SMM, August 10: Metals market: As of the midday close, domestic base metals showed mixed performance. SHFE copper fell 0.52%, SHFE aluminum rose 0.15%, SHFE lead increased 0.41%, SHFE zinc dropped 1.68%, SHFE tin lost 1.34%, and SHFE nickel edged up 0.33%. Additionally, the most-traded foundry aluminum futures edged up, while the most-traded alumina futures edged down. The most-traded lithium carbonate futures rose 1.5%. The most-traded silicon metal futures gained 0.47%. The most-traded polysilicon futures fell 2.54%. Ferrous metals showed mixed performance. Iron ore slipped 0.7%, rebar lost 0.47%, and hot-rolled coil dipped 0.15%. Stainless steel advanced 0.48%. Coking coal and coke: the most-traded coking coal contract rose 1.75% and the most-traded coke contract added 0.43%. In the overseas base metals market, as of 11:43, LME metals broadly rose. LME copper gained 0.3%, LME aluminum climbed 0.69%, LME lead rose 0.29%, and LME zinc edged down 0.09%. LME tin was up 0.52% and LME nickel was down 0.21%. In precious metals, as of 11:43, COMEX gold fell 0.28% and COMEX silver rose 0.36%. In domestic precious metals: SHFE gold gained 1.5% and the most-traded SHFE silver futures rose 2.05%. Additionally, as of the midday close, the most-traded platinum futures rose 0.61% and the most-traded palladium futures fell 0.05%. As of the midday close, the most-traded European container shipping futures fell 2.8% to 1,634 points. As of 11:43 on August 10, selected futures’ midday quotes: Spot and Fundamentals Copper: Today, Guangdong #1 copper cathode spot against the front-month contract: high-quality copper was quoted at a premium of 100 yuan/mt, down 60 yuan/mt from the previous trading day; standard-quality copper was quoted at parity, down 60 yuan/mt; SX-EW copper was quoted at parity, down 60 yuan/mt. The average price of Guangdong #1 copper cathode was 107,945 yuan/mt, down 410 yuan/mt from the previous trading day, while the average price of SX-EW copper was 107,835 yuan/mt, down 410 yuan/mt. In the spot market, Guangdong inventory edged up after the weekend, mainly due to increased arrivals of imported copper... Macro Front Domestic side: [NBS: July CPI up 0.5% YoY, PPI up 3.5% YoY] NBS data showed that in July, due to imported factors, the Consumer Price Index (CPI) fell 0.1% MoM and rose 0.5% YoY. The core CPI, which excludes food and energy prices, rose 0.3% MoM and 0.9% YoY. Overall, CPI maintained a mild increase. China saw increased demand in some sectors, but affected by imported factors and seasonality, the producer price index (PPI) fell 0.7% MoM and rose 3.5% YoY, with the growth rate pulling back 0.6 percentage points from the previous month. In July 2026, China's producer price index rose 3.5% YoY and fell 0.7% MoM. The industrial producer purchase price index rose 5.5% YoY and fell 1.0% MoM. From January to July, the average producer price index rose 1.8% YoY, and the average producer purchase price index rose 2.8% YoY. Dong Lijuan, chief statistician at the Urban Department of the National Bureau of Statistics (NBS), commented on the CPI and PPI data for July 2026. [PBOC reverse repo operation resulted in a net withdrawal of 45 billion yuan on the day] The PBOC conducted 18 billion yuan in 7-day reverse repo operations today, with 63 billion yuan of 7-day reverse repos maturing, resulting in a net withdrawal of 45 billion yuan on the day. (Jin10 Data App) US dollar: As of 11:43, the US dollar index rose 0.12% to 99.72. According to the CME "FedWatch": The probability of the US Fed keeping rates unchanged by September is 55.6%, and the probability of a cumulative 25 basis point rate hike is 44.4%. The probability of the US Fed keeping rates unchanged by October is 40.8%, the probability of a cumulative 25 basis point rate hike is 47.4%, and the probability of a cumulative 50 basis point rate hike is 11.8%. (Jin10 Data App) Economists surveyed by Reuters expect the US July headline CPI annual rate to fall to 3.4% from 3.5% in June; the core CPI annual rate is expected to fall to 2.5% from 2.6% in the previous month. Economists at Citigroup believe that, as expected, if there is a second consecutive month of softer inflation readings, it would mean more than one month of data pointing to cooling inflationary pressures, essentially ruling out a September rate hike. However, economists also expect a slight increase in core services inflation in July, with prices rising 0.3% MoM. Previously, the data was flat from May to June. Bank of America analysts said a rebound in core services