[Aluminum Scrap and Secondary Aluminum Weekly Review: Inventory Buildup from Lower Costs and Off-Season, ADC12 Consolidates on a Subdued Note] China's aluminum scrap market prices this week followed the decline in primary aluminum, showing a pattern of weakness at high levels, but cost support still existed, limiting the downside. On August 20, SMM A00 spot aluminum closed at 23,600 yuan/mt, down 520 yuan/mt from 24,120 yuan/mt last Thursday. Dragged by the decline in primary aluminum prices, aluminum scrap prices...

[SMM Silver Weekly Review: Silver Prices Saw a V-Shaped Reversal This Week, with Spot Discounts Continuing to Widen] Silver prices fell first and then rose this week. Mid-week, they plunged sharply, dragged down by a global bond sell-off and a surge in US Treasury yield; subsequently, the Treasury’s expanded buybacks triggered a sharp drop in the US dollar, and silver prices rebounded strongly to regain lost ground. Spot market discounts continued to widen, with insufficient downstream buying interest, forming a divergent pattern of “rising prices, widening discounts.” Inventory buildup totaled 53 mt, while ETF holdings edged down. In the short term, prices were expected to see wild swings; watch the US Treasury yield trend.

Today, iron ore futures trended weak. The most-traded contract on the DCE, I2701, closed at 707 yuan/mt, down 1.19% from the previous trading day. Spot prices at Qingdao Port fell by 4-5 yuan/mt, traders were less aggressive in offering quotes, steel mills restocked as needed, procurement pace was moderate, and overall spot transaction volumes were low. The latest SMM survey data on key 10-port inventories showed that total inventory stood at 105.4 million mt, down 1.55 million mt MoM. Among these, except for a slight inventory buildup in concentrate fines, lump ore, pellet and coarse fines all recorded destocking. In the short term, iron ore demand side remains stable. On fundamentals, iron ore prices are likely to consolidate in the near term, while the directional movement depends more on the transmission of news flow. [SMM Steel]

HRC futures settled at 3,291 today, up 0.03% for the day. On the spot side, cold-rolled and hot-rolled coil spot prices held steady today, with overall trading activity generally moderate. The weekly balance sheet for HRC was released today. On the supply side, HRC production rebounded this week. On the demand side, demand declined WoW this week. On the inventory side, both mill inventory and social inventory recorded buildup this week. In terms of social inventory, SMM's statistics covering 86 warehouses nationwide (large sample) show HRC social inventory at 4.4982 million mt, up 54,900 mt WoW, up 1.24% WoW, and up 31.38% YoY on a calendar year basis. By region, markets in east China and north China saw inventory buildup, while south China, central China, and northeast China experienced mild destocking. From the market perspective, traders have gradually started stockpiling ahead of the peak season, but downstream procurement has yet to show clear improvement. At steel mills, shipments have improved recently due to market stockpiling activities, but considering the height of peak-season demand, traders have not engaged in above-expectations stockpiling. In the short term, prices lack a clear directional catalyst. The futures market is betting on September peak season expectations, with upside capped by current weak demand and downside supported by costs and future demand expectations. Prices are likely to move sideways within a narrow range.

[SMM Stainless Steel Daily Review] SS Futures Move Sideways; Spot Quotes Stable, Cost Support Emerges Amid Weak Demand According to SMM on August 20, SS futures consolidated on a strong note. Although the night session was boosted by a weaker US dollar, it gradually pulled back after the morning open, with limited intraday fluctuations. At the close, the most-traded SS contract settled at 14,300 yuan/mt. Spot market side, following the sideways movement pace of SS futures, stainless steel spot quotes were largely stable, with transactions remaining sluggish. Although weak demand is hard to change, currently stainless steel mill profit margins are narrow, and cost side support for prices has strengthened, providing bottom support as well. The most-traded SS contract. At 10:15 a.m., SS2610 was reported at 14,345 yuan/mt, up 85 yuan/mt from the previous trading day. In Wuxi,304/2B spot premiums were in the range of 375-525 yuan/mt. In the spot market, average price of cold-rolled 201/2B coils in Wuxi was stable; cold-rolled 304/2B coils with mill edge, average price in Wuxi rose 25 yuan/mt, and in Foshan rose 25 yuan/mt; cold-rolled 316L/2B coils in Wuxi were flat; hot-rolled 316L/NO.1 coils, Wuxi quotes were stable; cold-rolled 430/2B coils in both Wuxi and Foshan were unchanged. This week, stainless steel futures were continuously disturbed by macro sentiment, overall maintaining a weak pullback trend. During the week, Indonesia's RKAB nickel mine approval news repeatedly disturbed industry expectations, coupled with the US Fed's hawkish policy stance and the unresolved US-Iran geopolitical conflict, market macro uncertainty stayed high, multiple bearish factors...

