[SMM Aluminum Flash] On August 14, SHFE aluminum futures warrants stood at 297,843 mt, down 2,227 mt from the previous trading day; over the past week, SHFE aluminum futures warrants fell by a total of 9,165 mt, or 2.99%; over the past month, SHFE aluminum futures warrants fell by a total of 85,936 mt, or 22.39%.

On Aug 13, London Metal Exchange (LME): Total stocks 248,300 tonnes, change -1,700 tonnes; Warranted stocks 244,475 tonnes; Cancelled warrants 3,825 tonnes.

On August 14, the average warrant price fell $5/mt from the previous trading day to $90/mt (price range: $80-100/mt); the average B/L price fell $5/mt from the previous trading day to $90/mt (price range: $80-90/mt); the average EQ copper (CIF B/L) price fell $2/mt from the previous trading day to $60/mt (price range: $56-68/mt), with quotations based on cargoes arriving from August to early September. During the week, the SHFE/LME price ratio remained in loss-making territory, the LME nearby backwardation structure was steep, and the market entered a stage where downstream buying interest was sluggish and upstream sellers were unwilling to dump cargoes at low prices. Divergence between buyers and sellers gradually widened, with thin trading and a wider price range. Today, mainstream quotations for August registered warrants were heard at around $100/mt, and mainstream quotations for EQ copper were heard at around $65/mt.

[SMM Shanghai Spot Copper] Looking ahead to next week, next Monday will be the last trading day for the SHFE copper 2608 contract, and the backwardation spread between the 2608 and 2609 contracts remains at a high level of 590-700 yuan/mt. Under SMM methodology, SMM always quotes against the front-month contract, and spot prices against the 2608 contract are still expected to show relatively deep discounts on Monday. As the pricing basis switches to the 2609 contract on Tuesday, spot premiums and discounts will show a notable apparent recovery. Delivery side, as of the morning close, open interest in the SHFE copper 2608 contract was still about 9,480 lots; as of August 13, SHFE registered copper warrants stood at 27,200 mt. Some suppliers continued to register eligible material as warrants, and material will remain partly split between the spot and warrant sides. Demand side, some downstream enterprises have seen a recovery in operating rates, and end-user clients mostly price against the 2609 contract; their acceptable copper price center has moved up from previous levels, and their bids are mostly concentrated near 107,000 yuan/mt. However, this price level is still some distance away from current futures prices, and actual demand release is expected to remain largely need-based. Overall, Shanghai spot copper prices against the SHFE copper 2608 contract next Monday are expected to remain at deep discounts, and spot prices against the 2609 contract will rebound noticeably after the contract rollover; downstream trading and the flow of deliverable material still need to be monitored going forward.

On the macro front , copper prices rose first and then fell this week, with the price center lifting WoW. US July nonfarm payrolls unexpectedly fell by 23,000, significantly weaker than expected; however, CPI fell to 3.4% YoY and core CPI declined to 2.5%, with inflation largely in line with market expectations, easing concerns about inflation exceeding expectations. In addition, the slowdown in US July PPI growth exceeded expectations, and traders reduced bets on a US Fed rate hike in September, with the latest probability at 32%; LME copper bottomed out. Domestically, the People's Bank of China said it would strengthen counter-cyclical adjustment, promptly plan and introduce incremental policies, and step up efforts to expand domestic demand, providing some support to market sentiment. Geopolitically, US-Iran negotiations and arrangements for navigation through the Strait of Hormuz continued to swing back and forth, with all parties sending different signals on ceasefire deadlines, safe shipping routes and control of the strait. The situation in the Middle East remained highly uncertain, prompting copper prices to fluctuate at high levels. As of 9:00 a.m. Beijing time on August 14, 2026, LME copper touched a weekly high of $14,262/mt, then fell to a low of $13,955/mt, down $307/mt from the high, a decline of about 2.15%; the most-traded SHFE copper contract touched a low of 107,130 yuan/mt, then rose to a high of 108,740 yuan/mt, up 1,610 yuan/mt from the low, a gain of about 1.50%. Fundamentals side , as of August 13, SMM copper inventories in major Chinese regions fell by 2,200 mt from last Monday to 116,700 mt, and total inventories were 8,900 mt lower than the 125,600 mt recorded in the same period last year. Domestic inventories remained at relatively low levels. Supply side, typhoon weather briefly affected cargo flows in east China at the start of the week; as of August 14, open interest in the SHFE copper 2608 contract was 11,615 lots, equivalent to 58,000 mt of metal content; over the same period, registered copper warrants on the SHFE stood at 27,200 mt, and potential deliverable volume was about 2.1 times warrant volume. Open interest in nearby contracts remained significantly higher than current registered warrants; combined with the upcoming delivery, this widened inter-month backwardation and lifted position-rolling costs for suppliers. Suppliers showed greater willingness to sell for cash, boosting spot supply in circulation. Of these, high-quality copper supply remained relatively limited, while non-registered copper supply was ample, and brand differentiation continued. Import side, the nearby LME backwardation structure widened, while the SHFE/LME price ratio for imports weakened; downstream purchase willingness remained low, and actual market deals were sluggish. Demand side, the traditional consumption off-season combined with high copper prices meant downstream users still mainly made just-in-time procurement, and overall transactions showed no significant improvement. For secondary copper, tax-inclusive supply tightened and invoice costs rose; scrap utilization enterprises pushed for lower prices, and the price difference between copper cathode and copper scrap stayed high. Looking ahead to next week , on the macro front, US employment data weakened significantly, CPI and PPI pointed to easing inflation pressures, market expectations for a September rate hike continued to decline, and expectations for domestic incremental policy will also continue to support copper prices. If US economic data strengthen again and the US Fed sends further hawkish signals, renewed rate hike expectations and a stronger US dollar will pressure copper prices. Fundamentals side, COMEX inventories continued to increase, while LME inventories and deliverable stocks continued to decline; supply outside the US tightened, supporting LME copper. In China, after delivery of the SHFE copper 2608 contract ends, nearby open interest pressure will ease and the inter-month backwardation will gradually narrow; domestic copper production and imported arrivals will increase, and combined with the consumption off-season and high copper prices, upside room for SHFE copper will be limited. In the short term, fundamentals will dominate the divergence between SHFE and LME, while macro expectations will mainly provide bottom support for copper prices. Overall, LME copper is expected to trade at $13,950-$14,150/mt next week, and the most-traded SHFE copper contract is expected to trade at 107,000-108,500 yuan/mt. Support for LME copper is stronger than for SHFE copper; LME copper is expected to rise, and SHFE copper will follow with modest gains, with LME outperforming SHFE overall.

[SMM Cast Aluminum Alloy Morning Comment: Futures Pullback Weighs on Spot; Cost Support Limits Downside Room] Yesterday, aluminum alloy market quotes were broadly lower, with the SMM ADC12 price lowered by 200 yuan/mt. The futures pullback further dampened spot market sentiment, and enterprises generally followed by lowering their quotes. The downstream sector is still in a demand off-season, with some enterprises still on high-temperature holidays or operating at reduced loads. End-user orders and procurement demand are weak, and the spot market lacks sustained upward momentum. However, the cost side still provides some support, as aluminum scrap prices remain relatively high overall and enterprises have limited room to cut prices further. The market lacks demand drivers on the upside, while the downside is constrained by costs. In the short term, ADC12 prices are expected to continue to consolidate within a range.