Copper: The LME was closed overnight, while the domestic SHFE copper main contract rose by 2.51% to 97,680 yuan per ton, with prices once again hitting a record high. On the macroeconomic front, the Japanese government plans to introduce its largest-ever initial budget for fiscal year 2026, totaling approximately 122.3 trillion yen, a 6.3% increase from the FY2025 budget, with the growth rate significantly exceeding the current inflation level. Domestically, the offshore yuan broke through 7.0 against the US dollar yesterday, and the onshore yuan also surpassed the 7.01 mark on the same day, both reaching their highest levels since the end of September 2024. Inventory-wise, SMM statistics on Thursday showed domestic refined copper social inventories increased by 25,200 tons from Monday to 193,600 tons. On the demand side, as copper prices climbed again, downstream enterprises turned cautious in their procurement, with transactions primarily driven by rigid demand. The Federal Reserve's liquidity support and expectations for a recovery in global economic growth next year continue to foster a supportive macroeconomic atmosphere; within this loose narrative structure, copper maintains a relatively strong trend. Fundamentally, low inventories and resilient demand still provide underlying support, but high prices may suppress some physical buying interest. Furthermore, as the year-end approaches, downstream demand may enter a seasonal lull, and domestic markets might gradually transition into an inventory accumulation phase. In the short term, monitor whether overheated sentiment and significant volatility risks from the precious metals market spill over into the nonferrous metals market. Strategically, however, maintaining a buy-on-dips approach is still recommended, while chasing rallies excessively is inadvisable.
Nickel & Stainless Steel: LME nickel rose 0.13% overnight to $15,660 per ton, while SHFE nickel increased by 1.35% to 126,800 yuan per ton. Regarding inventories, SHFE warehouse receipts decreased by 601 tons to 37,827 tons. Looking at spreads, the LME 0-3 month spread remained in negative territory; the import nickel premium held steady at 400 yuan per ton. On the news front, the Indonesian Nickel Miners Association revealed that the nickel ore production target proposed in the 2026 Work Plan and Budget might be approximately 250 million tons, a significant decrease from the 379 million ton target in the 2025 RKAB. APNI disclosed that the Ministry of Energy and Mineral Resources plans to revise the formula for calculating the benchmark price of nickel commodities early in 2026; a key focus of this revision is that the government will begin pricing associated minerals (such as cobalt) as independent commodities and levy royalties on them. Fundamentally, domestic nickel ore prices and premiums operated largely steadily. Nickel pig iron prices edged lower, while stainless steel supply actively contracted, leading to a noticeable weekly inventory drawdown; price increases improved the transaction atmosphere in the spot market. Both costs and demand in the new energy sector showed weakness, with raw material prices dipping slightly, and ternary precursor production schedules for December declined month-on-month. For Class I nickel, domestic social inventories saw a slight accumulation, while LME inventories decreased. News developments provided a boost to nickel prices, but the actual implementation remains uncertain, warranting attention to market sentiment.
Alumina, Electrolytic Aluminum & Aluminum Alloy: Alumina traded weaker overnight; the AO2601 contract settled at 2,635 yuan per ton, down 0.38%, with open interest increasing by 16,367 lots to 261,000 lots. SHFE aluminum traded stronger, with the AL2602 contract settling at 22,305 yuan per ton, up 0.61%, and open interest rising by 2,980 lots to 293,000 lots. Aluminum alloy also traded firmer; the main AD2602 contract settled at 21,380 yuan per ton, gaining 0.56%, while open interest decreased by 4,337 lots to 9,382 lots. On the spot side, the SMM alumina price retreated to 2,728 yuan per ton. The spot discount for aluminum ingots widened to 170 yuan per ton. Foshan A00 offers fell back to 21,880 yuan per ton, at a discount of 90 yuan per ton to Wuxi A00 prices. Aluminum billet processing fees held steady in most regions, with increases of 30 yuan per ton in Xinjiang, Wuxi, and Guangdong. Processing fees for aluminum rod (1A60 series) and 6/8 series remained stable, while low-carbon aluminum rod fees decreased by 41 yuan per ton. Increased shipments from several mines, coupled with the resumption of operations at a large mining company, provided support for near and远期 ore arrivals. As profits at Xinjiang delivery warehouses diminished, warehouse receipts began flowing out, concurrently, increasing imports of alumina continued to exert pressure on the spot alumina market. Alumina's downward trend persisted, gradually converging with futures prices, while the high spot premium continued to narrow. Aluminum ingots previously hindered by Xinjiang shipping disruptions might arrive in warehouses集中ly, leading to potential inventory accumulation pressure ahead. With macro sentiment largely priced in, subsequent upward momentum for aluminum prices appears relatively weak, suggesting a continuation of high-level consolidation.
