SMM, July 2: Metals market: As of the midday close, most base metals in the domestic market moved downward. SHFE copper and SHFE aluminum both fell by less than 0.2%. SHFE lead dropped 0.72%. SHFE zinc declined 1.04%. SHFE tin edged up 0.15%. SHFE nickel fell 0.41%. Additionally, the most-traded casting aluminum futures fell 0.97%, while the most-traded alumina contract rose 0.21%. Lithium carbonate’s most-traded contract extended its gains from the previous three trading sessions, rising another 1.26%. Silicon metal’s most-traded contract fell 0.18%. Polysilicon’s most-traded futures contract rose 0.36%. Ferrous metals mostly fell. Iron ore rose 0.54%. HRC and rebar both fell by less than 0.5%, while stainless steel dropped 0.92%. Coking coal and coke: the most-traded coking coal contract rose 0.28%, while the most-traded coke contract fell 0.96%. In the overseas base metals market, as of 11:39, LME metals were nearly all falling. LME copper fell 0.31%, LME aluminum fell 0.19%, and LME lead was parity at $1,866.5/mt. LME zinc fell 0.2%, and LME tin edged down. LME nickel fell 0.4%. In precious metals, as of 11:39, COMEX gold fell 0.16%, while COMEX silver rose 0.03%. In the domestic precious metals market: SHFE gold rose 1.28%; SHFE silver’s most-traded contract rose 2.06%. Additionally, as of the midday close, platinum’s most-traded futures contract rose 5.12%, and palladium’s most-traded futures contract rose 2.82%. As of the midday close, the most-traded container shipping (Europe) futures contract fell 2.12% to 2,561 points. Selected futures midday prices as of 11:39, July 2: Spot Market and Fundamentals Aluminum: In early trading, the price center of the SHFE aluminum 2606 contract was higher than the same period of the previous trading day. Warranted supply continued to flow out, keeping circulating spot supply ample overall. Downstream restocking was only sporadic, and with bearish futures sentiment spreading, end-user purchase willingness was generally weak. Mainstream transactions were at parity to a premium of 20 yuan/mt against the SHFE aluminum 07 contract... Macro Front China: [Mandatory National Standard on Safety Requirements for Combined Driver-Assistance Systems of Intelligent Connected Vehicles Officially Released] On June 27, the mandatory national standard GB 47955—2026, Safety Requirements for Combined Driver-Assistance Systems of Intelligent Connected Vehicles, developed and managed by the Ministry of Industry and Information Technology, was approved and released by the State Administration for Market Regulation and the Standardization Administration of China. It is scheduled for official implementation on January 1, 2027. Based on China's industrial development and regulatory needs, and balancing technical feasibility, product compatibility, and practical operability, this document presents a clear, comprehensive, and nationally relevant safety indicator system. First, it fully accounts for different product forms and technical paths, setting applicable safety requirements for three types of combined driver-assistance system products: basic single-lane, basic multi-lane, and navigation pilot assist. Second, integrating China's road traffic characteristics, it establishes baseline requirements for the safe operation of combined driver-assistance systems from aspects including functional requirements, data recording, and vehicle manufacturer safety assurance. Third, considering the core positioning of the system as "assisting" driving, it proposes user operation and use requirements regarding human-machine interaction, usage instructions, and user training, thereby laying a foundation for proper cooperation between users and systems. Fourth, aligned with the practical needs of China's industry management, it establishes a multi-tiered evaluation method covering site tests, road tests, and document inspections to comprehensively assess the safety capability of the systems. The PBOC conducted 288.5 billion yuan in 7-day reverse repo operations today, with an operation rate of 1.4%, unchanged from the previous period. Today, 370.5 billion yuan in reverse repos matured. US Dollar: As of 11:39, the US dollar index fell 0.03% to 101.39. Fed Chairman Warsh stated on Wednesday that inflation expectations and inflation risks have lessened in recent weeks; he reiterated the US Fed's commitment to reducing inflation to its 2% target. "During the initial weeks of this period, inflation expectations have edged down, and inflation risks have been reduced," Warsh said. "If anyone in a household, business, or financial market thinks the Fed will be comfortable with inflation above our 2% target—well, they should be disappointed: we will ensure price stability across the United States." Fed Chairman Warsh skirted a question on whether a rate hike is possible at the Fed's July meeting. "I expect that when we meet in four weeks' time, we will have a good family argument," he said. "When we get in that room behind closed doors, we will have a robust debate. Beyond that, I have nothing for you." Warsh made the remarks at the ECB's annual policy retreat in Sintra, Portugal—his first public appearance since his inaugural Fed press conference last month. Since then, investors have come to expect more rate increases from the US Fed, but markets currently price in a less than 50% probability of a first hike this month. According to CME's "FedWatch": The probability that the US Fed holds rates steady in July is 71.7%, while the probability of a cumulative 25 basis point hike is 28.3%. The probability that the US Fed holds rates steady through September is 36.1%, the probability of a cumulative 25 bps hike is 49.8%, and the probability of a cumulative 50 bps hike is 14.1%. (Jin10 Data APP) Data: US manufacturing expanded for the sixth consecutive month in June, with war-driven surges in input costs easing. Printing, electrical equipment, and textiles led the gains, while paper products, furniture, and wood products contracted. Market attention has now shifted to Thursday’s US employment report. Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management, noted that with Warsh making inflation his number one focus, the June non-farm payrolls data is "unlikely to shift the interest rate outlook on its own," adding that FIFA World Cup-related hiring is expected to distort the figure. (Wall Street CN) Data: Today's data releases include the US June unemployment rate, June seasonally adjusted non-farm payrolls, initial jobless claims for the week ending June 27, June average hourly earnings (y/y) and (m/m), and May factory orders (m/m); Switzerland's June CPI (m/m); and the Eurozone's May unemployment rate. Also, monitor for: the Ministry of Commerce holds its first regular press briefing for July; 2027 FOMC voter and San Francisco Fed President Daly participates in a conference on the Spanish economy. Due to the US Independence Day holiday (July 3), the US June non-farm payrolls data will be released early at 20:30 Beijing time on Thursday, July 2. US stock markets will be closed on Friday, July 3. Trading in CME precious metals, energy, FX, US Treasury, and equity index futures contracts will close early at 01:00 Beijing time on July 4. Trading in ICE Brent crude oil futures contracts will close early at 01:30 Beijing time on July 4. Investors, please take note. (Jin10 Data APP) Crude Oil: As of 11:39, oil prices in both benchmarks extended their declines from the previous two trading sessions, with US oil falling 1.4% and Brent oil falling 1.24%. International crude oil prices pulled back, influenced by progress in Middle East peace talks. (Wall Street CN) OCBC Group Research has lowered its quarterly crude oil forecasts through Q2 2027, as supplies through the Strait of Hormuz rebound. Two OCBC strategists noted in a research report: "Shipping and crude supply through the Strait of Hormuz have rebounded following the US-Iran memorandum of understanding." They added: "Market expectations for a normalization of crude supply quickly pushed oil prices back to pre-conflict levels, reviving oversupply rhetoric." OCBC lowered its Q3 2026 Brent forecast to $75/bbl from $85/bbl; Q4 2026 to $75/bbl from $80/bbl; Q1 2027 to $73/bbl from $75/bbl; and Q2 2027 to $71/bbl from $75/bbl. (Jin10 Data APP) Rising energy shipping volumes through the Strait of Hormuz have prompted UBS to lower its 2026-2027 oil price forecasts. UBS now expects Brent to average $84/bbl this year, a $9/bbl cut from its previous forecast. The bank also cut its 2027 forecast to $75/bbl from $85/bbl. UBS stated: "Reduced geopolitical risk and a rapid supply rebound are pushing prices down faster than we expected." The bank expects a modest rebound to $80/bbl in H2 this year as floating storage in the Gulf normalizes and demand recovers. UBS also sees a higher risk premium, as the path to normalization may remain bumpy. UBS said: "The need to restock should continue to support prices through end-2027, but the required inventory rebuild is smaller than the 1 billion barrels we previously estimated." (Jin10 Data APP) Spot Market Overview: ► ► ► Other metals' spot midday reviews will be updated later; please refresh to check

