This week, multiple news items on the raw material front successively boosted market sentiment, with finished steel prices rebounding from lows in phases and generally showing a bottoming-out trend. At the start of the week, the weak fundamentals of finished steel were hard to change, and ferrous metals prices had overshot to the bottom. Subsequently, however, coal mines in Shanxi were affected by rainfall, and circuit failures led to production suspensions at some mines, sentimentally driving ferrous metals prices to bottom out. Mid-week, there were rumors of a 48-hour strike at BHP, with limited short-term tangible impact, but sentiment...

SMM, August 3: The SHFE aluminum 2608 contract opened at 23,400 yuan/mt today, reached a high of 23,665 yuan/mt, hit a low of 23,400 yuan/mt, and closed at 23,625 yuan/mt, down 10 yuan/mt or 0.04% from the previous trading day. Trading volume was 12,000 lots, open interest was 40,300 lots, and daily position change was -5,189 lots. The price stood above the MA5 (23505), MA10 (23357.50), MA20 (23228.50), and MA40 (23362.25), but still below the MA60 (23758.92). The short-term repairing pattern continued, but resistance remained overhead. In the MACD indicator, the DIFF (23.83) was above the DEA (-72.27), and the histogram recorded 192.20, with bullish momentum still releasing. Trading volume was low, and the daily position change of -5,189 lots indicated a significant capital outflow. The session’s low opening and subsequent recovery largely reflected position-squaring repair, and sustained upward momentum still needs to be observed. SMM comment: The indirect technical talks between the US and Iran made progress, with both sides discussing fund returns and strait security, and nuclear issue consultations are about to start. The geopolitical risk premium continued to shrink, disputes over the management of the Strait of Hormuz persisted, and the resumption of navigation through the strait remained uncertain. The US Fed’s hawkish pivot boosted the US dollar index, weighing on non-ferrous metals prices. Under macro headwinds, aluminum prices in China and overseas fell. In the short term, bearish factors dominate, and aluminum prices are expected to continue in the doldrums. The alumina 2609 contract opened at 2,627 yuan/mt today, reached a high of 2,648 yuan/mt, hit a low of 2,621 yuan/mt, and closed at 2,633 yuan/mt, down 2 yuan/mt or 0.08% from the previous trading day. Trading volume was 149,700 lots, open interest was 227,200 lots, and daily position change was -15,651 lots. The price remained below the MA5 (2653.60), MA10 (2682.50), MA20 (2690.55), MA40 (2764.93), and MA60 (2773.88). The moving averages maintained a bearish alignment, and the weak pattern of futures continued. In the MACD indicator, the DIFF (-35.37) was below the DEA (-31.96), and the histogram recorded -6.81, indicating persistent bearish momentum. Trading volume remained at a certain level, but the daily position change of -15,651 lots showed a significant capital outflow. Near-term futures are likely to continue consolidating on a weak note at low levels. SMM comment: According to SMM data, as of last Thursday, China’s total alumina inventory edged down WoW. Looking at the inventory structure, the raw material inventory at aluminum smelters continued to destock slightly, but due to recent large price fluctuations and market division over the outlook, restocking willingness was weak, with end-users mainly taking a wait-and-see approach. In-factory alumina inventory decreased, mainly due to phased maintenance at some northern enterprises, where production constraints led to prioritized consumption of in-factory inventory. This effect is expected to gradually fade after the maintenance ends next week. Port inventory continued building, with overseas port arrivals staying high, and imported resources supplemented spot supply, adding to market pressure. Overall, the oversupply pattern remained unchanged. Before Guinea’s bauxite quota policy is implemented, the market lacks a clear bullish driver. Next week’s inventory is expected to shift from weak destocking to a slight inventory buildup, supply and demand will remain loose, and alumina prices will continue to consolidate on a weak note. [The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make decisions cautiously and not use this as a substitute for independent judgment. Any decision made by clients is not associated with SMM]

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...

[Galvanising Operating Rate Edges Up]: The operating rate of the galvanising industry was 55.07% this week, up 1.56 percentage points WoW. Raw material side, zinc prices continued to consolidate at highs this week, with enterprises purchasing mainly on a need-to basis. Zinc ingot inventories at galvanising enterprises edged down.

