Copper: Overnight, both domestic and international copper prices rose amid fluctuations, while China's refined copper imports remained at a loss. On the macroeconomic front, U.S. Q3 real GDP surged by 4.3%, marking the fastest growth in two years, driven by robust household consumption. However, the annualized quarterly PCE price index stood at 2.9%, in line with expectations but higher than the previous 2.6%, potentially dampening expectations for Fed rate cuts. Former President Trump urged the next Fed chair to cut rates amid strong economic and market performance rather than prematurely stifling growth due to inflation concerns. Domestically, China's housing and urban-rural development conference emphasized stabilizing the real estate market. According to Mysteel, Chinese copper smelters and Antofagasta agreed on December 19 to set the 2026 copper concentrate TC/RC benchmark at $0/ton and 0 cents/lb. Inventory-wise, LME stocks rose by 825 tons to 158,575 tons, while Comex stocks increased by 3,879 tons to 427,435 tons. SHFE copper warrants rose by 1,001 tons to 49,543 tons, and BC copper warrants remained at 1,053 tons. Demand-wise, higher copper prices led to cautious downstream procurement, with transactions primarily driven by rigid demand. Supported by Fed rate cut expectations and bond purchases, copper maintains a bullish trend, also reflecting hopes for economic recovery in 2024. Low inventories and resilient demand provide underlying support, but high prices may curb physical buying as year-end approaches, potentially slowing demand. A buy-on-dips strategy is recommended, but excessive chasing of highs should be avoided.
Nickel & Stainless Steel: Overnight, LME nickel fell 0.1% to $15,115/ton, while SHFE nickel dropped 0.14% to ¥121,180/ton. LME inventories rose by 216 tons to 254,604 tons, while SHFE warrants fell by 301 tons to 38,621 tons. LME 0-3M spreads remained negative, and import nickel premiums held at ¥400/ton. Indonesia’s nickel mining association revealed that 2026 nickel ore production targets may drop sharply to 250M tons from 379M tons in 2025. The government plans to revise nickel pricing formulas in 2026, including royalties for by-products like cobalt. Nickel ore prices and premiums remained stable, while NPI prices dipped slightly. Stainless steel supply tightened, with weekly inventories declining and spot market sentiment improving. Weakness in new energy demand and costs led to lower raw material prices, with ternary precursor output falling MoM in December. Domestic social inventories edged higher, while LME stocks declined. Nickel prices were buoyed by news, but caution is advised amid price volatility.
Alumina, Aluminum & Aluminum Alloy: Overnight, alumina rose slightly, with AO2601 up 0.83% to ¥2,541/ton, while SHFE aluminum (AL2602) gained 0.16% to ¥22,160/ton. Aluminum alloy (AD2602) dipped 0.14% to ¥21,190/ton. SMM alumina prices fell to ¥2,746/ton, with aluminum ingot discounts widening to ¥170/ton. Foshan A00 prices dropped to ¥21,790/ton, while aluminum bar processing fees held steady. Increased ore shipments and mine restorations supported near-term supply. Xinjiang delivery bottlenecks eased, but alumina imports pressured spot prices. Alumina’s downtrend narrowed its premium to futures. Aluminum’s rally may stall post-macro sentiment digestion, with prices likely to consolidate at highs.
Industrial Silicon & Polysilicon: Industrial silicon rose 1.68% to ¥8,780/ton, with spot prices up ¥15 to ¥9,580–9,593/ton. Polysilicon fell 0.91% to ¥59,225/ton, with N-type silicon prices down to ¥52,350/ton. Northwest plant maintenance and year-end environmental curbs may tighten supply, supporting silicon prices. Rising silver prices lifted wafer and battery costs, but downstream production faces quota pressures. Exchange position limits triggered a minor pullback, while limited new warrants kept premiums elevated.
Lithium Carbonate: Lithium carbonate futures (2605) surged 5.31% to ¥120,160/ton. Battery-grade carbonate rose ¥500 to ¥99,500/ton, while industrial-grade gained ¥500 to ¥96,850/ton. Warrant stocks increased by 240 tons to 16,651 tons. Weekly output rose by 47 tons to 22,045 tons, with spodumene-based output up 60 tons to 13,804 tons. Ternary material output fell by 468 tons to 17,845 tons, while LFP output dropped 2,083 tons to 92,061 tons. NEV retail sales fell 4% YoY in early December, with penetration at 62.3%. New energy storage installations in November totaled 3.51GW/11.18GWh, down 22% YoY. Inventories fell by 1,044 tons to 110,425 tons. Mine output concerns fueled price spikes, but weak spot demand warrants caution.
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