Copper:
Overnight, both domestic and international copper prices experienced narrow-range fluctuations. The volatility index for Shanghai copper declined to around 17.67, while the spot import of refined copper in China showed a slight loss. A notable development from last night was in the geopolitical sphere, with US officials stating that Iran had recently fired upon three commercial vessels in the Strait of Hormuz, a behavior deemed "completely unacceptable." The US Treasury Department also revoked exemptions for Iranian oil sales, and the US military indicated it had initiated a powerful strike against Iran. Regarding inventories, LME copper stocks decreased by 2,375 tonnes to 312,575 tonnes. Comex copper inventories increased by 2,236 tonnes to 609,089 tonnes. Shanghai Futures Exchange copper warehouse receipts fell by 3,801 tonnes to 60,371 tonnes, while BC copper warehouse receipts rose by 998 tonnes to 5,451 tonnes. On the demand side, downstream consumers continue to purchase based on rigid demand, with weak willingness to stock up at high prices. While previous marginal easing in macro conditions and a pullback in the US dollar index had alleviated some financial pressure on copper prices, renewed tensions in the Middle East last night have led the market to trade on short-term inflation and interest rate logic. Market sentiment has weakened marginally, which may impact copper price performance. However, judging by Shanghai copper's volatility index, the market currently appears content with a narrow trading range, with neither bulls nor bears showing a strong inclination to break it. Therefore, a short-term wait-and-see stance is maintained.
Nickel & Stainless Steel:
Overnight, LME nickel fell 1.36% to $16,275 per tonne, while Shanghai nickel declined 0.16% to 126,680 yuan per tonne. Inventory-wise, LME nickel stocks remained steady at 274,620 tonnes, and SHFE warehouse receipts increased by 42 tonnes to 98,094 tonnes. Looking at premiums and discounts, the LME 0-3 month spread remained in negative territory, and the import nickel premium/discount held at -50 yuan per tonne. On the news front, Indonesia's Eramet revealed that PT Weda Bay Nickel (WBN) is continuously coordinating with the Indonesian Ministry of Energy and Mineral Resources (ESDM) and following the ministry's guidance to advance the adjustment process for its 2026 Work Plan and Budget (RKAB) production quota. Previously, Eramet's CEO had indicated that WBN planned to adjust its 2026 RKAB nickel ore production quota, aiming to increase it from the approved 12 million tonnes to around 42 million tonnes, the level from last year. July is the regular period for RKAB revision applications; if approved, companies typically receive new RKAB approval documents between July and September. On the supply side, attention is needed both on the quota situation for the second half of the year and on the potential easing of sulfur supply, which could boost capacity utilization rates for related production. Currently, within the nickel industry chain, inventory pressure remains the core issue. Simultaneously, nickel ore prices may continue to weaken, potentially leading to a decline in cost support. It is also worth noting that if quota issuance continues in the second half of the year, prices may remain under pressure.
Alumina, Electrolytic Aluminum & Aluminum Alloy:
Overnight, alumina prices were weak with fluctuations. The AO2609 contract closed at 2,701 yuan per tonne, down 0.18%, with open interest increasing by 6,097 lots to 359,000 lots. Aluminum prices showed strength with fluctuations. Overnight, LME aluminum closed at $3,137.5 per tonne, up 0.71%, with inventories decreasing by 3,125 tonnes to 292,400 tonnes. The AL2608 contract closed at 23,055 yuan per tonne, up 0.59%, with open interest decreasing by 6,639 lots to 239,000 lots. Aluminum alloy prices also showed strength with fluctuations. Overnight, the main AD2608 contract closed at 23,060 yuan per tonne, up 0.85%, with open interest increasing by 83 lots to 19,071 lots. In the spot market, SMM's alumina price fell to 2,759 yuan per tonne. The spot premium for aluminum ingots expanded to 10 yuan per tonne. Foshan A00 aluminum was quoted higher at 22,980 yuan per tonne, at a 50 yuan premium to Wuxi A00. Aluminum billet processing fees held steady in Henan, Linyi, and Baotou, decreased by 20-50 yuan/tonne in Wuxi and Nanchang, and increased by 10 yuan/tonne in Xinjiang and Guangdong. Processing fees for 1A60 aluminum rod series decreased by 100-200 yuan/tonne, while fees for 6/8 series remained stable, with low-carbon 6/8 series increasing by 46 yuan/tonne. Expectations for increased supply from overseas EGA, combined with dual pressure from new capacity ramp-ups in Guangxi and warehouse receipt cancellations in the domestic market, have weighed on spot prices. Following the short-term disappointment of policy expectations from Guinea, market sentiment premium has rapidly retreated. The current market has not yet priced in the potential impact of floods in Guangxi on newly commissioned alumina projects in the Fangchenggang area. In the short term, alumina prices are expected to remain weak with fluctuations, pending more catalysts for a rebound. Macro-level systemic pressure, coupled with rising expectations for the release of accumulated aluminum ingot inventories from the Middle East, forms the most significant resistance for aluminum prices. Smooth inventory drawdowns both domestically and internationally reflect strong downstream willingness to restock at lower prices, suggesting the fundamentals do not support a further deep decline. However, with absolute social inventory levels still higher than the same period in previous years, and narrowing export profits, short-term upward momentum appears insufficient. Aluminum is expected to continue its pattern of range-bound adjustment, following sentiment for further recovery and potential catch-up gains. Key focuses include whether the market's latest pricing of a delayed Fed rate hike is accurate and whether the smooth inventory drawdown for aluminum ingots can be sustained.