indicators could still keep a September rate hike on the table. Analyst Kate Duguid said that if the latter view prevails and inflation data comes in below expectations, then the Fed rate hike could be postponed to December or later. (Jin10 Data App) The US CPI report released on Wednesday is undoubtedly the most watched data this week. Economists generally expected the annual inflation rate to slow slightly, but core inflation to likely stay high, reflecting persistent price pressures in the services and housing sectors. Based on the latest data, the US Fed remained cautious, emphasizing the need for further confidence that inflation was moving sustainably toward its 2% target before considering interest rate cuts. (Jin10 Data App) Data: Data for the Eurozone's August Sentix Investor Confidence Index and China's July M2 money supply YoY have been released today. On the radar: The Bank of Japan released a summary of opinions from its July monetary policy meeting. Crude Oil: As of 11:43, oil prices rose in both benchmarks, with WTI up 0.67% and Brent up 0.91%. Stalled negotiations between Iran and the US over reopening the Strait of Hormuz supported oil prices. Weekend talks between Iran and Oman failed to reach an agreement on reopening the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi explicitly stated that Tehran currently had no direct negotiations with the US. According to media reports, Mohammad Bagher Zolghadr, head of Iran's Supreme National Security Council, said the Strait of Hormuz would remain closed until the US met six conditions, including ending military and aggressive actions against Iran and its allies, and providing compensation to Iran. The US insisted that any reopening arrangement must guarantee unimpeded freedom of navigation without conditions like Iranian approvals, fees, or controls. Citigroup noted that attacks by Yemen's Houthi forces on Saudi-affiliated vessels near the Red Sea and Bab el-Mandeb Strait continued, keeping risks beyond Hormuz also high. (Wall Street CN) Spot Market Overview: ► ► ► ► ► ► ► ► ► ► ►

[SMM Shanghai Spot Copper] Tomorrow, due to the impact of typhoon weather, cargo pick-up and transportation at some warehouses in east China will be restricted, and short-term cargo circulation efficiency will decline, providing some support to the spot market. However, trading was sluggish during the day. Affected by weather factors and high copper prices, downstream purchase willingness declined significantly, and purchases were mostly based on rigid demand. Some processing enterprises in Zhejiang reduced their cargo pick-up arrangements to Shanghai due to traffic restrictions, providing limited support from the demand side. On the inventory front, SMM recorded Shanghai social inventory at 78,300 mt, up 2,200 mt WoW from last Thursday; Jiangsu social inventory at 18,100 mt, down 2,400 mt WoW from last Thursday. Overall inventory changes in east China were limited, without reflecting significant supply pressure. Meanwhile, the backwardation spread between contracts widened to 240-310 yuan/mt. The spread between spot and futures widened, and some suppliers' need to roll positions and convert to cash increased, which may exert some pressure on spot premiums. Overall, with the combined effects of typhoon weather disrupting cargo circulation, the widening backwardation structure, and sluggish trading, it is expected that Shanghai spot copper against the 2608 contract will still maintain premiums tomorrow, but the overall center may fluctuate slightly. Attention should be paid to cargo pick-up and supply circulation at warehouses after the weather improves.

SMM Morning Meeting Minutes: Last Friday night, LME copper opened at $14,141/mt. At the beginning of the session, it swung wildly and hit a high of $14,173/mt. Then the center of copper prices shifted straight downward, dipping to $14,006/mt near the end of the session, and finally settled at $14,022/mt, down 0.5%. Trading volume reached 19,800 lots, and open interest stood at 258,000 lots, up 3,254 lots from the previous trading day, indicating an increase by bears. Last Friday night, the most-traded SHFE copper 2609 contract opened at 108,010 yuan/mt. It immediately rose to 108,140 yuan/mt at the beginning, then the center of copper prices consolidated lower, dipping to 107,130 yuan/mt near the end, and finally settled at 107,160 yuan/mt, down 0.8%. Trading volume reached 45,000 lots, and open interest stood at 215,000 lots, down 6,056 lots from the previous trading day, indicating a reduction by bulls.

