SMM Report, August 5: Bullish sentiment in the secondary refined lead market heated up. Most smelters, facing prolonged losses, actively supported a lead price raise, and some sources quoted premiums on shipments. Downstream enterprises, though recognizing the expectations for price hikes, still held previous inventory, showed weak willingness to chase the price increase, and only purchased small spot orders as needed. Market quotes diverged significantly, with upstream expecting an increase of 250-500 yuan/mt, while downstream procurement acceptance was limited. Spot orders mostly concluded around parity with the SMM #1 lead average price. Overall, actual volume was insufficient, and the short-term market was in a phase of gaming over price hike expectations. Today, the SMM secondary refined lead average price was reported at 15,500 yuan/mt, a discount of 25 yuan/mt to the SMM #1 lead average price. The supplier shipment sentiment was 1.29, and the secondary refined lead procurement sentiment today was 1.33 (historical data can be accessed by logging into the database). .

[SMM Rare Earth Daily Review: Rare Earth Prices Remain in the Doldrums, Intense Tug-of-War Between Upstream and Downstream] Overall, hampered by weak downstream orders and low purchase willingness from magnetic material enterprises when inquiring and sourcing, rare earth market inquiries continue to be under pressure, with an intense tug-of-war between upstream and downstream. Additionally, as Pr-Nd oxide futures prices keep softening, rare earth market prices remain in the doldrums, and actual trading performance is poor. In the short term, affected by the stalemate in market trading, Pr-Nd product prices are expected to move sideways.

Platinum prices surged sharply today. News front, the US Department of Commerce released an announcement on August 4 planning to add 14 downstream derivative products of steel, aluminum, and copper into the scope of Section 232 tariff control. Although the document did not directly mention platinum group metals, the market interpreted it as a signal of continuous escalation of US trade tariff policy tools. Coupled with US Treasury Secretary Bessent's statement on August 4 that the US and Iran were expected to reach an agreement on August 4 or 5 to reopen the Strait of Hormuz, international oil prices pulled back significantly, inflation expectations eased, leading to a pullback in expectations for US Fed interest rate hikes, and the precious metals sector as a whole got a boost. In early trading, the most-traded platinum contract PT2610 on GFEX closed at 432.5 yuan/g, surging 7.04%. The inverted spread between the best ask price of Platinum 9995 on the Shanghai Gold Exchange and GFEX PT2610 remained around 6 yuan/g. Spot market, mainstream quotations for platinum were at a discount of 3.5 yuan/g to 2 yuan/g against the PT2610 contract. Although the mainstream quotation premiums/discounts did not change significantly with the sharp rally in futures, downstream purchase willingness was extremely low, and the bid-ask spread widened. Suppliers, with limited willingness to sell at large discounts, opted to hold prices firm in their offers. Overall, trading in the platinum spot market was very sluggish today.

On August 5, the SMM average price of battery-grade nickel sulphate slightly decreased.

[SMM Daily Review: US-Iran Strait Standoff, Silver Prices Move Sideways] SMM Aug 5 – Easing US-Iran geopolitical tensions, along with the US dollar halting its decline, led to a slight rebound in silver prices, but strong economic data capped upside room. Spot demand remained sluggish, with transactions at parity and orders sluggish.

Today, iron ore futures trend was sluggish. The most-traded DCE I2609 contract closed at 699.5 yuan/mt, down 0.43% from the previous trading session. Spot iron ore prices at Qingdao Port rose by 4–9 yuan/mt from the previous trading day. Traders were actively offering, while steel mills’ procurement was mainly need-based, and overall spot trading was moderate. Fundamental side, iron ore demand saw a slight short-term recovery. According to SMM statistics, this week (Aug 1 – Aug 7), the hot metal impact from blast furnace maintenance was 1.3736 million mt, down 112,200 mt WoW. Next week (Aug 8 – Aug 14), the hot metal impact from blast furnace maintenance is expected to be 1.4252 million mt, up 51,600 mt WoW. Against the narrative of recovering demand, support for iron ore prices strengthened. Short-term iron ore prices may primarily move sideways.

