Copper: Overnight copper prices both domestically and internationally weakened, with domestic refined copper spot imports showing a small profit, and the Comex-LME copper price spread narrowing to around $140 per ton. On the macroeconomic front, U.S. Labor Department data showed that initial jobless claims for the week ending October 3 fell to a seasonally adjusted 197,000, below the market expectation of 200,000, and remained near a 57-year low for the fourth consecutive week, indicating that the U.S. labor market remains somewhat resilient. Federal Reserve Governor Waller stated that further rate hikes are still needed to bring inflation back to the 2% target, but they need not be implemented at consecutive meetings, and noted that the dot plot reflects a rate hike in early 2027 followed by a cut. On the inventory side, LME copper inventories fell by 4,650 tons to 235,225 tons; Comex copper inventories rose by 1,041 tons to 711,616 tons; SHFE copper warrants declined by 2,325 tons to 7,686 tons, while BC copper warrants remained at 3,676 tons. The core risk factor investors need to watch is the potential sharp price volatility that could result from the implementation of U.S. refined copper tariff policy. COMEX copper inventories have already reached 710,000 tons, while LME and domestic copper social inventories continue to decline. If tariff policy is implemented, it could trigger expectations of a dramatic adjustment in global copper inventory flows, thereby affecting LME copper pricing.
Nickel & Stainless Steel: Overnight LME nickel fell 1.14% to $15,550 per ton, while Shanghai nickel fell 0.81% to 118,580 yuan per ton. On the inventory side, LME inventories decreased by 30 tons to 278,598 tons, and SHFE warrants decreased by 251 tons to 92,879 tons. In terms of premiums and discounts, the LME 0-3 month spread remained in negative territory; the imported nickel premium remained at 50 yuan per ton. On the news front, on October 6, Indonesia's Ministry of Energy and Mineral Resources (ESDM) stated that the 2027 Work Plan and Budget (RKAB) evaluation will be faster than in 2026, and promised a fair decision on nickel ore production quotas, with the goal of issuing 2027 nickel ore RKABs before the regulatory deadline, avoiding evaluation dragging to the maximum period, and striving for early completion. On October 7, Indonesia's Coordinating Minister for Downstreaming and Energy Transition, who also serves as Minister of Energy and Mineral Resources, said the government plans to further tighten the moratorium on new nickel smelters producing semi-finished products, although the relevant moratorium policy has already been stipulated in Government Regulation No. 28 of 2025. Under current regulations, the application period for a one-year RKAB is from October 1 to November 15 each year. This year's cumulative nickel ore production quota is 260 million to 270 million metric tons, significantly lower than last year's actual output of 320 million metric tons. The Ministry of Energy and Mineral Resources predicts that actual nickel ore output for the full year will reach about 290 million metric tons, higher than the 2026 RKAB quota ceiling. On the fundamentals side, nickel ore prices, premiums, and sulfur prices weakened month-on-month, while due to climate and power pressures, nickel pig iron, MHP, and nickel matte in the October supply chain all saw production cuts, with domestic primary nickel and nickel sulfate output essentially flat. Pressure from quota increases and weakening theoretical cost support persists, and current production cuts have not yet been fully reflected in inventory, with overall fundamentals expectations relatively weak. Attention should be paid to supply-side production cut variables and vigilance maintained regarding macroeconomic disruptions.
Alumina & Electrolytic Aluminum & Aluminum Alloy: On the first trading day after the holiday, alumina AO2701 closed at 2,687 yuan per ton, down 0.33%. Open interest increased by 1,659 lots to 226,000 lots. Overnight LME closed at $3,050.5 per ton, down 2.13%, with inventories steady at 238,900 tons. Shanghai aluminum AL2611 closed at 23,220 yuan per ton, down 1.55%, with open interest decreasing by 819 lots to 269,000 lots. Aluminum alloy AD2611 closed at 23,000 yuan per ton, down 1.86%. Open interest increased by 1,186 lots to 13,483 lots; on the spot side, SMM alumina prices fell back to 2,668 yuan per ton. Aluminum ingot spot premium was 40 yuan per ton. Foshan A00 quotes fell back to 23,970 yuan per ton, while Wuxi A00 quoted a discount of 180 yuan per ton. Aluminum billet processing fees were raised by 50-120 yuan per ton in multiple regions; aluminum rod 1A60 series processing fees were raised by 50 yuan per ton, 6/8 series processing fees held steady, and low-carbon 6/8 series were lowered by 229-279 yuan per ton. Alumina's earlier bonded zone re-export cargoes were unloaded to replenish port inventories, and rising costs are unlikely to reverse the continued pressure on fundamentals. The current hawkish Fed expectations still weigh on non-ferrous valuations. During the holiday, LME aluminum fell for consecutive days before a narrow recovery, and Shanghai aluminum opened lower after the holiday in a catch-up decline. During the holiday, aluminum ingot social inventories accumulated by 50,000 tons to around 680,000 tons, roughly flat compared with the same period last year. The Xinjiang railway container shortage has not yet been resolved, combined with poor transportation in the southwest, and the pace of concentrated arrivals has been slow. Shanghai aluminum lacks sustained upward drivers and overall remains in weak range-bound trading, with low inventories and a strong dollar becoming the biggest battleground after the holiday. Key focus should be on the post-holiday downstream resumption speed and tracking the impact of dollar movements on domestic and international price spreads.
