Copper:
Overnight, both domestic and international copper prices exhibited a firm and slightly stronger trend, closing with modest gains. The loss on physical imports of refined copper into China narrowed. On the macroeconomic front, the US June ISM Manufacturing PMI fell 0.7 points from the previous month to 53.3, below the expected 53.9, though still near a four-year high. Concurrently, the pace of raw material price increases slowed significantly in June, with the ISM Prices Paid Index dropping sharply by 9.1 points to 73, well below the expected 77.5, marking the largest single-month decline since July 2022, indicating easing cost pressures. Overnight, Federal Reserve Chair Warsh, speaking at an ECB forum, explicitly stated that the Fed would abandon forward guidance on interest rates, with future decisions relying entirely on real-time economic data. He noted that inflation risks in the US had decreased over the past four weeks, reiterated the Fed's independence from political pressure, and emphasized continued efforts to reduce the balance sheet and implement internal reforms to adapt to the rapidly changing economic environment. Regarding inventories, LME stocks decreased by 4,375 tonnes to 324,850 tonnes; Comex stocks increased by 439 tonnes to 604,936 tonnes; SHFE copper warehouse receipts fell by 1,048 tonnes to 73,569 tonnes, while BC copper receipts dropped by 1,398 tonnes to 6,831 tonnes. Warsh's comments on slowing inflation fueled market expectations for a less aggressive Fed rate hike path, leading to a pullback in the US dollar index after an initial surge and contributing to copper's strength. The sustainability of this move warrants attention. Additionally, the updated report on US Section 232 copper tariffs has been formally submitted, and the market awaits the final outcome. While some pricing in has likely occurred, short-term volatility remains possible.
Nickel & Stainless Steel:
Overnight, LME nickel rose 0.49% to $16,390 per tonne, while SHFE nickel fell 0.1% to 126,270 yuan per tonne. Inventory-wise, LME stocks decreased by 210 tonnes to 274,230 tonnes, and SHFE warehouse receipts fell by 6 tonnes to 98,195 tonnes. Looking at premiums/discounts, the LME 0-3 month spread remained in negative territory; the import nickel premium/discount held steady at -150 yuan per tonne. On the news front, as of June 30, 2026, Indonesia's ESDM did not announce an official figure for an increase in the total nickel ore RKAB quota for 2026 at a relevant meeting, with the base quota maintained at 260 million wet tonnes. Any new supplementary quotas will require completion of the ESDM's approval process before being announced. On the supply side, attention is needed on the quota situation for the second half of the year. Additionally, a potential easing of sulfur supply later could boost utilization rates for related production capacity. On the demand side, production schedules for June suggest ternary cathode materials output is expected to be flat month-on-month, while stainless steel's nickel consumption is projected to decline slightly. Currently, inventory pressure remains the core issue in the nickel supply chain. Simultaneously, nickel ore prices may continue to weaken, potentially leading to a decline in cost support. Furthermore, it is important to note that if quotas continue to be issued in the second half of the year, prices could remain under pressure.
Alumina, Primary Aluminum & Aluminum Alloy:
Overnight, alumina prices traded with a firm bias. The AO2609 contract closed at 2,789 yuan per tonne, up 0.11%. LME aluminum closed at $3,076 per tonne overnight, down 0.31%, with inventories falling by 1,900 tonnes to 301,700 tonnes. The AL2608 contract closed at 22,485 yuan per tonne, down 0.04%, with open interest decreasing by 4,425 lots to 283,000 lots. Aluminum alloy prices also showed firmness overnight. The main AD2608 contract closed at 22,495 yuan per tonne, up 0.4%, with open interest down 1,079 lots to 15,952 lots. On the physical side, SMM's alumina price fell to 2,775.8 yuan per tonne. The spot premium for aluminum ingots held steady at 10 yuan per tonne. Foshan A00 aluminum was quoted lower at 22,250 yuan per tonne, at a 10 yuan per tonne discount to Wuxi A00. Aluminum billet processing fees were steady in Baotou, Henan, and Linyi, while other regions saw increases of 30-50 yuan per tonne. Processing fees for 1A60 series aluminum rod held steady, as did those for 6/8 series, while low-carbon 6/8 series fees decreased by 189-339 yuan per tonne. New alumina production capacity in Guangxi is ramping up, which is expected to fully offset reductions from environmental controls in Shanxi, making the flow of southern material northward a key theme. Support at the bottom for alumina and marginal pricing show mixed signals. Influenced by Fed rate hike expectations and a pullback in crude oil, aluminum prices face some short-term sentiment-driven pressure. Entering July, both domestic and international orders are expected to see a noticeable contraction. However, export resilience exists due to a stronger external price environment relative to domestic weakness. Aluminum retains some downside resilience due to its own inventory drawdown exceeding expectations and cannot rule out potential for subsequent upward momentum. Focus will be on downstream restocking interest following any price corrections.
