Copper: Copper prices fluctuated with a weaker bias overnight, with domestic refined copper spot imports remaining in a loss-making state. On the macroeconomic front, the rift between Europe and the U.S. widened during last night's Davos meeting, though former President Trump stated that Greenland is a core U.S. security interest but the U.S. would not seize it by force, instead seeking immediate negotiations. Following Trump's softened stance on the Greenland issue, market risk aversion eased somewhat. Domestically, on January 20, the Ministry of Finance released five policy documents consecutively on its official website, covering four discount policies and one special guarantee plan, signaling a commitment to stabilizing growth. Inventory-wise, LME stocks increased by 3,100 tons to 159,400 tons; Comex stocks rose by 6,599 tons to 503,405 tons; SHFE copper warehouse receipts fell by 2,612 tons to 145,581 tons, while BC copper receipts dropped by 501 tons to 10,760 tons. Last night's copper market performance showed that despite some easing in overseas financial market sentiment, it failed to further boost copper prices, with divergences between bulls and bears persisting. As previously mentioned, domestic copper demand has entered a seasonal lull, with inventory accumulation stronger than in recent years, amplifying disagreements within the industry. From the perspective of industrial conditions and fundamentals alone, there is also a need for adjustment. Overall, a cautious approach is advisable before the Spring Festival, during which traders should pay close attention to changes in the overseas situation.
Nickel & Stainless Steel: LME nickel rose 1.21% overnight to $17,975 per ton, while SHFE nickel increased 0.97% to 142,250 yuan per ton. On the inventory front, LME stocks decreased by 72 tons to 284,664 tons, and SHFE warehouse receipts fell by 326 tons to 41,152 tons. In terms of spreads, the LME 0-3 month spread remained negative; the import nickel spread held steady at 600 yuan per ton. News-wise, Indonesia will adjust its nickel quotas based on industry demand, with reductions aimed at supporting the prices of Indonesian mineral products. Similar measures will be implemented to prop up nickel prices, though no specific quota levels for 2026 were disclosed, only a reiteration that adjustments will be made to meet local smelter needs. Fundamentally, as prices surged rapidly, product prices across the industrial chain strengthened, with primary nickel output increasing significantly by 18.5% month-on-month to 37,200 tons. Hedging demand may exert some pressure on futures prices. While Indonesian policies provide short-term support for nickel prices, potential quota supplements in the longer term and high inventories pose upside pressure. Prices may experience wide fluctuations at high levels in the near term, with attention focused on the actual implementation of policies and market sentiment.
Alumina, Primary Aluminum & Aluminum Alloy: Alumina prices fluctuated with a stronger bias overnight. The AO2605 contract closed at 2,676 yuan per ton, up 0.26%, with open interest increasing by 10,074 lots to 496,000 lots. SHFE aluminum also trended stronger, with the AL2603 contract settling at 24,100 yuan per ton, a gain of 0.77%, and open interest rising by 1,679 lots to 345,000 lots. Aluminum alloy prices followed suit, with the main AD2603 contract closing at 22,850 yuan per ton, up 0.59%, while open interest decreased by 256 lots to 18,516 lots. On the spot market, SMM alumina prices retreated to 2,633 yuan per ton. The discount for aluminum ingot spot prices narrowed to 150 yuan per ton. Foshan A00 aluminum quotes rose to 23,740 yuan per ton, at a 40 yuan per ton premium over Wuxi A00. Aluminum billet processing fees remained stable in most regions, increasing by 20 yuan per ton in Xinjiang and Guangdong, but decreasing by 50 yuan per ton in Linyi. Processing fees for aluminum rod 1A60 series and 6/8 series held steady, while low-carbon aluminum rod fees fell by 63 yuan per ton. The impact of the rainy season in Australian mines is becoming apparent, though shipments from Guinean mines remain stable. Negotiated prices for foreign ore continued to decline to $60 per ton. With high ore reserve levels, alumina plants have yet to show purchasing intent. Inventories at both manufacturers and downstream users continue to accumulate, exerting sustained downward pressure on operating margins. Overseas geopolitical tensions have eased, with the U.S. temporarily suspending tariffs on certain critical minerals, leading to a rational correction of previously overheated sentiment. Domestically, the Spring Festival stockpiling cycle for downstream users has begun, but the overall recovery momentum is limited. The pace of aluminum ingot inventory accumulation continues, and the spot discount structure has deepened. In the short term, aluminum futures may face a phased correction, yet they are likely to exhibit resilience with support at high levels. Market participants should monitor the progress of downstream stockpiling and inventory trends.
