SMM Nickel July 20 News: Macro and Market News: (1) US media reported that the US-Iran conflict had intensified, and the Pentagon was stepping up the deployment of F-16 and F-35 fighter jets to the Middle East. An adviser to Iran's Supreme Leader said that if the US military continued its operations, Iran might shift to a full-scale offensive phase. (2) The Ministry of Finance, the General Administration of Customs, and the State Taxation Administration issued an announcement clarifying that, starting from September 1, 2026, the consumption tax policy for some battery products would be adjusted step by step. It stated that sodium-ion batteries, solid-state batteries, fuel cells, and solar cells including perovskite cells, tandem cells, and gallium arsenide cells would be exempt from consumption tax. Spot Market: On July 20, SMM #1 refined nickel price rose 750 yuan/mt from the previous trading day. For spot premiums, the average for Jinchuan #1 refined nickel was 1,650 yuan/mt, down 100 yuan/mt from the previous trading day, while the range for mainstream domestic electrodeposited nickel brands was -300 to 500 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2609) rose in early trading before pulling back slightly, closing the morning session at 130,720 yuan/mt, down 0.13%. As the conflict between the US and Iran escalated, shipping in the Strait of Hormuz was restricted, strengthening sulfur cost support. However, refined nickel inventories remained difficult to digest, with both domestic and international inventories still at high levels and destocking slow. In the short term, the price range of the most-traded SHFE nickel contract is expected to be 125,000-130,000 yuan/mt.

US media reported that the US-Iran conflict has escalated and the Pentagon is deploying more F-16 and F-35 fighter jets to the Middle East. An adviser to Iran's Supreme Leader: If the US military continues its operations, Iran may shift to an all-out offensive phase.

[Destocking Pattern Hard to Reverse in Short Term, Aluminum Prices Consolidate and Adjust in Short Term] Overall, geopolitical tensions in the Middle East remain volatile, market concerns over interest rate hikes persist, and supply continues to recover, but the destocking pattern is hard to reverse in the short term. Under the tug-of-war between longs and shorts, aluminum prices are expected to consolidate and adjust in the near term. Going forward, close attention should be paid to the progress of production resumptions in the Middle East and the trends of geopolitical conflicts, LME aluminum ingot inventory changes, and China’s downstream processing orders and aluminum semis export data.

SMM Morning Meeting Summary: Last Friday night, LME copper opened at $13,413/mt, dipped to an early low of $13,382/mt, then the center of copper prices drifted higher, climbing to $13,533/mt near the close, and finally settled at $13,528/mt, down 0.11%. Trading volume reached 19,600 lots, and open interest stood at 245,000 lots, an increase of 3,041 lots from the previous trading day, indicating bearish position-building. Last Friday night, the most-traded SHFE copper 2609 contract opened at 103,100 yuan/mt, dipped to 103,000 yuan/mt early in the session, then drifted higher to hit a high of 103,990 yuan/mt near the close, finally closing at 103,880 yuan/mt, up 0.15%. Trading volume was 31,000 lots, and open interest was 184,000 lots, up 3,839 lots from the previous trading day, reflecting bullish position additions.

SMM, July 20: Last Friday night, LME copper opened at $13,413/mt, fell to a low of $13,382/mt early in the session, then the price center drifted higher, rising to $13,533/mt near the end, and finally settled at $13,528/mt, down 0.11%. Trading volume reached 19,600 lots, and open interest reached 245,000 lots, up 3,041 lots from the previous trading day, indicating bears added to their positions. Last Friday night, the most-traded SHFE copper 2609 contract opened at 103,100 yuan/mt, dipped to 103,000 yuan/mt early on, then copper prices drifted higher, touching a high of 103,990 yuan/mt near the end, and finally settled at 103,880 yuan/mt, up 0.15%. Trading volume reached 31,000 lots, and open interest reached 184,000 lots, up 3,839 lots from the previous trading day, indicating bulls added to their positions. On the macro front, Iran ceased implementing the Iran-US memorandum of understanding, and Trump responded that he "doesn't care at all." Iran then warned that if US forces continued their operations, it would shift to a full-scale offensive, and had already used drones and missiles to attack US military targets in Kuwait, Bahrain, and Jordan. The US military confirmed two soldiers dead and one missing. Facing escalating conflict, the US accelerated the deployment of additional fighter jets to the Middle East and warned Gulf states, while Iran declared that shipping traffic through the Strait of Hormuz had dropped to zero, and threatened to target Gulf facilities, including airports in Dubai and Abu Dhabi. Escalating tensions in the Middle East weighed on copper prices. On the fundamentals side, the supply side saw persistently tight availability of spot cargoes, with inventories at lows for the year, maintaining an overall tight situation. On the demand side, the market was in the off-season for consumption, downstream procurement was sluggish, and overall performance was weak. Overall, copper prices are expected to drift higher today.

[SMM Tin Market Morning Update: Inventory destocking in and outside China resonates, the most-traded SHFE tin contract closely watches the 410,000 mark]

[SMM Zinc Morning Comment] Last Friday, SHFE zinc stopped declining and turned positive, but the daily candlestick center moved lower. Last Friday, SHFE zinc was in the doldrums. In the consumption off-season, downstream enterprises had low acceptance of high zinc prices...