Industrial Silicon & Polysilicon: On the 25th, industrial silicon traded firmer; the main 2605 contract settled at 8,835 yuan per ton, up 0.28% on the day, with open interest decreasing by 1,636 lots to 217,000 lots. The Baichuan industrial silicon spot reference price held steady at 9,063 yuan per ton compared to the previous trading day. The price for the lowest deliverable grade, #421, remained stable at 8,850 yuan per ton, with the spot market shifting from a discount to a premium of 15 yuan per ton relative to futures. Polysilicon traded stronger; the main 2605 contract settled at 60,760 yuan per ton, surging 4.8% on the day, with open interest increasing by 5,042 lots to 132,000 lots. The Baichuan polysilicon N-type recycled material price was adjusted down to 52,350 yuan per ton, and the price for the lowest deliverable silicon material also decreased to 52,350 yuan per ton, with the spot discount to the main futures contract widening to 8,410 yuan per ton. New maintenance dynamics emerged at northwest plants; as new output was locked in by previous hedging orders, overall pressure on manufacturers was not significant. Expectations of further environmental production cuts in northwest China towards year-end provided support. Boosted by production cuts and polysilicon strength, industrial silicon is expected to maintain its firm trend in the short term. Silicon plants significantly raised spot offers. Influenced by持续ly rising silver prices, battery cell prices across all sizes increased, and the actual transaction focus for key photovoltaic materials has been shifting upward recently. Pressure from the association's new quota system remains, and actual transactions still depend on downstream acceptance. Disruptions from capital flows仍需警惕.
Lithium Carbonate: Yesterday, the lithium carbonate futures 2605 contract rose 0.44% to 123,520 yuan per ton. Regarding spot prices, the average price for battery-grade lithium carbonate increased by 3,400 yuan per ton to 104,900 yuan per ton, the average price for industrial-grade lithium carbonate also rose by 3,400 yuan per ton to 102,250 yuan per ton, and the price for battery-grade lithium hydroxide (coarse particle) increased by 3,500 yuan per ton to 94,280 yuan per ton. For warehouse receipts, the inventory level remained unchanged at 17,101 tons yesterday. On the news front, effective January 1, 2026, the spot transaction settlement price for all products from Tianqi Lithium will no longer reference existing standards but will be adjusted to reference Mysteel's battery-grade lithium salt price or the main lithium carbonate futures contract price on the Guangzhou Futures Exchange. Hunan Yuneng will commence maintenance on some production lines from January 1, 2026, expected to reduce output by 15,000-35,000 tons. Wanrun Xinneng will conduct planned减产 maintenance on some production lines,预计 reducing the company's lithium iron phosphate output by 5,000 to 20,000 tons. On the supply side, weekly production increased by 116 tons week-on-week to 22,161 tons. Specifically, production from spodumene sources increased by 60 tons to 13,864 tons, output from lepidolite sources rose by 40 tons to 2,866 tons, production from salt lake sources decreased by 20 tons to 3,075 tons, and output from recycled materials increased by 36 tons to 2,356 tons. On the inventory side, weekly inventories decreased by 652 tons week-on-week to 109,773 tons. Inventories at downstream segments fell by 239 tons to 39,892 tons, inventories in other segments increased by 1,180 tons to 52,030 tons, and upstream inventories decreased by 239 tons to 17,851 tons. Sentiment in the commodity market improved yesterday; despite news-driven disturbances, prices showed a pattern of lower opening followed by higher closes. The divergence between futures and spot prices, along with issues in the pricing mechanism and price transmission, is creating operational pressures for some companies in the supply chain. Attention remains on whether strong demand next year can be substantiated.
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