This week, ferrous metals trended mostly higher, with performance varying slightly among varieties. Coking coal and coke were the strongest performers, while iron ore and finished steel posted relatively limited gains. During the week, safety supervision remained stringent, the pace of production resumptions at coal mines fell short of expectations, and structural shortages of coking coal grades further deepened, leading coking coal futures to continue rising. Coking plants suffered heavy losses...

Galvanized-Cold Rolled Spread Consolidated at Lows in 2026, Significantly Below Previous Years' Levels Since early 2026, the galvanized-cold rolled spread has been moving extremely sideways in the 220-300 yuan/mt range, with an average of 273 yuan/mt, significantly below the 414 yuan/mt average in the same period of 2025. SMM Galvanized-Cold Rolled Spread Chart Source: SMM Looking back at historical data, from 2023 to 2025, the galvanized-cold rolled spread showed clear seasonal characteristics, with the spread quickly shooting up in Q2 as downstream demand recovered, reaching a yearly high in mid-year before gradually pulling back. However, in 2026, the spread broke its historical pattern, consolidating at narrow low levels throughout the year, without the significant expansion seen in Q2 of previous years. In H1 2026, the galvanized-cold rolled spread mostly consolidated in the 220-300 yuan/mt range, with minor fluctuations in January-March, and after hitting a yearly low in May, it slowly edged up, with a peak only approaching 300 yuan/mt, significantly below the 500-800 yuan/mt peak levels in the same period of previous years. The prolonged suppression of the galvanized-cold rolled spread is fundamentally due to constraints from both supply and demand. On the supply side, the concentrated release of new production lines for China domestic galvanizing and zinc-aluminum-magnesium products has intensified competition, significantly compressing the upside room for galvanizing processing fees. On the demand side, real estate-related galvanizing consumption remained relatively weak; although automotive and home appliance demand showed resilience, the overall incremental demand for galvanized sheet was limited, and exports of galvanized sheet were unable to fully absorb the new capacity, significantly weakening the boost effect from peak seasons. Meanwhile, on the cost side, ample supply of cold-rolled substrate and its low price level, along with difficulties for zinc price fluctuations to fully support galvanized sheet costs, further curbed the upward movement room for the galvanized-cold rolled spread. In H2 2026, the galvanized-cold rolled spread is expected to continue moving sideways in the current range or narrow upward fluctuations Looking ahead to H2 2026, the probability of a significant rise in the spread is low; under a neutral scenario, it may continue moving sideways in the 260-340 yuan/mt range. If manufacturing orders show marginal improvement during the September-October peak season, the spread may have a slight upward opportunity, but due to capacity constraints, the upside room is limited. If peak season demand falls short of expectations, the spread faces downward pressure to 220-250 yuan/mt. Further sharp contraction in the spread would lead to larger losses for steel mills, forcing some galvanizing production lines to undergo maintenance or cut production, providing bottom support for the spread. Overall, against the backdrop of overcapacity and weak demand, the galvanized-cold rolled spread is unlikely to return to previous high levels, and is more likely to fluctuate in a range following marginal changes in demand.

SMM Weekly Stainless Steel Futures Review — week of August 17–21, 2026. Chinese stainless steel futures held in a narrow band all week, settling at RMB 14,205/mt (about $2,108/mt) on August 21.

Two residential land parcels in Wuhan's East Lake High-tech Development Zone were transferred on the 21st, with a total transaction amount of 835 million yuan. Among them, the Kangqiao Street residential project attracted multiple real estate companies to participate in bidding. After 122 rounds of fierce bidding, Shiyan Hancheng Real Estate finally won the parcel with a total price of 743 million yuan, with a transaction floor price of 14,738 yuan/sqm and a premium rate of 49%. The Changling residential project was won by Wuhan Gehua Group at a reserve price of 93 million yuan, with a transaction floor price of 4,978 yuan/sqm.

