SMM, July 27: In Guangdong today, #1 copper cathode spot premiums against the front-month contract were reported at 50–110 yuan/mt, with an average premium of 80 yuan/mt, down 85 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 20 yuan/mt to parity, averaging a discount of 10 yuan/mt, down 90 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 105,360 yuan/mt, up 275 yuan/mt from the previous trading day, while SX-EW copper averaged 105,270 yuan/mt, up 270 yuan/mt. Spot market: Guangdong inventory rose significantly after the weekend, mainly due to increased arrivals and weakening consumption. With higher inventory and rising copper prices, suppliers eager to sell actively lowered their offers, causing premiums to continuously decline during the day. In early trading, standard-quality copper was quoted at 80 yuan/mt, but few buyers emerged. Suppliers were forced to cut prices, and final transaction levels reached 50 yuan/mt. The purchasing sentiment index for copper cathode in Guangdong stood at 2.51, down 0.05 from the previous trading day, while the shipment sentiment index was 2.89, up 0.09 (historical data can be accessed via our database). As of 11:00 a.m., high-quality copper against the front-month contract was reported at 110 yuan/mt, standard-quality copper at a premium of 50 yuan/mt, and SX-EW copper at a discount of 10 yuan/mt. Overall, rising copper prices and inventory build-up dampened downstream restocking interest, pushing spot premiums lower throughout the session amid thin trading.

[SMM Lead Morning Brief: Short-term China inventory buildup expectations may cause lead prices to consolidate on a subdued note] On Friday, reports indicated that Pakistan was exploring paths to restart US-Iran negotiations; Trump stated that the US is negotiating with Iran. As August approaches, the market has expectations for the traditional peak season for lead-acid batteries, but current actual consumption is less than satisfactory...

During the week of July 20-23, the copper scrap market operated under a threefold backdrop: low copper cathode inventory and high premiums, continued compliance restrictions from reverse invoicing, and a deepening high-temperature off-season. The SHFE copper closing price at 11:30 surged from 104,180 yuan/mt to 106,340 yuan/mt, then pulled back slightly to 106,170 yuan/mt by the end of the week

[SMM Analysis: Soaring Copper Prices Widen Price Difference Between Copper Cathode and Copper Scrap; Increased Spot Shipments from Suppliers, Arbitrage Purchases Dominate Transactions] This week (7/20-7/23), the copper scrap market operated under a triple framework of low copper cathode inventory and high premiums, ongoing compliance constraints from reverse invoicing, and a deepening high-temperature off-season. The SHFE copper closing price at 11:30 surged from 104,180 yuan/mt to 106,340 yuan/mt, before pulling back slightly to 106,170 yuan/mt at the end of the week, with a weekly gain of over 2,000 yuan/mt. Driven by the unilateral rise in copper cathode prices and the resilience of copper scrap in holding prices firm, the price difference between copper cathode and copper scrap expanded from 3,218 yuan/mt to 4,545 yuan/mt, briefly reaching a high of 4,800 yuan/mt during the week. The inherent price resilience of copper scrap was the core feature of the supply side this week.....

In late July, China's aluminum billet processing fees have continued to pull back from their highs in June, with φ120 aluminum billet processing fees in some major consumption areas approaching the production cost line. Amid weakening marginal demand during the off-season, increased arrivals in South China, and a relatively stable center in aluminum prices, whether processing fees can hold firm near the cost line has become the core issue of market focus....

[SMM Analysis: Aluminum Billet Processing Fees Pull Back to Near Production Cost Line – Can They Hold Firm?] Entering late July, China’s aluminum billet processing fees have continued to pull back from June highs, with φ120 aluminum billet processing fees in some key consumption areas approaching the production cost line. The market is feeling the dual pressure of holding prices firm and making shipments. According to SMM’s latest data, as of July 23, social inventory of aluminum billets in China’s key consumption areas climbed to 121,000 mt, marking two consecutive weeks of inventory buildup. Over the same period, warehouse withdrawals fell to 33,000 mt, a clear WoW pullback. Against a backdrop of weakening off-season demand, increased arrivals in South China, and relatively stable aluminum price centers, whether processing fees can stabilize near the cost line has become the core issue the market is watching.

Ferrous metals showed slight divergence this week, with coking coal outperforming while iron ore, coke, and coil and rebar were generally weaker, and iron ore led the decline. During the week, news of the U.S.-Iran conflict fluctuated, but the market...

