Copper: Risk-Off Sentiment Rises, Copper Prices Primarily Correct The Shanghai copper futures contract closed down at 100,280 yuan on Friday evening, hitting an intraday low of 99,620 yuan, while LME copper corrected and closed near $13,155. The macro outlook is neutral to bearish. Trump issued tariff statements targeting eight European countries, while also hinting that Hassett might remain in the White House. Uncertainty over monetary policy, combined with rising risk-off sentiment, drove precious metals higher in the morning session. Fundamentals remain neutral. Global copper inventories increased by 65,700 tons last week to 955,000 tons. Domestic copper stocks in China saw a significant accumulation of approximately 36,700 tons to 319,000 tons. LME copper stocks shifted to a slight accumulation, while COMEX copper stocks continued a substantial accumulation of 22,600 tons to about 492,000 tons. Overall, rising risk aversion coupled with profit-taking pressure is expected to subject copper prices to short-term corrective pressure. However, support from pre-holiday downstream restocking demand and tight raw material supplies may limit the downside room for copper prices. The Shanghai copper futures contract is expected to trade within a range of 99,000-102,000 yuan/ton today. Strategically, consider light short positions for short-term trading, while medium to long-term investors may wait for lower levels to establish long positions in forward months.
Nickel & Stainless Steel: On the news front, Indonesia's Ministry of Energy and Mineral Resources indicated it would adjust the 2026 nickel ore RKAB quota to 250-260 million tons. The realization of this positive catalyst provided a short-term boost to nickel prices. Looking ahead, the nickel market lacks further fundamental contradictions, as quota tightening expectations were largely priced in earlier. In the short term, focus on the overall sentiment in the non-ferrous metals sector; in the medium to long term, monitor potential supplementary changes to Indonesia's RKAB quotas. For trading, adopt a range-bound strategy for nickel and stainless steel. The Shanghai nickel 2602 contract is referenced within the range of 130,000-150,000 yuan/ton. The stainless steel SS2603 contract is referenced within the range of 13,000-15,000 yuan/ton.
Polysilicon: Information from the Silicon Industry Branch suggests that polysilicon production schedules may be significantly reduced, potentially leading supply and demand towards a tight balance. Polysilicon prices might stabilize in the short term. The cancellation of export tax rebates for downstream photovoltaic products could temporarily benefit a rush to export, but its impact on polysilicon demand is expected to be relatively limited. Spot market transactions are likely to remain subdued. The PS2605 contract is expected to trade within the range of 45,000-55,000 yuan/ton. Trading strategy involves range-bound operations.
Aluminum: Market sentiment continued to cool last week, with alumina prices maintaining a downward trend. The weighted index for domestic spot alumina was 2,627.6 yuan/ton, down 34.1 yuan/ton week-on-week. This week's import spot quotations are around $308/ton, theoretically implying an import loss of approximately 62 yuan/ton for northern China. The latest transaction price for low-grade bauxite from Guinea is $60/dry ton. Converted to the equivalent price range for the standard 45/3 grade, it is approximately $63-64/dry ton, indicating a further decline in alumina production costs. Current operating alumina capacity has recovered to 96.25 million tons, with oversupply pressure persisting. Alumina pricing is expected to revert to fundamental dominance, with a high probability of further price declines. The trading strategy favors selling on rebounds. The alumina 05 contract is expected to trade within the range of 2,500-2,800 yuan/ton. Hold short positions. From a macro perspective, interest rate cut expectations remain unchanged, and major global economies maintain proactive fiscal policies. The short-term sentiment pullback does not alter the medium-term macro-bullish structure. Over the weekend, renewed tariff disputes between the US and Europe over Greenland contributed to cautious market sentiment, potentially leading to a short-term decline in non-ferrous metals volatility. Fundamentally, domestic supply is growing steadily, with ingot production seeing a phased increase. Hesitation persists in processing and consumption links due to high prices. With the Spring Festival approaching, some processing enterprises are opting for early holidays. Domestic social inventories of primary aluminum are expected to return to the million-ton level in the first quarter. Bearish fundamentals and short-term sentiment suggest aluminum prices may undergo a phased minor correction. The Shanghai aluminum 02 contract is expected to trade within the range of 23,000-24,500 yuan/ton. Adopt a wait-and-see stance for now.
