[SMM Magnesium Market Analysis: Magnesium Market Walked a Symmetric Consolidation Pattern in H1 2026, Weakening After the Fade of the Boom – Where Is the Bottom of Magnesium Prices?] Looking back at the Chinese magnesium market in H1 2026, affected by concentrated production halts at magnesium smelters earlier, the pattern of strong supply and weak demand quietly reversed. Tight spot supply and low inventory provided a good foundation for phased rises in the fundamentals of the magnesium ingot market. Coupled with news-driven disturbances such as surging demand for magnesium alloys, speculative demand suddenly emerged, and market procurement enthusiasm soared. In Q1, magnesium prices showed a stair-step increase. Overly high expectations boosted smelters' production enthusiasm, and magnesium smelter output rose continuously. By June 2026, China's primary magnesium production had reached 110,000 mt. The continuous increase in output added to the sales pressure on magnesium smelters. With both inventory and output rising, magnesium prices showed a stair-step decline in Q2. Overall, magnesium prices presented an inverted V-shaped trend in H1.

[Weekly Review of Aluminum Scrap and Secondary Aluminum]The price difference between A00 aluminum and aluminum scrap narrowed sharply, and with cost support, the spread between ADC12 and primary aluminum continued to widen.

[SMM EMM Weekly Review: Cost and Production Cuts Double Bottom Support, Off-Season Market Stabilizes in Narrow Range] This week, China's EMM market rebounded slightly and then entered a sideways movement channel. Spot quotations overall stabilized and consolidated. The futures market showed a stalemate pattern where both gains and losses were difficult, with the downside room for prices fully locked. Costs and the supply side formed a double bottom support, becoming the core driving force stabilizing the market......

SMM July 2: Intraday, the most-traded SHFE lead 2608 contract opened at 15,811 yuan/mt, saw small fluctuations and edged higher early in the session, but failed to hold above the average price line. It subsequently consolidated and pulled back, dipping to 15,745 yuan/mt before slightly rebounding. In the latter half of the session, it moved sideways weakly in the 15,745-15,760 range, finally closing at 15,765 yuan/mt, recording a bearish candlestick. It fell by nearly 170 yuan/mt, a decline of 0.9%. The primary lead market showed divergence, with production cuts and smelters undergoing maintenance and resuming production coexisting; secondary lead output weakened, and downstream battery manufacturers also cut production, weighed down by sluggish orders, leaving the industry currently with both supply and demand weak. Combined with high LME lead inventories and a continuous inflow of low-grade lead suppressing futures, short-term lead prices are expected to remain in the doldrums. Data source statement: All data other than public information are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only and not constituting any decision-making advice.

SMM July 2 – Price review: As of Thursday this week, the SMM alumina index stood at 2,693.19 yuan/mt, up 11.9 yuan/mt from last Thursday. Shandong was quoted at 2,770–2,830 yuan/mt, up 20 yuan/mt from last Thursday; Henan was quoted at 2,790–2,850 yuan/mt, up 20 yuan/mt from last Thursday; Shanxi was quoted at 2,800–2,870 yuan/mt, up 20 yuan/mt from last Thursday; Guangxi was quoted at 2,630–2,730 yuan/mt, flat from last Thursday; Guizhou was quoted at 2,760–2,800 yuan/mt, flat from last Thursday. Markets outside China: As of July 2, 2026, FOB Western Australia alumina priced at $330/mt, with ocean freight at $32.3/mt and the USD/CNY selling rate near 6.80. This translates to an approximate delivered-to-China-main-port price of around 2,865.02 yuan/mt, a premium of 90.37 yuan/mt over the alumina index. One overseas spot alumina transaction was reported this week, details as follows: (1) On June 25, 2026, 30,000 mt of alumina were traded overseas at $330/mt FOB Western Australia, for August shipment. Chinese market: According to SMM data, as of Thursday this week, China’s total built capacity for metallurgical-grade alumina stood at 118.42 million mt/year, with operating capacity at 87.95 million mt/year. The national weekly alumina operating rate fell 0.23 percentage points WoW to 74.27%. Shandong’s weekly operating rate rose 0.95 percentage points to 89.31%; Shanxi’s rate rose 0.41 percentage points to 64.31%; Henan’s rate fell 3.5 percentage points WoW to 56.83%; Guangxi’s rate rose 0.43 percentage points WoW to 76.13%; Guizhou’s rate rose 3.13 percentage points WoW to 81%. Spot market: Two transactions were concluded this week. Xinjiang procured 10,000 mt of spot alumina at a delivered price of around 3,135 yuan/mt. Gansu procured spot alumina at a delivered price of 3,000 yuan/mt. As of Thursday this week, while alumina prices continued to trend higher, gains had noticeably narrowed, with prices showing signs of weakness over the past two days. The overall center of spot transaction prices continued to shift lower. Inventory: According to SMM, China’s total alumina inventory edged up 1,000 mt WoW to 7.015 million mt, with overall changes relatively small. Structurally, aluminum smelter raw material inventory fell 47,000 mt to 3.364 million mt, mainly as elevated spot alumina prices prompted some smelters to actively draw down high-cost in-factory inventory, leading to a decline. Alumina refinery in-factory inventory rose slightly by 2,000 mt to 1.231 million mt, as maintenance-related production cuts in Shanxi were offset by production increases in south China, resulting in limited overall change. Ports, new vessels arrived successively, and this week port inventory increased by 31,000 mt to 891,000 mt. Warrant inventory, affected by invoicing issues and the spread between futures and spot prices, saw weakened willingness to ship to delivery warehouse, decreasing by 9,000 mt to 263,000 mt. In-transit and platform inventory increased by 23,000 mt to 1.267 million mt, mainly due to warrants gradually maturing and converting to spot, coupled with continuous shipments from Guangxi, leading to some accumulation of in-transit cargoes. Overall, the operating pattern of alumina is expected to change little next week. Some enterprises using domestic ore may schedule maintenance due to ore supply issues, but the impact on monthly production will be limited, and overall inventory will remain at current levels. Prices, as the regional alumina mismatch gradually eases, the spot price center is expected to pull back, and the subsequent trend will tend to be under pressure. [Data other than publicly available information are based on public information, market communication, and SMM's internal database models, processed by SMM, for reference only and do not constitute decision-making advice.]

SMM July 2 News: Data highlights: As of Thursday, July 2, SMM copper inventories in major Chinese regions decreased by 6,100 mt WoW to 199,900 mt. Total inventories were 68,100 mt higher compared to 131,800 mt in the same period last year. Specifically, in Shanghai, reduced arrivals of both imported and domestic cargoes, along with downstream enterprises gradually picking up goods, drove inventory destocking; the situation was similar in Jiangsu, where downstream demand recovered and inventories also pulled back; in Guangdong, the mid-year settlement coincided with multiple downstream enterprises making temporary production cuts, causing Guangdong's inventories to keep rising. Looking ahead, on the supply side, imported cargo arrivals are expected to stay stable in the near term, while domestic cargo arrivals remain low. On the demand side, after copper prices stabilized, downstream buying sentiment weakened, with only just-in-time procurement being made. Currently, spot supply is generally tight, and the market is dominated by just-in-time purchases. National copper social inventories are expected to continue destocking next week.