Copper: Overnight, copper prices both domestically and internationally initially declined before rebounding, with domestic spot imports of refined copper maintaining a slight profit margin. On the macro front, U.S. retail sales in April grew by 4.9% year-on-year, marking the strongest performance in nearly eight months, although the University of Michigan Consumer Sentiment Index has fallen to a historic low. Domestically, the cumulative increase in aggregate social financing reached 15.45 trillion yuan, with RMB loans increasing by 8.59 trillion yuan. By the end of April, M2 grew by 8.6% year-on-year, M1 by 5%, and the M2-M1 spread widened to 3.6%, up 0.2 percentage points from the previous figure. In terms of inventory, LME stocks decreased by 1,500 tons to 397,050 tons. On the demand side, companies remain cautious towards high copper prices, with downstream purchases primarily driven by essential needs. As previously noted, in a generally stable macro environment, market focus tends to shift to commodities significantly impacted by supply or demand. Recently, with extreme TC charges and the ongoing shortage of sulfur overseas, copper is once again being viewed as a bullish commodity due to its unstable supply outlook. It is recommended to adopt a strategy of cautious optimism. The risk lies in potential U.S.-Iran negotiations, particularly if there is unexpected progress regarding navigation through the Strait of Hormuz, which could alleviate sulfur shortages and lead to a rapid decline in copper prices.
Nickel & Stainless Steel: Overnight, LME nickel fell 1.17% to $18,940 per ton, while Shanghai nickel dropped 1.06% to 144,650 yuan per ton. Inventory-wise, LME stocks remained at 275,778 tons, while SHFE warehouse receipts increased by 2,753 tons to 76,028 tons. Looking at premiums and discounts, the LME 0-3 month spread remained negative, and the import nickel premium/discount held at -500 yuan per ton. On the supply side, Indonesian mines have entered maintenance phases due to quota issues. According to reports from Bloomberg and other international media on May 11, 2026, facing the imminent exhaustion of domestic nickel ore production quotas, Indonesia's Ministry of Energy and Mineral Resources (ESDM) has explicitly required PT Weda Bay Nickel (WBN) to fully utilize its approved production quota for 2026 before seeking new approvals. WBN has submitted a revision application to ESDM to increase capacity to meet the annual demand of approximately 100 million tons of nickel ore for its high-pressure acid leaching (HPAL) smelter. However, ESDM remains cautious, with the Secretary-General of the Mining Directorate emphasizing that, under current regulations, companies can formally submit RKAB revisions in the second half of 2026, after which the government will conduct a comprehensive assessment before deciding on approval. Additionally, earlier supply and price issues for raw materials led to reduced operational loads at some Indonesian projects, resulting in a proactive narrowing of supply. While current sulfur supply and price pressures may ease, it will take time to replenish supplies. On the demand side, nickel consumption for ternary precursors, ternary materials, and stainless steel increased in May. However, primary nickel inventory pressure remains significant, with weekly LME stocks rising and domestic social inventories continuing to increase. Market sentiment fluctuations combined with inventory pressure suggest that short-term prices will remain volatile. Given the firm performance on the cost side, it is advisable to monitor short-term buying opportunities on dips and observe whether previous supply-side production cuts can lead to inventory reduction.
Alumina, Electrolytic Aluminum & Aluminum Alloys: Overnight, alumina showed a slight upward trend, with AO2609 closing at 2,798 yuan per ton, up 0.43%. Open interest increased by 3,887 lots to 353,000 lots. Shanghai aluminum also rose, with AL2606 closing at 25,055 yuan per ton, up 1.25%. Open interest increased by 837 lots to 291,000 lots. Aluminum alloys showed mixed performance, with AD2606 closing at 23,595 yuan per ton, down 1.01%, while open interest increased by 322 lots to 13,915 lots. In the spot market, SMM alumina prices rebounded to 2,686 yuan per ton. Aluminum ingot spot discounts widened to 120 yuan per ton. Foshan A00 prices rose to 24,460 yuan per ton, with a discount of 90 yuan per ton compared to Wuxi A00. Aluminum bar processing fees remained stable in Baotou, Henan, and Linyi, while fees in Xinjiang, Nanchang, Guangdong, and Wuxi decreased by 50-80 yuan per ton. Aluminum rod processing fees for 1A60 series remained stable, while fees for 6/8 series held steady, and low-carbon 6/8 series increased by 90-141 yuan per ton. Post-holiday, maintenance capacity for alumina in Guangxi gradually resumed, increasing supply pressure. Downstream electrolytic aluminum restocking remained cautious, and the pre-holiday passive destocking logic weakened, leading to a return to weak price fluctuations. Domestic electrolytic aluminum prices lacked momentum to follow the upward trend, with divergence between domestic and international markets widening rather than narrowing. Overseas geopolitical risks have cooled, while the low inventory logic on the LME persists. Domestically, holiday inventories continued to accumulate, downstream resumption of operations fell short of expectations, and demand began to show characteristics of a traditional off-season. While export demand for cables remains strong, production schedules for air conditioner aluminum foil and photovoltaic frames began to decline in May, and traders reported paper losses, leading to weaker overall purchasing willingness. Macro sentiment gradually stabilized, but high aluminum prices lack sustained demand support, with both topside and downside constraints, entering a range-bound fluctuation pattern. Key focus areas include signals of inventory destocking and changes in export orders.
