Copper: LME copper prices surged then retreated overnight, while domestic prices experienced wide fluctuations. The import spread for domestic refined copper remained in negative territory. On the macroeconomic front, U.S. December CPI grew 2.7% year-on-year, aligning with expectations and the previous figure; core CPI increased 2.6% year-on-year, matching the prior reading but slightly below the anticipated 2.7%. The softer-than-expected core inflation reading builds momentum for subsequent Federal Reserve rate cuts, though the probability of a January cut remains relatively low. Domestically, adjustments to export tax rebates for products like photovoltaic cells may trigger a rush to export in the first quarter. Inventory-wise, LME stocks rose by 4,325 tonnes to 141,550 tonnes; Comex inventories increased by 8,215 tonnes to 480,356 tonnes; SHFE copper warehouse receipts climbed by 5,505 tonnes to 122,127 tonnes, while BC copper receipts grew by 4,882 tonnes to 5,935 tonnes. Regarding demand, as copper prices climbed again, downstream enterprises turned cautious in their procurement, with transactions primarily driven by rigid demand. Furthermore, the widening import losses are gradually opening the export window, potentially benefiting first-quarter export demand. The optimistic sentiment from precious metals continues to spill over into the nonferrous metals market. Despite signs of short-term fundamental weakness, investor enthusiasm persists. Additionally, the expectation of a first-quarter export rush continues to support copper prices sentimentally. Strategically, maintaining a buy-on-dips approach is advisable, but excessive chasing of highs should be avoided.
Nickel & Stainless Steel: LME nickel fell 2.63% overnight to $17,600 per tonne, while SHFE nickel dropped 0.33% to 140,620 yuan per tonne. On the inventory front, LME stocks decreased by 414 tonnes to 284,148 tonnes, and SHFE warehouse receipts declined by 234 tonnes to 39,436 tonnes. In terms of spreads, the LME 0-3 month backwardation remained negative; the import nickel premium held steady at 600 yuan per tonne. News emerged that Indonesia will adjust its nickel quotas based on industry demand, with reductions aimed at supporting the prices of Indonesian mineral products. Similar measures are expected to be implemented to bolster nickel prices, though specific quota levels for 2026 were not disclosed, only reiterating that adjustments will be made to meet local smelter needs. Fundamentally, as prices surged rapidly, product prices across the industry chain strengthened. Primary nickel production increased significantly by 18.5% month-on-month to 37,200 tonnes, and hedging demand may exert some pressure on futures prices. Indonesian policy stimulus is driving nickel prices higher; attention should be paid to actual implementation and market sentiment. Given that quota finalization will take time, opportunities for long positions near cost levels are worth monitoring.
Alumina, Electrolytic Aluminum & Aluminum Alloy: Alumina prices weakened with volatility overnight. The AO2605 contract closed at 2,790 yuan per tonne, down 0.64%, with open interest decreasing by 16,349 lots to 537,000 lots. SHFE aluminum edged higher, with the AL2603 contract settling at 24,780 yuan per tonne, up 0.69%, and open interest rising by 9,307 lots to 380,000 lots. Aluminum alloy prices also firmed, with the main AD2603 contract closing at 23,580 yuan per tonne, a gain of 0.64%, while open interest dipped by 18 lots to 22,081 lots. Spot-wise, SMM alumina prices retreated to 2,656 yuan per tonne. The spot discount for aluminum ingots narrowed to 60 yuan per tonne. Foshan A00 offers were lowered to 24,310 yuan per tonne, showing a 20 yuan premium over Wuxi A00. Aluminum billet processing fees held steady in most regions but increased by 150 yuan per tonne in Xinjiang and Guangdong. Processing fees for aluminum rod (1A60 series) and 6/8 series remained stable, while low-carbon aluminum rod fees fell by 56 yuan per tonne. Alumina plants maintain high ore reserves, leading to subdued premium purchasing sentiment in the short term and continued cost pressure. With environmental controls ending and production ramping up, supplemented by imports, inventories at both producers and downstream users continue to accumulate, sustaining the convergence logic from spot to futures. As warehousing profits re-emerge in Xinjiang, warehouse receipts may exert renewed pressure on the futures market. The end of environmental controls, coupled with the cancellation of export tax rebates, is prompting photovoltaic companies to rush exports. Processing operations are expected to maintain resilience, slightly easing the inventory accumulation pressure on aluminum ingots. The divergence between macro and micro factors is gradually narrowing, shifting from overheated exuberance to rational correction. Aluminum prices continue their high-level trend, with spot discounts persistently narrowing.