Zinc: Zinc prices exhibited weak consolidation on Friday evening. Macroscopically, Trump's announcement of 10% tariffs on eight European countries, combined with profit-taking from previous long positions, weighed on macro sentiment. Fundamentally, the decline in Treatment Charges (TC) across regions has slowed. Recent loosening of the import arbitrage window has provided some supplement from imported ore. On the supply side, some smelters in Yunnan province have temporary maintenance plans before the holiday due to raw material issues. Overall, the month-on-month increase in zinc ingot output in January is expected to be less than 10,000 tons. On the demand side, the ferrous sector remains sluggish, offering limited support to operating rates in primary processing like galvanizing. Social inventories continued to decline during the week, mainly due to delayed arrivals. Overall, fundamental bullish support is insufficient, and macro sentiment shows signs of cooling, suggesting zinc prices will primarily focus on finding a bottom in the short term. Trading strategy: Adopt a wait-and-see stance for Shanghai zinc. The main contract is expected to trade around 23,800-25,000 yuan/ton.
Lead: Shanghai lead futures showed weak consolidation on Friday evening. Fundamentally, on the supply side, for primary lead, TC remains under pressure. Maintenance at some smelters in Central and East China has partially concluded, leading to a month-on-month increase in supply. For secondary lead, scrap battery output is expected to decline, with recyclers showing relatively strong price support intentions. Secondary lead smelting profits have improved, but growth in operating rates for secondary enterprises is constrained by scrap battery supply. On the consumption side, entering the traditional off-season, coupled with the impact of new national standards, downstream proactive inventory replenishment willingness has significantly decreased, with procurement mainly being need-based. In the spot market, domestic social inventories continued to accumulate. Overall, supply and demand remain weak, and lead prices are expected to trend weakly with consolidation. Trading strategy: Adopt a range-bound strategy for Shanghai lead. The main contract is expected to trade around 16,800-17,800 yuan/ton.
Aluminum Alloy: Aluminum alloy futures showed weak consolidation on Friday evening. Macroscopically, Trump's announcement of tariffs on eight European countries, combined with profit-taking, pressured macro sentiment. Fundamentally, on the raw material side, according to Fubao research, recent intensified checks on reverse invoicing have widened the price gap between scrap aluminum with and without invoices, significantly increasing tax costs for smelters. Fubao recorded a smelting profit of 848.4 yuan/ton on January 15th. On the supply-demand side, die-casting manufacturers have poor purchasing willingness, while smelters, affected by policy推进, are actively managing costs, leading to relatively firm selling prices. Regarding spreads, the AD-AL main contract spread held steady at a low level around -1200, while the spot spread recovered slightly week-on-week to around -500. Overall, if capital sentiment continues to cool while spot aluminum alloy prices remain firm, watch for the possibility of the AD-AL spread reverting seasonally. Trading strategy: Adopt a range-bound strategy for aluminum alloy. The main contract is expected to trade around 22,500-23,500 yuan/ton.
Precious Metals: Precious metals showed further divergence. Gold advanced steadily, silver retreated slightly after a strong breakout, platinum closed higher with significant volatility, while palladium performed weakly and closed down. This is mainly due to differing previous gains across the metals and varying impacts from news flow. Fed Vice Chair Jefferson stated that current policy is in a "good place," and Trump's preference for Hassett remaining at the White House suppressed rate cut expectations, creating pressure on precious metals. However, escalating US-Iran tensions and US announcements of tariffs on eight European countries increased geopolitical uncertainty, supporting safe-haven and speculative buying in precious metals. Overall, precious metals are currently sensitive to news-driven fluctuations, and investors should monitor short-term risks. Long-term long positions in gold can be held. Adopt a wait-and-see stance for short-term trading in silver, platinum, and palladium. The Shanghai gold 2604 contract is referenced within 1010-1060 yuan/gram. The Shanghai silver 2604 contract is referenced within 21,500-23,000 yuan/kg. The Guangzhou platinum 2606 contract is referenced within 590-640 yuan/gram. The Guangzhou palladium 2606 contract is referenced within 450-490 yuan/gram.
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