[SMM Analysis: High Copper Prices Curb Demand, Copper Scrap Payable Indicators Diverge] No.1 and No.2 copper were affected by maintenance at some smelters, the consumption off-season, and high copper prices, which slowed down procurement demand and caused transaction payable indicators to pull back somewhat. As of mid-August, the payable indicator for No.1 copper transactions pulled back to around 96%-97%, with US No.2 copper at about 95.5% and European No.2 copper mainly at 94.5%-95%. In contrast, given still-tight supply and strong direct substitution properties for copper cathode, bare bright copper found notable downside support, and its quoted payable indicator held at a high of 98.5%-99% without visible loosening.

According to SMM statistics, both mill inventories and social inventories rose to varying degrees in the current period. The total inventory of construction steel stood at 8.543 million tons, rising by 64,200 tons month-on-month, a month-on-month increase of 0.76%, with the inventory accumulation pace picking up slightly.

Construction steel social inventory: According to an SMM survey, total construction steel social inventory posted a slight build this period. As of August 13, 2026, SMM construction steel social inventory stood at 5.7557 million mt, up 50,000 mt WoW, an increase of 0.88%. During the survey period, Typhoon Dolphin struck, bringing heavy rainfall to some regions. Outdoor projects experienced severe waterlogging and construction progress was hindered. Compounded by transportation disruptions, end-use procurement demand declined, and inventory continued to build. Regional social inventory: Inventory performance across regions remained divergent. In east China, overall inventory shifted from decline to increase, mainly because typhoon-related heavy rainfall significantly constrained outdoor construction work and slowed the pace of end-use procurement. In northeast China, new maintenance at an individual blast furnace steel mill reduced supply, driving inventory from increase to decline. Inventory in southwest China also destocked slightly, mainly because the futures market improved somewhat during the survey period, market sentiment recovered in phases, and buying interest strengthened slightly. In addition, some steel mills in the region reduced production and overall material arrivals declined slightly; combined, these factors shifted inventory from increase to decline. Inventory performance in other regions was basically normal.

SMM, August 10: Data Summary: As of Monday, August 10, SMM copper inventories in major regions across China decreased by 900 mt WoW from last Monday to 118,000 mt, total inventories fell by 13,600 mt YoY from 131,600 mt in the same period last year, with divergent performances across regions. Specifically, in Shanghai, arrivals contracted, but high copper prices suppressed downstream consumption, resulting in inventory buildup; in Jiangsu, domestic arrivals were relatively low, leading to slight destocking; in Guangdong, the export window opened, reducing domestic inflows and causing inventory to edge lower. Market Outlook: Supply side, both domestic and imported copper cathode arrivals are expected to edge up in the short term, easing the tightness in market circulating supplies somewhat. Demand side, high copper prices dampened producers' production enthusiasm, downstream users only made just-in-time procurement, and typhoon disruptions hindered cargo pick-up at warehouses. A survey shows that the operating rate of copper cathode rod is expected to increase to 59.42% this week, up 1.12 percentage points WoW. Under the overall supply-demand pattern, domestic spot supply is marginally loosening while end-user procurement remains sluggish. This week, national social inventories of copper cathode are expected to show an inventory buildup trend.

In July 2026, the lithium carbonate market experienced a persistent downward trend, with the overall price center of gravity shifting lower. The tug‑of‑war between strong spot fundamentals and weak forward expectations persisted throughout the month. Price : Early in the month, prices rebounded from lows on supply‑contraction expectations, with the main contract LC2609 surging from around RMB 145,300/ton to RMB 167,800/ton—a weekly gain of approximately 8.4%. Thereafter, the market weakened under the combined pressure of anticipated Zimbabwean ore arrivals, progress on domestic lepidolite mine restarts, and expectations of warehouse receipt cancellations. The main contract opened July at RMB 164,000/ton and closed on July 31 at RMB 137,760/ton, falling nearly RMB 30,000/ton over the month with an intra‑month amplitude of 21.55%. In the spot market, the price center for battery‑grade lithium carbonate moved notably lower compared with June. By mid‑July, the futures curve shifted into backwardation, with the spread between near‑term and forward contracts widening further. Supply : Domestic lithium carbonate output edged down month‑on‑month in July, with actual production of approximately 105,000 tons. The decline was mainly attributable to concentrated maintenance at spodumene‑ and lepidolite‑based smelters—temporarily suspended Zimbabwean concentrate exports delayed raw material arrivals, reducing spodumene‑based lithium carbonate output. Salt‑lake operations entered their peak production season, with a modest output increase that partially offset the reduction. Upstream lithium salt producers maintained a strong reluctance to sell spot cargoes, with persistently low willingness to offer, keeping their in‑house inventories at low levels. Demand : Downstream activity remained robust. In July, domestic lithium battery production rose 5.6% month‑on‑month, while LFP cathode material production increased 6.85% month‑on‑month. Downstream material producers continued their strategy of buying on dips as needed, showing strong willingness to purchase for rigid demand below RMB 145,000/ton, but with limited acceptance of higher prices. No large‑scale concentrated restocking emerged. Inventory : Lithium carbonate inventories accelerated their drawdown in July, with social inventories declining for twelve consecutive weeks. Large‑sample inventory data showed a roughly 8% decline over the month, with the weekly drawdown rate accelerating from 2.68% to 4.46%. Structurally, inventories shifted from upstream to downstream, as strong end‑consumption effectively absorbed spot stocks. Outlook : In the near term, lithium carbonate prices are likely to remain in a range‑bound, weakly volatile pattern. Ongoing maintenance and tightening raw material flows provide support, while forward supply‑increase expectations—including progress on the Jianxiawo mine restart and scheduled Zimbabwean ore arrivals—continue to cap upside. High downstream production schedules offer rigid demand support, but the impetus to chase prices remains insufficient. Key factors to monitor include the pace of smelter maintenance resumption, August downstream production expectations, and the actual release rhythm of ore‑side supply.