[Rainy Season Arrives, Galvanizing Demand Weakens]: This week, the operating rate of the galvanizing industry was 53.51%, down 1.05 percentage points WoW. From the raw material side, zinc prices consolidated and rebounded this week, downstream purchasing enthusiasm weakened, wait-and-see sentiment was relatively strong, and they mainly drew down raw material inventories, leading to a decline in zinc ingot inventories at galvanizing enterprises.

In H1 2026, the galvanizing industry generally showed characteristics of "slow recovery in Q1 and underperformance in the peak season in Q2," with the overall operating rate weaker than the same period last year.

[2026 Galvanizing Half-Year Review: Weak Peak-Season Performance, H2 Demand Expected to See Marginal Improvement] In H1 2026, the galvanizing industry as a whole exhibited a pattern of “slow recovery in Q1 and Q2 peak-season underperformance,” with the overall operating rate weaker than the same period last year.

SMM Jul 6: The SHFE aluminum 2608 contract opened at 22,850 yuan/mt, reached a high of 23,080 yuan/mt, dipped to a low of 22,785 yuan/mt, and closed at 22,940 yuan/mt, up 105 yuan/mt or 0.46% from the previous trading day. Trading volume was 146,200 lots and open interest was 246,000 lots, with a daily decline of 7,151 lots. Price settled above the MA5 (22,687) and MA10 (22,840.50), but remained below the MA20 (23,433.75), MA40 (23,982.50), and MA60 (24,287.67). Short-term momentum improved, but the medium- and long-term bearish pattern has not yet reversed. On the MACD, DIFF (-444.86) was below DEA (-410.16), and the histogram recorded -69.41, indicating persisting bearish momentum but narrowing significantly from earlier. Trading volume of 146,200 lots declined further from the previous session, and the daily open interest decline of 7,151 lots signals continued capital outflows. Today's uptick was more a reflection of technical recovery driven by short-covering. SMM Commentary: The indirect technical talks between the US and Iran made progress, with both sides discussing fund repatriation and strait security, and consultations on the nuclear issue are about to begin. The geopolitical risk premium continued to shrink, while disputes over the management of the Strait of Hormuz persisted, leaving uncertainty over the strait’s resumption of navigation. The US Fed’s hawkish pivot boosted the US dollar index, putting pressure on non‑ferrous metals prices. Amid macro headwinds, aluminum prices fell in and outside China, with bearish factors dominating in the short term. Aluminum prices are expected to be in the doldrums going forward. The alumina 2609 contract opened at 2,727 yuan/mt, hit a high of 2,727 yuan/mt, dipped to a low of 2,694 yuan/mt, and closed at 2,701 yuan/mt, down 16 yuan/mt or 0.59% from the previous trading day. Trading volume was 184,200 lots and open interest was 352,500 lots, with a daily increase of 18,337 lots. Prices remained below the MA5 (2,732), MA10 (2,776.60), MA20 (2,835.35), MA40 (2,812.43), and MA60 (2,815.27), with the moving averages in bearish alignment and the market continuing to show weakness. On the MACD, DIFF (-30.82) was below DEA (-11.56), and the histogram recorded -38.51, signaling continued bearish momentum. Trading volume of 184,200 lots pulled back slightly from the previous session, but the daily increase in open interest of 18,337 lots indicates additional capital entering at lower levels, with bears remaining aggressive. SMM Commentary: According to SMM data, as of last Thursday, total domestic alumina inventory had edged down from the previous week. By inventory structure, raw material inventories at aluminum smelters continued to destock slightly, but given the recent sharp price fluctuations and divergent market outlooks, restocking appetite was weak, with end‑users largely on the sidelines. Alumina in-factory inventory decreased, mainly due to phased maintenance at some northern refineries, where production constraints led to priority use of in-factory stocks; this impact is expected to fade gradually after maintenance concludes next week. Port inventories continued to build, with ex‑China port arrivals staying high and import cargoes supplementing spot supply, adding pressure to the market. Overall, the oversupply picture remains unchanged, and before Guinea’s bauxite export quota policy is implemented, the market lacks clear bullish drivers. Next week, inventories are likely to shift from weak destocking to a slight buildup, with supply-demand staying ample and alumina prices expected to continue to be in the doldrums. [The information provided is for reference only. This article does not constitute direct investment, research, or decision‑making advice. Clients should make decisions prudently, and not substitute this for independent judgment. Any decision made by clients is unrelated to Shanghai Metals Market.]

