Group 1: Report Industry Investment Rating - No relevant content Group 2: Core Viewpoints of the Report - Copper: After the Bank of Japan's interest rate hike, the macro environment improved, and copper prices rose with increasing positions. Last week, copper prices first declined and then rebounded, with the trading volume increasing as prices rose. High copper prices have suppressed consumption, leading to a continuous weakening of the basis and monthly spreads, with a clear pattern of near - term weakness and long - term strength in futures prices. The 2026 copper concentrate long - term processing fee benchmark was set at $0/ton and $0/lb. In the short term, macro factors are driving copper prices up, with strong upward momentum, and the industry is following passively. Keep an eye on the pressure at the $12,000 mark for LME copper and the RMB 95,000 mark for SHFE copper. [5] - Aluminum: After the Bank of Japan's interest rate hike, the macro environment improved, and aluminum prices rose with increasing positions. Last week, aluminum prices first declined and then rebounded, similar to copper. After the interest rate hike on Friday, the market sentiment improved, and aluminum prices increased with positions, recovering the losses of the week. As aluminum prices rise, downstream sentiment is turning more cautious. The substitution of aluminum for copper in the home appliance industry is expected to increase, giving a strong consumption outlook for aluminum, which may also make long - term aluminum prices stronger than near - term ones. Technically, keep an eye on the high - level pressure in early December. [6] Group 3: Summary of Each Section According to the Table of Contents 1 Macro Factors - After the Bank of Japan's interest rate hike last Friday, it was a relief for the US dollar, and short - term market liquidity increased. The US dollar index and copper prices rebounded simultaneously. [10] 2 Copper 2.1 Quantity and Price Trends - Last week, copper prices first declined and then rebounded, and the trading volume increased as prices rose. High copper prices have suppressed consumption, leading to a continuous weakening of the basis and monthly spreads, with a clear pattern of near - term weakness and long - term strength in futures prices. [5] 2.2 Copper Ore Shortage - Last week, copper ore port inventories continued to rise from a low level and were approaching the same level as previous years. On December 19, Mysteel's copper ore port inventory was 680,000 tons, a weekly increase of 16,000 tons. The short - term increase in port inventories has slowed down, and the overall level is still at a low level compared to previous years. The 2026 copper concentrate long - term processing fee benchmark was set at $0/ton and $0/lb. [25] 2.3 Electrolytic Copper Inventory Accumulation - On December 18, Mysteel's electrolytic copper social inventory was 174,500 tons, a weekly increase of 3,300 tons, and the COMEX + LME inventory was 623,800 tons, a weekly increase of 10,700 tons. Short - term copper price increases have significantly suppressed downstream consumption, leading to an increase in inventories. However, there has been a clear divergence in domestic and overseas inventories since December, which may be due to stronger domestic industrial demand and overseas weakness, or may be digested through exports. [27] 2.4 Downstream Primary Processing - In November, the capacity utilization rate of copper products rebounded month - on - month, indicating that downstream acceptance increased after copper prices reached a high and then declined in November. As copper prices broke through upwards at the end of November, it is expected that downstream sentiment will turn more cautious again, and the capacity utilization rate in December may decline significantly. SMM predicts that the total output of the copper rod industry in December will decrease by 45,000 tons month - on - month to 1 million tons. In terms of the operating rate, the operating rate of electrolytic copper rod enterprises was 65.07%, a month - on - month decrease of 1.58 percentage points and a year - on - year decrease of 7.53 percentage points; the operating rate of recycled copper rod enterprises was 19.61%, a month - on - month decrease of 4.23 percentage points and a year - on - year decrease of 16.73 percentage points. [29] 3 Aluminum 3.1 Quantity and Price Trends - Last week, aluminum prices first declined and then rebounded, similar to copper. After the interest rate hike on Friday, the market sentiment improved, and aluminum prices increased with positions, recovering the losses of the week. As aluminum prices rise, downstream sentiment is turning more cautious, and the spot discounts of LME aluminum and SHFE aluminum remain weak. [6] 3.2 Upstream Industry Chain - On December 12, the aluminum ore port inventory was 26.08 million tons, a decrease of 355,400 tons from the previous week and an increase of 8.69 million tons compared to the same period in 2024. Last week, alumina showed signs of stabilizing after fluctuations but remained weak overall. The improvement in the macro environment has stabilized it, but the weak industrial fundamentals have led to its weak performance. The strong aluminum prices and weak alumina prices have widened the profit margins of electrolytic aluminum plants. [44][45] 3.3 Slowdown in Electrolytic Aluminum Inventory Reduction - On December 18, Mysteel's electrolytic aluminum social inventory was 561,000 tons, a decrease of 18,000 tons from the previous week; the overseas electrolytic aluminum inventory was 526,200 tons, an increase of 700 tons from the previous week. Global electrolytic aluminum inventories are in a state of slow reduction at a low level, which provides strong industrial support for aluminum prices. [48] 3.4 Downstream Primary Processing - Last week, the processing fee of aluminum rods increased, indicating a recovery in downstream demand and a strong willingness of the downstream industry to replenish inventories at a low level. On December 18, the aluminum rod inventory was 100,700 tons, an increase of 14,200 tons from the previous week. The slight increase in aluminum rod inventory last week corresponded to the increase in processing fees, as aluminum rod production enterprises replenished inventories at a low price. [52][54] 4 Conclusion - Copper: Last week, copper prices first declined and then rebounded, and the trading volume increased as prices rose. In the short term, macro factors are driving copper prices up, with strong upward momentum, and the industry is following passively. Keep an eye on the pressure at the $12,000 mark for LME copper and the RMB 95,000 mark for SHFE copper. - Aluminum: Last week, aluminum prices first declined and then rebounded, similar to copper. The substitution of aluminum for copper in the home appliance industry is expected to increase, giving a strong consumption outlook for aluminum, which may also make long - term aluminum prices stronger than near - term ones. Technically, keep an eye on the high - level pressure in early December. [58]

Report Summary 1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Views - **Copper**: Today, Shanghai copper continued to rise with increasing positions, approaching the 93,000 mark at the end of the session, with an increase of about 30,000 contracts during the session. The weakening US dollar index led to a general rise in non - ferrous metals. The premiums of LME copper and Shanghai copper continued to strengthen, increasing the short - term expectation of spot shortages in non - US regions. Technically, copper prices broke through the 90,000 mark with increasing positions, showing strong short - term upward momentum [6]. - **Aluminum**: Today, aluminum prices maintained the strong pattern from last night, with the open interest continuing to rise. Due to the weak US dollar, non - ferrous metals generally rose. Both domestic and international electrolytic aluminum inventories remained stable at low levels. As aluminum prices rose, downstream buyers were hesitant due to high prices and purchased on an as - needed basis, causing the spot discount to continue to weaken. Technically, in the short term, aluminum prices rose with increasing positions, breaking through the 22,000 mark and the previous high in 2024, indicating strong short - term upward momentum [7]. - **Nickel**: Today, Shanghai nickel fluctuated narrowly below 118,000. The weak US dollar led to a general rise in non - ferrous metals. The spot premium continued to strengthen, supporting the futures price. In the short term, nickel prices remained volatile, with little change in open interest and low capital attention [8]. 3. Summary of Each Section Industry Dynamics - **Copper**: Goldman Sachs believes that although copper prices recently broke through $11,000/ton, triggering market optimism, this round of price increase may not be sustainable. Unless inventories significantly decrease and demand substantially recovers, copper prices may decline. Goldman Sachs maintains the 2026/2027 price range at approximately $10,000 - 11,000/ton. On December 4, Mysteel's social inventory of electrolytic copper was 164,500 tons, a cumulative increase of 6,000 tons from the 1st [10][11]. - **Aluminum**: According to SMM statistics on December 5, the total inventory of bauxite at 9 domestic ports was 22.72 million tons, an increase of 420,000 tons from the previous week. On December 4, Mysteel's social inventory of electrolytic aluminum was 593,000 tons, a cumulative increase of 2,000 tons from the 1st [12][13]. - **Nickel**: On December 5, the price range of SMM 1 electrolytic nickel was 117,400 - 122,700 yuan/ton, with an average price of 120,050 yuan/ton, a decrease of 350 yuan/ton from the previous trading day. The mainstream spot premium quotation range of Jinchuan 1 electrolytic nickel was 4,800 - 5,000 yuan/ton, with an average premium of 4,900 yuan/ton, unchanged from the previous trading day. The spot premium and discount quotation range of domestic mainstream brand electrowon nickel was - 200 - 400 yuan/ton [14]. Related Charts - **Copper**: The report includes charts of copper basis, copper monthly spread, domestic visible inventory of electrolytic copper, overseas copper exchange inventory, LME copper cancelled warrant ratio, and SHFE warrant inventory [15][16][17]. - **Aluminum**: The report includes charts of aluminum basis, aluminum monthly spread, domestic social inventory of electrolytic aluminum, overseas exchange inventory of electrolytic aluminum, Shanghai - London ratio, and aluminum bar inventory [29][31][33]. - **Nickel**: The report includes charts of nickel basis, nickel monthly spread, LME inventory, SHFE inventory, LME nickel trend, and nickel ore port inventory [41][43][45].