Core Viewpoint - The aluminum market is experiencing a significant price surge, driven by favorable domestic and international macroeconomic conditions, despite some short-term demand weakness and supply constraints [1][2][4][5]. Group 1: Domestic Macro Factors - Recent domestic policies, including the 2026 national subsidy plan and the promotion of high-quality electricity grid development, are expected to boost aluminum demand [1]. - The automotive sector is seeing a rebound in orders and production due to new model launches and upcoming replacement subsidy policies, which supports aluminum demand [4]. Group 2: International Macro Factors - The divergence in the Federal Reserve's meeting minutes indicates ongoing market speculation regarding interest rate changes, which may influence commodity prices, including aluminum [2]. - Geopolitical tensions, particularly in Venezuela, have raised concerns about global trade and supply chain stability, potentially impacting aluminum supply [2]. Group 3: Supply and Demand Dynamics - The copper-aluminum ratio has significantly exceeded historical norms, leading to increased speculation in the aluminum market as investors anticipate a correction [3]. - Despite a seasonal decline in demand, the automotive sector and the rapid expansion of energy storage systems are expected to provide a counterbalance to the overall weakness in aluminum consumption [4][5]. - Current aluminum production capacity is constrained, limiting supply growth, while recent disruptions in overseas supply have further tightened the market [4][6]. Group 4: Long-term Outlook - While short-term demand may be weak, the long-term outlook for aluminum remains positive due to stable growth in transportation and energy storage sectors, as well as potential shifts in material usage from copper to aluminum [5][6]. - The financial attributes of aluminum are currently driving prices more than its commodity attributes, with significant capital inflow into the aluminum market post-holiday [5].

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Precious Metals and Commodities Market - **Key Drivers**: Quantitative easing, tariff policies, geopolitical uncertainties, and inflation concerns have significantly influenced the prices of precious metals since 2020 [2][4][7]. Core Insights and Arguments - **Price Trends**: Precious metals have seen a strong performance, particularly silver and platinum, driven by global economic uncertainty and inflation fears. The internal rate of return (IRR) for precious metal projects can exceed 50%, making them more attractive than copper projects, which typically have an IRR of around 20% [2][6][4]. - **Copper Price Expectations**: The market anticipates copper prices to rise to $8 per pound due to insufficient current prices ($5 per pound) to incentivize new investments and production expansions [8]. - **Shift to Safe-Haven Assets**: Post-pandemic economic recovery in the U.S. has been weak, leading to a shift of funds towards safe-haven assets like precious metals, as confidence in U.S. debt repayment capabilities diminishes [9][11]. - **Geopolitical Factors**: Geopolitical uncertainties have prompted Western countries to accelerate the development of domestic critical mineral resources, impacting supply and prices [10][30]. Additional Important Insights - **Speculative Sentiment in Silver Market**: The decline in the gold-silver ratio indicates heightened speculative sentiment, with retail investors heavily buying silver, which could lead to a reversal of bullish sentiment [5][34]. - **Outlook for Industrial Metals**: The outlook for non-ferrous metals remains optimistic, with expectations of continued leadership in the market, particularly for copper, lithium, and gold [26][29]. - **Valuation of Precious Metals**: Precious metals are currently more attractive compared to other commodities due to lower initial capital expenditures and tighter supply conditions [6][31]. - **Market Volatility**: The upcoming change in the Federal Reserve chairmanship could lead to increased market volatility, affecting interest rate policies and overall market sentiment [15]. Market Dynamics - **Investment Opportunities**: The current low valuations in the non-ferrous metals sector present significant investment opportunities, with historical data suggesting a positive correlation between low price-to-earnings ratios and market performance [31]. - **Future Price Risks**: The silver market faces potential risks from speculative buying, which could lead to sharp price corrections if sentiment shifts [40][42]. - **Impact of Retail Investors**: Retail investors are expected to play a crucial role in the silver market, potentially driving prices higher in the short term, but their speculative behavior may also lead to volatility [42][43]. Conclusion The precious metals and commodities market is currently influenced by a combination of macroeconomic factors, geopolitical uncertainties, and speculative behaviors. The outlook remains cautiously optimistic, with significant opportunities for investment, particularly in precious metals and select industrial metals. However, potential risks from market volatility and shifts in investor sentiment must be closely monitored.

