SMM, July 23: Metals market: Overnight, domestic base metals generally rose. SHFE copper fell 0.16%, SHFE aluminum gained 0.35%, SHFE lead gained 0.54%, SHFE zinc gained 0.98%, and SHFE tin fell 0.23%. SHFE nickel rose 0.62%. Additionally, the most-traded alumina futures contract fell 1.72%, and the most-traded casting aluminum contract gained 0.28%. Overnight, ferrous metals all rose. Stainless steel edged up 0.2%, iron ore gained 0.34%, rebar rose 0.16%, and HRC edged up. Coking coal and coke: the most-traded coking coal contract added 0.51%, and the most-traded coke contract edged up 0.08%. Overnight overseas, LME base metals mostly moved sideways. LME copper edged down 0.04%. LME aluminum was flat at $3,192.5/mt. LME lead fell 0.18%. LME zinc fell 0.15%. LME tin rose 0.39%. LME nickel fell 0.53%. Overnight precious metals : COMEX gold rose 1.44%, and COMEX silver rose 1.57%. Overnight, the most-traded SHFE gold contract gained 1.16%, and the most-traded SHFE silver contract gained 1.69%. As of 7:07 am July 23, overnight closing prices: Macro front China: [National Energy Administration: As of end-June, national cumulative installed power generation capacity reached 4.04 billion kW, up 10.8% YoY] On July 22, the National Energy Administration released national electricity statistics for the January-June period. As of end-June, total installed power generation capacity reached 4.04 billion kW, up 10.8% YoY. Solar power capacity was 1.27 billion kW, up 15.8% YoY; wind power capacity was 680 million kW, up 18.5% YoY. [CSRC: steadily expand high-level institutional opening and continuously improve the convenience for foreign investors in the capital market] On July 21, Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), met in Beijing with John Graham, President and CEO of Canada Pension Plan Investment Board. The two sides exchanged views on global and China economic and financial trends, investing in China’s capital market, and other topics. Wu Qing noted that against a complex and shifting international landscape, China’s economy performed generally stable in H1, maintaining a positive and improving trend and demonstrating resilience and vitality. The CSRC will pursue progress while ensuring stability, resolutely safeguard the sound and stable operation of the capital market, steadily expand high-level institutional opening, and continuously improve the convenience for foreign investors in the capital market. We welcome international institutional investors, including the Canada Pension Plan Investment Board (CPP Investments), to expand their investments in China and share in the dividends of China’s economic and capital market reform and development. Graham stated that CPP Investments, as a long-term investor with a global footprint, pays close attention to and remains optimistic about the effectiveness of China’s economic reform and development, has long regarded China as one of its key investment regions globally, and will continue to practice its value investing philosophy by actively deploying investments in China. [Beijing State-owned Capital Operation and Management Co., Ltd. (BSCOMC): To date, it has allocated nearly 10 billion yuan of its own funds to the stock market.] On July 22, Beijing State-owned Capital Operation and Management Co., Ltd. (BSCOMC) announced that, to date, BSCOMC had allocated nearly 10 billion yuan of its own funds to the stock market. Going forward, BSCOMC will rely on its own funds and its securities companies and public fund subsidiaries to continue increasing its holdings of listed companies’ stocks, support the development of the Beijing Stock Exchange, and, in line with its functional positioning as a state-owned capital operation company, resolutely safeguard the strategic value of listed companies’ core assets, thereby contributing the strength of Beijing’s state-owned enterprises to the stable and healthy development of the capital market. On the US dollar front: Overnight, the US dollar index fell 0.09% to 101.12. US military strikes on Iran entered their 11th day, oil prices spiked to a six-week high, inflation expectations heated up in response, and the possibility of a Fed rate hike in July resurfaced. (Wallstreetcn) According to CME FedWatch: The probability of the Fed keeping rates unchanged in July is 65.3%, while the probability of a cumulative 25bp rate hike is 34.7%. By September, the probability of unchanged rates is 22%, a cumulative 25bp hike is 54.9%, and a cumulative 50bp hike is 23%. (Jin10 Data APP) Joseph Lavorgna, chief US economist at Sumitomo Mitsui Banking Corporation (SMBC), stated that if inflation does not slow, policymakers will lose their hard-won credibility. In a report, Lavorgna noted that over the past 70 years, there have been only six instances where core inflation fell by 0.9% or more year-over-year. In each case, the slowdown in inflation occurred because the Fed was tightening policy. Lavorgna said, “The longer the Fed waits, the greater the likelihood that interest rates will have to rise above the level necessary. That’s why so many past tightening cycles ended in tragedy. Chair Warsh understands this.” (Jin10 Data APP) On the macro front: Today, data due to be released include China’s June RMB share in Swift global payments, Australia’s June seasonally adjusted unemployment rate, the UK’s July CBI industrial order book balance, the Eurozone’s deposit