Industrial Silicon & Polysilicon:
On the 1st, industrial silicon prices traded with a weak bias. The main 2609 contract closed at 8,375 yuan per tonne, down 0.12% on the day, with open interest decreasing by 3,975 lots to 301,000 lots. Baichuan's spot reference price for industrial silicon was 9,121 yuan per tonne, unchanged from the previous trading day. The price for the lowest deliverable grade fell to 8,600 yuan per tonne, narrowing the spot premium to 275 yuan per tonne. Polysilicon prices traded firmly. The main 2609 contract closed at 35,820 yuan per tonne, up 1.79% on the day, with open interest increasing by 3,125 lots to 111,000 lots. The standard for the lowest deliverable grade rose to 35,985 yuan per tonne, widening the spot premium to 915 yuan per tonne. Industrial silicon producers in southwestern China are gradually accelerating their resumption of operations, narrowing the price gap between high and low-grade material. The convergence of futures-spot spreads and the concentrated cancellation of warehouse receipts are leading to the flow of receipts back into the spot market. Downstream sectors have yet to engage in concentrated restocking. Industrial silicon inventories are facing marginal upward pressure, making a sustained price rally difficult. Expectations for large-scale production cuts in the polysilicon industry have not materialized, and the market has returned to a pattern of low-level consolidation. The market is focused on potential updates to energy consumption policies following key meetings. News flow may continue to cause intermittent disturbances, warranting caution against sharp price swings.
Lithium Carbonate:
Yesterday, the lithium carbonate futures 2609 contract rose 4.62% to 164,560 yuan per tonne, with open interest decreasing by 1,438 lots to 423,000 lots. Regarding spot prices, the average price for battery-grade lithium carbonate increased by 3,500 yuan per tonne to 160,000 yuan per tonne. The average price for industrial-grade lithium carbonate also rose by 3,500 yuan per tonne to 156,000 yuan per tonne. Battery-grade lithium hydroxide (coarse particle) increased by 3,750 yuan per tonne to 147,500 yuan per tonne. On warehouse receipts, inventory increased by 600 tonnes yesterday to 49,331 tonnes. On the supply side, July lithium carbonate production is estimated to increase by 90 tonnes month-on-month to 115,410 tonnes. This includes a decrease of 4,500 tonnes month-on-month for spodumene-based production, an increase of 2,700 tonnes for lepidolite-based production, an increase of 1,390 tonnes for salt lake-based production, and an increase of 500 tonnes for recycled material. On the demand side, July production schedules indicate ternary cathode material output is expected to increase 3% month-on-month to 89,690 tonnes, lithium iron phosphate (LFP) cathode material to increase 7% to 536,850 tonnes, lithium cobalt oxide to increase 3% to 7,740 tonnes, while lithium manganese oxide output is scheduled to decrease 1% to 10,770 tonnes. Lithium battery production is scheduled to increase 7% month-on-month, with domestic production up 7% and overseas production up 4%. Domestically, ternary power battery production is scheduled to increase 7% month-on-month, LFP power battery production to increase 9%, and LFP energy storage battery production to increase 4%. Regarding inventories, large-sample inventories decreased by 1,207 tonnes week-on-week to 129,959 tonnes, while small-sample inventories fell by 833 tonnes to 95,812 tonnes. Using the large-sample口径, inventories in other segments decreased by 2,924 tonnes week-on-week to 66,179 tonnes, smelter inventories increased by 122 tonnes to 15,495 tonnes, and downstream inventories increased by 1,595 tonnes to 48,285 tonnes. Fundamentally, the short-term矛盾 exposed by warehouse receipts and the basis has eased slightly. July production schedules appear robust, potentially accelerating the pace of inventory drawdown in the near term and providing a short-term boost to prices. However, for the medium term, caution is warranted regarding potential supply increases from the restart of the Jianxiawo mine and the concentrated arrival of lithium ore from Zimbabwe. This could lead to a month-by-month deceleration in the rate of inventory drawdown during the third quarter.
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