SHFE copper, nickel futures weaken, aluminum strengthens

By the end of Friday's daytime trading session, the SHFE's most-traded December copper and nickel contracts had declined by 1.2% and 1% on week, closing at Yuan 85,940/tonne ($12,066/t) and Yuan 119,440/t, respectively. In contrast, the January 2026 aluminum contract gained 1.4% from a week earlier to end at Yuan 21,625/t.

The declines in copper and nickel futures were largely attributed to lowered expectations of a U.S. Federal Reserve rate cut in December, and forecasts for softer downstream demand during the winter months, market analysts said.

Cleveland Federal Reserve President Beth Hammack noted on Thursday that persistently high inflation weighs against another rate cut, fuelling uncertainty over the U.S. monetary policy and heightening volatility in global commodities markets.

In addition, Chinese demand for copper and nickel is projected to weaken in December amid the usual off-season for consumption when construction activity usually slows, further dampening SHFE investors' sentiment regarding these two metals.

By contrast, aluminum futures prices gained support from anticipated tightening global supply which strengthened the demand outlook for the light metal in China. Market analysts said that energy supply shortages in Australia, Europe, and the U.S. may lead to production cuts or shutdowns at some overseas primary aluminum smelters.

For instance, Rio Tinto announced last week that it was considering closing its Tomago aluminum smelter, Australia's largest, by the end of 2028, due to "unviable operating costs" once its current power contract expires.

Meanwhile, the SHFE warehouse inventories for the three metals also showed mixed trends this week. As of November 7, copper and aluminum stocks in the SHFE-bonded and standard warehouses had fallen by 1% and 0.2% from a week ago to 115,035 tonnes and 113,335 tonnes, respectively. Nickel inventories, however, had risen by 1.2% on week to 37,187 tonnes.

Written by Iris Pang, pangjunyu@mysteel.com