Industrial Silicon & Polysilicon: Industrial silicon prices fluctuated with a stronger bias on the 21st. The main 2605 contract closed at 8,780 yuan per ton, up 0.52% for the day, with open interest decreasing by 865 lots to 224,000 lots. The Baichuan spot reference price for industrial silicon held steady at 9,628 yuan per ton compared to the previous trading day. The price for the lowest deliverable grade remained unchanged at 8,850 yuan per ton, with the spot premium narrowing to 70 yuan per ton. Polysilicon prices also showed strength, with the main 2605 contract closing at 49,700 yuan per ton, down 1.59% for the day, while open interest increased by 288 lots to 43,920 lots. The Baichuan price for N-type polysilicon feedstock dropped to 54,500 yuan per ton, matching the price of the lowest deliverable silicon feedstock, with the spot premium widening to 4,800 yuan per ton. Furnaces in Southwest China have been completely shut down, except for those with captive power plants or integrated supply, while production has resumed in Xinjiang after maintenance, resulting in a net reduction in supply. Downstream production cuts have hindered the overall upward momentum for industrial silicon. Polysilicon faces pressure from supply-demand imbalances and antitrust regulations, shifting market trading logic from speculation-driven to fundamentals-focused. The basis for polysilicon's strong pricing stance is difficult to sustain. Recent cancellation of export tax rebates triggered a surge in overseas orders, significantly alleviating module production pressure. However, due to raw material backlog in the wafer segment, this increase has not been transmitted to the polysilicon segment, and the scale of production cuts in the crystalline silicon sector is expected to expand further. In the short term, futures are unlikely to see significant gains and may trade steadily, while spot quotations could gradually lose support.
Lithium Carbonate: The lithium carbonate futures 2605 contract rose to 166,740 yuan per ton yesterday. Regarding spot prices, the average price for battery-grade lithium carbonate increased by 6,000 yuan per ton to 158,500 yuan per ton, while the average for industrial-grade lithium carbonate rose by 6,000 yuan per ton to 155,000 yuan per ton. The price for battery-grade lithium hydroxide (coarse particles) increased by 4,500 yuan per ton to 151,500 yuan per ton. On the warehouse receipt front, inventory increased by 975 tons yesterday to 28,656 tons. On the supply side, weekly production increased by 115 tons week-on-week to 22,535 tons. Specifically, spodumene-based production rose by 35 tons to 13,959 tons, lepidolite-based output increased by 20 tons to 2,956 tons, salt lake-based production grew by 40 tons to 3,185 tons, and recycled material-based production added 20 tons to 2,435 tons. Lithium carbonate production for January 2026 is forecast to decrease by 1.2% month-on-month to 97,970 tons. On the demand side, ternary material production for January 2026 is projected to fall by 5% month-on-month to 78,180 tons; lithium iron phosphate (LFP) output is expected to drop by 10% month-on-month to 363,400 tons. Ternary power battery production for January 2026 is estimated to decline by 6.15% month-on-month to 28.7 GWh, LFP power battery output is anticipated to decrease by 9.77% month-on-month to 90.01 GWh, while LFP energy storage battery production is forecast to increase by 0.99% month-on-month to 63.15 GWh. Inventory-wise, weekly social inventory of lithium carbonate increased by 337 tons week-on-week to 109,942 tons. Downstream inventories decreased by 2,458 tons to 36,540 tons, inventories in other segments rose by 2,080 tons to 55,020 tons, and upstream inventories increased by 715 tons to 18,382 tons. Supply and cost disruptions in the resource sector persist, with destocking expectations remaining for the first quarter. As long as no clear negative feedback emerges from demand and downstream inventories stay at relatively low levels, prices are likely to fluctuate with a stronger bias in the short term. However, caution is warranted regarding amplified market volatility and the impact of positioning.
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