Copper prices experienced a slight upward movement overnight, with domestic refined copper spot imports showing modest profitability. On the macroeconomic front, the US ISM Services PMI for June declined from 54.5 to 54.0, slightly below the market consensus of 54.2. The figure remains above the 50-point expansion-contraction threshold, indicating continued service sector growth, albeit at a decelerating pace. Diverging views within the Federal Reserve regarding monetary policy communication are becoming apparent. Governor Waller stated that forward guidance remains a valuable policy tool, contrasting with views expressed by others. Regarding inventories, LME stocks decreased by 3,950 tonnes to 314,950 tonnes; Comex copper inventories rose by 220 tonnes to 606,853 tonnes; SHFE copper warehouse receipts fell by 4,300 tonnes to 64,172 tonnes, while BC copper warehouse receipts dropped by 1,804 tonnes to 4,453 tonnes. On the demand side, downstream consumers continue purchasing on a just-in-need basis, showing weak willingness to stock up at higher price levels. A marginally looser macro environment and a retreat in the US dollar index have alleviated financial pressure on copper prices. However, it is important to note that while the tariff report has been submitted, it has not yet been implemented. The 90-day decision window still harbors policy uncertainty, which may continue to cause sentiment-driven volatility. From a price perspective, the rebound in copper remains relatively weak, with low volatility indicating a lack of strong market conviction to break the current equilibrium. A cautious view is warranted in the short term, focusing on whether copper prices can break out of the current trading range and monitoring downstream feedback to elevated copper prices.
Nickel & Stainless Steel
LME nickel rose 0.86% overnight to $16,500 per tonne, while SHFE nickel increased 0.41% to 127,210 yuan per tonne. Inventory data shows LME stocks holding steady at 274,620 tonnes, and SHFE warehouse receipts decreased slightly by 5 tonnes to 98,052 tonnes. In terms of premiums/discounts, the LME 0-3 month spread remains in negative territory, and the import nickel discount held at -50 yuan per tonne. On the news front, as of June 30, 2026, Indonesia's ESDM did not announce an official increase in the total nickel ore RKAB quota for 2026 during the relevant meeting. The base quota remains at 260 million wet tonnes, with any new supplementary quotas pending approval from the ESDM 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 in sulfur supply could subsequently boost capacity utilization rates for related production. The core contradiction in the current nickel industry chain remains inventory pressure. Concurrently, nickel ore prices may continue to weaken, potentially eroding cost support. Furthermore, it should be noted that if quotas continue to be issued in the second half of the year, prices may remain under pressure.
Alumina, Electrolytic Aluminum & Aluminum Alloy
Alumina prices showed a slight weakness overnight, with the AO2609 contract closing at 2,713 yuan per tonne, down 0.15%. Open interest increased by 9,653 lots to 344,000 lots. Aluminum prices firmed slightly. Overnight, LME aluminum closed at $3,115.5 per tonne, up 0.81%, with stocks decreasing by 3,225 tonnes to 295,500 tonnes. The SHFE AL2608 contract closed at 22,900 yuan per tonne, up 0.28%, with open interest decreasing by 3,475 lots to 249,700 lots. Aluminum alloy prices also edged higher. The main AD2608 contract closed overnight at 22,835 yuan per tonne, up 0.24%, with open interest decreasing by 119 lots to 19,018 lots. In the spot market, SMM's alumina price fell to 2,767 yuan per tonne. The spot premium for aluminum ingots expanded to 10 yuan per tonne. Foshan A00 aluminum was quoted at 22,890 yuan per tonne, at a 60 yuan per tonne premium to Wuxi A00. Aluminum billet processing fees held steady in Henan, Linyi, and Nanchang, decreased by 400 yuan per tonne in Baotou, and fell by 20-40 yuan per tonne in Xinjiang, Wuxi, and Guangdong. Processing fees for 1A60 aluminum rod were stable, as were those for 6/8 series rods, while low-carbon 6/8 series rods saw an increase of 149 yuan per tonne. Expectations of increased supply from overseas EGA, combined with the dual selling pressure from new capacity ramp-up in Guangxi and warehouse receipt cancellations domestically, have weighed on the spot market. Additionally, market sentiment premium has receded rapidly following the short-term non-implementation of Guinea's policies. Alumina is expected to maintain a slightly weak, range-bound trend. Expectations for Fed rate hikes are creating macro-systemic headwinds, while anticipation of the release of accumulated aluminum stocks in the Middle East is also heating up, becoming the primary resistance for aluminum prices. As aluminum prices have fallen below pre-Middle East conflict levels and a pattern of stronger spot versus weaker futures has emerged, fundamentals do not support a further significant decline. Smooth inventory drawdowns both domestically and internationally reflect strong downstream willingness to restock at lower prices. However, current absolute social inventory levels remain higher than the same period in previous years. Coupled with narrowing export profits, short-term upward momentum appears insufficient. Aluminum is expected to continue its range-bound adjustment, with potential for a catch-up rally following further sentiment recovery. Key focuses include whether the market's latest pricing of a delayed Fed rate hike is accurate and whether the smooth aluminum ingot destocking trend can be sustained.
