Copper: Overnight, copper prices both domestically and internationally showed a firming trend with slight gains. The import window for domestic refined copper closed. On the macroeconomic front, former U.S. President Donald Trump delivered his first State of the Union address of his second term to Congress last night. He expressed dissatisfaction with the Supreme Court's rulings, reiterated plans to use other legal authorities to impose new tariffs, and conveyed optimism about the stock market and inflation. The U.S. Trade Representative stated that the "global import tariff" rate imposed on certain countries would increase from the recently implemented 10% to 15% or higher. Domestically, the U.S. Trade Representative mentioned continuing the Section 301 investigation related to the Phase One trade agreement with China and potential tariff actions, to which China's Ministry of Commerce responded. Regarding inventories, LME copper stocks increased by 6,475 tonnes to 249,650 tonnes, with continued inflows into LME warehouses in the Americas. COMEX copper stocks decreased by 479 tonnes to 545,257 tonnes. SHFE copper warrant stocks rose by 10,717 tonnes to 287,806 tonnes, while BC copper warrant stocks fell by 700 tonnes to 14,218 tonnes. On the demand side, post-holiday work resumption is being monitored. The recent copper price increase was significantly influenced by renewed strength in precious metals and export disruptions from Zimbabwe. However, short-term risks remain, including potential secondary corrections due to fading macro sentiment and inventory build-up pressure. Nevertheless, the core drivers for higher copper prices—the supply gap from insufficient global copper mining capital expenditure and demand growth from new energy and AI computing infrastructure—have not fundamentally changed. Therefore, a significant pullback in copper prices due to weaker macro and fundamental realities could present a golden opportunity to establish long-term long positions.
Nickel & Stainless Steel: Overnight, LME nickel rose 0.73% to $18,045 per tonne, while SHFE nickel increased 0.11% to 141,680 yuan per tonne. Inventory-wise, LME stocks increased by 480 tonnes to 287,808 tonnes, and SHFE warrant stocks rose by 1,253 tonnes to 53,177 tonnes. In terms of spreads, the LME 0-3 month backwardation remained negative, and the import nickel premium held steady at 50 yuan per tonne. Prior to the holiday, Tri Winarno, Director General of Minerals and Coal at Indonesia's Ministry of Energy and Mineral Resources (ESDM), revealed that approved nickel ore production quotas were between 260-270 million tonnes, significantly lower than the previous year's RKAB production targets. According to Ferro-Alloys Online, an Indonesian nickel pig iron plant reduced production due to tight nickel ore supply and furnace maintenance, impacting output by 30,000-40,000 physical tonnes per month. Reuters reported that after another tailings dam landslide, Indonesian Environment Minister Hanif Faisol Nurofiq is considering revoking the environmental permit for Tsingshan New Energy Co., Ltd. Fundamentally, nickel ore premiums have strengthened again, with post-holiday quotes ranging from $35-40 per tonne (excluding incentives), as per Ferro-Alloys Online. SMM data shows declining nickel ore inventory indices for Indonesian pyrometallurgical and hydrometallurgical processes, mainly due to monitoring system delays and new project ramp-ups. Combined with expectations of tighter Indonesian quotas, concerns about resource supply constraints may persist, pushing up cost support levels. While seasonal demand has weakened sequentially, cost support remains solid. Given ongoing disruptions from Indonesian news, opportunities for light long positions near cost levels should be monitored. If visible inventories show significant drawdowns, it could provide further positive feedback for prices. Caution is advised regarding overseas macroeconomic risks.