SMM Nickel July 2 News: Macro and Market News: (1) US June ADP employment increased by 98,000, the lowest gain since March, missing market expectations of a 118,000 increase. (2) New US Fed Chair Warsh reiterated on Wednesday (July 1) his preference to shrink the central bank’s balance sheet, but stressed that any such steps would be implemented only after thorough public communication and preparation. Spot Market: On July 2, SMM #1 refined nickel price rose 1,050 yuan/mt from the previous trading day. As for spot premiums, Jinchuan #1 refined nickel averaged 2,150 yuan/mt, up 200 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -400 to 400 yuan/mt. Futures Market: The most-traded SHFE nickel 2609 contract moved sideways in the morning session, ending at 125,880 yuan/mt, down 0.41%. The strength of the US dollar and a hawkish shift in market expectations for US Fed policy kept the macro environment challenging. Markets are focused on this week’s US ADP and non-farm payrolls data. In the near term, nickel prices are expected to be in the doldrums in the 125,000-135,000 yuan/mt range.

[SMM Daily Review: Silver Prices Consolidate and Rebound, Spot Premiums Hold Steady] SMM, July 2 – The US Fed’s dovish remarks and the ADP data falling short of expectations cooled interest rate hike expectations, lending support to silver prices. Spot premiums held mostly steady with thin trading, and the market awaited guidance from the non-farm payrolls data.

[Geopolitical Risk Premium Continues to Narrow, Aluminum Prices in the Doldrums] Progress has been made in indirect technical talks between the US and Iran, with discussions on fund repatriation and Strait security. Consultations on the nuclear issue are about to begin. The geopolitical risk premium continues to narrow. The dispute over management rights of the Strait of Hormuz persists, and uncertainty remains over the resumption of Strait navigation. The Federal Reserve's hawkish pivot boosted the US dollar index, weighing on nonferrous metal prices. Under macro headwinds, aluminum prices fell in and outside China. In the short term, bearish factors dominate, and aluminum prices are expected to stay in the doldrums.

[SMM Morning News on Tin: Macro Headwinds Weigh on Tin Prices, Retreat After Rapid Rise; Spot Cargoes Plunge Into "High Prices Suppressing Demand" Dilemma]

[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2608 contract opened at 24,400 yuan/mt. At the beginning of the session, bears reduced positions, driving the price up to hit a high of 24,535 yuan/mt. However, bears then added positions, causing the futures to drift lower and touch a low of 24,305 yuan/mt. Towards the end of the session, the price edged up and then maintained a consolidating trend, finally closing down at 24,375 yuan/mt, down 25 yuan/mt, or 0.10%. Trading volume decreased to 60,970 lots, and open interest fell by 1,001 lots to 94,484 lots.