Industrial Silicon & Polysilicon: On the 14th, industrial silicon showed slight weakness, with the main contract 2609 closing at 8,655 yuan per ton, down 0.52% for the day. Open interest decreased by 12,152 lots to 315,000 lots. The Baichuan industrial silicon spot reference price was 9,186 yuan per ton, unchanged from the previous trading day. The lowest deliverable grade price rebounded to 8,700 yuan per ton, shifting from a discount to a premium of 45 yuan per ton. Polysilicon showed strength, with the main contract 2606 closing at 37,570 yuan per ton, up 1.64% for the day. Open interest decreased by 4,329 lots to 58,681 lots. The adjusted lowest deliverable standard was 34,000 yuan per ton, with the spot discount widening to 3,570 yuan per ton. Resumption of industrial silicon production in southwestern China added pressure, while downstream demand remained limited to essential purchases, lacking excess stocking or export orders to absorb the supply increase. Production cuts in the northwest have been fully priced in, and expectations for resumption in the southwest are clear, but downstream purchasing sentiment remains weak. New hedging positions entered at high levels on the futures market, creating pressure for a correction. Recent quarterly reports from several polysilicon companies revealed widespread losses, prompting downstream wafer producers to adopt more cautious procurement strategies. Post-holiday, silicon material plants continued to fulfill previous orders, while significant new order signings stalled due to disagreements. Currently, spot and futures markets lack coordination in terms of volume and price, making it difficult for spot prices to follow the upward trend. Futures prices are gradually digesting market sentiment, with a clearer trend of correction converging toward spot prices.
Lithium Carbonate: Yesterday, lithium carbonate futures 2609 fell 4.99% to 191,760 yuan per ton, with open interest decreasing by 41,227 lots to 478,000 lots. In the spot market, the average price of battery-grade lithium carbonate dropped by 5,500 yuan per ton to 195,000 yuan per ton, while industrial-grade lithium carbonate fell by 5,500 yuan per ton to 190,500 yuan per ton. Battery-grade lithium hydroxide (coarse particles) declined by 4,700 yuan per ton to 182,000 yuan per ton. Warehouse receipts increased by 1,766 tons to 47,720 tons. On the supply side, weekly production increased by 122 tons to 26,016 tons. May lithium carbonate production is expected to increase by 3.4% month-on-month to 113,780 tons. In April 2026, Chile's total lithium carbonate exports reached 29,526 tons, up 3.40% month-on-month and 35.63% year-on-year, with exports to China totaling 22,956 tons, up 21.29% month-on-month and 47.66% year-on-year. On the demand side, ternary material production in May is expected to increase by 9% month-on-month to 87,920 tons, lithium iron phosphate production by 8% to 503,700 tons, lithium cobalt oxide production by 23% to 9,480 tons, and lithium manganese oxide production by 7% to 13,000 tons. Lithium battery production in May is projected to increase by 7% month-on-month to 239.3 GWh, with ternary battery production up 6% to 33.3 GWh, lithium iron phosphate battery production up 7% to 196.4 GWh, and other battery types up 7% to 9.5 GWh. In terms of inventory, weekly social inventories decreased by 1,255 tons to 101,418 tons, with downstream inventories down 3,421 tons to 37,147 tons, inventories in other segments up 1,870 tons to 45,180 tons, and upstream inventories up 296 tons to 19,091 tons. Market sentiment weighed on prices, and speculative news contributed to further corrections in futures prices. Spot trading activity improved, but weekly data indicate a return to destocking in the short term, with inventory turnover days significantly declining. Short-term prices are expected to remain volatile as they await new catalysts, but opportunities for buying on dips may still be considered.
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