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - In December, copper prices are expected to remain high and fluctuate. It is recommended to maintain the operation strategy of buying on dips. The upward drive for copper prices comes from the increasing expectation of interest rate cuts in December and the long - term broad - money cycle, while the supply - side problems such as low copper concentrate processing fees and production disruptions, and the demand from the new energy sector support the copper price. However, factors like high inventory, the substitution of aluminum for copper, and weak demand in the real estate and home appliance sectors may limit the upside space [6][7]. Summary of Each Section According to the Table of Contents 1.后市研判 (Outlook for the Market) - In December, copper prices will be in a high - level oscillation. The operation strategy of buying on dips should be maintained. The increasing expectation of interest rate cuts in December and the long - term broad - money cycle provide upward drive. On the supply side, problems such as the decline in global copper ore grade, slow new project commissioning, and insufficient capital expenditure are difficult to solve in the short term, and production disruptions in major producing areas lead to lower - than - expected annual production growth. The demand from the automotive and new energy sectors provides support, but high inventory and the substitution of aluminum for copper may limit the upside [6][7]. 2.行情回顾 (Market Review) - In November, copper prices showed a high - level oscillation trend. The implementation of the Fed's interest rate cut and the US government shutdown event weakened the macro - driving force [9][10]. 3.宏观面 (Macroeconomic Aspects) - **US Situation**: The US manufacturing PMI has contracted for eight consecutive months, and the overall labor demand is slowing down. However, the service PMI has reached an eight - month high. Although the performance and outlook of NVIDIA are excellent, the market doubts about its valuation bubble. The dovish shift of the previous hawkish officials has increased the expectation of interest rate cuts in December to 75%, and the market has priced in more than three interest rate cuts within a year, which provides upward drive for copper prices [16]. - **China Situation**: In October, China's manufacturing PMI declined, and the non - manufacturing PMI rose slightly. The overall national economy was running smoothly, and new growth drivers continued to expand. The government has introduced policies to promote consumption, and the market is concerned about the introduction of more growth - stabilizing policies [18][21]. 4.基本面 (Fundamental Aspects) - **Supply Side** - **Copper Ore Import**: In October 2025, China's copper ore and concentrate imports were 2,451,487.80 tons, a month - on - month decrease of 5.24% and a year - on - year increase of 6.08%. The supply from major suppliers increased, but that from other sources decreased, and the tight supply of copper concentrate remained difficult to ease [22]. - **Processing Fees**: As of the week of November 21, the Mysteel standard clean copper concentrate TC weekly index was - 41.81 US dollars per dry ton, a decrease of 0.06 US dollars per dry ton from the previous week. The tight copper concentrate supply situation led to low processing fees and high pressure on the year - end negotiations between domestic smelters and overseas miners [25]. - **Inventory**: Affected by the 232 tariff policy, the US has absorbed a large amount of refined copper globally. Although the siphon effect is gradually weakening, South American copper still prefers to be exported to the US. The total global copper inventory exceeds 800,000 tons, remaining above the central level [28]. - **Production**: In October 2025, China's refined copper production was 1.204 million tons, a year - on - year increase of 8.9%. Due to smelter overhauls, the production decreased month - on - month, and the impact will be more evident in December [36]. - **Imports and Exports**: In October, China's refined copper imports were 323,144.72 tons, a month - on - month decrease of 13.62% and a year - on - year decrease of 16.32%. Exports were 65,945 tons, a year - on - year increase of more than five times and a month - on - month increase of nearly 1.5 times [45]. - **Waste Copper**: In October, China's waste copper imports were 196,600 tons, a month - on - month increase of 6.81% and a year - on - year increase of 7.35%. However, the low domestic waste copper utilization rate limited the demand for recycled copper raw materials [41]. - **Demand Side** - **Copper - Aluminum Ratio**: The copper - aluminum ratio has exceeded 4.0, which is conducive to the substitution of aluminum for copper and suppresses copper consumption [31]. - **Downstream Products**: In October, the output of copper strips, copper rods, and other products decreased month - on - month due to high copper prices [48][52]. - **Real Estate**: The real estate market is still in the adjustment period, and the demand for copper in the real estate sector is suppressed [56]. - **New Energy**: In October 2025, China's new energy vehicle production was 1.71 million, a year - on - year increase of 19.3%. The new energy power generation sector maintained a high - growth trend, providing marginal demand for copper [61]. - **Home Appliances**: In October 2025, the production of air conditioners, refrigerators, and washing machines decreased year - on - year. Although there was some subsidy release in November - December, the home appliance market was still under pressure [64].

