Copper prices edged higher overnight on both domestic and international exchanges, with the import loss for refined copper widening in the spot market. Macro data from the US showed the ADP employment report indicating only 44,000 new private sector jobs in July, significantly below the 65,000 expected, and the June figure was revised down from 98,000 to 95,000, marking the weakest reading since January. The ISM Services PMI came in at 54.1, slightly below the 54.5 forecast, while the price sub-index surged to 70.3, its highest in four months, creating a classic stagflation signal of weak employment and strong prices. On the geopolitical front, the US Treasury announced the revocation of sanctions related to Iran, continuing to send positive signals for easing tensions.
In terms of inventories, LME copper stocks fell by 6,525 tonnes to 231,825 tonnes, while COMEX stocks increased by 1,281 tonnes to 652,023 tonnes. SHFE copper warrants decreased by 1,180 tonnes to 23,727 tonnes, and BC copper warrants remained at 5,327 tonnes. On the demand side, high copper prices are continuing to suppress demand, and the strength of the peak season in the second half of the year is being tested. With the COMEX premium in play, the US is steadily absorbing overseas copper, again drawing market attention. This has led to a persistently tight supply of copper in non-US regions, with LME copper inventories showing a rapid decline, ultimately becoming the core fundamental factor supporting the current copper price rally, with a short-term view remaining bullish. However, the market is also awaiting Trump's ruling on copper tariffs, which introduces significant uncertainty and warrants caution.
LME nickel closed down 0.06% at $17,140 per tonne, while SHFE nickel fell 0.17% to 130,760 yuan per tonne. In terms of inventories, LME nickel stocks decreased by 96 tonnes to 264,780 tonnes, and SHFE warrants dropped by 144 tonnes to 100,857 tonnes. Regarding premiums, LME 0-3 month premiums remained negative, while import nickel premiums rose by 100 yuan per tonne to -150 yuan per tonne. Politically, according to Mysteel, Indonesian Energy and Mineral Resources Minister Bahlil Lahadalia emphasized that the government prioritizes the approval of work plans and budgets from mining companies that pay a high proportion of royalties to the government. The Ministry of Energy and Mineral Resources (ESDM) is gradually relaxing RKAB quotas, balancing domestic demand with international commodity price fluctuations, but he declined to provide details to maintain market stability.
Fundamentally, weekly inventories have increased. For August production schedules, primary nickel is expected to see a slight month-on-month decline, while domestic and international nickel pig iron output is set to increase. On the demand side, production schedules for new energy vehicles and stainless steel both show month-on-month growth. The overall contradictions within the nickel industry chain are not strong, with attention focused on new quota policies and macro sentiment impacts.
Alumina traded with a bullish bias overnight, with AO2609 closing at 2,722 yuan per tonne, up 2.56%. Open interest decreased by 21,586 lots to 178,000 lots. Aluminum also strengthened, with LME aluminum closing at $3,241 per tonne, up 0.56%, and inventories falling by 1,500 tonnes to 259,400 tonnes. AL2609 closed at 23,835 yuan per tonne, up 0.28%, with open interest increasing by 1,452 lots to 242,000 lots. Aluminum alloy traded with a bullish bias, with the main contract AD2610 closing at 23,450 yuan per tonne, up 0.13%, and open interest increasing by 146 lots to 17,172 lots. In the spot market, SMM alumina prices fell to 2,698 yuan per tonne. Aluminum ingot spot discounts widened to 30 yuan per tonne. Foshan A00 quotes fell to 23,800 yuan per tonne, while Wuxi A00 discounts stood at 150 yuan per tonne. Processing fees for aluminum rods remained stable in Henan and Linyi, while other regions saw increases of 20-40 yuan per tonne. Processing fees for 1A60 aluminum wire remained stable, while 6/8 series aluminum wire processing fees were stable, and low-carbon 6/8 series fees decreased by 42 yuan per tonne.
