[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the current social inventory continues to destock rapidly. SMM data shows that Shanghai's social inventory recorded 76,500 mt, down 9,100 mt MoM; Jiangsu's social inventory recorded 19,500 mt, down 6,900 mt MoM, with available spot cargoes remaining persistently tight. From the perspective of supplier behavior, after low-priced cargoes were quickly digested, the market found it difficult to locate discounted cargoes, and suppliers held firm in their intention to support prices. High-quality copper premiums were maintained at a high of 360-400 yuan/mt. After the contract rollover, the backwardation spread between the front-month and next-month contracts narrowed but still stayed at a relatively high level. Overall, with inventory continuing to destock and limited replenishment arrivals, Shanghai spot copper prices against the SHFE 2608 contract are expected to remain at a premium tomorrow, with the overall center possibly moving slightly higher.

[7.16 Morning Meeting Minutes] US June CPI rose 3.5% YoY, compared to the expected 3.8% increase and the previous 4.2% rise. US June CPI fell 0.4% MoM, versus the expected 0.1% decline and the previous 0.5% increase. After the release of US June CPI data, traders pushed back their expectations for US Fed interest rate hikes to October. The most-traded SHFE nickel 2609 contract drifted lower in morning trading, closing down 0.43% at 128,870 yuan/mt at the end of the morning session. US inflation cooled significantly in June, with the unadjusted core CPI rising 2.6% YoY, below the expected 2.8% and the previous 2.9%. The cooling inflation further pushed back market expectations for US Fed rate hikes, and the US dollar extended its decline. In the short term, nickel prices may see a rebound, with the most-traded SHFE nickel contract price range between 127,000-133,000 yuan/mt.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the open interest for the SHFE copper 2607 contract is currently less than 2,000 lots, and the 2607 contract maintains a high backwardation against the 2608 contract. After the contract rollover, the market will officially price around the 2608 contract. Supply side, social inventory has been continuously declining recently. Arrivals of domestic and imported materials at some warehouses have been low, and the tightness of available spot supply is unlikely to ease significantly in the short term. LME data shows that the ratio of cancelled warrants on the LME has been rising continuously; coupled with the opening of the import window, subsequent import supply growth is expected to see some improvement. According to SMM, some warrants have been cancelled from LME and shipped to the Chinese market, expected to arrive at the end of this month or early next month. Demand side, downstream buyers' acceptance of high premiums is limited, market transactions are light, and suppliers have been continuously lowering their offers to secure deals. Since SMM always quotes against the front-month contract, spot premiums have been rapidly recovering due to the backwardation structure. Overall, with the support of the backwardation structure and weakening downstream consumption, Shanghai spot copper premiums against the 2608 contract are expected to remain at a premium tomorrow.

SMM Nickel, July 15: Macro & Market News: (1) US June CPI rose 3.5% YoY, versus an estimated 3.8% and a prior 4.2%. The US June CPI fell 0.4% MoM, compared to an estimated 0.1% decline and a 0.5% prior increase. Following the release of the US June CPI data, traders pushed back expectations for US Fed interest rate hikes to October. (2) General Administration of Customs: Since the beginning of this year, China’s export growth has exceeded 10%, maintaining expansion for 11 consecutive quarters. Spot Market: On July 14, SMM #1 refined nickel price fell by 250 yuan/mt from the previous trading day. On spot premiums, Jinchuan #1 refined nickel averaged 2,000 yuan/mt, down 100 yuan/mt from the prior trading day, while premiums for mainstream domestic electrodeposited nickel brands ranged from -300 to 500 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2609) drifted lower in early trading, closing the morning session at 128,870 yuan/mt, down 0.43%. US June inflation cooled significantly, with unadjusted core CPI rising 2.6% YoY, below the market expectation of 2.8% and the prior 2.9%. The cooling inflation further delayed expectations for US Fed interest rate hikes, and the US dollar extended its decline. In the short term, nickel prices may rebound, with the most-traded SHFE nickel contract seen trading in the range of 127,000-133,000 yuan/mt.

On July 14, SMM #1 refined nickel price fell 250 yuan/mt from the previous trading day. In terms of spot premiums, Jinchuan #1 refined nickel averaged 2,000 yuan/mt, down 100 yuan/mt from the previous trading day, while the range for domestic mainstream brand electrodeposited nickel was -300 to 500 yuan/mt.