Industrial Silicon & Polysilicon:
On the 7th, industrial silicon prices were weak with fluctuations. The main 2609 contract closed at 8,350 yuan per tonne, down 0.48% for the day, with open interest increasing by 10,753 lots to 318,500 lots. The Baichuan spot reference price for industrial silicon was 9,114 yuan per tonne, down 4 yuan from the previous trading day. The price for the lowest deliverable grade fell to 8,600 yuan per tonne, with the spot premium expanding to 340 yuan per ton. Polysilicon prices showed strength with fluctuations. The main 2609 contract closed at 36,025 yuan per tonne, up 0.28% for the day, with open interest decreasing by 1,922 lots to 116,700 lots. The standard for the lowest deliverable grade rose to 35,985 yuan per tonne, with the spot premium narrowing to 520 yuan per tonne. Entering July, electricity prices in Baoshan, Yunnan have dropped to 0.28 yuan per tonne. Driven by government subsidies and previous hedging orders, the pace of local production resumption has accelerated significantly. Downstream, the organic silicon sector awaits new production control directives, while a polysilicon plant in Xining, Qinghai underwent unexpected maintenance, suddenly increasing marginal pressure on industrial silicon. Three new energy consumption limit standards for the photovoltaic sector have been released, with the transition period compressed to six months. However, high inventory pressure across the industry persists, with digestion mainly occurring at the module end, while inventories for silicon wafers and cells continue to accumulate, and polysilicon inventories have shifted from decline to increase. The industry has re-entered a pattern of weak current reality versus strong expectations. In the short term, polysilicon remains in a bottoming adjustment phase within its cycle, awaiting policy signals and market consensus to align.
Lithium Carbonate:
Yesterday, the lithium carbonate futures 2609 contract fell 1.35% to 163,360 yuan per tonne, with daily open interest decreasing by 3,265 lots to 413,600 lots. In the spot market, the average price for battery-grade lithium carbonate dropped by 750 yuan per tonne to 164,500 yuan per tonne, while the average price for industrial-grade lithium carbonate also fell by 750 yuan per tonne to 160,500 yuan per tonne. The price for battery-grade lithium hydroxide (coarse particle) decreased by 1,000 yuan per tonne to 151,500 yuan per tonne. Regarding warehouse receipts, inventory decreased by 623 tonnes yesterday to 46,085 tonnes. On the supply side, weekly production fell by 927 tonnes week-on-week to 25,715 tonnes. July's lithium carbonate production is estimated to increase by 90 tonnes month-on-month to 115,410 tonnes, with spodumene-based production down 4,500 tonnes month-on-month, lepidolite-based production up 2,700 tonnes, salt lake-based production up 1,390 tonnes, and recycled lithium production up 500 tonnes. On the demand side, July production schedules show ternary cathode material output up 3% month-on-month to 89,690 tonnes, lithium iron phosphate (LFP) cathode material up 7% to 536,850 tonnes, lithium cobalt oxide up 3% to 7,740 tonnes, and lithium manganese oxide down 1% to 10,770 tonnes. Lithium battery production schedules increased by 7% month-on-month, with domestic production up 7% and overseas production up 4%. Domestically, production schedules for ternary power batteries increased by 7%, LFP power batteries by 9%, and LFP energy storage batteries by 4%. Inventory-wise, large-sample inventories decreased by 2,155 tonnes week-on-week to 127,804 tonnes, while small-sample inventories fell by 1,239 tonnes to 94,573 tonnes. Based on the large-sample口径, inventories in other segments decreased by 3,417 tonnes to 62,762 tonnes week-on-week, smelter inventories decreased by 1,905 tonnes to 13,590 tonnes, while downstream inventories increased by 3,167 tonnes to 51,452 tonnes. Based on production schedules, July could see a destocking of around 14,000 tonnes, with the short-term destocking pace potentially accelerating gradually. However, medium-term caution is warranted regarding supply increases from the potential restart of Jianxiawo and the concentrated arrival of lithium ore shipments from Zimbabwe, which could lead to a month-by-month deceleration in the monthly destocking level during the third quarter. The previous price rebound from around 145,000 yuan per tonne to 168,000 yuan per tonne has already partially priced in known positive factors. Further upside in the short term requires additional catalysts. It is advisable to monitor whether the spot market can provide further positive feedback.
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