Copper: Lighten Positions Ahead of the Spring Festival 1. Macro Overview. Overseas, Federal Reserve Governor Milan, typically seen as dovish, indicated that interest rate cuts this year may need to exceed 100 basis points, and the market is watching for further signals. The U.S. House of Representatives passed a funding agreement negotiated between former President Trump and Senate Democrats, potentially ending a partial government shutdown. Tensions in the Gulf persist, as U.S.-Iran talks in Oman failed to yield substantial consensus, leaving the possibility of conflict. Domestically, China's January RatingDog Manufacturing PMI rose to a three-month high of 50.3, with selling prices increasing for the first time in 14 months. 2. Fundamentals. Copper concentrate TC (Treatment Charges) remain at historically low levels, sustaining concerns over tight supply and providing strong fundamental support. Estimated refined copper production for February is 1.1435 million tons, down 0.3% month-on-month but up 8.1% year-on-year. Imports: Net refined copper imports in December fell 48.44% year-on-year to 201,800 tons, with a cumulative annual drop of 15.21%; Scrap copper imports rose 14.81% month-on-month to 239,000 metal tons, up 9.88% year-on-year, with a cumulative annual increase of 4.12%. Inventory: As of February 6th, global visible copper stocks increased by 29,000 tons to 1.123 million tons compared to the last count (January 30th). LME stocks rose by 8,300 tons to 183,275 tons; Comex stocks increased by 10,302 tons to 534,405 tons; Chinese social inventories of refined copper rose by 13,000 tons weekly to 335,800 tons, while bonded area stocks fell by 2,500 tons to 69,400 tons. Demand: Downstream users are winding down for the holiday, slowing procurement, leading to inventory accumulation. 3. View. Precious metal volatility continues to significantly impact the nonferrous sector. Combined with demand disruptions from the Spring Festival holiday, this creates short-term downward pressure on prices. However, intraday performance shows strong support for copper prices below 100,000 yuan/ton, indicating sustained investor interest and maintaining a market bias where prices are easier to rise than fall. The current copper price logic cannot be solely based on fundamentals; its financial attributes are increasingly important. The overall outlook remains cautiously bullish with volatility. Strategically, buying on dips is advised. However, with the holiday approaching and potential geopolitical risks in overseas markets, it is recommended to hold light positions.
Nickel & Stainless Steel: Rising Costs Amidst Weak Market Sentiment 1. Supply: Indonesian nickel ore premium increased by $4.5/ton to $30/wet ton; Philippine 1.5% nickel ore premium held at $7.0/wet ton. February refined nickel output is forecast to drop 5% monthly to 35,800 tons. Domestic NPI production is expected to fall 12% monthly to 20,000 nickel tons; Indonesian NPI output is projected to decrease 3% monthly to 128,600 nickel tons. Nickel sulfate output is estimated to decline 6% monthly to 31,490 nickel tons. 2. Demand (New Energy): February precursor production is forecast to drop 7% monthly to 80,790 tons; ternary material output is expected to fall 15% monthly to 69,250 tons. February lithium battery output is projected to decrease 11% monthly to 171.71 GWh: ternary batteries down 16% to 26.54 GWh, LFP batteries down 10% to 138.73 GWh, others down 25% to 6.45 GWh. 2.1 Stainless Steel: Weekly prices mostly declined. Total social inventories in mainstream markets (89 warehouse caliber) reached 965,000 tons, up 1.29% weekly, with 300-series stocks rising by 15,000 tons to 632,000 tons. 3. Inventory: LME nickel stocks decreased by 246 tons weekly to 285,282 tons; SHFE nickel stocks rose by 810 tons to 51,274 tons; social inventories increased by 2,582 tons to 73,225 tons; bonded area stocks rose by 500 tons to 2,200 tons. 4. View. Fundamentally, strong nickel ore premiums and high NPI prices persist. SMM data indicates declining Indonesian pyrometallurgical and hydrometallurgical nickel ore stock indices, attributed to monitoring delays and new project ramp-ups. Combined with expectations of tightening Indonesian quotas, concerns about future supply tightness remain, pushing up cost support. For stainless steel, February holiday factors lead to inventory accumulation, although supply-side maintenance is common. In new energy, nickel sulfate spot trading is quiet due to the holiday, and ternary material output is expected to weaken. Recent chaotic market sentiment resonates with nickel prices. While seasonal demand is weakening, cost support remains solid, providing strong price underpinning. Geopolitical news from Indonesia adds volatility. Light long positions near cost levels may be considered, but nickel currently lacks fundamental support for an independent bullish trend, so market sentiment correlation remains key.