Report Information - Report Title: Copper Monthly Report (November 2025) - Report Date: 2025 - 11 - 28 - Report Institution: AVIC Futures - Analyst: Fan Ling - Futures Practitioner Qualification Number: F0272984 - Investment Consulting Qualification Number: Z0011970 1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - In November, copper prices showed a high - level volatile trend. The macro - driving force weakened due to the Fed's interest rate cut and the US government shutdown. In December, the expectation of an interest rate cut increased, and the long - term broad - money cycle would drive copper prices upward. However, the copper market was affected by multiple factors such as supply and demand, inventory, and substitution, with both upward and downward pressures [7][8][13]. 3. Summary by Directory 3.1 Market Review - In November, copper prices generally showed a high - level volatile trend. The Fed's interest rate cut in November and the US government shutdown event caused market concerns about the US economic outlook, weakening the macro - driving force [7][8]. 3.2 Macro - aspect - **US Economic Data**: The US economic data was mixed. The ISM manufacturing PMI continued to contract, the ADP employment data was inconsistent, the unemployment rate rose, the PPI increased, retail sales were lower than expected, and the private - sector employment loss intensified. Although Nvidia's performance was good, the market was skeptical about the current valuation bubble. The hawkish officials' stance shifted, and the expectation of an interest rate cut in December rose to 75%. In the long - term, the market priced in more than three interest rate cuts within a year, and the broad - money cycle would drive copper prices upward [13]. - **Domestic Economy**: The domestic national economy was stable, and attention should be paid to the introduction of more growth - stabilizing policies [15]. 3.3 Fundamental - aspect - **Supply Side** - **Copper Ore Import**: In October 2025, China's copper ore concentrate imports were 2,451,487.80 tons, a month - on - month decrease of 5.24% and a year - on - year increase of 6.08%. The supply from major countries increased, but that from other countries decreased. The domestic copper concentrate spot processing fee was hovering at a low level, and the tight supply situation of copper ore was still difficult to ease [17]. - **Copper Production**: In October 2025, China's refined copper production was 1.204 million tons, a year - on - year increase of 8.9%. Due to some smelters' maintenance and the difficulty in purchasing anode copper, the production decreased month - on - month. In November, some smelter maintenance was postponed, and the impact would be more reflected in December. Some enterprises' long - term maintenance affected production in November and December. The China Non - Ferrous Metals Industry Association suggested setting an upper limit on the smelting capacity of key metals [30]. - **Scrap Copper Import**: In October, China's scrap copper imports were 196,600 tons, a month - on - month increase of 6.81% and a year - on - year increase of 7.35%. From January to October, the cumulative imports were 1.8956 million tons, a year - on - year increase of 1.99%. The main import sources were Japan, Thailand, South Korea, and Malaysia. However, the domestic recycled copper raw material demand was limited by the low operating rate [34]. - **Refined Copper Import and Export**: In October, China's refined copper imports were 323,144.72 tons, a month - on - month decrease of 13.62% and a year - on - year decrease of 16.32%. The exports were 65,945 tons, a year - on - year increase of more than five times and a month - on - month increase of nearly 1.5 times. The decrease in imports was due to the decline in supply from major countries, the expansion of the LME - COMEX arbitrage spread, and the deterioration of the import parity [37]. - **Demand Side** - **Copper Product Output**: In October, the output of copper strips decreased by 3.62% month - on - month to 189,100 tons, lower than the same period last year. The output of refined copper rods decreased by 10.99% month - on - month to 756,000 tons, affected by high copper prices [39][42]. - **End - use Industries** - **Real Estate**: From January to October, the national real estate development investment decreased by 14.7% year - on - year, new - built commercial housing sales area decreased by 6.8%, and sales volume decreased by 9.6%. The real estate market was in an adjustment period, suppressing copper demand in the real - estate field [45]. - **New Energy**: In October, China's