SMM August 10: Last Friday night, LME copper opened at $14,141/mt, shot up in early session to a high of $14,173/mt amid wild swings, then its center dropped sharply, dipping near the close to $14,006/mt, finally settling at $14,022/mt, down 0.5%, with trading volume at 19,800 lots and open interest at 258,000 lots, up 3,254 lots from the previous trading day, showing bears added positions. Last Friday night, the most-traded SHFE copper September 2609 contract opened at 108,010 yuan/mt, initially climbed to 108,140 yuan/mt, then its center drifted lower, near the close touching a low of 107,130 yuan/mt, finally settling at 107,160 yuan/mt, down 0.8%, with trading volume at 45,000 lots and open interest at 215,000 lots, down 6,056 lots from the previous trading day, showing bulls cut positions. On the macro front, US July nonfarm payrolls unexpectedly fell by 23,000, while the unemployment rate dropped to 4.1%, sending mixed employment signals. Trump initiated proceedings to remove Fed Governor Cook, and said rates are not solely decided by Warsh; geopolitically, Trump postponed military action against Iran, but Iran said the Strait of Hormuz remains closed. Weakening nonfarm payrolls put the US dollar under pressure, but the Fed independence controversy and Middle East uncertainty sent copper prices shooting up before pulling back. Fundamentally, the supply of available spot cargoes hasn't eased significantly yet, but the approaching delivery and position rollover demand are expected to increase the circulation of lower-priced cargoes, with overall tightness maintained. Demand side, constrained by the off-season and elevated copper prices, downstream users only made just-in-time procurement. Taking all into account, copper prices are expected to drift higher today.

In July 2026, the operating rate of secondary copper rod was 12.43%, lower than the expected 12.61%, down 0.18 percentage points MoM and 18.47 percentage points YoY. In July 2026, the copper scrap rod market operated under the dominant theme of the most-traded SHFE copper contract shooting up from 102,000 yuan/mt to above 106,000 yuan/mt, with a monthly gain exceeding 3,000 yuan/mt. Driven by the one-sided rally of copper cathode and insufficient follow-through from copper scrap, the price difference between primary metal and scrap widened from around 2,000 yuan/mt at the start of the month to over 4,000 yuan/mt at month-end, and at one point mid-month it even reached 4,800 yuan/mt. The price difference between copper cathode rod and secondary copper rod also hit the economic threshold of above 1,800 yuan/mt during the copper price surge. Under the dual framework of continued reverse invoicing compliance constraints and deepening high-temperature off-season, the market displayed a distinct polarization: structural tightness in supply, robust downstream arbitrage-driven purchases, and an off-season that was even weaker for physical consumption. Starting July 1, the new "three-in-one reverse invoicing" policy (with the prepayment rate of individual income tax for natural persons with annual sales of up to 600,000 yuan reduced to 0.25%) was formally implemented, further reshaping the regional supply landscape. On the supply side, the copper scrap market continued the structural tightness seen since 2026, with the underlying constraint still being the combined impact of the reverse invoicing policy and the phase-out of fiscal and tax subsidies: inspections in Hubei and other regions became stricter, and invoicing quotas in areas such as Shuyang, Jiangsu remained restricted. More critically, in July, Henan province abolished fiscal and tax subsidies while reverse invoicing could still be implemented. In Shuyang, Jiangsu, following the reverse invoicing controls, companies were notified in July of the cancellation of subsidies, and most scrap utilization enterprises had suspended operations to wait and see. Some unfulfilled orders from Jiangsu flowed to neighboring provinces, and available compliant and deductible copper scrap remained tight. Mainstream copper scrap invoice tax rates had exceeded 11%, rising to 12% in some areas, further driving up raw material procurement costs for enterprises. On the demand side, as the price difference between primary metal and scrap widened to above 3,800 yuan/mt, the economic viability of copper scrap became evident, and secondary copper rod enterprises' purchase willingness was remarkably robust. However, this robust purchase willingness was mainly directed at futures arbitrage rather than physical restocking. During the copper price surge, secondary copper rod enterprises widely adopted a hedging logic of "buy raw materials and sell futures" to purchase copper scrap. After securing enough for the day's demand during the morning session, they stopped quoting and did not chase higher prices to accept goods. However, such arbitrage-driven purchases initially did not fully translate into actual production