Alumina, Primary Aluminum & Aluminum Alloy: Accelerating Inventory Build-Up, Seeking Bottom Support 1. Supply: According to SMM, the weekly alumina operating rate increased by 0.53% to 77.8%. Concentrated restarts occurred post-maintenance in Shandong, Shanxi, Henan, and Guangxi, while a Guizhou producer halted. For primary aluminum, new Indonesian projects and domestic technical upgrades in Xinjiang and Inner Mongolia are ramping up, keeping daily output high. SMM forecasts: February domestic metallurgical alumina operating capacity to fall to 86.248 million tons, output at 6.618 million tons, down 10.4% monthly and 4.5% yearly; February domestic primary aluminum operating capacity to rise to 44.1 million tons, output at 3.432 million tons, down 9.6% monthly but up 3.5% yearly, with the molten aluminum ratio dropping to 64.4%. 2. Demand: Processing plants are closing for the holiday. The average operating rate for fabricators fell 1.5% weekly to 59.4%. By sector: aluminum cable held steady at 60.6%; aluminum sheet/strip down 2% to 64%; aluminum foil down 1.3% to 70.1%; aluminum profiles down 5.1% to 44.3%. Secondary alloy operating rate fell 0.4% to 58.9%. Aluminum billet processing fees were stable in most regions, rising 150-180 yuan/ton in Xinjiang, Wuxi, and Guangdong. Aluminum rod processing fees were stable. 3. Inventory: Exchange stocks: Alumina inventories rose 50,200 tons weekly to 176,000 tons; SHFE aluminum stocks increased 28,400 tons to 245,000 tons; LME aluminum stocks fell 4.75 million tons to 493,000 tons. Social inventories: Alumina stocks decreased 5,000 tons weekly to 222,000 tons; aluminum ingot stocks rose 54,000 tons to 836,000 tons; aluminum billet stocks increased 29,500 tons weekly to 273,000 tons. 4. View. Alumina futures gained against the trend, supported by rising overseas prices and early winter raw material stocking by domestic smelters. However, high social inventories and pressure from warrant cancellations may limit further gains. Entering the final pre-holiday week, fabricator closures keep demand weak. While planned U.S.-Iran talks in Oman reduced risk premiums, weighing on aluminum prices, renewed U.S. warnings for citizens to leave Iran keep tensions uncertain. Pre-holiday variables depend on new geopolitical developments. Post-holiday, the traditional 'Golden March' peak season may pull prices back up. Focus remains on overseas news during the holiday and the extent of domestic ingot inventory build-up, which will influence aluminum's post-adjustment rebound level.
Industrial Silicon & Polysilicon: Stockpiling Ends, Market Weakens 1. Supply: According to Baichuan, weekly industrial silicon output fell 10,340 tons to 63,300 tons; the operating furnace rate dropped 4.02% weekly to 22.36%, with 32 fewer furnaces online (178 total). Northwest China: Xinjiang saw significant shutdowns (29 furnaces), with 144 furnaces operating in the region. Southwest China: Yunnan halted 2 furnaces, Sichuan was fully halted, leaving 10 furnaces operating. Elsewhere: Inner Mongolia halted 1 furnace. 2. Demand: Polysilicon prices declined: P-type down 1,000 yuan/ton to 46,000 yuan/ton; N-type down 500 yuan/ton to 51,000 yuan/ton. Huadian's centralized project tender saw module makers hike prices, but terminal IRR constraints created a 'price without market' pressure. Wafer producers focused on destocking; new polysilicon orders stalled, with February negotiation cycles lengthening. Organosilicon prices held steady at 13,800-14,000 yuan/ton. Producers continued output cuts; while some monomer plants offered hidden discounts, downstream holiday stockpiling had largely ended, and logistics were winding down. Weekly polysilicon output fell 100 tons to 20,100 tons; DMC output decreased 800 tons weekly to 41,300 tons. 3. Inventory: Exchange stocks: Industrial silicon inventories rose 11,150 tons weekly to 69,700 tons; polysilicon stocks increased 4,800 tons to 257,400 tons. Social inventories: Industrial silicon stocks fell 16,500 tons weekly to 439,400 tons, with plant stocks down 14,500 tons to 235,900 tons. Huangpu port stocks decreased 1,000 tons to 58,000 tons; Tianjin port stocks fell 1,000 tons to 78,000 tons; Kunming port stocks held at 51,000 tons. Polysilicon social inventories rose 900 tons weekly to 341,000 tons. 4. View. Yunnan producers are delivering final pre-holiday orders, with comprehensive output cuts expected next week. Xinjiang's significant cuts suggest continued supply contraction. With arbitrageurs actively selling and downstream stockpiling finished, there's little pre-holiday upward momentum. New polysilicon orders have stalled; wafers are traded on a case-by-case basis. Aside from module traders selling under financial pressure, other sectors are stable amidst deadlocked transactions. Pre-holiday logic focuses on capital repatriation, keeping the polysilicon market weak. Post-holiday, the market dynamic will shift to a battle of expectations and confidence, awaiting the 'Golden March' season start, downstream demand recovery, and new positive industry signals.
