SMM August 5: On the metals markets: As of the midday close, base metals on the domestic market almost all rose. SHFE copper rose 0.79%, SHFE aluminum rose 0.15%, SHFE lead rose 2.61%, SHFE zinc rose 1.38%, SHFE tin rose 0.5%, and SHFE nickel fell 0.78%. In addition, the most-traded cast aluminum futures were flat at 23,365 yuan/mt. The most-traded alumina futures rose 0.99%, the most-traded lithium carbonate futures rose 1.45%, the most-traded silicon metal futures rose 0.72%, and the most-traded polysilicon futures rose 1.83%. Most ferrous metals rose. Iron ore rose 0.93%, rebar rose 0.34%, hot-rolled coil rose 0.5%, and stainless steel fell 2.09%. Coking coal and coke: the most-traded coking coal contract rose 3.27%, and the most-traded coke contract rose 2.13%. On the overseas base metals market, as of 11:45, LME metals broadly rose. LME copper was flat at $14,043/mt, LME aluminum rose 0.22%, LME lead rose 0.71%, LME zinc rose 0.59%, LME tin rose 0.13%, and LME nickel fell 0.2%. On the precious metals front, as of 11:45, COMEX gold rose 0.8% and COMEX silver rose 1.33%. On the domestic precious metals front, SHFE gold rose 1.92%, and the most-traded SHFE silver contract rose 5.35%. In addition, as of the midday close, the most-traded platinum futures rose 7.04%, and the most-traded palladium futures rose 6.01%. As of the midday close, the most-traded European container freight futures fell 8.96% to 1,635 points. As of 11:45 on August 5, the following are some futures’ midday quotes: > Click to view the SMM data dashboard Spot and fundamentals Copper: Today, in Guangdong, #1 copper cathode spot against the front-month contract: high-quality copper was quoted at a premium of 110 yuan/mt, up 10 yuan/mt from the previous trading day; standard-quality copper was at a premium of 30 yuan/mt, up 30 yuan/mt; and SX-EW copper was at a discount of 30 yuan/mt, up 30 yuan/mt. The average price of Guangdong #1 copper cathode was 106,990 yuan/mt, up 450 yuan/mt from the previous trading day, while the average price of SX-EW copper was 106,890 yuan/mt, up 460 yuan/mt. Spot market: Guangdong inventories ended a two-day increase and declined again, mainly due to reduced arrivals... > Click for details Macro front Domestic: [The PBOC’s open market operations net drained 201.5 billion yuan today] The PBOC conducted 5 billion yuan of 7-day reverse repo operations, with an operation rate of 1.40%, unchanged from the previous operation. Today, 206.5 billion yuan of reverse repos matured. > On August 5, the central parity rate of the yuan in the interbank foreign exchange market was 6.7889 yuan per US dollar US dollar side: As of 11:45, the US dollar index fell 0.05% to 99.82. Oil prices fell further, with markets betting that the tight energy supply situation will ease, potentially reducing inflationary pressures, and cooling expectations for US Fed interest rate hikes. (Wall Street CN) According to the CME "FedWatch," the probability that the US Fed will keep rates unchanged in September is 41.6%, while there is a 58.4% probability of a cumulative 25bp rate hike. For October, the probability of rates staying unchanged is 30.5%, with a 53.9% probability of a cumulative 25bp hike and a 15.5% probability of a cumulative 50bp hike. (Jin10 Data APP) "Fed mouthpiece" Nick Timiraos wrote that US Treasury Secretary Bessent’s policy reaction function has shifted to a less dovish stance. His remarks this year suggest that the Fed should continue to hold rates steady. Earlier this year, Bessent cited models showing that the Fed’s policy rate could be anywhere from more than 25bp to over 100bp above the neutral rate. Today (August 4), he put forward two points. He first defended Warsh’s decision last week not to articulate any policy reaction function: "I believe every meeting should be open, and market participants should judge for themselves... I think Warsh wants to keep his options open to achieve the best outcome." Secondly, he did propose a policy reaction function that could be seen as dovish, arguing that near-term shocks should be ignored: "What exactly will be the impact of rising short-term rates? We’ll have to wait and see." He raised this question, but then responded by noting that underlying inflation is "very mild... very steady." "In core inflation, after stripping out the more volatile components influenced by energy, the rest has been very steady. I expect this to continue." (Jin10 Data APP) On the economic data front, US job openings declined somewhat in June, but hiring rebounded slightly, indicating that labour market demand remained relatively stable. eToro’s Bret Kenwell noted that this Friday’s non-farm payrolls report will be the next key period: "If the data is strong, especially amid still-elevated inflation, it will reinforce expectations for a September rate hike; but if the data is weak, combined with last week’s lower-than-expected GDP growth, it could provide more justification for the Fed to stay on hold." (Wall Street CN) Data: Today will see the release of France’s June industrial production m/m, final July services PMIs for France, Germany, the Eurozone, and the UK, Eurozone June PPI m/m, US July ADP employment change, final US July S&P Global services PMI, and US July ISM non-manufacturing PMI, among other data. Watch for: 2028 FOMC voter, Kansas City Fed President Schmid delivered a speech on the US Fed, monetary policy, and agricultural economic outlook. Crude oil: As of 11:45, oil prices on both benchmarks extended their declines from the previous two trading days, with WTI down 1.36% and Brent