Copper: Overnight, both domestic and international copper prices oscillated higher, while the spot import of refined copper in China remained in a state of loss. On the macroeconomic front, the Trump administration continues to show strong interest in Greenland, and the reciprocal tariff increases between the US and Europe have caused unease; domestically, China's GDP grew by 5% year-on-year in 2025, breaking through the 140 trillion yuan mark, with Q4 GDP growth at 4.5%. However, some economic data underperformed, leading markets to potentially anticipate stronger counter-cyclical adjustment policies. Inventory-wise, LME inventories increased by 3,850 tonnes to 147,425 tonnes; Comex inventories rose by 3,807 tonnes to 492,528 tonnes; SHFE copper warehouse receipts fell by 7,762 tonnes to 152,655 tonnes, while BC copper holdings remained at 11,286 tonnes. On the demand side, as copper prices climbed again, downstream companies turned cautious in their procurement, with transactions primarily driven by rigid demand. Domestic consumption has entered a slack season, leading to weaker copper consumption and inventory accumulation that is stronger than in recent years. This has intensified divergence within the industry. Judging solely from the current industrial situation and fundamentals, there is a need for adjustment. However, financial support for copper remains present, making sustained declines difficult. Before the Spring Festival, the overall outlook is still viewed as oscillating with a bullish bias. Strategically, maintaining a buy-on-dips approach is recommended, but excessive chasing of highs should be avoided.
Nickel & Stainless Steel: Overnight, LME nickel rose 1.8% to $18,145 per tonne, while SHFE nickel increased 1.98% to 143,640 yuan per tonne. Regarding inventories, LME stocks decreased by 24 tonnes to 285,708 tonnes, and SHFE warehouse receipts dropped by 187 tonnes to 41,798 tonnes. Looking at spreads, the LME 0-3 month spread remained in negative territory; the import nickel spread held steady at 600 yuan per tonne. On the news front, Indonesia will adjust its nickel quotas based on industry demand. The quota reduction aims to support the price of Indonesian mineral products, and similar measures will be implemented to bolster nickel prices. However, no specific quota level for 2026 was disclosed, with officials only reiterating that adjustments will be made to meet the needs of local smelters. On Monday, January 19th, the CEO of nickel miner PT Vale Indonesia stated that the company's approved mining production quota for this year might be insufficient to meet the demand from a smelter coming online later in the year. Company data shows a target of 71,234 tonnes of high-grade nickel matte production for 2025, with 66,848 tonnes already produced by November. Fundamentally, as prices rose rapidly, product prices across the nickel industry chain strengthened. Primary nickel production schedules surged 18.5% month-on-month to 37,200 tonnes, and hedging demand could exert some pressure on futures prices. Indonesian policy stimulus is driving nickel prices higher; attention should be paid to the actual implementation and market sentiment. It is advisable to watch for buy-on-dips opportunities near the cost line.
Alumina, Primary Aluminium & Aluminium Alloy: Overnight, alumina prices weakened. The AO2605 contract closed at 2,691 yuan per tonne, down 2.18%, with open interest increasing by 24,514 lots to 516,000 lots. Primary aluminium prices on the SHFE strengthened, with the AL2603 contract closing at 24,225 yuan per tonne, up 1.06%, and open interest rising by 4,235 lots to 341,000 lots. Aluminium alloy prices also firmed, with the main AD2603 contract closing at 22,910 yuan per tonne, up 0.77%, while open interest decreased by 100 lots to 20,105 lots. In the spot market, SMM alumina prices retreated to 2,641 yuan per tonne. The spot discount for aluminium ingots widened to 160 yuan per tonne. Foshan A00 aluminium was quoted lower at 23,900 yuan per tonne, at a 30 yuan per tonne premium over Wuxi A00. Aluminium billet processing fees held steady in most regions, but increased by 100 yuan per tonne in Xinjiang, Nanchang, Guangdong, and Wuxi. Processing fees for 1A60 aluminium rod and 6/8 series aluminium rods remained stable, while low-carbon aluminium rod processing fees decreased by 160 yuan per tonne. The impact of the rainy season on Australian mines is becoming evident, while shipments from Guinea remain stable. Negotiated prices for foreign ore continued to decline to $60 per tonne. With high ore reserve levels, alumina plants still show no procurement intent. Inventories at both producers and downstream users continue to accumulate, pushing the operational focus lower. Overseas geopolitical tensions have eased, and the US has postponed tariffs on some key minerals, leading to a rational correction from previously overheated sentiment. Domestically, the Spring Festival stockpiling cycle for downstream users has begun, but the overall recovery is limited. The pace of aluminium ingot inventory accumulation continues, and the spot discount structure has deepened. In the short term, aluminium futures prices may face a phase of correction, but are likely to remain resilient with support at higher levels. Monitor the progress of downstream stockpiling and inventory trends.