Lithium Carbonate: Volatile Sentiment, Lack of Fundamental Certainty 1. Supply: Weekly output fell 825 tons to 20,744 tons: spodumene-based production down 790 tons to 12,454 tons; lepidolite-based up 90 tons to 2,922 tons; salt lake-based down 75 tons to 3,130 tons; recycling-based down 50 tons to 2,238 tons. February lithium carbonate output is forecast to drop 16.3% monthly to 81,930 tons, with declines across all raw material types. 2. Demand: Weekly ternary material output decreased 937 tons to 17,116 tons; inventories fell 448 tons to 18,243 tons. Weekly LFP output dropped 723 tons to 87,500 tons; inventories decreased 1,787 tons to 95,032 tons. Weekly power cell output rose 1.1% to 26.7 GWh: LFP cells down 1% to 20.2 GWh; ternary cells up 8.3% to 6.5 GWh. February forecasts: Ternary material output down 15% monthly to 69,250 tons; LFP output down 11% to 354,000 tons; LCO output down 25% to 7,780 tons; LMO output down 8% to 10,790 tons. Auto Market (CPCA): January 2026 is a recovery period post-new energy vehicle subsidy phase-out, with some demand pulled forward to December 2025, creating a noticeable hangover effect. Estimated January 2026 NEV wholesale volume is 900,000 units, up 1% year-on-year. Energy Storage (DATA): January 2026 China energy storage project tenders (including cell projects) saw cell award volumes exceed 21 GWh. CATL and EVE held top shares at 18.9% and 18.1% respectively; CALB ranked third at 15.1%. The weighted average cell tender price was 0.37 yuan/Wh. Integrator award volumes exceeded 21 GWh, with CATL and EVE leading at 17.0% and 16.2%; Hithium third at 9.5%. The weighted average EPC tender price was 0.96 yuan/Wh; energy storage system tender price was 0.54 yuan/Wh. 3. Inventory: Weekly lithium carbonate social inventories fell 2,019 tons to 105,463 tons: downstream stocks up 3,058 tons to 43,657 tons; other segments down 4,430 tons to 43,450 tons; upstream stocks down 647 tons to 18,356 tons. 4. View. Influenced by market sentiment, lithium carbonate futures fell sharply. Spot trading volume increased again, mainly from downstream buyers. However, with holiday stockpiling essentially complete and some strategic inventory already in place, strong short-term prices could lead to quieter actual procurement, weighing on prices. News of a significant month-on-month increase in January Chilean shipments is attributed to pre-holiday scheduling and is likely unsustainable; significant supply pressure on China may manifest after the holiday. Concurrently, domestic production will resume in March. The pressure will then shift to whether demand can exceed expectations. If demand only matches December levels, the market could shift from a >6,000-ton destocking in February to a tight balance/slight inventory build in March. Nonetheless, the continued post-holiday inventory decline could become a significant bullish factor. Rationally, the short-term market lacks clear bullish catalysts, and sentiment is chaotic. Opportunities after volatility subsides may be more attractive.
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