SMM, August 20: Data highlights: As of Thursday, August 20, SMM copper inventories in mainstream China regions increased by 17,700 mt WoW to 134,400 mt, and total inventories also rose by 2,700 mt compared to the same period last year's 131,700 mt. By region, arrivals in Shanghai grew, and the pullback in copper prices spurred modest demand recovery, but the overall trend remained an inventory buildup; in Jiangsu, higher arrivals led to a slight inventory accumulation; in Guangdong, post-contract rollover arrivals shrank while warehouse withdrawals rose, resulting in a pullback in inventories. Looking ahead, on the supply side, arrivals of domestic copper are set to increase in the short term, but import arrivals are pulling back, marginally easing China's supply pressure. On the demand side, copper prices continue to consolidate at highs, and downstream players mainly make just-in-time procurement. Spot copper availability is loosening, and market trading sentiment is relatively subdued. Based on supply-demand fundamentals, China's copper social inventory is expected to accumulate modestly next week.

[SMM Aluminum Alloy Flash] This week, China’s social inventory of cast aluminum alloy ingots recorded 28,100 mt, up 2,500 mt WoW, marking the second consecutive week of inventory buildup, with the buildup magnitude further widening from last week. Currently in the demand off-season, downstream purchase willingness is low, and market shipment pace is slow. Meanwhile, periodic increases in spot-futures arbitrage purchases provided some replenishment to inventory. Overall, social inventory still faces buildup pressure in the short term, and it is expected to continue a slight upward trend.

The domestic ore market in Liaodong remained relatively stable. Steel mills’ tendering pace was slow, and most traders were closed and staying on the sidelines; a few offered low prices only as needed. However, amid no inventory buildup at beneficiation plants and under funding pressure, low prices were mostly hard to accept. Both sides were locked in a stalemate, and spot supply in the market has tightened temporarily, strengthening support for ore prices. Still, most steel mills purchased at stable prices, with some areas still showing a desire to push for lower prices. In addition, the price spread between domestic and imported ore has not narrowed significantly, and steel mills show an even stronger preference for imported ore.

SMM, August 19: The center of SHFE aluminum 2609 contract futures moved lower today compared with the same period yesterday. Continued arrivals in east China fueled active selling sentiment, making it difficult for spot discounts in the region to narrow significantly. Today, spot premiums for A00 aluminum ingot were transacted at discounts of 40 yuan/mt to parity. SHFE aluminum futures pulled back, but trading sentiment in the central China market remained sluggish. With the deepening off-season, buying sentiment among downstream processing enterprises stayed low. Against the backdrop of falling aluminum prices, suppliers showed a strong willingness to hold prices firm, but overall trading volume was low. Ultimately, the actual transaction price range in the central China market centered around discounts of 90-120 yuan/mt against the SHFE aluminum 09 contract. On the inventory side, aluminum ingot inventory in major consumption areas increased by 1,000 mt MoM today, with only Wuxi showing an inventory buildup.

[SMM Stainless Steel Daily Review] SS Futures Weaken, Spot Stainless Steel Transactions Mediocre, Awaiting Peak Season Validation SMM, August 19 – SS futures maintained a subdued consolidation trend. Dragged lower by the broad decline in nonferrous metals, SS prices pulled back in tandem. As of the close, the most-traded SS contract settled at 14,260 yuan/mt. In the spot market, although SS futures pulled back somewhat, the overall decline was relatively small. Stainless steel traders mostly held their offers steady, with only occasional small discounts. Overall transactions remained sluggish, showing no signs of recovery ahead of the “September-October peak season.” The Most-Traded SS Futures Contract. At 10:15 a.m., SS2610 was at 14,260 yuan/mt, up 25 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 410-610 yuan/mt range. In the spot market, the average price of Wuxi cold-rolled 201/2B coil was steady; for cold-rolled 304/2B coil with mill edge, Wuxi average price was flat, Foshan average price was flat; the price of Wuxi cold-rolled 316L/2B coil fell by 100 yuan/mt; for hot-rolled 316L/NO.1 coil, Wuxi quotation was flat; cold-rolled 430/2B coil in both Wuxi and Foshan was flat. This week, stainless steel futures were continuously disturbed by macro sentiment, maintaining an overall weak pullback trend. During the week, news on Indonesia’s RKAB nickel ore approval repeatedly disrupted industry expectations. Coupled with the hawkish tone of the US Fed’s policy stance and the unresolved US-Iran geopolitical conflict, macro uncertainty stayed high. Multiple bearish factors dragged SS futures down continuously throughout the week, with bearish sentiment dominating the market and futures movement...