Global copper scrap supply remains tight, with social inventories across China, Japan, South Korea and India generally at low levels. Despite copper prices trading near historical highs, scrap payabilities remain firm, with Millberry at around 98.5%-99%, No.1 copper at 97%-98%, and No.2 copper at 94%-96%. Tight concentrate supply is also supporting demand for recycled copper feedstock. With scrap availability unlikely to improve significantly in the near term, copper scrap payabilities are expected to remain elevated.

Battery-grade lithium carbonate stood at RMB 139,000/mt as of August 4, down 16.27% month-on-month, continuing a weak downward trend even as fundamentals strengthen a "strong reality, weak price" divergence now driving the market. On the demand side, NEV and energy storage sectors remain robust, with domestic battery production schedules up 6-8% MoM in August and power battery demand steadily recovering, keeping utilization rates and rigid demand support above market expectations. On the supply side, overseas disruptions policy controls and geopolitical tension in lithium-rich countries, extreme weather in Argentina, and concentrated maintenance among domestic lithium salt producers continue to limit near-term supply growth. Inventories have now declined for 12 consecutive weeks, with total social inventories falling to 114,300 mt as of the week ending July 30 and the pace of destocking accelerating. Downstream and distributor stocks are being steadily worked off, while only upstream smelters show slight accumulation, easing inventory pressure across the industry. Despite this tightening spot picture, market funds have overdrawn pessimistic long-term expectations, with pricing logic now driven by forward supply demand outlook rather than current conditions. As H1 results from lithium battery producers confirm earlier optimism on energy storage demand, capital has rotated toward bearish positioning, focused on doubts over the sustainability of high-growth energy storage installation demand and expectations of an accelerated release of new production capacity pushing the market toward consensus on a looser future supply demand balance. SMM view: Lithium carbonate is likely to maintain a "near-term strong, far-month weak" divergence rather than a unilateral trend. Continued destocking and resilient downstream demand should firm up spot prices as pessimistic sentiment gradually unwinds, while far-month contracts stay pressured by expectations of loose future supply and elevated industrial chain valuations. Close attention to supply-demand shifts is still warranted.

SMM August 6: Data summary: As of Thursday, August 6, SMM copper inventories in major regions across China increased by 7,300 mt WoW to 119,200 mt, while total inventory fell by 12,800 mt YoY from 132,000 mt in the same period last year. Specifically, in Shanghai, inbound and outbound volumes were basically flat with little inventory fluctuation; in Jiangsu, pressured by high copper prices, downstream demand remained weak and inventories posted a slight buildup; in Guangdong, increased arrivals combined with sluggish consumption pushed inventories higher in tandem. Inventory trends diverged across regions this week, though overall changes were limited. Looking ahead, on the supply side, near-term concentrated arrivals of domestic and imported cargo are expected to ease domestic supply pressure. On the demand side, amid the traditional consumption off-season, high copper prices are likely to further dampen purchase willingness among downstream processing enterprises. Currently, spot cargo availability is easing, with market trading sentiment remaining subdued. Based on overall supply-demand conditions, national copper social inventories are expected to post a slight buildup next week.

[SMM Tin Midday Review: Macro liquidity expectations and the weak spot market constrain each other, with the most-traded SHFE tin contract continuing to consolidate at highs]

SMM, August 3: Data Brief: As of Monday, August 3, SMM copper inventories in major regions of China increased by 6,200 mt WoW to 118,900 mt. Total inventories decreased by 17,000 mt compared to 135,900 mt in the same period last year, with regional divergences. Specifically, in Shanghai, arrivals of domestic copper increased, and import supply continued to supplement, coupled with weak downstream demand, resulting in some inventory buildup. In Jiangsu, arrivals were relatively low, and inventories saw a slight destocking. In Guangdong, arrivals rose, but consumption has not yet improved, and inventories continued to rise. Market Outlook: On the supply side, arrivals of domestic and imported copper cathode are expected to rebound slightly in the short term, easing the tightness in spot circulation somewhat. On the demand side, high copper prices are weighing on enterprises' production willingness, and downstream just-in-time procurement sentiment remains weak. A survey shows that the operating rate of copper cathode rod is expected to drop to 59.72 this week, down 0.35 percentage points WoW. Under the overall supply-demand pattern, domestic spot supply is marginally looser, and end-user procurement remains sluggish. This week, national social inventories of copper cathode are expected to continue their buildup trend.