Average warrant premiums on August 19 rose $2/mt from the previous trading day, reported at $87/mt (price range $79-95/mt); B/L average premiums rose $2/mt, reported at $82/mt (price range $77-87/mt); EQ copper (CIF B/L) average premiums remained flat, reported at $53/mt (price range $45-61/mt), with offers referencing August-early September arrivals. Recently, the copper price center pulled back, and the import SHFE/LME price ratio continued to recover, but downstream recognition of premiums was limited, demand recovery was moderate, and buying and selling remained in a tug-of-war, resulting in sluggish actual transactions. It was heard today that an offer for EQ copper arriving in late August was at $60/mt, and an offer for EQ copper arriving in September was at $70/mt.

On August 18, the average warrant price was unchanged from the previous trading day at $85/mt (price range $70-100/mt); the average B/L price was unchanged from the previous trading day at $80/mt (price range $75-85/mt); the average EQ copper (CIF B/L) price fell by $2/mt from the previous trading day to $53/mt (price range $45-61/mt), with quotations referencing cargoes arriving from August to early September. Copper prices pulled back today, and the SHFE/LME price ratio recovered somewhat. Meanwhile, the backwardation structure narrowed, but downstream players still stayed on the sidelines; buyers and sellers continued to tug-of-war, and prices for cargoes nearing arrival at port tended to weaken. It was heard today that EQ copper arriving in late August was quoted at $45/mt.

As of July 31, the SHFE zinc front-month contract settled at RMB 24,800/mt, up RMB 190/mt month-on-month, a gain of 0.77%. Zinc prices traded at elevated levels throughout July, dipping to a monthly low of RMB 24,070/mt in early July before peaking at RMB 25,035/mt toward month-end, with prices holding broadly firm at the high end of the range.

[Zinc Ingot Export Window Remained Open; Where Will Zinc Prices Head in August?] In August, zinc concentrate TCs continued to decline MoM. SMM’s domestic zinc concentrate TCs fell to -1,550 yuan/mt Zn, once again setting a new record low. However, supported by profits from by-products such as sulphuric acid and metal-rich materials, coupled with the gradual resumption of production at some smelters following earlier maintenance, SMM expected refined zinc production to increase MoM in August.....

On August 17, the average warrant price fell by $5/mt from the previous trading day to $85/mt (price range $70-100/mt); the average B/L price fell by $5/mt from the previous trading day to $80/mt (price range $75-85/mt); the average EQ copper (CIF B/L) price fell by $5/mt from the previous trading day to $55/mt (price range $45-65/mt), with quotes referencing cargoes arriving from August to early September. The sharp rise in copper prices suppressed downstream demand, and the SHFE/LME price ratio and term structure remained unfavorable, with strong wait-and-see sentiment in the market; the morning session was very quiet today.

[SHFE/LME zinc price ratio continued to consolidate around 6.8]: This week, the SHFE/LME zinc price ratio consolidated around 6.8, and the zinc ingot export window opened intermittently. Outside China, the US July PPI unexpectedly came in below expectations, inflationary pressures were fading, and rate hike expectations weakened. Market sentiment improved slightly and US-Iran uncertainty increased. LME zinc inventories continued to destock, capital concentration was relatively high, and LME zinc continued to fluctuate at highs.