This week, multiple news items on the raw material front successively boosted market sentiment, with finished steel prices rebounding from lows in phases and generally showing a bottoming-out trend. At the start of the week, the weak fundamentals of finished steel were hard to change, and ferrous metals prices had overshot to the bottom. Subsequently, however, coal mines in Shanxi were affected by rainfall, and circuit failures led to production suspensions at some mines, sentimentally driving ferrous metals prices to bottom out. Mid-week, there were rumors of a 48-hour strike at BHP, with limited short-term tangible impact, but sentiment...

SMM, August 3: The SHFE aluminum 2608 contract opened at 23,400 yuan/mt today, reached a high of 23,665 yuan/mt, hit a low of 23,400 yuan/mt, and closed at 23,625 yuan/mt, down 10 yuan/mt or 0.04% from the previous trading day. Trading volume was 12,000 lots, open interest was 40,300 lots, and daily position change was -5,189 lots. The price stood above the MA5 (23505), MA10 (23357.50), MA20 (23228.50), and MA40 (23362.25), but still below the MA60 (23758.92). The short-term repairing pattern continued, but resistance remained overhead. In the MACD indicator, the DIFF (23.83) was above the DEA (-72.27), and the histogram recorded 192.20, with bullish momentum still releasing. Trading volume was low, and the daily position change of -5,189 lots indicated a significant capital outflow. The session’s low opening and subsequent recovery largely reflected position-squaring repair, and sustained upward momentum still needs to be observed. SMM comment: The indirect technical talks between the US and Iran made progress, with both sides discussing fund returns and strait security, and nuclear issue consultations are about to start. The geopolitical risk premium continued to shrink, disputes over the management of the Strait of Hormuz persisted, and the resumption of navigation through the strait remained uncertain. The US Fed’s hawkish pivot boosted the US dollar index, weighing on non-ferrous metals prices. Under macro headwinds, aluminum prices in China and overseas fell. In the short term, bearish factors dominate, and aluminum prices are expected to continue in the doldrums. The alumina 2609 contract opened at 2,627 yuan/mt today, reached a high of 2,648 yuan/mt, hit a low of 2,621 yuan/mt, and closed at 2,633 yuan/mt, down 2 yuan/mt or 0.08% from the previous trading day. Trading volume was 149,700 lots, open interest was 227,200 lots, and daily position change was -15,651 lots. The price remained below the MA5 (2653.60), MA10 (2682.50), MA20 (2690.55), MA40 (2764.93), and MA60 (2773.88). The moving averages maintained a bearish alignment, and the weak pattern of futures continued. In the MACD indicator, the DIFF (-35.37) was below the DEA (-31.96), and the histogram recorded -6.81, indicating persistent bearish momentum. Trading volume remained at a certain level, but the daily position change of -15,651 lots showed a significant capital outflow. Near-term futures are likely to continue consolidating on a weak note at low levels. SMM comment: According to SMM data, as of last Thursday, China’s total alumina inventory edged down WoW. Looking at the inventory structure, the raw material inventory at aluminum smelters continued to destock slightly, but due to recent large price fluctuations and market division over the outlook, restocking willingness was weak, with end-users mainly taking a wait-and-see approach. In-factory alumina inventory decreased, mainly due to phased maintenance at some northern enterprises, where production constraints led to prioritized consumption of in-factory inventory. This effect is expected to gradually fade after the maintenance ends next week. Port inventory continued building, with overseas port arrivals staying high, and imported resources supplemented spot supply, adding to market pressure. Overall, the oversupply pattern remained unchanged. Before Guinea’s bauxite quota policy is implemented, the market lacks a clear bullish driver. Next week’s inventory is expected to shift from weak destocking to a slight inventory buildup, supply and demand will remain loose, and alumina prices will continue to consolidate on a weak note. [The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this as a substitute for independent judgment. Any decision made by clients is not associated with SMM]

Ferrous metals showed slight divergence this week, with coking coal outperforming while iron ore, coke, and coil and rebar were generally weaker, and iron ore led the decline. During the week, news of the U.S.-Iran conflict fluctuated, but the market...

[Galvanising Operating Rate Edges Up]: The operating rate of the galvanising industry was 55.07% this week, up 1.56 percentage points WoW. Raw material side, zinc prices continued to consolidate at highs this week, with enterprises purchasing mainly on a need-to basis. Zinc ingot inventories at galvanising enterprises edged down.

[Rainy Season Arrives, Galvanizing Demand Weakens]: This week, the operating rate of the galvanizing industry was 53.51%, down 1.05 percentage points WoW. From the raw material side, zinc prices consolidated and rebounded this week, downstream purchasing enthusiasm weakened, wait-and-see sentiment was relatively strong, and they mainly drew down raw material inventories, leading to a decline in zinc ingot inventories at galvanizing enterprises.

In H1 2026, the galvanizing industry generally showed characteristics of "slow recovery in Q1 and underperformance in the peak season in Q2," with the overall operating rate weaker than the same period last year.