Industrial Silicon & Polysilicon
Industrial silicon prices firmed slightly on the 6th, with the main 2609 contract closing at 8,390 yuan per tonne, up 0.3% for the day. Open interest decreased by 7,190 lots to 307,700 lots. The Baichuan industrial silicon spot reference price was steady at 9,118 yuan per tonne compared to the previous trading day. The price for the lowest deliverable grade fell to 8,600 yuan per tonne, narrowing the spot premium to 300 yuan per tonne. Polysilicon prices also moved higher. The main 2609 contract closed at 35,925 yuan per tonne, up 0.41% for the day, with open interest increasing by 535 lots to 118,600 lots. The standard for the lowest deliverable grade rose to 35,985 yuan per tonne, widening the spot premium to 525 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 lock-ins, the pace of local production resumption has accelerated significantly. Downstream, the organic silicon sector awaits new production control directives, while a sudden maintenance event at a polysilicon base in Xining, Qinghai has abruptly increased marginal pressure on industrial silicon. Three new energy consumption limit standards for the photovoltaic sector have been released, with a transition period compressed to six months. However, the industry still grapples with high inventory pressure. While inventory is being digested at the module end, stockpiles are still accumulating for silicon wafers and cells, and polysilicon inventories have shifted from decline to increase. The industry has re-entered a phase characterized by weak current realities versus strong future expectations. In the short term, polysilicon remains in a bottoming-out adjustment phase within its cycle, awaiting alignment between policy signals and market forces.
Lithium Carbonate
Yesterday, the lithium carbonate futures 2609 contract fell 2.66% to 164,560 yuan per tonne, with daily open interest increasing by 4,170 lots to 416,900 lots. Spot prices remained steady: the average price for battery-grade lithium carbonate held at 165,250 yuan per tonne, industrial-grade at 161,250 yuan per tonne, and battery-grade lithium hydroxide (coarse particle) at 152,500 yuan per tonne. Warehouse receipt inventory decreased by 1,498 tonnes yesterday to 46,708 tonnes. On the supply side, weekly production decreased by 927 tonnes week-on-week to 25,715 tonnes. For July, lithium carbonate production is projected to increase by 90 tonnes month-on-month to 115,410 tonnes. This includes a decrease of 4,500 tonnes for spodumene-based production, an increase of 2,700 tonnes for lepidolite-based, a rise of 1,390 tonnes for salt lake-based, and an increase of 500 tonnes for recycled material. On the demand side, July production schedules show a month-on-month increase of 3% for ternary cathode materials to 89,690 tonnes, a 7% increase for lithium iron phosphate (LFP) to 536,850 tonnes, a 3% increase for lithium cobalt oxide to 7,740 tonnes, and a 1% decrease for lithium manganese oxide to 10,770 tonnes. Lithium battery production schedules increased by 7% month-on-month, with domestic schedules up 7% and overseas up 4%. Domestically, ternary power battery production schedules increased by 7%, LFP power battery schedules by 9%, and LFP energy storage battery schedules 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 data, inventory in other segments decreased by 3,417 tonnes to 62,762 tonnes, smelter inventory decreased by 1,905 tonnes to 13,590 tonnes, while downstream inventory increased by 3,167 tonnes to 51,452 tonnes. Based on production schedules, July is expected to see a destocking of approximately 14,000 tonnes, with the pace of destocking potentially accelerating in the short term. However, for the medium term, vigilance is required regarding supply increments from the potential resumption of production at Jianxiawo and the concentrated arrival of lithium ore shipments from Zimbabwe. This could lead to a month-by-month deceleration in the monthly destocking rate 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 price upside in the short term requires additional stimulus. It is advisable to monitor whether the spot market can provide further positive feedback.
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