restocking. The end-user wire and cable and enamelled wire industries were squeezed by the dual pressures of low copper cathode inventories with high premiums and high absolute copper prices, with pervasive fear of high prices. New orders became even weaker in the off-season. At month-end, secondary copper rod enterprises’ raw material inventory had reached a relatively ample level after mid-month hedging purchases, and the purchasing sentiment index dropped from 2.21 to a low of 2.03. The core market contradiction shifted from "spread dividend goes to arbitrage" to "ample inventory suppressing transactions." Overall, the core contradiction in the secondary copper rod market in July shifted from "copper price level" to "who gets the spread dividend" and "where compliant supply is located" — the price difference between primary metal and scrap of around 4,000 yuan/mt brought by the copper price surge was essentially captured by arbitrage funds; secondary copper rod enterprises’ operations of buying raw materials and shorting futures supported the circulation of copper scrap, but this was not transmitted to physical consumption. The cancellation of subsidies in Henan, Shuyang in Jiangsu, and other regions triggered a regional supply restructuring, further concentrating compliant cargoes in areas with a relatively stable policy environment. The outflow of orders from Jiangsu to neighboring provinces is a direct reflection of this restructuring. Looking ahead to August, if the price difference between primary metal and scrap can stabilize above 4,000 yuan/mt, the implementation standards for reverse invoicing become clearer, and quotas in some regions are marginally relaxed, this may drive some restocking demand. Otherwise, amid a combination of low copper cathode inventory, high premiums, and downstream users’ fear of high prices, the secondary copper rod market will continue with a weak equilibrium pattern of "suppliers sell when copper prices rise, rod enterprises hedge and buy, but both sides wait and see when prices are high." A genuine recovery in physical consumption will still need to wait for a correction in copper prices or a material improvement in end-user orders.

This week (Aug. 3 – Aug. 7), the weekly average warrant transaction price range for Yangshan copper premiums was $101–$112/mt, QP August, with an average of $106/mt; the weekly average B/L transaction price range was $96–$107/mt, QP September, with an average of $102/mt; and EQ copper CIF B/L prices were $64–$73/mt, QP September, with an average of $69/mt. As of Aug. 7, the ex-exchange rate SHFE/LME copper price ratio for the SHFE copper 2608 contract against LME copper was 1.1247, with an import loss of around 1,385.43 yuan/mt, expanding by about 857 yuan/mt WoW. As of Friday, the backwardation structure for the August LME copper date widened WoW, with the carry spread between the August and September dates at −$61.53/mt. Currently, mainstream offer prices for ER registered copper B/L have dropped to double-digit levels; mainstream warrant offer prices for registered copper were near $100/mt. This week, Yangshan copper premiums pulled back from high levels, mainly because the SHFE/LME price ratio continued to deteriorate, compounded by the widening backwardation structure of nearby LME contracts, which increased suppliers' willingness to offer cargo. Meanwhile, as copper prices surged, downstream consumption demand was poor. Additionally, high premiums in the domestic market previously attracted cancelled warrants from LME Asian warehouses, which gradually arrived in China, causing temporary congestion at Shanghai Port. Together with some export cargo pressuring prices, market spot premiums weakened. According to SMM data, China's bonded zone copper inventories as of Thursday this week (Aug. 6) decreased by about 6,000 mt WoW from the previous period (Jul. 30) to 31,100 mt. Specifically, Shanghai bonded inventory decreased by 6,500 mt WoW to 26,900 mt, while Guangdong bonded inventory increased by 500 mt WoW to 4,200 mt. The weekly bonded zone inventory decline was mainly because of reports that cargo ships were heading to the US. Additionally, the slight opening of the export window led to small-scale exports by some smelters to the bonded zone. Looking ahead, the siphoning effect from North America continues, so the logic of overall supply constraints in the market remains. However, with the SHFE/LME price ratio significantly inverted, consumption demand suppressed by high copper prices, and expectations of concentrated cargo arrivals at ports, traders' psychological price expectations for spot cargo are rapidly declining, and imported copper premiums are expected to see a temporary pullback. Additionally, with the export window slightly open, smelters have export expectations. According to SMM, export volumes in the first week of August up to now have been relatively limited, and future export volumes need continued monitoring.