facility rate as of July 23, the Eurozone’s main refinancing rate as of July 23, Canada’s May retail sales month-over-month, US initial jobless claims for the week ending July 18, and the Eurozone’s July consumer confidence flash estimate. Also note: The ECB will announce its interest rate decision; ECB President Lagarde will hold a monetary policy press conference; Google and Tesla Q2 earnings reports were released after the US stock market close on July 22. Crude oil: Overnight, both crude oil futures extended gains for the third straight session, with WTI up 2.54% and Brent up 4.93%. The escalating Middle East conflict and market fears of supply disruptions supported oil prices. According to Iran's Tasnim News Agency, the Khatam al-Anbiya Central Command issued a statement saying the Strait of Hormuz remains closed. Any vessel needing to pass through the strait must use designated routes and follow previously announced transit arrangements. The statement noted that if the US follows through on its threats, Iran will cut off all oil flows in the Gulf region and strike oil, gas, electricity, and economic infrastructure there. The statement also said repeated US threats will only lead to the expansion of war in the region and beyond. (Jin10 Data APP) US domestic crude oil production for the week ending July 17 recorded its largest decline since the week ending January 30, 2026. US EIA Strategic Petroleum Reserve inventories for the week ending July 17 dropped to their lowest since the week ending March 25, 1983. EIA report: Commercial crude oil inventories excluding strategic reserves increased by 2.01 million barrels to 412 million barrels, up 0.49%. (Jin10 Data APP) US refiners are raising diesel output to near record levels, reversing the seasonal trend. According to the US Department of Energy, refineries have averaged 5.3 million barrels per day of refined fuel oil (of which diesel is the main component) this month. If sustained, this would be the highest diesel production for July on record in the US and one of the highest months outside the winter heating season. Typically, diesel production peaks near year-end, but this year, due to severe global supply tightness, refiners have ramped up output months ahead of schedule. (Jin10 Data APP) Recommended Reading:

Crude oil production remained stable. In June, the industrial crude oil production above designated size was 18.12 million mt, down 0.5% YoY; daily average production was 604,000 mt. From January to June, the industrial crude oil production above designated size totaled 109.43 million mt, up 0.9% YoY.

According to the National Bureau of Statistics (NBS), in June, raw coal production of industrial enterprises above designated size (hereinafter referred to as designated industrial enterprises) declined YoY, crude oil production remained stable, natural gas production turned from decline to increase, and power generation grew steadily. I. Raw Coal, Crude Oil, and Natural Gas Production and Related Information Raw coal production declined YoY. In June, raw coal production of designated industrial enterprises was 380 million mt, down 9.7% YoY, with a daily average production of 12.7 million mt. From January to June, raw coal production of designated industrial enterprises was 2.37 billion mt, down 1.7% YoY. Crude oil production remained stable. In June, crude oil production of designated industrial enterprises was 18.12 million mt, down 0.5% YoY, with a daily average production of 604,000 mt. From January to June, crude oil production of designated industrial enterprises was 109.43 million mt, up 0.9% YoY. The decline in crude oil processing widened. In June, the crude oil processing volume of designated industrial enterprises was 51.24 million mt, down 17.7% YoY, with the decline widening by 8.6 percentage points from May, and the daily average processing volume was 1.708 million mt. From January to June, the crude oil processing volume of designated industrial enterprises was 343.87 million mt, down 4.9% YoY. Natural gas production turned from decline to increase. In June, natural gas production of designated industrial enterprises was 21.4 billion m³, up 1.1% YoY, compared to a 2.2% decline in May, with a daily average production of 710 million m³. From January to June, natural gas production of designated industrial enterprises was 133 billion m³, up 1.6% YoY. II. Power Generation Situation Power generation of designated industrial enterprises grew steadily. In June, the power generation of designated industrial enterprises was 827.6 billion kWh, up 2.0% YoY, with a daily average generation of 27.59 billion kWh. From January to June, power generation of designated industrial enterprises was 4,750.1 billion kWh, up 3.5% YoY. By type, in June, the growth rates of thermal and hydropower for designated industrial enterprises slowed down, nuclear and solar power growth accelerated, and wind power turned from increase to decrease. Among these, thermal power increased by 0.5% YoY, with the growth rate slowing down by 1.6 percentage points from May; hydropower grew by 4.8%, with the growth rate slowing down by 8.2 percentage points; nuclear power grew by 8.5%, with the growth rate accelerating by 3.5 percentage points; wind power declined by 5.6%, compared to a 0.5% increase in May; and solar power grew by 14.2%, with the growth rate accelerating by 2.1 percentage points.