Industrial Silicon & Polysilicon: Industrial silicon prices weakened on the 13th. The main 2605 contract closed at 8,635 yuan per tonne, down 1.65% for the day, with open interest increasing by 3,592 lots to 242,500 lots. The Baichuan spot reference price held steady at 9,628 yuan per tonne. The price for the lowest deliverable grade remained stable at 8,850 yuan per tonne, with the spot premium widening to 215 yuan per tonne. Polysilicon also trended weaker; the main 2605 contract settled at 49,005 yuan per tonne, falling 4.45% intraday, while open interest edged up by 14 lots to 48,844 lots. The Baichuan price for N-type polysilicon dropped to 54,750 yuan per tonne, matching the price of the lowest deliverable grade and widening the spot premium to 5,745 yuan per tonne. A major Xinjiang producer has entered a maintenance period, prompting silicon plants to engage in high-level hedging and actively sell to spot-futures arbitrageurs. Producer inventories are gradually shifting to intermediate links, increasing hidden stocks. Recent cost movements have been generally stable with minor adjustments. Industrial silicon supply and demand are both declining, maintaining a volatile pattern. Frequent news about anti-internal competition and industry self-discipline, coupled with pre-holiday logistics halts in Xinjiang, has triggered pre-festival shipment rushes in producing areas, leading to concentrated warehouse receipt registrations. Overheated speculative sentiment is cooling, limiting the premium upside for polysilicon.
Lithium Carbonate: The lithium carbonate futures 2605 contract surged 7.44% yesterday to 166,980 yuan per tonne. Spot price-wise, the average price for battery-grade lithium carbonate rose by 7,500 yuan per tonne to 159,500 yuan per tonne. The average price for industrial-grade lithium carbonate increased by 7,500 yuan per tonne to 156,000 yuan per tonne, while battery-grade lithium hydroxide (coarse particle) climbed by 7,500 yuan per tonne to 150,500 yuan per tonne. Regarding warehouse receipts, registered inventory increased by 928 tonnes yesterday to 26,898 tonnes. On the supply side, weekly production rose by 115 tonnes week-on-week to 22,535 tonnes. Spodumene-based production increased by 35 tonnes to 13,959 tonnes, lepidolite-based output grew by 20 tonnes to 2,956 tonnes, salt lake-based production rose by 40 tonnes to 3,185 tonnes, and recycled material-based output increased by 20 tonnes to 2,435 tonnes. January 2026 lithium carbonate production is forecast to decrease 1.2% month-on-month to 97,970 tonnes. Demand-side, January 2026 NCM cathode material production is projected to fall 5% month-on-month to 78,180 tonnes; LFP cathode production is expected to drop 10% month-on-month to 363,400 tonnes. January 2026 NCM power battery output is forecast to decline 6.15% month-on-month to 28.7 GWh, LFP power battery output is anticipated to decrease 9.77% to 90.01 GWh, while LFP energy storage battery output is expected to increase 0.99% to 63.15 GWh. Inventory-wise, weekly stocks increased by 337 tonnes week-on-week to 109,942 tonnes. Downstream inventories fell by 2,458 tonnes to 36,540 tonnes, inventories in other segments rose by 2,080 tonnes to 55,020 tonnes, and upstream inventories increased by 715 tonnes to 18,382 tonnes. Considering the recent export tax rebate adjustments, strong terminal demand expectations, battery manufacturers' anti-internal competition efforts, and upward revisions to cathode material production schedules, even substantial raw material price increases might potentially curb terminal demand, but this may be difficult to disprove in the short term. Simultaneously, against the backdrop of low downstream inventories and the medium-to-long-term bullish trading logic for lithium prices, we believe that restocking demand and speculative capital interest will persist even if prices dip. Therefore, as long as demand remains unrefuted, the overall price trend appears prone to rises rather than falls.
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