No official announcement has been made regarding the export control rules for Guinea bauxite, and combined with increasing port inventories and a rapid accumulation of warrants after cancellations, the premium sentiment in the alumina market has largely dissipated. At the same time, the deep decline in the market has shown signs of bottoming. The Federal Reserve's July meeting kept interest rates unchanged, providing an opportunity for valuation recovery in the non-ferrous metals sector in August. With downstream operating rates declining and export space narrowing, the momentum of social inventory destocking is showing signs of weakness. The short-term upside for aluminum prices is still constrained by off-season effects. Attention is focused on whether the pre-peak season restocking window in mid-August can open successfully, leading to further gains in aluminum prices.
Industrial silicon traded with a bullish bias on the 5th, with the main contract 2609 closing at 8,370 yuan per tonne, up 0.6% for the day, and open interest decreasing by 14,511 lots to 214,000 lots. Baichuan's industrial silicon spot reference price was 9,021 yuan per tonne, down 11 yuan per tonne from the previous trading day. The price of the lowest deliverable grade fell to 8,550 yuan per tonne, with the spot premium narrowing to 210 yuan per tonne. Polysilicon traded with a bearish bias, with the main contract 2609 closing at 35,480 yuan per tonne, down 0.89% for the day, and open interest decreasing by 2,443 lots to 86,900 lots. The price of the lowest deliverable grade rebounded to 36,365 yuan per tonne, with the spot discount turning into a premium of 700 yuan per tonne. Silicon plants in Inner Mongolia have confirmed production cuts and maintenance, while sporadic restarts are occurring in Xinjiang and Yunnan, with supply pressure still unresolved. There has been no concentrated restocking activity downstream, and industrial silicon is being temporarily supported by polysilicon, with prices expected to continue trading near cost levels.
Regarding polysilicon, the latest meeting on Wednesday provided further guidance, but the market saw a slight pullback after the news was released. Most polysilicon companies are currently withholding quotes, and another meeting in Shanghai on Thursday is still pending, with the market awaiting further direction. The volatility triggered by recent news has not yet subsided, and investors are advised to be cautious and track meeting developments.
Lithium carbonate futures saw gains yesterday, with the 2609 contract rising 2.61% to 143,220 yuan per tonne, with open interest decreasing by 9,640 lots to 306,200 lots. The LC2701 contract rose 2.49% to 141,780 yuan per tonne, with open interest increasing by 6,667 lots to 198,000 lots. In spot prices, the average price of battery-grade lithium carbonate rose by 250 yuan per tonne to 140,250 yuan per tonne, while industrial-grade lithium carbonate rose by 250 yuan per tonne to 135,250 yuan per tonne. Battery-grade lithium hydroxide (coarse particles) rose by 750 yuan to 128,750 yuan per tonne. In terms of warrants, inventory increased by 470 tonnes to 28,123 tonnes. According to Mysteel, the total lithium carbonate inventory across 207 sample sites this week was 155,170 tonnes, a decrease of 7,280 tonnes from the previous week. This includes 23,460 tonnes at smelters (down 1,110 tonnes), 83,650 tonnes held by traders (including custodial stocks, down 2,850 tonnes), and 48,060 tonnes at material factories and end-users (down 3,320 tonnes).
On the supply side, weekly output decreased by 1,027 tonnes to 22,841 tonnes, with August lithium carbonate production expected to increase by 7% month-on-month to 112,000 tonnes. On the demand side, ternary material production is expected to increase by 5% month-on-month to 93,840 tonnes, lithium iron phosphate output by 5% to 565,100 tonnes, lithium cobalt oxide by 4% to 7,380 tonnes, and lithium manganese oxide output by 11% to 11,920 tonnes. Lithium battery production is expected to increase by 7% month-on-month to 288.9 GWh. In terms of inventories, large-sample weekly inventory decreased by 6,449 tonnes to 107,877 tonnes, while small-sample inventory decreased by 3,324 tonnes to 83,587 tonnes. Based on the large sample, other link inventories fell by 4,285 tonnes to 46,042 tonnes, smelter inventories increased by 1,051 tonnes to 14,342 tonnes, and downstream inventories decreased by 3,215 tonnes to 47,493 tonnes. Market sentiment has slightly warmed, with weekly inventories continuing to decline rapidly, and prices showing signs of stabilizing and rebounding. However, overall spot tightness is moderate, and while basis quotes have strengthened, trading volumes are weak. Attention is focused on key resistance levels.
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