SMM July 4 news: Metal market: Last Friday night, domestic base metals nearly all rose. SHFE copper gained 0.14%, SHFE aluminum rose 0.6%, SHFE lead added 0.38%, SHFE zinc increased 0.87%, and SHFE tin jumped 3.8%. SHFE nickel edged down 0.02%. In addition, the most-traded alumina futures contract fell 0.07%, and the most-traded cast aluminum contract rose 0.24%. Last Friday night, ferrous metals mostly closed higher. Stainless steel dropped 1.85%, iron ore rose 0.27%, rebar gained 0.39%, and hot-rolled coil added 0.4%. Coking coal and coke: the most-traded coking coal contract rose 1.21%, and the most-traded coke contract rose 1.6%. Last Friday night, in the overseas market, LME base metals rose across the board. LME copper gained 0.54%, LME aluminum added 0.23%, LME lead rose 1.04%, LME zinc climbed 2.17%, LME tin surged 4.99%, and LME nickel rose 0.4%. Last Friday night, precious metals : COMEX gold rose 1.49%, posting a weekly gain of 2.22%; COMEX silver gained 2.87%, closing the week higher with a 5.26% increase. Last Friday night, the most-traded SHFE gold contract rose 0.81%, ending the week up 3.5%; the most-traded SHFE silver contract gained 1.61%, posting a weekly rise of 8.82%. JPMorgan said that in the short term, gold prices may be capped by weakening demand and are likely to remain moving sideways overall. The main reasons are weaker purchasing power in key demand areas and renewed sensitivity of gold to changes in real interest rates, which may limit further price gains. However, the bank maintains a medium- to long-term bullish outlook. It expects gold to gradually rebound in H2 2026, with an average price of around $4,300 per ounce in Q3, rising to about $4,500 in Q4. Looking ahead to 2027, JPMorgan believes the rally may continue, driven mainly by continued central bank buying, stronger physical demand, and persistent long-term structural allocation needs. These factors will support gold's long-term appeal as a safe-haven and reserve asset. As of 7:41 a.m. on July 4, last Friday night's closing quotations: Macro front China: [Li Qiang: Take more forceful measures and actions in building a modern industrial system, accelerating high-level self-reliance in science and technology, building a strong domestic market, and deepening reforms and expanding opening up] On July 1, Premier Li Qiang, also secretary of the CPC Leadership Group of the State Council, presided over a meeting of the group to study and implement the spirit of General Secretary Xi Jinping's important speech at the celebration of the 105th anniversary of the founding of the Communist Party of China and Xi Jinping Thought on Party Building. The meeting emphasized the need to strive for new achievements in high-quality development, strengthen initiative and a sense of urgency in work, and take more robust measures and actions in building a modern industrial system, accelerating self-reliance in high-level science and technology, developing a strong domestic market, and deepening reform and expanding opening up. It called for taking solid action, shouldering responsibilities, and striving to carry forward the baton of history, so as to make greater contributions to building a strong country and achieving national rejuvenation. (Xinhua News Agency) [The State Council: Increasing Efforts in Energy Conservation and Carbon Reduction Transformation in Key Industries such as Steel and Non-Ferrous Metals to Achieve Energy Savings of More Than 150 Million mt of Standard Coal] Recently, the State Council issued the “15th Five-Year Plan for Building a Beautiful China,” clarifying the overall requirements, targets and indicators, key tasks, and major projects for comprehensively advancing the building of a Beautiful China during the 15th Five-Year Plan period. The Plan proposes that by 2030, the quality of the ecological environment will be comprehensively improved, and new significant progress will be made in building a Beautiful China. Green production and lifestyles will be essentially in place, the carbon peak target will be met as scheduled, total emissions of major pollutants will continue to decline, comprehensive solid waste management capacity and level will be significantly enhanced, urban and rural living environments will be notably improved, the diversity, stability, and sustainability of ecosystems will be continuously strengthened, nuclear and radiation safety levels will keep rising, national ecological security will be effectively guaranteed, an ecological and environmental governance system adapted to the requirements of building a Beautiful China will be steadily refined, a number of demonstration models for building a Beautiful China will be established, and the people’s sense of gain, happiness, and security from the ecological environment will be continuously enhanced. It also makes an outlook on the 2035 