Industrial Silicon & Polysilicon: On the first trading day after the holiday, industrial silicon traded weak and range-bound, with the main 2611 contract closing at 8,505 yuan per ton, down 0.53% intraday, and open interest decreasing by 28,900 lots to 243,800 lots. Baichuan industrial silicon spot reference price was 9,207 yuan per ton, unchanged from the previous trading day. The lowest deliverable price fell back to 8,750 yuan per ton, and the spot premium widened to 270 yuan per ton. Polysilicon traded weak and range-bound, with the main 2611 contract closing at 36,335 yuan per ton, down 0.6% intraday. Open interest decreased by 3,301 lots to 84,161 lots; the lowest deliverable price slightly fell back to 39,880 yuan per ton, and the spot premium narrowed to 3,130 yuan per ton. Before the holiday, industrial silicon overall performed weakly and steadily, with insufficient market confidence. Polysilicon was repeatedly pulled between production cut expectations and weak reality, with essentially no new orders signed, inventories continuing to accumulate, and only a small number of participants engaging in spot-forward transactions. During the holiday, the domestic market was closed and stable, with limited overseas news disruptions. The earlier production cut benefits for industrial silicon have basically been priced in by the market, and the trading logic has shifted from supply contraction to demand deterioration. Rising electricity prices on the cost side provide bottom support, and short-term range-bound trading faces pressure. Polysilicon production cut expectations are heating up, but large manufacturers have not yet reduced operations. Downstream wafer plants remain conservative in restocking, and post-holiday pickup volumes are unlikely to exceed expectations. Whether October production cuts can be substantively implemented becomes the key variable. Focus should be on post-holiday production cut execution progress, downstream operating rates and supply chain bargaining, as well as policy signals such as new energy consumption standards.
Lithium Carbonate: Yesterday, lithium carbonate futures 2701 fell 1.28% to 117,300 yuan per ton, with daily open interest decreasing by 3,025 lots to 409,700 lots. On the spot price side, the average price of battery-grade lithium carbonate rose 2,150 yuan per ton to 124,950 yuan per ton, the average price of industrial-grade lithium carbonate rose 2,150 yuan per ton to 121,450 yuan per ton, and battery-grade lithium hydroxide (coarse particles) rose 2,500 yuan per ton to 114,000 yuan per ton. On the warrant side, yesterday's warrant inventories decreased by 120 tons to 31,870 tons. On the supply side, weekly lithium carbonate production decreased by 699 tons month-on-month to 25,895 tons, of which spodumene-based lithium production decreased by 242 tons to 13,998 tons, lepidolite-based lithium production increased by 110 tons to 3,002 tons, salt lake lithium production decreased by 285 tons to 5,803 tons, and recycling-based lithium production decreased by 106 tons to 2,615 tons. October lithium carbonate production is expected to decrease by 370 tons month-on-month to 118,071 tons, of which spodumene-based lithium production is expected to increase by 2,750 tons to 65,800 tons, lepidolite-based lithium production is expected to decrease by 1,350 tons to 13,850 tons, salt lake lithium production is expected to decrease by 1,600 tons to 23,340 tons, recycling-based lithium production is expected to increase by 780 tons to 13,030 tons, and lithium slag-based lithium production is expected to decrease by 950 tons to 2,051 tons. On the demand side, October ternary material production is expected to increase 3% month-on-month to 84,110 tons, lithium iron phosphate production is expected to increase 4% month-on-month to 640,000 tons, lithium cobalt oxide production is expected to decrease 9% month-on-month to 5,760 tons, and lithium manganese oxide production is expected to decrease 6% month-on-month to 10,400 tons; lithium battery production is expected to increase 6% month-on-month to 320.4 GWh. On the inventory side, weekly inventories decreased by 9,260 tons month-on-month to 139,517 tons, of which upstream increased by 201 tons to 31,342 tons, cathode plants decreased by 8,347 tons to 42,952 tons, traders decreased by 1,445 tons to 45,225 tons, and battery cell plants and others increased by 331 tons to 19,998 tons. From a monthly balance perspective, supply growth has not expanded as expected, demand continues to maintain slight growth, and the monthly destocking pace may accelerate compared with last month. However, current market sentiment is weak, spot has not yet shown shortages, and weak demand expectations are weighing on prices. If the basis continues to strengthen and supply disruptions create supply-demand mismatches, lithium prices are expected to stabilize or rebound. But given that demand expectations themselves are difficult to either confirm or refute, the price ceiling will be limited. If negative feedback emerges, prices will continue to decline.
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