Hong Kong is further solidifying its position as a major Asian bullion trading hub, with several banks reportedly importing large gold bars ahead of the planned launch of a new central gold clearing system in July. At least four of the 11 banks participating in the new mechanism have asked traders to move 400-ounce gold bars into the city, Bloomberg reported, citing people familiar with the matter. The bars meet the London Good Delivery standard, the global benchmark for wholesale physical gold trading. The move suggests that banks are building up physical inventories to support delivery once the clearing system begins operating. The 400-ounce gold bar is the standard format used in London, the world’s largest bullion trading hub. These bars are commonly traded among banks, sovereign entities, and large institutional players. In Asia, however, gold trading is more commonly conducted in smaller kilogram bars, or kilobars. The decision to bring in 400-ounce bars therefore reflects Hong Kong’s intention to align its new clearing system with international bullion market practices, at least at launch. According to people familiar with the preparations, banks need to hold sufficient gold inventories in Hong Kong to facilitate physical delivery when clearing begins. The Role of the New Clearing Company The Hong Kong Precious Metals Central Clearing Company Limited is spearheading the development of this upcoming mechanism. Its board comprises 11 banks, including six international lenders, as well as other industry participants. Some of these lenders are expected to act as clearing banks when the system launches, while others may need more time to build the necessary bullion trading and settlement capabilities. Hong Kong’s Financial Services and Treasury Bureau said the clearing company has been working closely with the market to formulate the framework and rules for the system. Preparatory work has entered its final stage, according to the bureau. Hong Kong’s planned gold clearing system is expected to closely resemble key parts of London’s bullion market infrastructure. One important feature is the use of unallocated accounts. These accounts allow market participants to trade gold without assigning specific physical bars to each transaction. This structure helps improve liquidity and allows for faster, larger-scale settlement. At launch, Hong Kong plans to use the London Good Delivery standard. Longer-term arrangements, including whether the system will expand to other bar formats or delivery standards, are still to be determined. Competition With Singapore Hong Kong’s launch comes as competition intensifies among Asian financial centers seeking a larger role in the global gold market. Singapore has also announced plans to launch its gold clearing mechanism by the end of the year. Its system is expected to align with the London Good Delivery framework for large bars while also supporting delivery and settlement standards for kilobars used by major exchanges in Chicago and Shanghai. By moving first, Hong Kong could gain an advantage in attracting banks, trading houses, and institutional investors seeking more options for bullion trading and settlement in Asia. Both Hong Kong and Singapore are trying to capitalize on strong demand for gold across Asia. Many investors continue to view the precious metal as a long-term store of wealth and a hedge against uncertainty. Gold prices reached record highs earlier this year before retreating as geopolitical tensions in the Middle East, inflation concerns, and expectations of higher interest rates weighed on the market. Despite the pullback, demand for gold infrastructure in Asia remains significant, particularly as investors and financial institutions seek alternatives to traditional Western trading centers. Conclusion The reported import of London-standard 400-ounce gold bars marks a practical step in Hong Kong’s effort to build a deeper and more liquid bullion market. If the clearing system launches as planned in July, it could give Hong Kong a stronger role in regional gold trading by offering market participants a local platform for settlement, delivery, and liquidity. For now, the inventory buildup by participating banks signals that preparations are entering their final stage and that Hong Kong is positioning itself as a more important bridge between Asia’s gold demand and the global bullion market. source： https://www.phoenixrefining.com/blog/hong-kong-banks-build-gold-inventories-ahead-of-new-bullion-clearing-system-launch

This week, finished steel continued its gradual decline, while raw materials began to stabilize, with coking coal rebounding to some extent. During the week, rumors about a coal mine accident in Shanxi and customs clearance restrictions at the Mongolian border spread, boosting sentiment. Coupled with the China Mineral Resources talks, the raw materials side rebounded from lows. In the second half of the week, as rumors of maintenance at steel mills across various regions emerged, negative feedback expectations intensified somewhat, and raw materials pulled back. Approaching the weekend, however, the 10th round of coke price increases was initiated, pushing coking coal and coke futures higher. In the spot market, the off-season characteristics of end-users became increasingly evident, with the market restocking at low prices as needed. With spot prices remaining relatively firm, the spot-futures price spread continued to widen...