targets and proposes accelerating the formation of the overall layout for building a Beautiful China. (Xinhua News Agency) The Plan mentions increasing efforts in energy conservation and carbon reduction transformation in key industries such as thermal power, steel, non-ferrous metals, petrochemicals, chemicals, and building materials, promoting and popularizing energy-saving and low-carbon technologies, and achieving energy savings of more than 150 million mt of standard coal. With the Beijing-Tianjin-Hebei region and surrounding areas as the focus, industrial coal-fired boilers with a capacity of 65 steam tonnes per hour or below will be gradually phased out. The substitution of clean energy for coal-fired boilers and industrial kilns in industries such as food, textiles, and papermaking will be advanced. [Ministry of Finance and Two Other Departments: Adjusting Vehicle and Vessel Tax Preferential Policies for Energy-Saving Vehicles and NEVs] On July 2, the Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology issued an announcement on adjusting vehicle and vessel tax preferential policies for energy-saving vehicles and new energy vehicles. It states that from January 1, 2027, the policy of halving vehicle and vessel tax for energy-saving vehicles will be abolished, and the exemption from vehicle and vessel tax for pure electric commercial vehicles, plug-in hybrid (including extended-range) vehicles, and fuel cell commercial vehicles will be abolished. Vehicles of the above types newly acquired by taxpayers or acquired before the implementation of this announcement shall be subject to vehicle and vessel tax in accordance with the Vehicle and Vessel Tax Law of the People’s Republic of China, its implementation regulations, and other relevant provisions. [PBOC: To conduct 1,000 billion yuan outright reverse repo operation on July 6, with 3-month tenor] To keep banking system liquidity ample, on July 6, 2026, the People's Bank of China will conduct a 1,000 billion yuan outright reverse repo operation via a fixed-quantity, interest rate tender with multiple-price winning bids, with a tenor of 3 months (91 days), maturing on October 5, 2026 (adjusted for holidays if it falls on a holiday). (Jinshi Data APP) On the dollar front: Overnight last Friday, the US dollar index rose 0.03% to 100.91. On the weekly chart: The dollar index fell on a weekly basis, down 0.44% for the week, its biggest weekly decline since mid-April. The decline occurred as US June employment data cooled noticeably, leading the market to lower expectations for near-term Fed rate hikes, and the dollar index fell this week. Against a weaker dollar backdrop, the euro rose to $1.1440, up about 0.5% for the week; sterling rose to $1.3352, up about 1.1% for the week, its best performance in nearly three months. The yen rebounded from near a 40-year low, with USD/JPY once pulling back to around 161, though still at elevated levels. Japan continued to release signals of forex intervention, with finance and cabinet officials stating they are closely monitoring markets and remain prepared to intervene. Analysts pointed out that the dollar's movement has clearly been influenced by employment data and interest rate expectations, and if subsequent economic data continue to weaken, the dollar could still face further pressure. However, whether the yen can sustain its rebound still depends on the US-Japan interest rate differential and Japan's policy actions. (Jinshi Data APP) "Fed mouthpiece" Nick Timiraos said: Trump stated that he considers Fed Chairman Warsh to be on the dovish side within the Federal Open Market Committee (FOMC). A day earlier, White House National Economic Council Director Hassett made similar remarks; a week earlier, US Treasury Secretary Bessent said he hoped the Fed would remain "open-minded" on inflation and expects the Fed to ease policy this year. A new era of "forward guidance"... (Jinshi Data APP) BNP Paribas Chief Economist Isabel Mateos y Lago said: "If July's nonfarm payrolls are very strong, close to or exceeding 130,000, then I think the July meeting will be full of suspense. The uncertainty may not be as high now, but in my view, the case for a Fed rate hike remains valid." Ahead of the July 4 holiday, short-term interest rate futures markets expected a roughly 20% probability of a Fed rate hike at the July 29 rate decision, down from 33% before the release of the payrolls report. Markets still expect the US Fed to raise rates by 25 basis points this year, but not until December at the earliest. For the ECB, Lagarde said, "The baseline expectation remains another rate hike in September. But it is worth noting that Governing Council members speaking at the Sintra meeting did not rule out skipping this additional hike." She warned that the normalization of energy supply could take six months or longer