Alumina, Primary Aluminum & Aluminum Alloy: Overnight, alumina prices firmed slightly. The AO2605 contract closed at 2,874 yuan per tonne, up 0.77%, with open interest increasing by 8,601 lots to 314,000 lots. SHFE aluminum also strengthened, with the AL2604 contract closing at 23,980 yuan per tonne, up 1.18%, and open interest rising by 8,746 lots to 257,000 lots. Aluminum alloy prices firmed, with the main AD2604 contract closing at 22,895 yuan per tonne, up 1.71%, while open interest decreased by 1,079 lots to 10,400 lots. Spot-wise, SMM alumina prices halted their decline and rose to 2,618 yuan per tonne. Aluminum ingot spot discounts widened to 200 yuan per tonne. Foshan A00 aluminum was quoted at 23,450 yuan per tonne, a premium of 60 yuan per tonne over Wuxi A00. Aluminum billet processing fees held steady in most regions, with increases of 20-30 yuan per tonne in Xinjiang, Guangdong, and Wuxi. Aluminum rod processing fees for 1A60 series remained stable, while fees for 6/8 series held steady, and low-carbon aluminum rod fees increased by 4 yuan per tonne. Rising overseas alumina prices and domestic primary aluminum smelters' winter raw material stockpiling supported the counter-trend rise in alumina futures. However, high social inventories and pressure from warrant expiries continue to cap gains. During the holiday, U.S.-Iran tensions escalated, adding uncertainty, and Trump's renewed tariff announcements stirred overseas macro sentiment, causing fluctuations in foreign markets. Post-holiday, SHFE aluminum may see short-term catch-up gains but with limited upside. The extent of aluminum ingot inventory accumulation after any price pullback will determine the starting point for rebounds; heavier-than-expected stockpiles could suppress the pace of recovery. Monitoring overseas news disruptions, post-holiday downstream work resumption, and aluminum ingot inventory trends is crucial.
Silicon Metal & Polysilicon: On the 25th, silicon metal prices firmed slightly. The main 2605 contract closed at 8,430 yuan per tonne, up 0.3% for the day, with open interest increasing by 20,108 lots to 314,000 lots. Baichuan's spot reference price for silicon metal held steady at 9,458 yuan per tonne. The lowest deliverable grade price remained at 8,850 yuan per tonne, with the spot premium narrowing to 420 yuan per tonne. Polysilicon prices weakened, with the main 2605 contract closing at 47,630 yuan per tonne, down 0.76% for the day, and open interest rising by 563 lots to 38,292 lots. Baichuan's price for N-type polysilicon dropped to 53,000 yuan per tonne, with the lowest deliverable grade also at 53,000 yuan per tonne, and the spot premium narrowing to 5,370 yuan per tonne. Yunnan producers completed pre-holiday rush orders and will enter a full production halt post-holiday. A major Xinjiang plant halted before the holiday, facing significant short-term restart pressures. Silicon metal supply has narrative support, but limited demand constrains significant upside. Before the holiday, new polysilicon orders stalled, and wafer pricing shifted to case-by-case negotiations, with multi-sector quotes stabilizing amid deadlocked transactions. Post-holiday, market focus turns to peak season demand expectations and clarity on new industry policies. Short-term weakness is expected, with caution needed for further downside risks if policy and demand expectations disappoint.
Lithium Carbonate: Yesterday, the lithium carbonate futures 2605 contract rose 3.4% to 166,480 yuan per tonne. Spot prices: battery-grade lithium carbonate average increased by 9,750 yuan per tonne to 161,750 yuan per tonne; industrial-grade average rose by 9,750 yuan per tonne to 158,250 yuan per tonne; battery-grade lithium hydroxide (coarse particle) increased by 8,500 yuan per tonne to 153,000 yuan per tonne. Warrant stocks decreased by 330 tonnes to 38,525 tonnes. News-wise, Zimbabwe suspended all exports of raw materials and lithium concentrate. On the supply side, February lithium carbonate production is estimated to fall 16.3% month-on-month to 81,930 tonnes, with declines across all raw material extraction methods. Demand-side, February ternary material output is projected to drop 14.6% month-on-month to 69,250 tonnes, while lithium iron phosphate output falls 10.7% to 354,000 tonnes. Inventory-wise, weekly social stocks of lithium carbonate decreased by 2,019 tonnes to 105,463 tonnes. Downstream stocks increased by 3,058 tonnes to 43,657 tonnes; other segments decreased by 4,430 tonnes to 43,450 tonnes; upstream stocks fell by 647 tonnes to 18,356 tonnes. Supply disruptions, stronger lithium ore auction prices, and projected short-term inventory declines based on February output plans are significant bullish factors. Short-term pressure may arise from a significant month-on-month increase in Chilean shipments and potential gradual recovery in domestic production, depending on whether demand exceeds expectations. Medium-term, considering shipping cycles, actual supply impacts may be felt from May onwards.
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