down 1.06%. Qatar said both the US and Iran are optimistic about an agreement to reopen the Strait of Hormuz, and the relevant proposal has been drafted. US Treasury Secretary Bessent publicly stated that the agreement could be reached on Tuesday or Wednesday. As a result, crude oil futures continued their decline. The Strait of Hormuz is a critical passage for global energy supply; if reopened, it is expected to normalize global oil supply. According to Xinhua News Agency, Iranian Foreign Ministry spokesperson Baghaei said on the 4th that Iran is still negotiating with Oman on the Strait of Hormuz, and the negotiations have made "positive progress" at both technical and political levels. US Treasury Secretary Bessent indicated that an agreement could be reached as early as Tuesday or Wednesday this week. According to a report by Axios on the 4th, regional sources and US officials said that the US, Iran, and Oman are "close to reaching" a temporary agreement to reopen the Strait of Hormuz, and the US side hopes to announce the agreement on the 5th. (From Wallstreetcn APP) Spot Market Overview: ► ► ► ► ► ► ► ► ► ► ►

SMM August 5: Metals market: Overnight, base metals on the domestic market broadly rose. SHFE copper rose 0.68%. SHFE aluminum rose 0.08%. SHFE lead rose 1.79%, SHFE zinc rose 0.84%, and SHFE tin rose 0.63%. SHFE nickel fell 0.75%. Additionally, the most-traded alumina futures contract rose 0.19%, and the most-traded cast aluminum contract rose 0.09%. Overnight, ferrous metals showed mixed performance. Stainless steel fell 1.25%, iron ore was flat at 699.5 yuan/mt, rebar fell 0.07%, and hot-rolled coil edged up. Coking coal and coke: the most-traded coking coal contract rose 1.01%, and the most-traded coke contract rose 0.63%. Overnight, on the overseas market, LME base metals broadly rose. LME copper rose 1.41%. LME aluminum fell 0.29%. LME lead rose 1.23%. LME zinc rose 0.74%. LME tin rose 0.84%. LME nickel fell 0.35%. Overnight, precious metals : COMEX gold rose 1.07%, and COMEX silver rose 3.27%. Overnight, the most-traded SHFE gold contract rose 0.87%, and the most-traded SHFE silver contract rose 3.45%. CITIC Securities said in a research note that gold prices shot up and then fell rapidly this year, but they believe gold is still in a major bull market, citing accelerating expansion of the US fiscal deficit, difficult-to-heal geopolitical rifts under deglobalization, and continued support from global central bank gold purchases. They therefore view the current pullback as only a temporary correction within the bull market. The current drawdown has approached historical extremes, and the $4,000/oz area is likely the bottom zone of this round. Looking ahead, the situation in the Strait of Hormuz is expected to shift from a drag to a boost for gold prices, the Fed’s monetary policy may be more optimistic than market expectations, and the surge in US military spending is pushing up the deficit; gold prices are expected to return to an upward trajectory within the year. (Jin10 Data App) As of 7:11 on August 5, closing prices for overnight trading were: Macro front China: [MIIT: Strengthen the screening and testing/verification of risks and hidden dangers in "aggressive" innovative designs of road motor vehicle products, and strengthen the safety evaluation of combined driver assistance and autonomous driving functions] On August 4, the Equipment Industry Department I of the Ministry of Industry and Information Technology (MIIT) organized a discussion with road motor vehicle inspection and testing institutions to analyze the current product safety and inspection work situation and to arrange efforts to regulate the competitive order and improve the quality of inspection and testing in the road motor vehicle sector. The meeting called for inspection and testing institutions to thoroughly implement the decisions and plans of the Party Central Committee and the State Council, firmly resist irrational competition, and strictly control product testing. First, conduct in-depth self-checks to systematically identify problems in the inspection and testing of road motor vehicle products and earnestly carry out rectifications. Second, strengthen industry self-discipline, focus on main responsibilities, reinforce responsibility, enhance integrity and self-discipline, and jointly safeguard the credibility of the entire industry. Third, hold the bottom line of product safety by implementing quality control measures for sample vehicle management, personnel management, and process management, strengthen the screening and testing/verification of risks and hidden dangers in "aggressive" innovative designs, and enhance the safety evaluation of combined driver assistance and autonomous driving functions. Fourth, improve capabilities by actively participating in the formulation and revision of standards and regulations, accelerate the establishment of a testing and evaluation system for intelligent connected vehicles, strengthen the capacity for road motor vehicle inspection and testing, and provide objective, fair information and professional opinions to the industry. Going forward, the MIIT will work with relevant departments to in-depth carry out actions on production consistency and quality improvement for road motor vehicle products, intensify work inspections, urge and guide inspection and testing institutions to fulfill their role as "gatekeepers" of product safety, improve the quality of inspection and testing work, impose joint penalties on institutions with problems, and resolutely hold the bottom line of