to take effect, and eurozone inflation could accelerate again. Even so, she also believes that consumer prices outside energy-affected areas will not face pressure. Allianz Chief Economist Ludovic Subran said, "The US non-farm payrolls data was actually weak, but I still think inflation will peak above 3.7%, and AI, fiscal stimulus and the energy sector are still supporting economic growth. The US Fed may have to raise rates in September. I think this is where the real divergence between Europe and the US lies." Subran believes that after last month's hike, the ECB will not act again. "That was an insurance hike, but judging from the current data, it seems that moment has passed," he said. "The trauma effect of the war (with Iran) takes time to manifest. The economy is still bearing the costs of war, but the situation is much better than a few weeks ago."(Jin10 Data APP) Other currencies: ECB Governing Council member Mullan said that as falling oil prices ease price pressures in the eurozone, the ECB is in a favorable position after last month's rate hike. Mullan said that while it is too early to predict the next two meetings in July and September, officials have made clear that "we will not enter a new rate-hiking cycle." Mullan said, "For now, we are in a favorable position. The balance of risks is also at a reasonable level." Mullan added, "Falling oil prices will ease inflation pressure in the services sector," and "we have not yet seen second-round effects."(Jin10 Data APP) On the macro front: This week will see the release of Switzerland June seasonally adjusted unemployment rate, Eurozone July Sentix Investor Confidence Index, Eurozone May PPI m/m, Eurozone May retail sales m/m, US June S&P Global Services PMI Final, US June ISM Non-Manufacturing PMI, US June Global Supply Chain Pressure Index, Germany May seasonally adjusted industrial output m/m, UK June Halifax seasonally adjusted house price index m/m, France May trade balance, US ADP employment change for the week ended June 20, US May trade balance, China June foreign exchange reserves, Japan May trade balance, New Zealand interest rate decision for July 8, US May wholesale sales m/m, China June CPI y/y, China June PPI y/y, Germany May seasonally adjusted trade balance, US initial jobless claims for the week ending July 4, US June existing home sales annualized, Germany June CPI m/m final, France June CPI m/m final, Switzerland June consumer confidence index, Canada June employment change, China June M2 money supply y/y, and other data. Additionally, events to watch this week include: a 900 billion yuan outright reverse repo maturing today; speeches from Fed Governor Waller, ECB Executive Board member Schnabel, ECB Governing Council member Wunsch, and Deputy Governor of Sveriges Riksbank Seim; Turkey hosts the NATO summit through July 8; the Reserve Bank of New Zealand announces its interest rate decision; RBNZ Governor Bremman holds a monetary policy press conference; the Fed releases minutes of its monetary policy meeting; the ECB releases minutes of its June monetary policy meeting; FOMC permanent voter and New York Fed President Williams delivers a speech; and 2026 FOMC voter and Dallas Fed President Logan delivers a speech. Crude Oil: In overnight trading last Friday, both oil futures edged up slightly, with WTI up 0.13% and Brent up 0.19%. On the weekly chart: WTI futures fell for a fourth consecutive week, down 0.65% for the week; Brent futures also declined for a fourth straight week, down 0.91% for the week. The crude oil market is relatively stable, with Brent stabilizing near $72 per barrel as the market weighs the supply outlook around the Strait of Hormuz and the progress of US-Iran negotiations. (Wall Street News) Data from Intercontinental Exchange (ICE) show: In the week ending June 30, Brent crude futures speculators cut their net long positions by 34,704 contracts to 55,634 contracts. Gasoil futures speculators cut their net long positions by 2,664 contracts to 57,852 contracts. (Jin10 Data APP) Data show that oil exports from the Gulf region in June increased by more than 3 million barrels per day (bpd) from May, exceeding 10 million bpd, but still 40% below pre-war levels. The UAE led the recovery in oil markets, enabling millions of barrels of crude stranded in the Gulf region to enter international markets, allowing producers to raise output and push oil prices down to pre-war levels. Kpler data show that combined crude and condensate exports from Saudi Arabia, the UAE, Kuwait, Iraq and Iran rose by more than 3.5 million bpd from May to 10.07 million bpd. Vortexa, another cargo analytics firm, estimated June shipments at 10.2 million bpd, up from 7 million bpd in May, but still well below the 16.5 million bpd recorded a year earlier. According to data from Kpler, Vortexa and LSEG, the UAE’s crude exports