Futures: Overnight, the LME lead 3M contract on August 20 traded in a range, opening at $1,886/mt and consolidating sideways in a narrow range of $1,886-1,892/mt during the Asian session. It quickly dipped to the intraday low of $1,877.5/mt in early European trading before gradually recovering. After entering the combined European and US trading session (after 20:00 Beijing time), it accelerated its rally, hitting a high of $1,903.5/mt and eventually closing at $1,899.5/mt, up $13.5/mt from the previous trading day, a gain of 0.72%. The trading range for the session was $1,877.5-1,903.5/mt, with a volatility of $26/mt, trading volume of 6,876 lots, and open interest of 174,073 lots. Overnight, the SHFE lead 2610 contract opened higher and moved higher in the night session, starting at 15,930 yuan/mt. It quickly rallied after opening, rising to around 16,060 yuan/mt, successfully breaking through the 16,000 yuan/mt mark. It then continued to drift higher, reaching a high of 16,120 yuan/mt and eventually closing at 16,115 yuan/mt, up 180 yuan/mt from the previous trading day's closing price, a gain of 1.13%. Night session trading volume was 39,852 lots, with open interest of 80,584 lots. Notably, the rally in SHFE lead during the night session was highly synchronized with LME lead movement. LME lead accelerated its rally after 20:00 Beijing time, rising quickly from around $1,880/mt to $1,903.5/mt. SHFE lead followed suit immediately after the night session opened at 21:00, rallying from 15,940 yuan/mt, breaking through the 16,000 yuan/mt mark, and reaching a high of 16,120 yuan/mt. The two trends were highly correlated, with the combined strength of both SHFE and LME driving lead prices higher. On the macro front: This evening, the preliminary August manufacturing PMIs for France, Germany, the Eurozone, and the US will be released. The probability of the US Fed keeping rates unchanged in September was 63.8%, while the probability of a rate hike was 36.2%, with expectations of a rate hike in October further heating up. Additionally, the 5-year German bond yield touched 3% for the first time since 2008, and long-end US bond yields rebounded. The Middle East situation escalated sharply, with Trump announcing "the toughest economic action in history" against Iran, and the Houthis attacking Saudi Aramco facilities. Overnight, the three major US stock indices closed lower, putting industrial metals under short-term pressure. National Development and Reform Commission (NDRC) Chairman Zheng Shanjie chaired a symposium with private enterprises to solicit opinions on stabilizing economic operations and promoting effective investment, releasing signals of stabilizing growth. Shanghai introduced the "Shanghai Eight Measures" for the real estate market, lowering the minimum down payment ratio for commercial personal housing loans. China and Switzerland completed the upgrade negotiations for their free trade agreement. The Ministry of Commerce commented separately on the EU's abuse of unilateral tools to suppress Chinese enterprises and the US tariff of 232 on Chinese drones. Spot fundamentals: SMM #1 lead prices rose by 50 yuan/mt (up 25 yuan/mt the previous day), with spot premiums offered by suppliers unchanged from the previous day. For primary lead cargoes self-picked up from the production site, suppliers had varying shipment sentiments, resulting in chaotic market quotes. Quotes from major production regions against the SMM #1 lead average price ranged from discounts of 20 yuan/mt to premiums of 100 yuan/mt EXW (with the previous day's premium cap at 50 yuan/mt). Secondary lead smelters showed an improved willingness to sell, though some held prices firm (the previous day, shipments mainly followed the market). Quotes for secondary refined lead against the SMM #1 lead average price were at discounts of 100-0 yuan/mt EXW. Downstream enterprises' wait-and-see sentiment intensified, with reduced acceptance of high lead prices. Some large downstream enterprises, after earlier procurement, mainly picked up goods under long-term contracts, showing cautious purchasing and very few new spot orders. Overall, the center of lead prices moved higher, with suppliers holding differing views. Some held prices firm with significantly raised premiums, while those bearish on the outlook actively sold. Cargo supply decreased in some regions, lifting spot premiums, and transactions entered a long-term contract trading state. Inventory: As of August 19, LME lead inventory stood at 417,100 mt, down 1,475 mt from the previous trading day; SHFE lead ingot warrant inventory totaled 63,918 mt, down 1,572 mt from the previous trading day. Lead price forecast for today: Overall, the SHFE lead 2610 contract opened higher and moved higher overnight, with LME lead rallying in sync. The combined strength of both domestic and overseas markets drove the center of lead prices higher. Yesterday, SMM #1 lead prices rose by 50 yuan/mt. Suppliers were divided in sentiment, while downstream wait-and-see sentiment intensified, with reduced acceptance of high lead prices. Purchasing was mainly focused on long-term contract pick-ups, with very few new spot transactions, indicating limited actual supply and demand follow-through. Today, SHFE lead is expected to consolidate on a strong note at high levels, with attention needed on changes in daytime session fund positions, spot transaction follow-through, and the impact of evening European and US PMI data.