SMM July 6: The SHFE aluminum 2608 contract opened at 22,685 yuan/mt, rose to a high of 22,970 yuan/mt, dipped to a low of 22,685 yuan/mt, and settled at 22,885 yuan/mt, up 225 yuan/mt or 0.99% from the previous trading day. Trading volume was 168,800 lots, open interest stood at 253,200 lots, with a daily open interest change of -9,839 lots. The price reclaimed the MA5 (22,612) but remained below the MA10 (22,895), MA20 (23,463), MA40 (23,967.75) and MA60 (24,254.42). The moving average system remains in a bearish arrangement, and the short-term rebound has not yet reversed the weak pattern. In the MACD indicator, DIFF (-449.81) is below DEA (-383.17), and the histogram recorded -133.27, showing bearish momentum still exists but is narrowing marginally. Trading volume of 168,800 lots declined by 65,400 lots from the previous trading day, and the daily open interest change of -9,839 lots points to continued capital outflow. Today’s rise largely reflects a technical repair driven by bears covering positions. SMM Commentary: US-Iran indirect technical talks have made progress, with discussions around fund returns and strait security, and nuclear consultations are about to start. The geopolitical risk premium continues to converge, while the Strait of Hormuz management dispute persists and the resumption of navigation through the strait remains uncertain. The US Fed’s hawkish pivot boosted the US dollar index, pressuring nonferrous metals prices. Under macro headwinds, aluminum prices in and outside China fell. In the short term, bearish factors dominate, and aluminum prices are expected to remain in the doldrums. The alumina 2609 contract opened at 2,716 yuan/mt, rose to a high of 2,730 yuan/mt, dipped to a low of 2,705 yuan/mt, and settled at 2,720 yuan/mt, down 2 yuan/mt or 0.07%. Trading volume was 193,200 lots, open interest stood at 334,200 lots, with a daily open interest change of 11,220 lots. Prices are still below the MA5 (2,748.20), MA10 (2,790.80), MA20 (2,839.30), MA40 (2,815.55) and MA60 (2,799.83). The moving average system maintains a bearish divergence, and the downward trend has not yet been repaired. In the MACD indicator, DIFF (-23.67) is below DEA (-3.94), and the histogram widened to -39.47, with bearish momentum continuing to be released. Trading volume of 193,200 lots decreased by 68,000 lots from the previous trading day, but the daily open interest change of 11,220 lots indicates capital still entered the futures market at low levels, and short-term bearish initiative remains strong. SMM Commentary: According to SMM statistics, as of last Thursday, China’s total alumina inventory edged down WoW. Looking at the inventory structure, raw material inventory at aluminum smelters continued to destock slightly, but due to large recent price fluctuations and divergent market views on the outlook, restocking willingness was weak and end-users mainly adopted a wait-and-see stance. In-factory inventory at alumina refineries decreased, mainly affected by some enterprises in the north undergoing periodic maintenance; under production constraints, they prioritized consuming in-factory inventory. After the maintenance ends next week, this impact is expected to gradually fade. Port inventories continued to accumulate, with port arrivals from outside China staying high, as imported resources supplemented spot supply and added market pressure. Overall, the oversupply pattern remains unchanged. Before Guinea’s bauxite quota policy is implemented, the market lacks clear bullish drivers. Next week, inventory is expected to shift from weak destocking to a slight inventory buildup, supply-demand conditions will stay loose, and alumina prices will remain in the doldrums. [The information provided is for reference only. This article does not constitute direct investment research and decision-making advice. Clients should make prudent decisions and should not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]

[Resumption recovery, operating rates of galvanising producers rise]: This week's operating rate of galvanising producers was 54.56%, up 3.03 percentage points WoW. Raw material side, zinc prices rebounded this week. Downstream players primarily stayed on the sidelines, mainly picking up previously priced zinc ingots, while zinc ingot inventories at galvanising enterprises edged up. The operating rate rebound was mainly because some galvanising plants were closed for the Dragon Boat Festival last week, causing a sharp decline in operations, while this week they all resumed normal production, pushing the rate back up.