons, up 6.8% month-on-month and 4.7% year-on-year; the aluminum liquid ratio fell to 76.6%.
Demand: High prices suppressed procurement, coupled with upgraded environmental requirements, leading to a decrease in the average operating rate of processing enterprises by 0.6% weekly to 60.8%. By segment: aluminum cable operating rate decreased by 0.6% to 60.6%; aluminum plate/sheet operating rate decreased by 1% to 64%; aluminum foil operating rate decreased by 1.1% to 69.3%; aluminum profile operating rate decreased by 0.6% to 51%. Recycled aluminum alloy operating rate increased by 1% to 60.8%. Aluminum billet processing fees were下调20-140 yuan/ton across the board; aluminum rod processing fees held steady in most regions, while Guangdong saw an increase of 50 yuan/ton.
Inventory: For exchange inventories, alumina weekly destocking was 17,000 tons to 121,300 tons; Shanghai aluminum weekly inventory accumulation was 7,998 tons to 128,500 tons; LME weekly inventory accumulation was 1,450 tons to 521,100 tons. For social inventories: alumina weekly inventory accumulation was 30,000 tons to 150,000 tons; aluminum ingot weekly inventory accumulation was 39,000 tons to 617,000 tons; aluminum billet weekly inventory accumulation was 5,000 tons to 124,500 tons.
View: Currently, alumina plants hold relatively high ore reserves, leading to low sentiment for premium purchases in the short term. Long-term contract prices for several mines saw significant下调in Q1 next year, further pressing down alumina costs. As long-term contracts with electrolytic aluminum plants are finalized, the possibility of substantial short-term production cuts is low, making it difficult for alumina to escape downward pressure, with spot prices continuing to converge towards futures. Macro sentiment remains positive. The Xinjiang shipment issue was fully resolved during the week, leading to a concentrated arrival of backlogged goods at ports. The pressure for subsequent aluminum ingot inventory accumulation is gradually increasing. Coupled with downstream operating rate回调approaching New Year's Day and year-end capital withdrawal needs, the macro-micro divergence has entered a phase of intensification. Spot discounts remain under continuous pressure, suppressing further short-term gains in the near-month contract. Aluminum prices are expected to continue their high-level震荡rhythm.
Industrial Silicon & Polysilicon: Upstream/Downstream Production Cuts, Sentiment Cools Industrial silicon futures震荡偏强during the week, with the main contract 2605 closing at 8,880 yuan/ton on the 26th, a weekly gain of 2.19%. Polysilicon震荡偏弱, with the main contract 2605 closing at 58,955 yuan/ton, a weekly decline of 2.14%. Spot prices were stable to slightly lower. Non-oxygenated 553 fell by 250 yuan/ton to 8,900 yuan/ton; oxygenated 553 held steady at 9,400 yuan/ton; 421 held steady at 9,900 yuan/ton.
Supply: According to Baichuan, weekly industrial silicon production increased by 1,350 tons week-on-week to 81,500 tons. The weekly furnace operating rate increased by 0.5% to 30.5%, with the number of operating furnaces increasing by 4 to 243. In the Northwest region, 6 new submerged arc furnaces were started in Xinjiang during the week, bringing the total operating silicon furnaces in the Northwest to 192. In the Southwest region, Yunnan shut down 2 silicon furnaces, Sichuan shut down 1, bringing the total operating silicon furnaces in the Southwest to 19. In other regions, Inner Mongolia started 1 new silicon furnace, with no other changes during the week.
Demand: Polysilicon P-type held steady at 44,000 yuan/ton, while N-type increased by 800 yuan/ton to 51,800 yuan/ton. Silicon material plants' latest offers rose above 65,000 yuan/ton. However, due to downstream order contraction and resistance to high prices, no large-scale transactions were concluded. Wafer and cell manufacturers continued to承受压力with sustained production halts, with some companies planning holidays until after New Year's Day. Weekly organic silicon prices held steady at 13,500-14,000 yuan/ton. During the week, a major plant in Shandong ended its price suspension and re-quoted. Organic silicon manufacturers reached a consensus for joint price support. Downstream players chose to stock up early to hedge against potential future procurement cost increases. Weekly polysilicon production increased by 300 tons to 26,600 tons. Weekly DMC production decreased by 1,600 tons to 45,200 tons.
