China's physical metals markets moved in opposite directions in the first full trading week since the National Day closure. Copper's major-region social inventory rose on delivery-related arrivals and weak consumption at high prices, while aluminium ingot and 6063 billet stocks fell a combined 69,000 tonnes. Zinc and lead concentrate terms deteriorated further, and a localised water constraint continued to limit output at some Morowali nickel lines.
TL;DR
- Copper major-region social inventory rose approximately 12,100 tonnes to around 110,000 tonnes, with south China the exception as regional stocks continued declining.
- Copper cathode rod utilisation recovered to 73.27%, up 29.59 percentage points, an increase substantially affected by the holiday-shortened base week.
- Aluminium primary ingot inventory fell 50,000 tonnes to 636,000 tonnes and 6063 billet stocks fell 19,000 tonnes to 168,500 tonnes.
- Bonded aluminium ingot inventory moved the other way, rising 1,300 tonnes to 115,900 tonnes, so not all aluminium inventories drew down.
- Zinc's imported concentrate treatment charge index fell $14.48/dmt to −$150.20/dmt, while the domestic Zn50 charge held at −¥2,350 per metal tonne.
- Lead's domestic Pb50 treatment charge fell ¥100 to zero, with the imported Pb60 charge at −$190/dmt.
- Some Morowali RKEF lines have run at approximately 30–40% of normal utilisation since 22 September on water shortages, affecting specific lines rather than the park as a whole.
- Chinese tin ingot social inventory stood at 8,750 tonnes, up 117 tonnes against 30 September, a comparison that still spans the holiday.
Comparison Period
The weekly inventory and operating-rate series below compare 15 October with 8 October and therefore cover an ordinary five-day trading week. This is the first clean week-on-week comparison for those series since the National Day closure, and it differs from the previous two editions, in which changes were measured against 30 September and spanned seven closed days.
The dashboard also carries readings on other bases, each identified where it appears. The zinc and lead concentrate reviews are dated 16 October. The Morowali utilisation constraint dates from 22 September. Tin ingot social inventory is compared with 30 September and still spans the closure. Cast aluminium alloy inventory is reported by SMM on a month-on-month basis.
China Metals Dashboard
| Metal | Reading | Change | Basis |
|---|
| Copper | ~110,000t major-region social inventory | +12,100t | 15 Oct vs 8 Oct |
| Copper | 73.27% cathode rod utilisation | +29.59pp | 15 Oct vs 8 Oct |
| Aluminium | 636,000t primary ingot | −50,000t | 15 Oct vs 8 Oct |
| Aluminium | 168,500t 6063 billet | −19,000t | 15 Oct vs 8 Oct |
| Aluminium | 115,900t bonded ingot | +1,300t | 15 Oct vs 8 Oct |
| Aluminium | 61.7% downstream utilisation | +1.2pp | 15 Oct vs 8 Oct |
| Zinc | −$150.20/dmt imported concentrate TC | −$14.48/dmt | 16 Oct review |
| Zinc | −¥2,350/metal t domestic Zn50 TC | unchanged | 16 Oct review |
| Lead | ¥0/metal t domestic Pb50 TC | −¥100/t | 16 Oct review |
| Lead | −$190/dmt imported Pb60 TC | tightening | 16 Oct review |
| Nickel | 30–40% of normal utilisation, affected Morowali RKEF lines | since 22 September | — |
| Tin | 8,750t ingot social inventory | +117t | vs 30 September |
Inventory definitions differ by product and region, cover different survey populations and should not be aggregated. Treatment charges are quoted in the units and currencies in which SMM publishes them.
Copper Builds as Deliveries Arrive
Copper's major-region social inventory rose approximately 12,100 tonnes in the week, reaching around 110,000 tonnes on 15 October. SMM attributes the increase to delivery-related arrivals combined with weak consumption at prevailing high prices. Both contribute to the reported build, and the available data do not apportion the movement between them.
The national figure again conceals regional divergence. South China recorded continued stock declines even as the aggregate rose, which means the build is concentrated elsewhere. That distinction matters because national inventory is frequently read as a proxy for Chinese demand, when a single region's arrival schedule can account for most of a weekly movement.
Copper cathode rod utilisation recovered to 73.27%, up 29.59 percentage points. The comparison base is the holiday-shortened week, during which production was suspended for most of the period, so the size of the increase is substantially a function of that base rather than a measure of demand recovery. The level is the more useful figure, and at 73.27% rod production has resumed at a rate that is consistent with the market absorbing cathode, even as social inventory built.