reached a record 3.7 million to 3.8 million bpd in June, more than 1 million bpd above May’s level. (Jin10 Data APP) Additionally, three sources said that Venezuela’s largest refinery, the 645,000-bpd Amuay refinery, has resumed operations after a power outage on Friday and is currently processing about 140,000 bpd of crude, with the fluid catalytic cracking (FCC) unit also back online. Following two earthquakes last week that caused heavy casualties, multiple refineries in Venezuela were affected by power outages. Sources also said that the El Palito refinery, with a daily processing capacity of 146,000 barrels, has had power restored, but staff have not yet been able to restart the production units. (Jinshi Data APP) A Reuters survey showed that OPEC’s crude oil production rebounded sharply in June, up about 3.3 million barrels per day MoM to 19.43 million barrels per day, a clear rebound from May’s more-than-two-decade low, but still well below quota levels. The recovery in output mainly came from Gulf countries restoring supply, with Kuwait posting the largest increase; Iran, Saudi Arabia, and Iraq also raised output in tandem. Nigeria and Libya likewise made small increases. The UAE exited OPEC on May 1 and is no longer included in the statistics. The report noted that the earlier Iran war and the effective blockade of the Strait of Hormuz had disrupted supply; the US subsequently lifted restrictions on vessels at Iranian ports, helping some output recover. Although OPEC+ had planned to increase production in June, the plan was not fully implemented due to the war. Overall, global crude oil supply was being repaired, but had not yet returned to normal levels. (Jinshi Data APP) Recommended Reading:

Futures: Last Friday, LME lead opened higher with a gap at $1,870.5/mt, drifted higher during the Asian session; after entering the European session, bulls added positions while bears exited, and LME lead hit a high of $1,898/mt. It moved sideways near the close and finally settled at $1,888/mt, up 1.04%. Last Friday night, the most-traded SHFE lead 2608 contract opened at a low of 15,885 yuan/mt, moved sideways around the daily average line, with an intraday high of 15,965 yuan/mt, and finally closed at 15,930 yuan/mt, up 0.28%. On the macro front: ECB Governing Council member Mullan said that after last month's rate hike, inflation has pulled back with the plunge in crude oil prices, and the central bank is now in a favorable position. As tax revenue fell short of expectations, Germany plans to increase its borrowing target for 2027. Seven major OPEC+ oil-producing countries decided to increase crude oil production by 188,000 barrels per day on average in August. South Korea plans to use the tax dividends from the chip industry to set up a future fund to invest in economic growth engines and support the younger generation. The National Development and Reform Commission (NDRC) issued the "15th Five-Year Plan for Circular Economy Development." In June, the RatingDog China Services PMI stood at 54.1, down 0.3 percentage points from May, in expansion territory for the 42nd consecutive month. Three departments: adjust the vehicle and vessel tax preferential policies for energy-saving vehicles and NEVs. Hon Hai: June sales were NT$821.8 billion, up 52.1% YoY. Spot fundamentals: After stopping falling, SHFE lead rebounded, and suppliers actively quoted and sold, but after the lead price rose, downstream enterprises engaged in more negotiations, resulting in stagnant deals. Meanwhile, quotations for EXW cargoes from primary lead smelters saw lower premiums/discounts, with mainstream producing areas offering at discounts of 25 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price. For secondary lead, some smelters were in reduced or suspended production, with limited circulating supply in the market. Some secondary refined lead was quoted at discounts of 25 yuan/mt to premiums of 50 yuan/mt against SMM #1 lead, and downstream customers' rigid demand shifted toward primary lead. Also, after prices rebounded, dip-buying interest waned, and market trading was sluggish. Inventory: On July 3, LME lead inventory decreased by 1,300 mt to 293,150 mt; as of July 2, total social inventory of lead ingots across five regions tracked by SMM reached 72,500 mt, up 1,300 mt from June 29. Today's lead price forecast: Last week, amid a bearish fund frenzy, SHFE lead fell to a more than two-year low, causing widening losses for lead smelters and forcing secondary lead enterprises to reduce or suspend production again. Signs of bear exit then emerged, and lead prices stopped falling and rebounded. This week, we need to watch downstream enterprises' purchasing dynamics. If lead ingot destocking materializes, lead prices may continue to rebound; otherwise, vigilance is needed against the bears that have not yet exited.