Industrial Silicon & Polysilicon: On the 19th, industrial silicon prices firmed. The main 2605 contract closed at 8,845 yuan per tonne, up 1.6% for the day, with open interest decreasing by 3,702 lots to 235,000 lots. The Baichuan spot reference price for industrial silicon held steady at 9,628 yuan per tonne from the previous session. The price for the lowest deliverable grade remained stable at 8,850 yuan per tonne, narrowing the spot premium to 5 yuan per tonne. Polysilicon prices also strengthened. The main 2605 contract closed at 50,505 yuan per tonne, up 0.63% for the day, with open interest falling by 1,649 lots to 44,571 lots. The Baichuan price for N-type polysilicon for reuse dropped to 55,000 yuan per tonne. The price for the lowest deliverable polysilicon grade was 55,000 yuan per tonne, with the spot premium narrowing to 4,495 yuan per tonne. Furnaces in Southwest China have been completely shut down, except for those with captive power plants or integrated supply. Production has resumed in Xinjiang after maintenance, offsetting supply reductions. Downstream production cuts have hampered the overall upward momentum for industrial silicon. Polysilicon faces pressure from supply-demand imbalances and anti-monopoly supervision, shifting market focus from speculative news to fundamentals. The底气 for polysilicon's strong pricing is difficult to sustain. Recent cancellations of export tax rebates triggered a surge in overseas orders, significantly alleviating module production pressure. However, due to raw material backlog in the wafer segment, this increase has not been transmitted to the polysilicon segment. Production cuts in the crystalline silicon sector are expected to further expand. Short-term futures are expected to lack upward momentum and trade steadily, while spot offers may gradually lose support.
Lithium Carbonate: Yesterday, the lithium carbonate futures 2605 contract fell 3.83% to 147,260 yuan per tonne. Regarding spot prices, the average price for battery-grade lithium carbonate dropped by 7,000 yuan per tonne to 151,000 yuan per tonne, while the average for industrial-grade fell by 7,000 yuan to 147,500 yuan per tonne. Battery-grade lithium hydroxide (coarse particle) decreased by 5,000 yuan per tonne to 144,000 yuan per tonne. For warehouse receipts, inventory increased by 240 tonnes yesterday to 27,698 tonnes. On the supply side, weekly production increased by 115 tonnes week-on-week to 22,535 tonnes. This included a 35-tonne increase from spodumene-based extraction to 13,959 tonnes, a 20-tonne rise in lepidolite-based production to 2,956 tonnes, a 40-tonne increase from salt lake extraction to 3,185 tonnes, and a 20-tonne rise from recycled material extraction to 2,435 tonnes. Lithium carbonate production for January 2026 is forecast to decrease by 1.2% month-on-month to 97,970 tonnes. On the demand side, ternary material production for January 2026 is projected to fall 5% month-on-month to 78,180 tonnes; lithium iron phosphate (LFP) production is expected to drop 10% to 363,400 tonnes. Ternary power battery production for January 2026 is forecast to decline 6.15% month-on-month to 28.7 GWh, while LFP power battery production is expected to decrease 9.77% to 90.01 GWh. LFP energy storage battery production is projected to increase slightly by 0.99% to 63.15 GWh. Inventory-wise, weekly social inventories of lithium carbonate increased by 337 tonnes week-on-week to 109,942 tonnes. Downstream inventories fell by 2,458 tonnes to 36,540 tonnes, inventories in other segments rose by 2,080 tonnes to 55,020 tonnes, and upstream inventories increased by 715 tonnes to 18,382 tonnes. Recent significant price corrections in lithium carbonate are driven by capital flows. Sustained declines in absolute prices could further release spot liquidity. If the basis fails to remain strong, it could lead to a spiral decline in both spot and futures prices. Monitor spot transactions and the basis to further verify short-term demand and stockpiling coefficients. In the absence of clear negative feedback from demand, a buy-on-dips strategy remains primary. However, caution is warranted regarding amplified market volatility and position disturbances. Keep an eye on supply-side disruptions (overseas, Jiangxi region) and potential right-side opportunities.
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