Inventory: For exchange inventories, industrial silicon weekly inventory accumulation was 2,040 tons to 47,100 tons; polysilicon weekly inventory accumulation was 9,300 tons to 119,000 tons. For social inventories: industrial silicon weekly destocking was 6,000 tons to 456,200 tons,其中plant inventory destocking was 5,000 tons to 266,000 tons. Huangpu Port held steady at 58,000 tons; Tianjin Port destocked 1,000 tons to 80,000 tons; Kunming Port held steady at 52,000 tons. Polysilicon weekly inventory accumulation was 2,000 tons to 308,300 tons.
View: Industrial silicon plants in the Southwest reduced production again. The Northwest saw both increases and decreases, with expectations of environmental production cuts ahead. Silicon plants have limited inventory pressure overall due to hedging at high levels. Short-term industrial silicon continues its upward logic driven by costs and production cuts. During the week, cell production was affected by a significant rise in silver prices, leading to further production cuts and price hikes. Wafer manufacturers significantly raised their offers. The price increase effect in the crystalline silicon segment was poor, and news emerged of several polysilicon plants planning production cuts in January. As market feedback regarding收储cooled, and discussions重新议定产业链利润分配and downstream production cut pressures resumed, coupled with the emergence of new warehouse receipt registrations adding pressure, the polysilicon futures market gradually corrected. Given that the risk of disturbance from capital flows on the futures market remains, investors are advised to be cautious about shorting and to focus on the implementation of production cuts by silicon material plants.
Lithium Carbonate: Monitor Whether Transmission is Smooth 1. Supply: Weekly production increased by 116 tons week-on-week to 22,161 tons. Breakdown: spodumene-based lithium production increased by 60 tons to 13,864 tons; lepidolite-based production increased by 40 tons to 2,866 tons; salt lake-based production decreased by 20 tons to 3,075 tons; recycled material-based production increased by 36 tons to 2,356 tons.
2. Demand: Weekly ternary materials production decreased by 119 tons week-on-week to 17,726 tons, while inventory decreased by 89 tons to 18,002 tons. Weekly lithium iron phosphate (LFP) production decreased by 1,309 tons to 90,752 tons, while inventory decreased by 1,386 tons to 100,885 tons. According to the CPCA, from December 1-21, national passenger vehicle new energy retail sales were 788,000 units, up 1% compared to the same period last December and up 3% from the previous month. The penetration rate for new energy retail sales reached 60.6%. Cumulative retail sales year-to-date reached 12.26 million units, up 18% year-on-year. From December 1-21, national passenger vehicle manufacturers' new energy wholesale volume was 782,000 units, down 10% compared to the same period last December and down 12% from the previous month. The penetration rate for new energy wholesale by manufacturers reached 60.1%. Cumulative wholesale volume year-to-date reached 14.538 million units, up 25% year-on-year.
3. Inventory: Weekly inventory decreased by 652 tons week-on-week to 109,773 tons. Breakdown: downstream inventory decreased by 1,593 tons to 39,892 tons; inventory in other segments increased by 1,180 tons to 52,030 tons; upstream inventory decreased by 239 tons to 17,851 tons.
4. View: Fundamentals basically maintained the pattern of slight supply increase and continued inventory drawdown, but the divergence between SMM and Fubao weekly inventories persists. Several industry news items attracted market attention during the week: Effective January 1, 2026, Tianqi Lithium's settlement price for all product spot transactions will be adjusted to reference Mysteel's battery-grade lithium salt price or reference the main contract price of the Guangzhou Futures Exchange's lithium carbonate futures; Hunan Yuneng will conduct maintenance on some production lines starting January 1, 2026, expected to reduce output by 15,000 - 35,000 tons; Ronbay New Energy will perform减产检修on some production lines according to the planned schedule, expected to reduce the company's LFP output by 5,000 to 20,000 tons; Dynanonic will conduct maintenance on some production lines according to the既定安排and carry out technical transformation on some equipment to achieve optimal operating levels. Maintenance is scheduled from January 1, 2026, expected to last one month. Currently, there appear to be some issues with the pricing mechanism and price transmission. The actual focus should be on whether price transmission to the downstream is smooth and whether strong demand can be verified.
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