SMM July 1: Metals market: Overnight, base metals broadly rose in both domestic and overseas markets, with only LME lead, LME nickel, and SHFE lead declining—LME lead fell 1.08%, LME nickel fell 0.55%, and SHFE lead fell 0.47%. The rest of the metals all gained. LME tin and SHFE tin surged over 2%, with LME tin up 2.58% and SHFE tin up 2.25%. LME zinc and SHFE zinc rose over 1%, with LME zinc up 1.85% and SHFE zinc up 1.4%. Gains in the remaining metals were all within 1%. Alumina main contract fell 0.25%, while cast aluminum main contract rose 0.42%. Overnight in the ferrous metals sector, most prices rose except for stainless steel. Stainless steel gained 0.92%, while iron ore fell 0.27%. Declines in other metals were modest. For coking coal and coke, coking coal edged up 0.08% and coke fell 0.15%. Overnight in precious metals, COMEX gold fell 0.42%, at one point dipping to a low of $3,955.4/oz, while COMEX silver rose 0.7%. Domestically, SHFE gold gained 0.8% and SHFE silver surged 3.43%. As of 6:44 am July 1, overnight closing prices: Macro front Domestic side: [NBS: June manufacturing PMI at 50.3%, China’s economic sentiment rebounds somewhat] National Bureau of Statistics (NBS) data showed that the June manufacturing PMI was 50.3%, up 0.3 percentage point from the previous month, returning to expansion territory. By enterprise size, large enterprise PMI was 50.7%, down 0.4 ppt from May but still above the threshold; medium-sized enterprise PMI was 50.5%, up 1.9 ppts, above the threshold; small enterprise PMI was 48.2%, down 0.3 ppt, below the threshold. Among the five sub-indexes that make up the manufacturing PMI, the production index and new orders index were above the threshold, while the raw material inventory index, employment index, and supplier delivery time index were all below the threshold. Huo Lihui, Chief Statistician of the NBS Service Industry Survey Center, commented on China’s June 2026 PMIs. The non-manufacturing business activity index for June was 50.2%, up 0.1 ppt from May, indicating a modest rebound in non-manufacturing sentiment. The services sector expanded at a faster pace. The services business activity index was 50.4%, up 0.1 ppt, showing some improvement. By sector, business activity indexes for telecommunications, broadcasting, satellite transmission services, internet software and information technology services, monetary and financial services, and insurance were all in the high-expansion territory above 55.0%, with rapid growth in total business volume. Air transport and real estate continued to operate below the threshold. The services business activity expectations index stood at 56.0%, up 0.6 ppt from May, reflecting improved corporate expectations for market development. Construction activity showed some improvement. The construction business activity index was 49.0%, up 0.2 ppt, edging up slightly. The construction business activity expectations index was 51.1%, remaining in expansion. [MIIT and eight other departments: Promote integrated planning and synchronous construction of industrial internet infrastructure and computing infrastructure such as smart computing facilities and supercomputing facilities] The Ministry of Industry and Information Technology (MIIT) and eight other departments issued a notice on the “Implementation Opinions on Promoting High-Quality Development of the Industrial Internet.” It proposes to enhance computing support. Promote integrated planning and synchronous construction of industrial internet infrastructure and computing infrastructure such as smart computing facilities and supercomputing facilities. Explore building an industrial computing network system, strengthen the dynamic coordination of multi-level computing capabilities across end, edge, and cloud, and meet the computing, network, storage, and usage needs of various entities’ business development. Rely on the integrated computing network to strengthen computing interconnectivity, improve the matching supply of intelligent and edge computing power, enhance the ability to process and deeply refine massive heterogeneous data at high speed, and deeply empower scenarios such as industrial large-model training and real-time interaction in the industrial metaverse. (Jin10 Data APP) US dollar: As of the overnight close, the US dollar index rose 0.06% to 101.17. Federal funds rate futures traders are increasingly betting that the Fed could start raising rates as soon as July. This previously unthinkable move could be disrupted by a series of economic data. The probability of a rate hike at the July policy meeting remains low, with interest-rate swaps currently pricing in about 9 basis points of tightening, implying roughly a 36% chance of a 25bp hike. Nonetheless, that probability has risen markedly; before new Fed Chairman Kevin Warsh shifted his focus to price stability, the odds were nearly zero. (From Wallstreetcn app) On the data front, the Job Openings and Labor Turnover Survey (JOLTS) report released Tuesday by the Bureau of Labor Statistics showed job openings edged up in May, but the pace of new hires pulled back. Data showed that at the end of May, total job openings across the US rose by 9,000 from the prior month to 7.594 million, above