SMM, Aug 11 – Overnight, LME copper opened at $14,122.5/mt, drifted lower in early trading to touch a low of $14,069/mt, then the copper price center gradually moved up to hit $14,177/mt, subsequently drifted lower again to finally settle at $14,120/mt, up 0.7%. Trading volume reached 15,000 lots, and open interest stood at 259,000 lots, up 1,164 lots from the previous trading day, reflecting long accumulation. Overnight, the most-traded SHFE copper 2609 contract opened at 107,850 yuan/mt, drifted lower in early trading to dip to 107,450 yuan/mt, then the copper price center moved up sharply to touch a high of 108,060 yuan/mt, eventually closing at 107,790 yuan/mt, up 0.16%. Trading volume reached 27,400 lots, and open interest stood at 212,000 lots, down 2,287 lots from the prior trading day, reflecting short covering. On the macro front, US Fed official Hammack said multiple rate hikes may be needed to bring down inflation, and Trump denied frequent calls with Warsh. In the Middle East, Iran discussed establishing safe shipping routes with Oman, with no transit fees involved; as Iran raised the issue of war compensation, Trump also said he would claim compensation and incorporate it into negotiations; Iran’s supreme leader made new personnel appointments, and Trump claimed the US military actually controls the Strait of Hormuz and has cleared mines. Overall, while the Middle East conflict has been recurring, expectations for rate hikes have diminished somewhat, providing some bullish support for copper prices. On the fundamental side, the supply end was affected by a typhoon, which reduced cargo flow efficiency, with high-quality copper being scarce while non-registered copper was relatively ample, leaving overall supply tight but with clear structural divergence among brands; the demand side was subdued by high copper prices, depressing downstream purchases, and overall performance remained weak. The supply-demand weakness persisted. On the inventory side, as of Monday, August 10, SMM copper inventories across major regions in China declined by 900 mt WoW to 118,000 mt, with total inventories down 13,600 mt from 131,600 mt a year earlier. In summary, copper prices are expected to drift higher today.

According to the latest SMM data, in July, the overall operating rate of domestic copper billet enterprises recorded 44.26%, down 1.83 percentage points MoM and down 0.56 percentage points YoY , with industry production staying at low levels and the pattern of divergence between large and small enterprises continuing. By enterprise size, the operating rate for large enterprises in the sample was 51.74% in July, still relying on long-term contracts and raw material channels to maintain strong production resilience, but it pulled back from June; the operating rate for medium-sized enterprises was 33.82%, and for small enterprises, it was only 22.96%. In July, operating rates for large, medium, and small enterprises trended down in tandem, with small and medium-sized enterprises hit significantly harder than top-tier players , and the polarization in the industry continued. Raw material constraints remained the core factor pressuring industry production . Controls on reverse invoicing for secondary resources continued to tighten, domestic supply of compliant secondary brass tightened, and enterprises turned to imported secondary brass to supplement raw materials, but supply outside China was tight, import offers stayed high, and raw material procurement costs stayed elevated. Brass raw material prices rose, but the downstream end-use market was fiercely competitive, with the finished product side unable to pass on costs synchronously, and profit margins for copper billet processing enterprises continued to be squeezed. Small and medium-sized processing plants were under financial pressure and faced greater difficulty in obtaining raw materials; voluntary production controls and cuts were widespread. On the demand side, in July, the industry was in a traditional consumption off-season , with procurement from traditional downstream brass end-users such as plumbing valves and hardware bathroom fittings remaining weak; downstream players mostly restocked on an as-needed basis, and willingness to proactively stockpile was weak, resulting in overall mediocre transactions for brass billets. While structural orders for copper billets used in new energy and AI cooling provided some support, growth was limited and insufficient to offset the demand weakness in traditional sectors. Affected by weak orders, finished product inventories at copper billet enterprises stayed at relatively high levels, and in-plant destocking progressed sluggishly, further weighing on enterprises' production willingness. Looking ahead to August, pressure from the traditional off-season will intensify further ; feedback from SMM sample enterprises indicates that the tight raw material supply is unlikely to improve significantly in the short term, and there are no signs yet of a substantive recovery in end-use demand. SMM expects that the overall operating rate of domestic copper billet enterprises will fall 2.04 percentage points MoM to 42.22% in August, and will be down 1.6 percentage points YoY . By size, large enterprises will see a slight decline in production due to insufficient new orders despite some existing order support; small and medium-sized enterprises will continue to face dual pressures from high-priced raw materials and inadequate end-use orders, with production remaining under pressure. Overall, short-term raw material bottlenecks and off-season demand exert dual pressure. China's copper billet market is expected to remain in the doldrums, and the recovery of industry operations and profits will still need to wait for the easing of raw material supply and the arrival of the traditional downstream consumption peak season.

[Magnesium Ingot in the Doldrums, Demand Caps Rebound Room] This week, mainstream quotations for magnesium ingot in major producing areas were 15,800-15,900 yuan/mt, up 100 yuan/mt WoW, while FOB prices in the overseas market weakened in tandem. The Chinese market consolidated at lows overall, with smelting costs providing bottom support and leaving limited further downside room. However, producers’ hold-back-from-selling sentiment showed signs of easing, and low-priced supplies emerged. Downstream users and traders had insufficient orders and remained cautious in procurement, leaving overall trading sluggish. On the export front, the overseas summer break has not yet ended, with limited inquiries from the overseas market and evident push for lower prices from buyers outside China. Upstream, dolomite supply channels were switched, keeping raw material supply ample and prices stable. Downstream magnesium powder and magnesium alloy followed the magnesium ingot in the doldrums, with the magnesium alloy market showing supply-demand weakness and processing fees under pressure. In the short term, magnesium ingot lacks upward drivers and is expected to continue the pattern of moving sideways.

SMM Weekly Stainless Steel Futures Review — week of July 27 – July 31, 2026. Conflicting RKAB supplementary quota signals and a hawkish Fed swing the benchmark contract to a RMB 30/mt gain in the week of August 3–7.

[Vietnam] Vietnam’s domestic steel market remained broadly stable after major mills raised prices last week. Prices for rebar held at around USD 533.6/tonne, while HRC for August delivery was quoted at USD 556–557/tonne. Rainy-season demand weakness and lower input costs limited further gains, while international prices eased from USD 540/tonne to USD 536/tonne. Meanwhile, the EU proposed a 16% anti-dumping duty on Vietnamese CRC, which could raise export costs and weaken its competitiveness in the EU market.

[SMM Silver Weekly Review: Silver Surges 7% This Week; Double Bottom Pattern Emerges; Mixed Outlook Ahead] This week, silver prices moved up unilaterally, gaining 7.08% WoW. Weaker ADP data and US-Iran peace talks drove a pullback in rate hike expectations, but hawkish comments and cautious sentiment ahead of the non-farm payrolls limited gains. Spot supply and demand were both weak, with transactions centered around parity. Inventories edged down, while ETF holdings inched up WoW. A short-term double bottom pattern has taken shape, but the foundation for further upside remains fragile. Watch for guidance from the upcoming non-farm payrolls data.