new - energy vehicle production was 1.71 million, a year - on - year increase of 19.3%. From January to October, the cumulative production was 12.672 million, a year - on - year increase of 28.1%. The new - energy power generation showed a differentiated trend. Photovoltaic had a short - term adjustment, with a 38% year - on - year decrease in new - installed capacity in October but a 39% year - on - year increase in cumulative new - installed capacity from January to October. Wind power continued to be booming, with a 34% year - on - year increase in new - installed capacity in October and a 53% year - on - year increase in cumulative new - installed capacity from January to October [49]. - **Home Appliances**: In October, the output of air - conditioners decreased by 13.5% year - on - year, refrigerators decreased by 6.0%, washing machines decreased by 2.0%, and color TVs increased by 1.7%. The home - appliance market was under pressure, and the follow - up sales were expected to remain under pressure [51]. - **Inventory** - The LME copper inventory was 156,575 tons, the New York copper inventory was 415,880 tons, and the SHFE copper inventory was 110,603 tons in the week of November 21. The total inventory exceeded 800,000 tons, remaining above the central level. The US's siphoning effect on global refined copper gradually weakened, but South American refined copper would still be preferentially exported to the US [23]. - **Substitution** - The copper - to - aluminum ratio exceeded the 4.0 mark in October. Historically, when the copper - to - aluminum ratio exceeded the "mean + one - standard - deviation", the aluminum price tended to be stronger than the copper price. The strengthening of the copper - to - aluminum ratio was conducive to the substitution of copper by aluminum, suppressing copper consumption [26].

Summary of Conference Call Notes Industry Overview - The conference call discusses the aluminum and copper industries, highlighting the current market dynamics and future outlooks for both metals. Key Points on Aluminum - **High Copper-Aluminum Ratio**: The copper-aluminum ratio is currently at a historical high of approximately 4, indicating a significant potential for aluminum price increases as it is seen as a substitute for copper in various applications, particularly in the electrical and home appliance sectors [2][6] - **Aluminum Price Dynamics**: LME aluminum prices have reached new highs, while domestic aluminum prices remain relatively weak. This price discrepancy creates conditions for aluminum to experience a price correction or "catch-up" [1][2] - **Supply Constraints**: China's electrolytic aluminum capacity utilization is nearing its limit at 98%, with a total capacity of 45 million tons. This limits further production increases. Additionally, overseas production is constrained due to power supply issues in regions like Canada and Australia [8] - **Export Tax Changes**: The cancellation of export tax rebates has led to a significant decrease in China's aluminum and aluminum product exports in 2025 compared to 2024. However, there has been an increase in scrap aluminum imports, indicating strong domestic consumption capabilities [9] - **Inventory Levels**: Both domestic and global electrolytic aluminum inventories are at low levels, which supports price stability and potential increases in 2026 [10] Key Points on Copper - **Supply Growth Slowdown**: Global copper mine supply growth has slowed to 1-2% due to issues such as mining difficulties in Indonesia. This limited supply makes copper prices more resilient to declines [3][4] - **Market Optimism**: The market outlook for copper prices is optimistic, supported by favorable macroeconomic conditions and easing trade tensions between China and the U.S. [3][5] - **Profitability in the Lead Industry**: The profitability in the electrolytic lead industry is concentrated in the electrolytic segment, with production profits nearing 4,000 RMB per ton. This indicates a healthy market for related stocks [11] Other Important Insights - **Downstream Demand Variability**: The demand in the casting industry is mixed, with stable orders for automotive profiles but pressure on construction-related profiles. Overall, downstream consumption is maintaining a year-on-year growth trend [12] - **Future Outlook for Copper and Magnesium**: Both copper and magnesium are expected to remain attractive investment options due to ongoing supply issues. Magnesium, in particular, is anticipated to see a price increase due to its favorable fundamentals compared to copper [13]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - This week, the main contract of Shanghai Aluminum 2512 closed at 21,625 yuan/ton on Friday afternoon, a week-on-week increase of 1.41%. Shanghai Aluminum showed a strong and volatile trend. The direction of the Fed's December interest rate cut is unclear, the US government shutdown set a record, and the PMI performance of the manufacturing and service industries in the US and Europe diverged, resulting in macro uncertainties. During the off-season, the start - up rate of aluminum products decreased, but the inventory pressure was limited. There were disturbances in overseas supply, and the copper - aluminum ratio was at a high level, so Shanghai Aluminum was strongly volatile [3]. - Macroscopically, the direction of the Fed's December interest rate cut is unclear, the US government shutdown set a record, and the PMI performance of the manufacturing and service industries in the US and Europe diverged. In terms of supply, domestic ore is in short supply, while imported ore is sufficient, and the shipment of some Guinea ore has resumed. The weekly output of domestic alumina decreased, but the operating capacity is still at a high level year - on - year and is accumulating inventory again. The room for the increase of domestic electrolytic aluminum operating capacity is limited. In terms of demand, the overall start - up rate of aluminum products decreased this week, and it is expected to continue to decline next week. In terms of inventory, the spot inventory of electrolytic aluminum increased slightly week - on - week, the spot inventory of aluminum rods decreased slightly, and the LME aluminum inventory decreased week - on - week [3]. - The macro situation is mixed with long and short factors, and uncertainties are increasing. During the off - season, the start - up rate of aluminum products decreased, but the inventory pressure was limited. There were disturbances overseas, and the copper - aluminum ratio was at a high level. Shanghai Aluminum is expected to be strongly volatile, and it is recommended to go long at low levels. Alumina continues to accumulate inventory, and its fundamentals are still weak, so it is recommended to go short on rallies [3]. 3. Summary by Directory Price Data - This week, Shanghai Aluminum was strongly volatile. The spread between December and January contracts of Shanghai Aluminum continued to be under pressure week - on - week, and the LME aluminum 0 - 3M spread continued to weaken week - on - week. The high price of the Shanghai Aluminum futures market put pressure on the spot premium of aluminum ingots [7][11][15]. Fundamental Data - Supply of domestic ore is tight, while imported ore is sufficient, and the shipment of some Guinea ore has resumed [19][21]. - The monthly spread of alumina changed little. The weekly output of domestic alumina decreased by 13,000 tons to 1.84 million tons, but the operating capacity is still at a high level year - on - year. The alumina import window narrowed, and the overall inventory increased by 56,000 tons to 4.788 million tons [22][26][29]. - The room for the increase of domestic electrolytic aluminum operating capacity is limited. The weekly output of domestic electrolytic aluminum increased by 70 tons to 854,000 tons. Aluminum imports are at a premium. The spot inventory of electrolytic aluminum increased slightly week - on - week, the spot inventory of aluminum rods decreased slightly, and the LME aluminum inventory decreased week - on - week [37][39][44]. - The overall start - up rate of aluminum products decreased this week, and it is expected to continue to decline next week due to the high price of the futures market and the off - season effect [51][56]. - From October 27th to November 2nd, the transaction areas of new and second - hand houses in 10 key cities decreased year - on - year. The production plan of household air conditioners in November was 12.76 million units, a decrease of 23.7% compared with the actual performance of the same period last year. The production plan of refrigerators in November was 7.78 million units, a decrease of 9.4% compared with the actual performance of the same period last year. The production plan of washing machines in November was 7.93 million units, a decrease of 0.2% compared with the actual performance of the same period last year. From October 1st to 31st, the retail sales of new energy vehicles in the national passenger car market increased by 17% year - on - year. The production plans of domestic component enterprises in November varied, with the overall production plan expected to decline month - on - month [57][64][74].