product safety. (From the Wallstreetcn App) [PBOC: Net injection of 50 billion yuan via open market government bond transactions in July] The PBOC released its liquidity injection data for various tools in July 2026. In terms of central bank lending, the standing lending facility (SLF) recorded a net withdrawal of 1 billion yuan; the medium-term lending facility (MLF) recorded a net injection of 100 billion yuan; and the pledged supplementary lending (PSL) recorded a net withdrawal of 116.1 billion yuan. In terms of open market operations, 7-day reverse repos recorded a net injection of 249.5 billion yuan, open market government bond transactions recorded a net injection of 50 billion yuan, and central treasury cash management recorded a net injection of 30 billion yuan. Dollar front: Overnight, the US dollar index fell 0.11% to 99.86. According to CME "Fed Watch," the probability that the Fed keeps interest rates unchanged in September was 41.6%, while the probability of a cumulative 25-basis-point rate hike was 58.4%. The probability that the Fed leaves rates unchanged through October was 30.5%, the probability of a cumulative 25-bp hike was 53.9%, and the probability of a cumulative 50-bp hike was 15.5%. US Treasury Secretary Bessent, in an interview with CNBC, said Fed Chairman Warsh wants to preserve flexibility to achieve the best outcome. When discussing the strategy of the Fed and Warsh, he called it a "detox" for the Fed. He said every meeting should be live (full of possibilities) and participants should exercise their own judgment. He believed the Fed will balance its growth and inflation objectives, and he trusted that Warsh will help the Fed strike a balance between the two. On the economy and inflation, he noted that after stripping out sectors affected by energy prices, core inflation performance has been very steady, and underlying inflation data has been very mild, a trend he expects to continue. He also noted that core inflation is slowing. "Fed whisperer" Nick Timiraos wrote that US Treasury Secretary Bessent's policy reaction function has shifted to become less dovish. His comments this year suggested that the Fed should continue to hold rates steady. Earlier this year, Bessent cited models indicating the Fed's policy rate could be as little as more than 25 bp or as much as more than 100 bp above the neutral rate. Today (August 4), he made two points. First, he defended Warsh's decision last week not to articulate any policy reaction function: "I think every meeting should be open, and market participants should make their own judgments... I think Warsh wants to keep his options open to achieve the best results." Second, he did lay out what could be seen as a dovish reaction function, advocating that near-term shocks should be ignored: "What exactly will the rise in short-term interest rates bring? We will wait and see." He raised that question but then responded by pointing out that underlying inflation is "very mild... very steady." "Within core inflation, after stripping out the volatile components significantly influenced by energy, the rest has been very steady. I think that will continue." (Jin10 Data App) Macro front: Data to be released today include China's July RatingDog Services PMI, France's June industrial output m/m, the final France July Services PMI, the final Germany July Services PMI, the final Eurozone July Services PMI, the final UK July Services PMI, the Eurozone June PPI m/m, the US July ADP employment change, the final US July S&P Global Services PMI, and the US July ISM non-manufacturing PMI. Also on the radar: a speech by Kansas City Fed President Schmid, a 2028 FOMC voter, on the Fed, monetary policy, and the agricultural economic outlook. Crude oil front: Overnight, both crude oil futures extended their declines from the previous trading day, with WTI falling 6.47% and Brent dropping 6.08%. Wallstreetcn noted that on Tuesday, August 4 (US Eastern Time), Reuters, citing informed sources, reported that Iran has abandoned its earlier demand for full control over two-way shipping in the Strait of Hormuz and instead proposed that Iran manage all vessel navigation entering the Strait while retaining supervisory rights and the right to intervene when necessary over vessels departing the Strait. Xinhua News Agency, citing US media, reported that US Treasury Secretary Bessent said on Tuesday that an agreement on the Strait of Hormuz could be reached on August 4 or 5. Also according to Xinhua, US Secretary of State Rubio said on the same day that negotiations with Iran on reopening the Strait had "made progress" but a deal had not yet been finalized. The sharp drop in oil prices meant cooling inflation expectations for the market. Tony Miano of Wells Fargo Investment Institute noted: "The market is reacting to the prospect that a reopening of Hormuz could help normalize global oil supplies and ease recent energy price pressures, and lower oil prices could ease inflation concerns." However, he cautioned that inflation is unlikely to normalize overnight, and even after energy pressures ease, overall prices could remain sticky in the near term. (Wallstreetcn)

[SMM Zinc Morning Meeting Minutes: LME Zinc Ingot Inventory Continues to Decline, Bulls Increase Positions Boosting LME Zinc Rise]: Overnight, LME zinc opened at $3,642/mt, and after opening, drifted higher, dipping to a low of $3,635/mt at the beginning of the session and touching a high of $3,684.5/mt near the end, finally closing up at $3,661/mt, up $27/mt, or 0.74%, with trading volume decreasing to 11,194 lots...