SMM July 3 News: The most-traded SHFE lead 2608 contract opened at 15,850 yuan/mt in intraday trading. In the morning session, it surged in a choppy manner, hitting an intraday high of 15,965 yuan/mt, before turning downward and weakening. In the afternoon, it continued to consolidate at lows, recovered slightly in late trading, and traded in a choppy manner. At the close, it settled at 15,885 yuan/mt, ending a four-day losing streak and recording a small bullish candlestick, gaining 120 yuan, or 0.76%. In the short term, lead prices were pressured by three bearish factors: weak seasonal demand in the battery off-season, inventory buildup from concentrated production resumptions at primary lead enterprises, and expectations for US Fed interest rate hikes. However, tight supply of scrap batteries pushed up smelting costs, and widespread production cuts due to losses at secondary lead smelters, combined with a global shortage of refined lead, provided bottom support for prices. In the short term, SHFE lead remains in the doldrums, with limited downside room. In the future, the focus should be on tracking downstream procurement, production resumptions at secondary lead smelters, lead ingot imports, and macro inventory changes outside China. Data Source Statement: Other data beyond public information is based on public data, market communication, and SMM's internal database models, processed by SMM, and is for reference only, not constituting any decision-making advice.

July 3 Brief: Northern ports: South African high-iron ore 30.5-31.4 yuan/mtu, down WoW; South African semi-carbonate ore 37.2-37.7 yuan/mtu, flat WoW; Gabonese ore 40.6-41 yuan/mtu, flat WoW; 46% Australian lumps 43.3-43.8 yuan/mtu, flat WoW; South African medium-iron ore 37-37.5 yuan/mtu, flat WoW. Southern ports: South African high-iron ore 33.5-34 yuan/mtu, down WoW; South African semi-carbonate ore 36.5-37 yuan/mtu, flat WoW; Gabonese ore 41-41.5 yuan/mtu, flat WoW; 46% Australian lumps 43.2-43.7 yuan/mtu, down WoW; South African medium-iron ore 37-37.5 yuan/mtu, flat WoW. The manganese ore market is stable but stagnant, end-use demand is weak, and buying and selling are dominated by wait-and-see sentiment.

Rebar prices drifted lower this week. The nationwide average price now stands at 3,089 yuan/mt, down 20 yuan/mt WoW from last Friday. Supply side, steel mill margins continued to shrink. A few blast furnace steel mills have gradually arranged maintenance and production cut plans, but most are still operating at previous levels. Attention will remain on the extent of production cuts. Among EAF steel mills in different regions, margins diverged slightly. In southwest China, electricity price subsidies during the rainy season kept margins relatively favorable, and most mills maintained previous output levels for now. However, in east China, adjustments to critical peak electricity pricing during the summer led to shorter operating hours, while in south China, high inventory pressure at steel mills also prompted reduced operating hours. Overall EAF production declined. Demand side, intermittent rainfall in east China this week slowed project construction progress. In central and northwest China, low-priced inflows from other regions encouraged downstream buyers to adopt a wait-and-see stance. Overall transaction performance was mediocre. Inventory side, total inventory continued to edge up. Given weak demand expectations, social inventory will remain in a phase of periodic accumulation. Looking ahead, supply-side margins turned worse, weakening production incentives, but soft demand provides limited support to bottom prices. While raw material side saw some sentiment-driven momentum, the underlying rebar fundamentals remain weak. Short-term market prices are likely to consolidate near the bottom. Future attention will be on the pace of inventory buildup.

The most-traded HRC contract fluctuated today, closing at 3,279 with a slight intraday decline of 0.3%. This week, cold-rolled and hot-rolled prices continued to weaken, and overall transaction volumes remained low. In terms of supply, the impact from mill line maintenance decreased WoW, leading to a slight increase in total HRC production. On the demand side, apparent demand dropped MoM. Regarding inventory, according to SMM statistics, HRC social inventory across 86 warehouses nationwide (large sample) reached 4.3757 million mt, up 84,500 mt or 1.97% WoW, and up 43.10% YoY on a lunar calendar basis. By region, all markets saw inventory buildup WoW, with the Northeast market recording a relatively large buildup. Cost side, the ninth round of coke price increases was implemented this week. Influenced by raw material market news, costs showed a pattern of strength early on and weakness later. Looking ahead, although the market has initiated a tenth round of coke price hikes, hot metal output has slowly pulled back from its peak, and cost support is expected to remain flat compared to earlier estimates. From the HRC supply-demand perspective, the current imbalance continues to accumulate. Amid off-season demand, inventory pressure is expected to persist and weigh on prices. Combined with remaining cost-side support, downside room is relatively small. HRC prices are likely to show a bottom-consolidation pattern next week, with the most-traded HRC contract moving in the 3,250–3,330 range.