Futures first rose and then fell today, closing at 2,983, down 0.2% from the previous trading day. On the spot side, most markets held offers steady in the morning; in the afternoon, as futures drifted lower, some markets edged down 10-20 yuan/mt, with overall trading sentiment weak. Fundamentals, supply side, both blast furnace and EAF steel mills mostly saw losses in per-mt steel margins. Recently, EAF mills have reduced working hours or halted production, and blast furnace mills have also cut output or conducted rolling line maintenance. According to SMM’s weekly maintenance survey, the impact from maintenance this period was 938,600 mt, up 174,200 mt WoW, and supply pressure on construction steel eased somewhat. Demand side, futures slightly recovered this morning, lifting market activity modestly and releasing downstream rigid procurement demand, though overall room for demand growth was limited. Overall, the market is in a macro vacuum period, construction steel fundamentals lack momentum, and short-term prices will likely continue to consolidate at lows.

[SMM Coking Coal and Coke Daily Review] Coking Coal Market: Linfen low-sulphur coking coal is quoted at 2,000 yuan/mt. Coking coal side, the pace of mine production resumptions is relatively slow, and the overall mine inventory has not experienced significant inventory buildup pressure, providing some support for coking coal prices. However, downstream demand is weak, the wait-and-see sentiment in the market remains strong, and it is relatively difficult to sell high-priced coal grades. The coking coal market will likely be in the doldrums in the short term. Coke Market: The nationwide average price of quasi-first-grade metallurgical coke (dry quenching) is at 1,980 yuan/mt. Supply side, most coke producers are currently at a loss, and some have cut production to varying degrees. However, coke shipments are sluggish, and coke inventory at plants continues to accumulate. Demand side, steel product prices have broken below key levels, deepening losses. Many steel mills have carried out production cuts and maintenance, actively controlling coke arrivals. Overall, market sentiment remains subdued, and there are expectations of a third round of coke price cuts. The coke market is likely to be in the doldrums in the short term. [SMM Steel]

[SMM Daily Review: Spot Lithium Carbonate Prices Unchanged on August 4] Today, SMM battery-grade spot lithium carbonate prices remained flat from the previous working day. The lithium carbonate 2609 contract opened lower at 138,800 yuan/mt today, fluctuated lower and quickly dipped, hitting a low of 137,300 yuan/mt. Subsequently, bulls stepped in, pushing prices to rebound quickly, and in the morning session, prices shot up to around 141,400 yuan/mt. Around midday, bulls and bears wrestled repeatedly in the 139,500–141,400 yuan/mt range, during which prices shot up to 141,400 yuan/mt twice but were met with selling pressure from bears each time. In the afternoon, prices pulled back amid consolidation, and in late trading, moved sideways within the 139,300–139,500 yuan/mt range. It eventually closed up 0.84% at 139,400 yuan/mt, with open interest declining by 8,337 lots. In the spot market, downstream material plants made just-in-time procurement on price dips. Inquiries were relatively active, but actual transactions showed a slowdown. Upstream spot orders continued to hold prices firm, and at the beginning of the month, deliveries were mainly based on long-term contracts. Overall, market transactions were relatively sluggish.

SMM, August 4 news: Today, SMM A00 spot aluminum prices closed at 23,730 yuan/mt, up 230 yuan/mt DoD from the previous trading day. Aluminum scrap prices followed the upward trend across regions, with some areas adopting a wait-and-see stance for specific grades. On the price spread side, as of August 4, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan stood at about 2,160 yuan/mt, while that for shredded aluminum tense scrap was about 950 yuan/mt. Against the backdrop of an off-season in consumption, low willingness to sell at low prices was common among aluminum scrap suppliers, and aluminum scrap prices remained generally firm. Demand side, with the onset of high-temperature holidays, operating rates at downstream cast aluminum alloy enterprises declined, and orders shrank; secondary aluminum plate/sheet and strip enterprises maintained moderate operating levels, but overall raw material demand support notably slipped compared to Q2. In the short term, supply-side tightness for compliant, invoiced cargoes persists, with suppliers' reluctance to sell at low prices providing bottom support for prices. Import side, the lagged effects of the UAE export ban and EU tariff hike policies will become increasingly apparent in the coming months, with port arrivals staying low from June to August. Demand side, the sluggish downstream orders trend is unlikely to reverse in the near term, and scrap utilization enterprises will most likely extend the strategies of purchasing as needed and keeping low inventory, with purchasing sentiment expected to show no significant improvement.