[SMM Zinc Morning Comment: SHFE Zinc Continues to Consolidate at Highs; Focus on Subsequent Export Performance] Overnight, the most-traded SHFE zinc 2609 contract opened at 25,110 yuan/mt. After opening, SHFE zinc fluctuated higher, reaching a high of 25,270 yuan/mt, then maintained a fluctuating trend above the daily average. Nearing the end of trading, SHFE zinc dipped slightly, dipping to a low of 25,100 yuan/mt at the end. It finally closed up at 25,165 yuan/mt, up 90 yuan/mt, or 0.36%..

SMM August 4 news: Metals market: As of the midday close, domestic base metals almost all rose. SHFE copper rose 0.91%, SHFE aluminum rose 1%. SHFE lead rose 0.23%. SHFE zinc fell 0.58%. SHFE tin rose 0.81%. SHFE nickel rose 1.55%. In addition, the most-traded cast aluminum futures rose 0.58%, the most-traded alumina futures rose 0.38%. The most-traded lithium carbonate futures rose 1.07%. The most-traded silicon metal futures rose 0.36%. The most-traded polysilicon futures rose 1.4%. Ferrous metals mostly rose. Iron ore was flat at 702.5 yuan/mt, rebar edged up, while hot-rolled coil edged down. Stainless steel rose 2.06%. Coking coal and coke: the most-traded coking coal contract rose 1.91%, and the most-traded coke contract rose 0.85%. Overseas base metals market, as of 11:41, LME metals all rose. LME copper rose 0.77%, LME aluminum rose 0.56%, LME lead rose 0.80%, LME zinc rose 0.61%. LME tin rose 0.77%. LME nickel rose 0.81%. Precious metals: as of 11:41, COMEX gold rose 0.54%, COMEX silver rose 1.87%. Domestic precious metals: SHFE gold rose 0.35%, the most-traded SHFE silver futures rose 1.64%. Additionally, as of the midday close, the most-traded platinum futures edged up, and the most-traded palladium futures fell 0.54%. As of the midday close, the most-traded European freight futures contract rose 3.19% to 1,843 points. As of 11:41, August 4, some futures midday market quotes: Spot and fundamentals Zinc: In Tianjin market, #0 zinc ingot were mainly traded at 24,760-24,950 yuan/mt, Zijin was traded at 24,880-25,010 yuan/mt, and #1 zinc ingot were mainly traded at around 24,760-24,870 yuan/mt. Zijin was quoted at a premium of around 0-30 yuan/mt against the 2609 contract, Huxin was quoted at 26,220 yuan/mt, #0 zinc ingot was quoted at a discount of around 30-120 yuan/mt against the 2609 contract, and Tianjin market was quoted at a discount of around 110 yuan/mt against Shanghai market. Macro front Domestic: [State Administration for Market Regulation: 20 places including Beijing, Shanghai, etc., designated as national trade secret protection innovation pilot sites] The General Office of the State Administration for Market Regulation issued a notice on promoting typical experiences and practices of national trade secret protection innovation pilot sites. Among them, Beijing Haidian District, Beijing Tongzhou District, Tianjin Binhai High-tech Zone, Shanghai Pudong New Area, Shanghai Fengxian District, Jiangsu Nanjing, Jiangsu Wuxi, Jiangsu Suzhou, Zhejiang Hangzhou, Zhejiang Ningbo, Zhejiang Wenzhou, Anhui Hefei, Fujian Xiamen Haicang District, Hubei Wuhan, Hunan Changsha, Guangdong Guangzhou, Guangdong Shenzhen, Guangdong Foshan, Chongqing Jiangjin District, Sichuan Chengdu Wuhou District were identified as the first batch of national trade secret protection innovation pilot sites. ()Market Regulation Administration [PBOC Net Withdraws 559 Billion Yuan from Open Market Today] PBOC conducted 46.5 billion yuan 7-day reverse repo operations, with an operation rate of 1.40%, unchanged from the previous session. Today, 605.5 billion yuan reverse repos matured. [Shenzhen New Home Sales Up Over 30% YoY in July] According to data from Shenzhen's real estate information platform, the city's new commercial housing sales totaled 3,773 units in July, down 35.2% MoM but up 19.3% YoY; among these, residential sales were 2,664 units, down 6.8% MoM but up 32.5% YoY. Looking at a longer period, new home sales from January to July totaled 35,104 units, a slight 0.7% YoY increase; of these, residential sales totaled 21,935 units, down 10.6% YoY, with the decline