As of this Friday, SiMn 6517 (cash) in north China was 5,650-5,700 yuan/mt, down WoW; SiMn 6517 (cash) in south China was 5,700-5,750 yuan/mt, down from last Friday, and SiMn 6014 (cash) in south China was 5,350-5,400 yuan/mt, flat WoW. Recently, SiMn futures were weak and moved sideways in a narrow range, the market was in a strong wait-and-see mood, spot prices fell, and futures and spot prices were largely aligned.

July 24 News: North China ports: 46% Australian lumps at 41.5-42 yuan/mtu, down WoW; South African semi-carbonate at 34.7-35.2 yuan/mtu, down WoW; Gabonese at 39.3-39.7 yuan/mtu, down WoW; South African high-iron at 29-29.5 yuan/mtu, down WoW; South African medium-iron at 36-36.5 yuan/mtu, stable WoW. South China ports: 46% Australian lumps at 42.9-43.4 yuan/mtu, down WoW; South African semi-carbonate at 36.7-37 yuan/mtu, down WoW; Gabonese at 40.9-41.4 yuan/mtu, stable WoW; South African high-iron at 31.5-32 yuan/mtu, down WoW; South African medium-iron at 37.5-38 yuan/mtu, stable WoW. Manganese ore market prices continue to grind lower, end-use demand remains tepid, and trader sell-offs at reduced prices are relatively common.

SMM, July 24: The most-traded SHFE aluminum 2609 contract closed at 23,345 yuan/mt today, up 85 yuan/mt or 0.37% on the day. Trading volume increased notably from the previous session, reaching 208,200 lots intraday. Volume expanded during the bottom-out rebound, indicating buying support at low levels and heightened tug-of-war between longs and shorts. Current open interest was 296,300 lots, down 5,885 lots. The simultaneous pullback in open interest and price gains formed a rally-on-declining-open-interest structure, suggesting short-term bears actively covered and exited, rather than new bulls entering aggressively. The upward momentum was biased toward short covering, with limited new buying power. SMM Commentary: Macro front, the U.S.-Iran conflict continued to escalate. U.S. forces carried out further airstrikes against Iran on July 17, while Iran launched large-scale attacks on U.S. military targets in Kuwait and Syria, and struck U.S. facilities in Bahrain. Amid repeated Middle East tensions, concerns over interest rate hikes persisted. Supply continued to recover, but the destocking trend was hard to reverse in the near term. Under the tug-of-war between longs and shorts, aluminum prices are expected to consolidate with adjustments in the short term. Later focus should be on the progress of production resumptions in the Middle East and geopolitical conflict trends, LME aluminum ingot inventory changes, and China’s downstream processing orders and aluminum semis export data. The most-traded alumina 2609 contract closed at 23,225 yuan/mt today, down 55 yuan/mt or 0.24%. Trading volume was 157,800 lots, slightly expanded. During the sideways consolidation, volume expanded mildly, with the tug-of-war between longs and shorts continuing at current price levels, showing no signs of concentrated fund exodus or aggressive moves by either side. Open interest was 253,000 lots, down 5,166 lots. The slight price decline alongside falling open interest formed a retreat-on-declining-open-interest pattern, with some bulls actively taking profits and exiting, while bears did not add positions aggressively to push prices lower. Downside momentum was weak, suggesting a healthy pullback within the consolidation, not a trend reversal to weakness. SMM Commentary: Total alumina inventory nationwide edged up MoM, with limited overall fluctuations. By segment, raw material inventory at aluminum smelters declined, mainly because spot prices remained relatively high, prompting downstream smelters to slow their procurement pace of high-priced raw materials and rely more on consuming in-factory inventory. Alumina refinery inventory increased slightly, but maintenance and production cuts at some Shanxi enterprises and new capacity releases in south China offset each other, keeping overall growth relatively limited. At ports, inventory rebounded due to consecutive arrivals of new vessels. Warrant inventory continued to decline, affected by invoicing issues and the narrowing spread between futures and spot prices, which weakened the willingness to deliver to warehouses. In-transit and station inventory accumulated, mainly as previous warrants expired and were released into the spot market, coupled with continued shipments from Guangxi, increasing supply in the circulation link. In the short term, the alumina market operating pattern is expected to remain largely unchanged. Although some enterprises using domestic ore have maintenance arrangements, the impact on monthly production is limited, and inventory levels are likely to remain at current status. On the price front, as regional spot mismatch issues gradually ease, the spot price center may pull back slightly, with subsequent trends likely to be under pressure. [The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make prudent decisions, do not substitute this for independent judgment, and any decisions made by clients are unrelated to Shanghai Metals Market.]