August 20, SMM News: Base metals: At midday close, most base metals on the domestic market rose. SHFE copper rose 0.36%, SHFE aluminum fell 0.57%. SHFE lead rose 0.28%. SHFE zinc edged down. SHFE tin rose 1.68%. SHFE nickel rose 1.19%. Additionally, the most-traded cast aluminum futures edged up, while the most-traded alumina contract fell 0.3%. The most-traded lithium carbonate contract rose 0.98%. The most-traded silicon metal contract rose 0.57%. The most-traded polysilicon futures rose 0.48%. Ferrous metals showed mixed performance. Iron ore fell 2.17%, rebar fell 0.46%, and hot-rolled coil fell 0.27%. Stainless steel rose 0.63%. Coking coal and coke: the most-traded coking coal contract rose 0.25%, and the most-traded coke contract rose 1.12%. On the overseas market base metals side, as of 11:40, LME metals generally rose. LME copper, LME lead, and LME zinc each gained less than 0.3%. LME aluminum fell 0.79%. LME tin rose 0.73%. LME nickel fell 0.64%. Precious metals, as of 11:40, COMEX gold rose 0.11%, COMEX silver rose 2.11%. Domestic precious metals: SHFE gold rose 2.47%, the most-traded SHFE silver contract rose 4.93%. Additionally, at midday close, the most-traded platinum futures rose 4.52%, and the most-traded palladium futures rose 2.44%. At midday close, the most-traded Europe container shipping futures fell 1.46% to 1,716.5 points. As of 11:40 on August 20, noon quotes for some futures: Spot market & fundamentals Aluminum: Today the futures market continued its decline, but the south China spot market was steady with improvement. The cumulative decline in absolute prices had been substantial, clearly breaking below the monthly moving average. Coupled with stable inventory draws and a significant single-day decline, these dual positives prompted holders to generally hold back from selling more firmly... Macro front China: [Unchanged for the 15th consecutive month! August LPR quotes released: 5-year above 3.5%, 1-year 3%] China's August loan prime rate (LPR) was released on August 20, with both 1-year and 5-year above LPR unchanged. The People's Bank of China authorized the National Interbank Funding Center to announce that the loan prime rate (LPR) on August 20, 2026 is: 1-year LPR at 3.0%, 5-year above LPR at 3.5%. The above LPR is valid until the next LPR release. The 7-day reverse repo rate, as the main policy rate, has remained unchanged for 15 consecutive months since its cut in May 2025. Therefore, the pricing basis for LPR quotes has not changed this month. The LPR was last adjusted in May 2025, with both the 1-year and over-5-year LPR cut by 10 basis points. [Shanghai issues "Housing Eight Measures" for property market: Down payment for second homes outside the outer ring road reduced from 20% to 15%, and interim home purchase subsidy policy introduced] To better meet residents' rigid and improved housing needs and promote the stable and healthy development of the real estate market, on August 20, six departments including the Shanghai Municipal Commission of Housing and Urban-Rural Development Management, the Shanghai Municipal Housing Authority, the Shanghai Municipal Finance Bureau, the Shanghai Branch of the People's Bank of China, the Shanghai Financial Regulatory Bureau, and the Shanghai Housing Provident Fund Management Center jointly issued the 《Notice on Optimizing Local Real Estate Policy Measures》 (hereinafter referred to as the 《Notice》), effective from August 21, 2026. The 《Notice》 mainly includes 8 policy measures in 5 aspects: optimizing housing provident fund withdrawal, optimizing personal housing credit, implementing trade-in home purchase subsidies, promoting housing voucher placement, and advancing the acquisition of second-hand housing. [Beijing Yizhuang: Will accelerate the mass production of 100,000-unit level embodied AI robots] According to the "Beijing Yizhuang" official account, on August 19, the 2026 World Robot Conference opened in Beijing Yizhuang. At the "Open Cooperation" main forum, Li Quan, member of the Party Working Committee and Deputy Director of the Management Committee of the Beijing Economic-Technological Development Area, released the "Beijing Machine Domain"—a vision of building a new society of human-machine integrated embodied AI. Beijing Yizhuang will accelerate the development of 100 feature robot products that can be practically deployed, promote their application in 1,000 niche areas; accelerate