economists’ forecast of 7.3 million. The April figure was revised down from an initially reported 7.618 million to 7.585 million. The increase in openings was mainly concentrated in professional and business services and very small businesses with fewer than ten employees. The job openings rate held steady at 4.6%. Hiring declined by 45,000 to 5.17 million, with the hiring rate stable at 3.3%. US job gains have accelerated sharply for three straight months, and the market had been optimistic that the labor market was returning to a recovery path after a soft patch in 2025. However, the strong payroll gains have been largely driven by a simultaneous decline in both layoffs and quits, rather than by a pickup in hiring by businesses. (Jin10 Data) HSBC said that a sharp rally in the US dollar could be one of the biggest “pain trades” in the second half of this year. The bank expects the dollar to strengthen gradually in the first half of 2027, and warned that if the Fed signals a stronger readiness to tighten policy than the market expects, and if geopolitical tensions flare up again, the dollar could see an “explosive” rally. Risks have increased since the Fed’s June meeting, when policymakers focused on inflation and offered little forward guidance. That shifted market attention back to interest-rate differentials and helped the dollar strengthen against major currencies over the past two weeks. “A stronger dollar will certainly cause pain, but we think the ‘pain trade’ in FX will be an explosive dollar rally,” analysts including Paul Mackel wrote in a June 29 note. (Bloomberg) According to CME FedWatch: The probability of the Fed holding rates unchanged in July is 66.3%, while the probability of a cumulative 25bp hike is 33.7%. For the September meeting, the probability of rates remaining unchanged is 33.1%, a cumulative 25bp hike stands at 50.0%, and a cumulative 50bp hike at 16.9%. (Jin10 Data APP) Macro side: Today will see the release of China’s June RatingDog manufacturing PMI, US June Challenger job cuts, US June ADP employment change, final reading of US June S&P Global manufacturing PMI, US June ISM manufacturing PMI, US May construction spending m/m, UK June Nationwide house price index m/m, final UK June manufacturing PMI, Switzerland May real retail sales y/y, final French June manufacturing PMI, final German June manufacturing PMI, final Eurozone June manufacturing PMI, preliminary Eurozone June CPI y/y, and preliminary Eurozone June CPI m/m. In addition, Fed Chairman Kevin Warsh, ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem will speak at the “Policy Panel” event at the ECB Global Central Bank Forum. The Davos Tech Summit will be held July 1-4, with the theme “Physical AI and Robotics.” It is noteworthy that on July 1, the Hong Kong Exchange is closed for Hong Kong Special Administrative Region Establishment Day, with Southbound and Northbound trading shut. The Toronto Stock Exchange in Canada is closed for Canada Day. Crude oil: Overnight, oil prices fell in both markets, with US oil down 1.02% and Brent down 0.65%. The US Energy Information Administration (EIA) reported in its monthly data released Tuesday that US crude oil production climbed to a record 13.93 million barrels per day in April, driven by the Iran war boosting oil prices and producers ramping up output. EIA data showed that output increased by 216,000 bpd in April, with New Mexico hitting a record 2.37 million bpd. Texas crude production edged up 36,000 bpd to 5.83 million bpd, the highest since last November. Texas and New Mexico share the Permian Basin, which accounts for about half of total US crude output. The third-largest producing state, North Dakota, saw output rise to 1.13 million bpd, also the highest since last November. (From Wallstreetcn app) American Petroleum Institute (API) data showed that last week, US API crude inventories fell by 6.072 million barrels, after a 765,000-barrel draw the prior week. API Cushing crude inventories rose by 503,000 barrels, compared with a draw of 982,000 barrels the previous week. API gasoline inventories fell by 2.106 million barrels (vs. a build of 1.238 million barrels the prior week), while distillate inventories rose by 2.922 million barrels (vs. a build of 1.447 million barrels the prior week). (From Wallstreetcn app) Russia’s crude oil exports are surging to record highs, causing a buildup of crude at sea, while the price of crude, Moscow’s main source of revenue, is falling sharply. According to tanker tracking data compiled by Bloomberg, Russia’s average daily seaborne crude exports rose to 4.13 million barrels in the four weeks through June 28. That is the highest since the Russia-Ukraine conflict erupted in 2022; before the conflict, a large portion of Russian oil was sent to Western Europe via pipelines. The export surge means Russian oil inventories at sea have increased by about a third since mid-April lows, and cargoes are starting to accumulate off the coast of Egypt and Singapore, suggesting Moscow may face increasing difficulty in placing all its volumes. The rise in exports comes as Ukraine continues to attack Russian refineries, which may force crude that cannot be processed domestically to be exported. (Jin10 Data APP)