narrowing compared with H1. (JIN10 APP) On the US dollar: As of 11:41, the US dollar index rose 0.05% to 100.01. The July US manufacturing PMI data showed strong demand, surging output, and accelerated hiring, marking the fastest expansion in over four years, which to some extent offset the interest rate cut expectations driven by declining oil prices, leaving overall market rate hike expectations relatively unchanged. According to CME FedWatch, the market priced in a 64.5% probability of at least a 25-basis-point rate hike by the Fed in September. (Wall Street CN) (JIN10 APP) Data from the Institute for Supply Management (ISM) showed that the US ISM manufacturing PMI registered 55.6 in July, the highest level since May 2022. A reading above 50 indicates sector expansion, and the industry has remained above that threshold for seven consecutive months. The production index rose to 58.5, the highest since the end of 2021, while the employment gauge indicated that manufacturers added workers for the first time since September 2023. New orders — a signal of demand — also rebounded. Manufacturing momentum has been strong this year, with factories benefiting from solid consumer demand, robust business investment, and government spending on national defense. All but one manufacturing industry reported growth in July, including printing, apparel, and electrical equipment. The only sector reporting contraction was chemical products. Fed’s Williams said he remains optimistic that inflationary pressures will gradually ease, but if that does not happen, the Fed will not hesitate to raise interest rates to ensure price pressures return to target. In an interview with Reuters last Friday, Williams said that if energy prices and trade tariffs have peaked and the economy maintains solid momentum, "I think some of the main factors that have pushed up inflation over the past year and a half will no longer play such a large role, and the disinflationary forces we observed earlier should reemerge."He added: "I am watching very closely what happens to core inflation measures over the coming months, whether that is consistent with inflation trending down to 2% and continuing to move lower, so that we achieve that sustained 2% inflation goal over the longer run by 2028." He also stated: "My own forecast is that inflation will come down somewhat in H2 this year and pull back further next year." Williams reiterated that the current monetary policy stance is "well positioned" to bring inflation back to the target. However, he noted: "If we are not on a path to bring inflation down to 2%... then it would be entirely appropriate to take action to get us back on a path to 2% inflation." (Jin10 Data APP) In terms of data: Today, the US June trade balance, US June JOLTS job openings, US June factory orders MoM, and other figures will be released. Items to watch: SpaceX announces Q2 2026 results; FMS 2026 Flash Memory Summit takes place from August 4-6, with Samsung, SK, and other storage giants in attendance. In terms of crude oil: As of 11:41, both crude benchmarks were up, with WTI rising 0.73% and Brent gaining 1.16%. With the outlook for US-Iran negotiations uncertain and market concerns over supply disruptions persisting, oil prices rebounded after the previous session's plunge. Shipping tracking data shows that six empty Saudi-flagged supertankers changed course in the Gulf of Aden in recent days, heading toward southern Africa. One of them is destined for Gibraltar. On August 3, the six tankers were sailing in formation in the high seas off the coast of Somalia. (Jin10 Data APP) Spot market at a glance: ► ► ► ► ► ► ► ► ► ► ► ► ► ►

[SMM Zinc Morning Comment: Insufficient Fundamental Support Led to Noticeable Pullback from Highs in Night Session SHFE Zinc] Overnight, the most-traded SHFE zinc 2609 contract opened at 25,250 yuan/mt, hitting a high of 25,250 yuan/mt before rapidly consolidating and pulling back. It touched a low of 24,780 yuan/mt during the session, then rebounded slightly from the low, ultimately closing down at 24,920 yuan/mt, a decline of 460 yuan/mt..