the mass production of 100,000-unit level embodied AI robots, and form a production capacity of 1 million sets of key core parts. (from Wall Street News APP) The PBOC conducted zero 7-day reverse repo operations for 8 consecutive working days. Today, 327.4 billion yuan of reverse repos matured. US dollar side: As of 11:40, the US dollar index rose 0.03% to 98.83. US Fed meeting minutes showed that several officials last month leaned toward raising rates, while many said that if inflation failed to decline, further tightening of monetary policy would be necessary. However, at the July meeting, uncertainty continued to heavily influence Fed officials' judgment. The minutes showed: "Regarding the monetary policy outlook, participants reiterated that their interpretation of future data would be a key component of policy discussions." The FOMC voted 9 to 3 in July to keep the benchmark interest rate in the range of 3.5% to 3.75%. Logan, Hammack, and Kashkari voted against, advocating for a 25-basis-point rate hike. Two other regional Fed presidents who did not have voting rights in July—Schmid and Musalem—also later stated that if they had had voting rights at that time, they would have supported a rate hike at that meeting. Most of the policy discussions at the July meeting revolved around differing judgments on future inflation trends. The meeting minutes stated: "Most participants expected that inflation would gradually pull back over the remainder of the year as the effects of tariffs and earlier energy price increases faded, but many participants noted that the possibility of inflation remaining elevated persisted." According to the CME FedWatch: The probability of the US Fed keeping rates unchanged by September is 67.3%, and the probability of a cumulative 25-basis-point rate hike is 32.7%. The probability of the Fed keeping rates unchanged by October is 58.3%, the probability of a cumulative 25-basis-point hike is 37.3%, and the probability of a cumulative 50-basis-point hike is 4.3%. Four US Senate Democrats led by Chris Van Hollen have demanded that Fed Chairman Warsh publicly disclose the content of his conversations with Trump, after The Wall Street Journal reported that the two had spoken multiple times, even though Warsh's schedule did not show such calls. The senators said that without disclosing contact information, it could lead the public to mistakenly believe that the White House is steering monetary policy. Last month, under questioning by Van Hollen, Warsh did not directly respond to the matter. The senators demanded that Warsh confirm in writing whether he has had any contact with Trump since taking office, or amend his schedule to disclose relevant calls. In early August, White House National Economic Council Director Hassett downplayed these calls, saying that Trump did not pressure Warsh on rate decisions; and Trump himself said that he had only had one brief conversation with Warsh. In contrast, former Fed Chairman Powell had detailed records of his calls with Trump and disclosed several face-to-face meetings. The US Treasury issued a statement saying it will at least double the size of liquidity support repo operations targeting long-term nominal coupon securities, covering two maturity buckets: 10-to-20-year and 20-to-30-year tenors. The current maximum size per operation is $2 billion, and future operations will be at least $4 billion each. The adjustment will take effect on September 9, 2026, and will be implemented for the remainder of the current refunding quarter (through November 4, 2026). The Treasury will provide more information on future repo sizes at the next quarterly refunding meeting, scheduled for November 4, 2026. The expansion of the repurchase operation scale reflects the Ministry of Finance's intention to provide stronger liquidity support for the long-term nominal government bond market. The Ministry of Finance will announce the updated temporary government bond repurchase arrangements later. US Treasury Secretary Bessent this year has become one of the most interventionist Treasury secretaries in decades through a series of unconventional operations, aiming to curb the rise in US borrowing costs. This week, the US Treasury announced it would "at least double" its originally planned repurchase of 10-year to 30-year bonds. Previously, the Treasury had signaled a possible reduction in long-term debt issuance. On July 31, Bessent