Raw material side, lithium carbonate and nickel sulphate prices fluctuated this week, while cobalt sulphate prices fell steadily.

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

[Production Under Pressure, Supply Marginal Reduction, Silicon Prices Remain Under Pressure] Currently, the silicon metal industry chain is showing a clear game-playing pattern, with structural divergence between upstream and midstream. On the supply side, silicon enterprises are incurring cash flow losses, and a few have undergone maintenance and production halts. As the actual output reduction has been limited so far, it has not had a directional impact on market sentiment. Silicon enterprises are holding prices firm and unwilling to lower quotations to boost orders, leading to an accumulation trend in industry in-factory inventory. In the midstream, social inventory has been destocking for several consecutive weeks. Trading firms engaging in both spot and futures markets are preferring transactions at low futures levels, and inventories in the trade circulation sector continue to destock. The tightening of circulating supply has driven the spot-futures price spread to strengthen, with spot prices showing greater resistance to declines than futures.

[SMM Aluminum Flash] This week, the overall trading in China's petroleum coke market improved. Low-sulphur petroleum coke remained firm and strong, while mainstream medium- and high-sulphur petroleum coke prices generally rose. Petroleum coke prices across all specifications edged higher. The latest SMM data shows that the north-east China No.1 petroleum coke spot price index was 4,415.73 yuan/mt, flat WoW; the Shandong No.2 petroleum coke spot price index was 4,276.73 yuan/mt, up 0.93% WoW; the Shandong No.3 petroleum coke spot price index was 3,738.11 yuan/mt, up 1.12% WoW; and the Shandong No.4 petroleum coke spot price index was 2,093.05 yuan/mt, up 4.46% WoW.

As of July 28, LME zinc inventories (including off-warrant stocks) had fallen to 119,600 mt, down by approximately 45,000 mt from mid-June. As overseas inventories continued to decline, the LME zinc market structure shifted from contango to backwardation, with the backwardation widening further. By July 28, the LME zinc cash-to-3M spread had strengthened to US$61.09/mt.

Spot lithium carbonate prices moved sideways in a narrow range this week, with the price center edging up slightly WoW. The futures market consolidated on a subdued note. The price range of the most-traded 2609 contract drifted lower from 143,300-148,200 yuan/mt early in the week to 140,600-149,400 yuan/mt. Mid-week, it hit a high of 149,400 yuan/mt before pulling back, and dipped to a low of 140,600 yuan/mt. Open interest continued to decline, with both longs and shorts mainly reducing positions. Market transactions showed a pattern of "downstream purchasing as needed and upstream holding prices firm while holding back from selling," and actual transactions were relatively active. Upstream lithium chemical plants had strong sentiment to hold prices firm and hold back from selling for spot orders, with willingness to sell remaining sluggish. Some enterprises anchored their willingness to sell spot orders at above 160,000 yuan/mt. Current supply was mainly based on long-term contract guarantees and "long-term contract + growth" delivery models. Downstream material plants continued their strategy of purchasing as needed and buying the dip, with relatively strong willingness to buy the dip below 145,000 yuan/mt for just-in-time needs, but limited acceptance of higher prices. There was little large-scale stockpiling, and procurement was generally stable as it was month-end. Traders were affected by both upstream supply contraction and limited spot order circulation, as well as downstream just-in-time procurement, and remained in a destocking state. Overall, market inquiries and actual transactions were relatively active. Supply side, production continued to decline significantly, and upstream inventory remained low. This week, China's lithium carbonate production continued to decline sharply, significantly affected by maintenance and production halts at lithium chemical plants using spodumene and lepidolite. Inventory changes: Upstream lithium chemical plants still maintained their strategy of holding back from selling spot orders, with persistently sluggish willingness to sell; combined with multiple plants entering maintenance, inventory remained low. Downstream material plants continued their pace of purchasing as needed; as it was month-end, procurement was generally stable, and inventory was basically stable. Traders, affected by both upstream supply contraction and downstream just-in-time procurement, continued destocking. The funding side showed a pattern of both longs and shorts reducing positions. Futures open interest continued to decline this week, indicating that both longs and shorts were closing positions; market wait-and-see sentiment intensified, and prices lacked a clear directional driver. Looking ahead, short-term lithium carbonate prices are expected to maintain a sideways consolidation pattern. Supply side, ongoing maintenance and production halts at some lithium chemical plants and tightening circulation of spodumene ore provided support for prices, with supply contraction being the main bullish factor currently. Demand side, downstream dip-buying and purchasing as needed continued, but large-scale concentrated stockpiling had not yet appeared, lacking sustained upward momentum. Going forward, key attention should be paid to the progress of maintenance recovery at lithium chemical plants, changes in downstream restocking pace, and production schedule expectations for August.