SMM, July 27: In Guangdong today, #1 copper cathode spot premiums against the front-month contract were reported at 50–110 yuan/mt, with an average premium of 80 yuan/mt, down 85 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 20 yuan/mt to parity, averaging a discount of 10 yuan/mt, down 90 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 105,360 yuan/mt, up 275 yuan/mt from the previous trading day, while SX-EW copper averaged 105,270 yuan/mt, up 270 yuan/mt. Spot market: Guangdong inventory rose significantly after the weekend, mainly due to increased arrivals and weakening consumption. With higher inventory and rising copper prices, suppliers eager to sell actively lowered their offers, causing premiums to continuously decline during the day. In early trading, standard-quality copper was quoted at 80 yuan/mt, but few buyers emerged. Suppliers were forced to cut prices, and final transaction levels reached 50 yuan/mt. The purchasing sentiment index for copper cathode in Guangdong stood at 2.51, down 0.05 from the previous trading day, while the shipment sentiment index was 2.89, up 0.09 (historical data can be accessed via our database). As of 11:00 a.m., high-quality copper against the front-month contract was reported at 110 yuan/mt, standard-quality copper at a premium of 50 yuan/mt, and SX-EW copper at a discount of 10 yuan/mt. Overall, rising copper prices and inventory build-up dampened downstream restocking interest, pushing spot premiums lower throughout the session amid thin trading.

[SMM Lead Morning Brief: Short-term China inventory buildup expectations may cause lead prices to consolidate on a subdued note] On Friday, reports indicated that Pakistan was exploring paths to restart US-Iran negotiations; Trump stated that the US is negotiating with Iran. As August approaches, the market has expectations for the traditional peak season for lead-acid batteries, but current actual consumption is less than satisfactory...

During the week of July 20-23, the copper scrap market operated under a threefold backdrop: low copper cathode inventory and high premiums, continued compliance restrictions from reverse invoicing, and a deepening high-temperature off-season. The SHFE copper closing price at 11:30 surged from 104,180 yuan/mt to 106,340 yuan/mt, then pulled back slightly to 106,170 yuan/mt by the end of the week

[SMM Analysis: Soaring Copper Prices Widen Price Difference Between Copper Cathode and Copper Scrap; Increased Spot Shipments from Suppliers, Arbitrage Purchases Dominate Transactions] This week (7/20-7/23), the copper scrap market operated under a triple framework of low copper cathode inventory and high premiums, ongoing compliance constraints from reverse invoicing, and a deepening high-temperature off-season. The SHFE copper closing price at 11:30 surged from 104,180 yuan/mt to 106,340 yuan/mt, before pulling back slightly to 106,170 yuan/mt at the end of the week, with a weekly gain of over 2,000 yuan/mt. Driven by the unilateral rise in copper cathode prices and the resilience of copper scrap in holding prices firm, the price difference between copper cathode and copper scrap expanded from 3,218 yuan/mt to 4,545 yuan/mt, briefly reaching a high of 4,800 yuan/mt during the week. The inherent price resilience of copper scrap was the core feature of the supply side this week.....

In late July, China's aluminum billet processing fees have continued to pull back from their highs in June, with φ120 aluminum billet processing fees in some major consumption areas approaching the production cost line. Amid weakening marginal demand during the off-season, increased arrivals in South China, and a relatively stable center in aluminum prices, whether processing fees can hold firm near the cost line has become the core issue of market focus....

[SMM Analysis: Aluminum Billet Processing Fees Pull Back to Near Production Cost Line – Can They Hold Firm?] Entering late July, China’s aluminum billet processing fees have continued to pull back from June highs, with φ120 aluminum billet processing fees in some key consumption areas approaching the production cost line. The market is feeling the dual pressure of holding prices firm and making shipments. According to SMM’s latest data, as of July 23, social inventory of aluminum billets in China’s key consumption areas climbed to 121,000 mt, marking two consecutive weeks of inventory buildup. Over the same period, warehouse withdrawals fell to 33,000 mt, a clear WoW pullback. Against a backdrop of weakening off-season demand, increased arrivals in South China, and relatively stable aluminum price centers, whether processing fees can stabilize near the cost line has become the core issue the market is watching.