Aluminium Draws Down Domestically, Builds in Bond
Aluminium produced the clearest drawdown in the complex. Primary ingot inventory fell 50,000 tonnes to 636,000 tonnes, reversing the post-holiday rebuild recorded a week earlier and returning stocks to a level marginally below the 2026 low of 638,000 tonnes reached on 30 September. The 6063 billet book fell 19,000 tonnes to 168,500 tonnes, a combined domestic withdrawal of 69,000 tonnes.
Billet stocks nevertheless remain around 21,000 tonnes above the corresponding 2025 level, so the drawdown reduces an elevated position rather than establishing a shortage. The distinction is relevant to how far the withdrawal can continue before it begins to constrain availability.
Bonded ingot inventory moved in the opposite direction, rising 1,300 tonnes to 115,900 tonnes. Bonded stocks sit in customs-supervised warehouses and have not entered domestic circulation, so they measure imported metal awaiting clearance rather than domestic availability. Reporting them alongside the domestic series prevents the broader claim that all aluminium inventories fell this week, which is not what the data show.
Leading downstream processors raised utilisation to 61.7%, up 1.2 percentage points. SMM cautions that the improvement reflects post-holiday restarts and the working-through of order backlogs rather than a broad recovery in end demand, and the modest size of the increase is consistent with that reading. Cast aluminium alloy inventory fell 5,800 tonnes, which SMM reports month on month rather than week on week.
Zinc Concentrate Terms Deteriorate Further
Zinc's imported concentrate treatment charge index fell $14.48/dmt to −$150.20/dmt. Treatment charges are the terms on which smelters take concentrate from miners, and a negative quoted charge indicates unusually tight terms and pressure on smelter economics. The realised economics of any individual contract also depend on concentrate pricing, payable metal percentages, by-product credits and other contractual provisions, so the quoted charge indicates the direction and severity of that pressure rather than measuring a smelter's margin directly.
The domestic Zn50 charge held unchanged at −¥2,350 per metal tonne, where it has now been pinned for several consecutive weeks. The two series are therefore moving differently, with the imported index continuing to fall while the domestic quotation is static. A flat domestic quotation does not establish that domestic conditions have stopped tightening, since quoted terms can lag changes in physical availability.
Downstream, galvanising producers' operating rate rebounded to 53.50%, up 17.24 percentage points, with enterprises restocking zinc ingot as prices pulled back after the holiday. As with copper rod, the magnitude of that increase is substantially a function of the holiday base. Tianjin spot premiums rose 30 yuan/mt on the week.
Lead Treatment Charges Reach Zero
Lead's domestic Pb50 concentrate treatment charge fell ¥100 per metal tonne to zero. A charge of zero means the quoted domestic terms now include no processing allowance at all, a materially more constrained position than the ¥100 recorded a fortnight earlier, and one that leaves no room for the domestic quotation to fall further before it turns negative.
The imported Pb60 charge stood at −$190/dmt, continuing the tightening trend visible since late September. Taken together, the two series indicate that lead smelters face deteriorating concentrate terms on both domestic and seaborne routes simultaneously, which is a more restrictive combination than either series would suggest alone.
Morowali's Constraint Is Localised
Some RKEF lines at the Morowali industrial park have operated at approximately 30–40% of normal utilisation since 22 September as a result of water shortages. SMM is explicit that this applies to affected lines rather than constituting a production cut across the entire park, and the distinction is important: Morowali is large enough that a park-wide reduction on that scale would be a significant event in the global nickel pig iron balance, whereas a localised constraint on particular lines is not.
SMM also estimates that smelter raw material stocks cover approximately two months of requirements, which limits immediate restocking demand even where lines are running below normal rates. The constraint is therefore unlikely to transmit quickly into ore procurement. Separately, the delivered China price for Indonesian high-grade NPI of 10 to 12% grade fell 17.5 yuan per nickel unit to 1,022.5 yuan per nickel unit on a tax-inclusive basis, as stainless mills signalled production cuts.
Tin Inventory Edges Higher
Chinese tin ingot social inventory stood at 8,750 tonnes, up 117 tonnes against 30 September. That comparison spans the National Day closure and is not an ordinary weekly movement, so the increase should be read as a fifteen-day change in a period that included seven non-trading days.