[7.15 Morning Meeting Minutes] The US will blockade Iranian ports starting at 4 a.m. on the 15th; Trump stated that a 20% fee will be charged on cargo transportation and may manage the Strait of Hormuz in the future. The most-traded SHFE nickel 2609 contract surged during the night session and consolidated in the morning session, closing at 129,250 yuan/mt, with an increase of 0.43%. Over the weekend, renewed tensions in the US-Iran conflict, along with a simultaneous rise in the US dollar and crude oil, exerted pressure on metals. However, Indonesia's Ministry of Energy and Mineral Resources officially announced on July 10 that it would no longer raise overall national nickel ore mining production quotas, with increases to be very limited and strict exception approval channels set only for domestic smelters facing severe raw material supply shortages. In the short term, nickel prices may rebound, with the most-traded SHFE nickel contract price range at 127,000-133,000 yuan/mt.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, which is the last trading day of the SHFE copper 2607 contract, SMM will continue to quote against the front-month contract. The current open interest for the 2607 contract is around 4,500 lots. SHFE warrant data show that warrants stood at 47,158 mt on July 13, which is relatively ample and sufficient to cover delivery needs. Supply side, social inventory has been declining rapidly recently, mainly due to low arrivals of both domestic and imported cargoes, leaving the tightness in spot circulation unchanged. The backwardation price spread between contracts in adjacent months widened to 180-340 yuan/mt, and the front-month contract showed notable strength. Additionally, some suppliers have already attempted to quote for the 2608 contract today, with standard-quality copper at a premium of about 300 yuan/mt, reflecting that the market still holds optimistic expectations for premiums after the contract rollover. Overall, supported by the backwardation structure and driven by delivery-related dynamics, Shanghai spot copper prices against the 2607 contract are expected to remain at a premium tomorrow.

SMM Nickel July 14 News: Macro and Market News: (1) The US will blockade Iranian ports starting at 4:00 a.m. on the 15th; Trump: Will impose a 20% fee on cargo shipments; May take over management of the Strait of Hormuz in the future. (2) US Fed Governor Waller: If core inflation posts another hot reading this week, the FOMC will have to consider tightening monetary policy in the near term. Spot Market: On July 14, SMM #1 refined nickel price increased by 1,200 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 2,100 yuan/mt, down 50 yuan/mt from the previous trading day, while domestically mainstream electrodeposited nickel brands ranged between -300-500 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2609) surged during the night session before consolidating in the morning session, closing the morning session at 129,250 yuan/mt, up 0.43%. Over the weekend, the US-Iran conflict took another unexpected turn, with synchronized rises in the US dollar and crude oil weighing on metals. However, Indonesia's Ministry of Energy and Mineral Resources officially announced on July 10 that it would not raise the overall national nickel mining production quota, with any quota increases to be very limited and only granted through a strict, special approval channel for local smelters facing severe raw material supply shortages. In the short term, nickel prices may see a rebound, with the most-traded SHFE nickel contract expected to trade within a range of 127,000-133,000 yuan/mt.

[7.14 Morning Meeting Minutes] On the 12th local time, US President Trump said the US carried out “heavy strikes” on Iran the night before. Regarding the navigational status of the Strait of Hormuz, there are disagreements among various parties. Iran’s Persian Gulf Strait Authority posted on social media on the 12th, stating that the Strait of Hormuz is currently impassable. Trump, however, said, “As far as the US is concerned, the Strait of Hormuz is still open.” The most-traded SHFE nickel 2609 contract edged down in early trading, closing at 128,030 yuan/mt by the end of the early session, up 0.02%. Over the weekend, the US-Iran conflict took another turn. The simultaneous rise of the US dollar and crude oil weighed on metals, but Indonesia’s Ministry of Energy and Mineral Resources officially announced on July 10 that it will no longer raise the national nickel ore mining production quota overall. The increase will be very limited, with strict exception approval channels set only for domestic smelters facing severe raw material supply shortages. In the short term, nickel prices may rebound, with the most-traded SHFE nickel contract trading in a range of 127,000-133,000 yuan/mt.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, SMM data shows Shanghai social inventory at 85,600 mt, down 19,200 mt WoW from last Thursday, and Jiangsu social inventory at 26,400 mt, down 4,600 mt WoW, indicating rapid destocking. Social inventory has fallen by approximately 60,000 mt over the past two weeks, keeping available spot cargoes persistently tight. According to SMM, the arrival of domestic spot cargoes at some warehouses has remained low, limiting supply-side growth. The backwardation price spread between monthly contracts significantly widened to 200 yuan/mt, leading to higher costs for warehouse warrant transfers and somewhat boosting suppliers’ willingness to sell, but the sentiment to hold prices firm remains. The import window is wide open, but given logistics and customs clearance delays, near-term spot market replenishment will remain limited. In summary, driven by rapid destocking, a widening backwardation structure, and firm supplier pricing, SHFE spot copper is expected to maintain a premium against the 2607 contract tomorrow.