led the US government's first yen purchase in 30 years. Former Treasury official Mark Sobel commented that Bessent is "absolutely an aggressive interventionist," with a style reminiscent of his hedge fund background. He believes that Bessent and senior government officials are clearly concerned about rising long-term US Treasury yields. Affected by inflation, Fed monetary policy, and fiscal deficits, the 10-year US Treasury yield has been rising, pushing up mortgage rates and dragging down economic growth. Some analysts point out that Bessent is trying to stabilize the market through yield curve intervention, but also warn that without addressing high debt and fiscal deficits, this strategy is difficult to sustain in the long term. (Jin Shi Data APP) Data: Today, the following data will be released: Australia July seasonally adjusted unemployment rate, Germany July PPI month-on-month, Switzerland July trade balance, UK August CBI industrial order expectations, US initial jobless claims for the week ending August 15, US August Philadelphia Fed manufacturing index, US July Conference Board leading index month-on-month, China July year-to-date installed power generation capacity, China July year-to-date installed power generation capacity year-on-year rate, among others. In addition, attention should be paid to: the Ministry of Commerce's August first regular press conference; interview of 2028 FOMC voter and St. Louis Fed President Musalem by CNBC; Alibaba's earnings release. Crude oil: As of 11:40, both crude oil benchmarks moved sideways, with WTI up 0.05% and Brent up 0.23%. With US-Iran negotiations in a stalemate, oil prices moved sideways. According to CCTV News: On August 19 local time, US President Trump posted on his social media platform "Truth Social" that Iran failed to seize the opportunity to reach an agreement, so he announced the "harshest economic action ever taken against any country" against Iran, calling it an unprecedented "economic war and economic isolation." Trump said the US is building a record number of oil pipelines to reduce dependence on the Strait of Hormuz. He said that with the emergence of more alternative supply routes and the US strengthening its control over the strait, the importance of the Strait of Hormuz will decline. Trump also said that although some had predicted that oil prices could skyrocket to $350, current oil prices remain around $84 to $85 per barrel. Two US officials told Axios that the US military has quietly established a shipping lane through the Strait of Hormuz, carrying millions of barrels of oil daily. Although the broader war remains deadlocked, the operation has achieved significant results. The operation has been ongoing for weeks, and 15 to 20 tankers have already passed through the southern channel off the coast of Oman to enter or exit the Strait. Officials said that about 10 million barrels of oil are shipped through the strait daily and enter the global energy market, but this figure is about half of the pre-war volume. This US-led operation is alleviating one of the most severe impacts of the war: the disruption of oil supply, which has driven a sharp rise in crude oil prices. Officials stated that although the current volume of oil shipped through the strait is still below pre-war levels, it has already had a notable impact on global oil supply. (Jinshi Data) In addition, Venezuelan oil minister Paula Enao told investors in Houston that Venezuela hopes to sign production-sharing contracts and increase oil production in this country with the world's largest crude oil reserves. Enao said that Venezuela currently has 916 blocks available for exploration and production. She said Venezuela is known for heavy crude, but there are also investment opportunities in light and medium crude and natural gas. She said: "We need to reach these agreements to enter these new blocks." "There is a whole world waiting for you to explore." This week, Venezuela has signed agreements with oilfield services giant Schlumberger (SLB.N) and independent oil producer Hnt Oil, but the country hopes to attract more private investment to revive oil production. Over the past 20 years, Venezuela's oil production has been steadily declining. Enao said about 140 companies attended the meeting, and the scale of on-site investors showed the market's interest in investing in Venezuela. Spot Market Overview: ► ► ► ► ► ► ► ► ► ► ► ► ► ►