Refined tin smelter utilisation in Yunnan and Jiangxi stood at 29.74%, a low rate that reflects continued raw material constraint in the Chinese tin concentrate market. On the demand side, solder makers operated at 79.1% in September. These three readings cover different periods and different producer populations, and are reported here as separate observations on the tin market rather than as a combined explanation of the inventory change.
Outlook
The immediate question is whether copper's inventory build continues once delivery-related arrivals have cleared. With rod production resumed and south China already drawing down, a second consecutive national build would be stronger evidence of weak consumption than this week's figure provides on its own.
Aluminium poses the opposite question. Domestic ingot stocks are now back at approximately the 2026 low, and a further withdrawal of comparable size would take them below it. Whether downstream utilisation holds above 61% once post-holiday order backlogs are cleared will determine how much of the drawdown reflects consumption rather than the timing of restarts.
In zinc and lead the direction of travel in treatment charges has been consistent for several weeks and shows no sign of reversing. Lead's domestic charge reaching zero is the more notable threshold, because any further tightening moves it into negative territory for the first time in the series.
Key Risks
Inventory definitions differ by product, region and survey coverage. Domestic, bonded and exchange-warehouse stocks measure different things and cannot be combined into a single national availability figure.
Operating-rate changes measured against the holiday week carry a substantial base effect. Both the copper rod and galvanising increases are affected; the levels are more informative than the changes.
Treatment charges indicate concentrate terms and pressure on smelter economics, not refined metal supply. Realised economics also depend on concentrate pricing, payable metal, by-product credits and contractual terms, and deteriorating charges do not establish that refined output will fall.
The Morowali utilisation figure applies to affected lines only and should not be extrapolated to the park's total output.
The tin inventory comparison spans the National Day closure and is not a weekly movement.
Intelligence Monitoring Points
- Copper: whether the national build extends into a second week, and whether south China continues drawing down against the aggregate.
- Aluminium: whether primary ingot stocks fall below the 638,000-tonne 2026 low recorded on 30 September.
- Aluminium: whether downstream utilisation holds above 61% once post-holiday backlogs clear.
- Zinc: whether the imported concentrate index continues falling while the domestic quotation stays pinned.
- Lead: whether the domestic Pb50 charge turns negative.
- Nickel: whether the Morowali water constraint extends beyond the currently affected lines.
- Tin: the first clean weekly inventory comparison, which arrives in the next release.
FAQ
Did Chinese metal inventories rise or fall this week? Both. Copper social inventory rose approximately 12,100 tonnes while aluminium ingot and billet stocks fell a combined 69,000 tonnes. These are different physical-market series covering different metals and are not comparable measures of national metal availability.
Why did copper inventory increase? SMM attributes the build to delivery-related arrivals combined with weak consumption at high prices. South China was the exception, with regional stocks continuing to decline.
Is Chinese metals demand recovering? The operating-rate increases this week are substantially affected by the holiday-shortened base week rather than demonstrating improving end demand. SMM specifically cautions that the aluminium downstream improvement reflects restarts and order backlogs.
What does a negative treatment charge mean? It indicates that concentrate is being offered on unusually tight terms, with no processing allowance built into the quoted charge, and that smelter economics are under pressure. The economics of an individual contract also reflect concentrate pricing, payable metal, by-product credits and other terms, so the quoted charge signals the severity of that pressure rather than measuring a margin.
Has Morowali cut nickel production? Not across the park. Some RKEF lines have run at approximately 30–40% of normal utilisation since 22 September because of water shortages, which SMM distinguishes from a park-wide production cut.
Data and source note: Physical market data are from Shanghai Metals Market, covering readings through 15 and 16 October 2026. The weekly inventory and operating-rate series compare 15 October with 8 October and cover an ordinary five-day trading week. Other readings carry different bases and are identified in the text and dashboard: the zinc and lead concentrate reviews are dated 16 October, the Morowali utilisation constraint dates from 22 September, tin ingot social inventory is compared with 30 September and spans the National Day closure, and cast aluminium alloy inventory is reported by SMM on a month-on-month basis. SMM reports copper major-region social inventory at approximately 110,000 tonnes following an increase of approximately 12,100 tonnes; both the level and the change are reported here as published rather than one being derived from the other. Inventory series cover different products, regions and survey populations; domestic, bonded and exchange-warehouse stocks are reported separately and are not aggregated. Treatment charges are quoted in the units and currencies in which SMM publishes them, without conversion. Operating rates are reported as published, and increases measured against the holiday-shortened week incorporate a base effect that is identified where relevant.
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