[Central Bank Sends Easing Signals; Supply-Demand and Geopolitical Games Limit Aluminum Price Upside Room] Our comprehensive assessment shows that the macro front has improved recently, with the marginal constraints of interest rate hike expectations on the nonferrous metals sector continuing to ease. The proportion of liquid aluminum in China has kept rising. China’s central bank will implement accommodative monetary policies, step up counter-cyclical adjustments, and redouble efforts to expand domestic demand to steer the economy toward sustained, more favorable, and broader-based development. The persistent geopolitical risk premium in the Middle East has jointly underpinned aluminum prices, significantly boosting short-term market confidence. However, the ongoing commissioning of long-term aluminum capacity outside China, the recent softness in traditional end-use demand in China, combined with the repeated shifts in expectations for US Fed interest rate hikes and the uncertainties triggered by geopolitical turmoil in the Middle East, continue to exert certain pressure on the upside room for aluminum prices.

Futures: Last Friday, LME lead opened at $1,895/mt, drifting lower then stabilizing in the Asian session; entering the European session, it briefly touched a high of $1,899/mt before weakening, dipping to a low of $1,875.5/mt in late trading, and finally closed at $1,880.5/mt, down 0.69%. Last Friday night, the most-traded SHFE lead 2609 contract opened at 15,550 yuan/mt, lightly touched a high of 15,565 yuan/mt at the start before drifting lower, dipped to 15,360 yuan/mt in late trading, and finally settled at the low of 15,360 yuan/mt, down 1.22%. On the macro front: South Korea's KOSPI index rallied nearly 18% last Friday, posting its largest single-day gain on record, with a monthly decline of 22% ranking as the third-largest in history. Foreign investors net purchased 7.2 trillion won worth of KOSPI shares last Friday, hitting an all-time high. On the first day of tighter regulations on leveraged ETFs in South Korea, trading volume plummeted 75%. South Korea's July exports surged to the second-highest level on record, and semiconductor exports soared nearly 180% YoY. The US Fed: ① Fed Chairman Walsh considered reducing the frequency of annual meetings. ② Several Fed officials voiced support for interest rate hikes, intensifying hawkish pressure internally. China's manufacturing PMI for July was 49.2%, with manufacturing production showing good resilience. The People's Bank of China held a work conference for H2 2026, continuing to implement moderately accommodative monetary policy. July sales performance from new energy vehicle startups was released, with BYD sales exceeding 410,000 units to reach a new high, and Leap Motor surpassing the 100,000-unit mark. Spot fundamentals: In the Shanghai market, Chihong lead was quoted at 15,600-15,630 yuan/mt, at premiums of 50-80 yuan/mt against the SHFE 2609 contract. The center of SHFE lead shifted lower again, with suppliers reducing shipments and limited quotes from the Jiangsu, Zhejiang, and Shanghai markets. Meanwhile, EXW cargo quotes from primary lead smelters showed north-south divergence, with suppliers in the northern market actively quoting and selling, while those in the southern market held back from selling at low prices, offering few quotes, and mainstream production areas quoted at premiums of 0-25 yuan/mt against the SMM #1 lead average price. In secondary lead, smelters had many shutdowns, with some secondary lead smelters holding prices firm to sell, and secondary refined lead quotes were at premiums of 20-50 yuan/mt against the SMM #1 lead average price, with individual quotes at a premium of 125 yuan/mt. Downstream enterprises remained mainly engaged in just-in-time procurement, with wait-and-see sentiment rising, and spot market trading was thin. Inventory side: On July 31, LME lead inventory decreased by 4,575 mt to 441,275 mt; as of July 30, total SMM lead ingot social inventory across five regions reached 68,500 mt, up 6,100 mt from July 23, and up less than 100 mt from July 27. Lead price forecast today: In August, lead consumption is expected to show no improvement, with downstream enterprises cautious in procurement and lead ingot inventory accumulating, dragging lead prices to consolidate on a subdued note. Meanwhile, increased maintenance and production cuts at primary and secondary lead smelters, along with expectations of supply tightening, drove the narrowing of spot discounts for lead, providing strong support for lead prices.

[SMM Daily Review: Weaker Dollar and Cooling PCE Resonate, Silver Price Continues to Consolidate at Lows] SMM July 31 News: The dollar plunged below 100, PCE cooled, but conditions for a trend shift in rate hikes were not met, and silver prices consolidated. Spot cargo supply and demand were both weak at month-end, transactions were sluggish. Attention is on next month's maintenance and demand recovery.

[Marginal Easing in Expectations for US Fed Rate Hikes, Continued Aluminum Destocking Underpins Market] Based on a comprehensive assessment, the macro front has improved recently; marginal constraints from rate hike expectations on the nonferrous metals sector continue to ease; the proportion of liquid aluminum in China keeps rising; the Middle East geopolitical risk premium continues to accumulate, while aluminum ingot destocking continues in China, collectively underpinning aluminum prices; and market confidence has strengthened markedly in the short term. However, the continuous rollout of long-term aluminum capacity outside China, weak traditional end-use demand in China, coupled with recurring expectations for US Fed rate hikes overseas and disturbances from uncertainties in the Middle East geopolitical situation, still exert some pressure on the upside room for aluminum prices. In the short term, aluminum prices consolidate on a strong note.

SMM July 30: PV Aluminum Extrusion: This week, according to feedback from PV frame enterprises in the survey sample, industry operating rates remained stable overall. According to SMM, China’s module scheduled production was ~38.5 GW in July, and is expected to edge up MoM to 39.3 GW in August. Underpinned by stable-to-rising demand from downstream module production schedules, PV frame enterprises’ operating rates are expected to hold steady in the near term, with leading PV frame enterprises with long-term contract advantages maintaining high operating rates. Raw Material Prices: During the period (July 27–30, 2026), the SMM A00 weekly average price was 23,357.5 yuan/mt, up 0.8% from the previous week’s average. Overall, the continuous rise in the proportion of liquid aluminum in China, the persistent geopolitical risk premium in the Middle East, combined with sustained destocking of domestic aluminum ingots, jointly supported aluminum prices, visibly enhancing near-term market confidence. However, the continuous additions of forward aluminum capacity outside China, weak traditional end-use demand in China, together with ongoing fluctuations in expectations for US Fed interest rate hikes and uncertainty in the Middle East geopolitical situation, still pose certain pressure on aluminum price upside. In the near term, aluminum prices maintained a consolidation pattern on a strong note. Next week, the most-traded SHFE aluminum contract is expected to move in a range of 23,000–24,150 yuan/mt, and LME aluminum in a range of $3,100–3,250/mt.

[SMM Aluminum Price Weekly Review: Two Major Factors Boosted Market Confidence, Short-Term Aluminum Price Maintained Consolidation on a Strong Note]