[SMM Morning Meeting Minutes: Bulls Exit, LME Zinc Drifts Lower] Last Friday, LME zinc recorded a bearish candlestick with a long lower shadow, the 60-day moving average below provided support, and the MACD turned into a bearish candlestick. Last Friday, the US dollar strengthened, LME zinc bulls exited, and it was overall in the doldrums. Subsequently......

SMM, July 18: Metals market: Last Friday's overnight domestic base metals nearly all rose. SHFE copper rose 0.15%, SHFE aluminum rose 0.22%, SHFE lead rose 0.69%, SHFE zinc fell 0.85%, SHFE tin rose 1.57%. SHFE nickel fell 0.28%. Additionally, the most-traded alumina futures rose 1.64%, and the most-traded cast aluminum futures rose 0.67%. Most ferrous metals fell in last Friday's overnight session. Stainless steel fell 0.3%, iron ore fell 0.46%, rebar fell 0.35%, hot-rolled coil fell 0.36%. Coking coal and coke: the most-traded coking coal contract rose 1.34%, and the most-traded coke contract rose 0.56%. In overseas metals last Friday overnight, LME base metals mostly fell. LME copper fell 0.11%. LME aluminum fell 0.33%, LME lead rose 0.96%. LME zinc fell 1.48%. LME tin rose 0.73%. LME nickel fell 0.38%. In precious metals last Friday overnight : COMEX gold rose 0.77%, but its weekly performance was down, falling 2.2% for the week; COMEX silver rose 0.06%, posting two consecutive weekly losses, down 6.56% for the week. The most-traded SHFE gold contract rose 0.67% last Friday overnight, but recorded two consecutive weekly declines, falling 3.07% for the week; the most-traded SHFE silver contract rose 1.05%, but declined for two straight weeks, down 7.85% for the week. Data from the World Gold Council showed that gold prices weakened in June, erasing earlier gains, and H1 ended with a decline. Despite outflows in June, Chinese market gold ETFs still achieved significant inflows in H1, pushing total AUM slightly higher to 243 billion yuan, with total holdings increasing by 29 mt to 277 mt. In June, Chinese market gold ETFs saw outflows of 15 billion yuan, marking the weakest monthly performance on record. (From Wallstreetcn APP) As of 8:45 on July 18, last Friday's overnight closing prices: Macro front China: [Ministry of Finance and Two Other Departments Adjust Consumption Tax Policy for Certain Batteries] On July 17, the Ministry of Finance announced that starting from September 1, 2026, mercury-free primary batteries, nickel-metal hydride batteries (also known as NiMH batteries), lithium primary batteries, lithium-ion batteries, and all-vanadium flow batteries will be subject to a consumption tax at a rate of 2%; starting from September 1, 2027, these battery products will be subject to a consumption tax at a rate of 4%. Starting from April 1, 2027, solar cells (also known as solar cells) will be subject to a consumption tax at a rate of 2%; starting from April 1, 2028, solar cells will be subject to a consumption tax at a rate of 4%. From September 1, 2026 to December 31, 2028, consumption tax will be exempted for sodium-ion batteries, solid-state batteries, fuel cells, as well as for perovskite cells, tandem cells, and gallium arsenide cells among solar cells. [MIIT: Automotive Producers Required to Firmly Resist Irrational Competition and Strengthen Product Testing, Verification, and Safety Assessment] On July 17, the Equipment Industry Department I of the Ministry of Industry and Information Technology (MIIT) convened a symposium for key automotive producers, deploying efforts to further regulate competition order in the automotive industry, enhance production conformity and quality safety levels of automotive products, and carry out key tasks such as safety risk and hazard investigations and inspections and supervision of automotive products. (from Wall Street CN app) [Ministry of Housing and Urban-Rural Development: Advance Urban Renewal with High Quality and Intensify the Implementation of the Renovation of Old Urban Residential Communities] On July 17, the Party Leadership Group of the Ministry of Housing and Urban-Rural Development held an expanded study session of the theoretical study center group. The meeting stressed that carrying out urban work in the new era and on the new journey is a glorious mission with arduous tasks. It called for advancing urban renewal with high quality, promoting urban governance with high efficiency, and building “four-good” construction of good houses, good residential communities, good neighborhoods, and good urban districts to high standards. It emphasized intensifying efforts to implement livelihood-related projects such as the renovation of old urban residential communities, the construction of complete communities, the improvement of property service quality, the environmental remediation of back alleys and lanes, the development of pocket parks, and the opening and sharing of green spaces. It called for making great efforts to solve the most pressing difficulties and problems faced by the people, such as the installation of elevators, parking, and charging, striving to make people’s urban life more convenient, comfortable, and beautiful, and seizing the momentum to open up a new landscape in the modernization and construction of people-oriented cities. (China Construction News) [The “Several Measures to Further Promote the Development of ‘AI+Manufacturing’ in Shanghai” Issued] The Shanghai Municipal Commission of Economy and Informatization has issued the “Several Measures to Further Promote the Development of ‘AI+Manufacturing’ in Shanghai.” It mentions promoting breakthroughs in key and core technologies. Support will be provided for breakthroughs in technologies such as knowledge graph integration and text-to-3D parts design, focusing on frontier fields including industrial vertical large models, AI programming large models, physical AI, industrial agents, industrial software, and the industrial Internet, with a maximum support of 20 million yuan. For the R&D of comprehensive security solutions for industrial large models and agents, a maximum support of 10 million yuan will be provided. The measures aim to reduce the cost of using intelligent elements. Industrial intelligent computing cloud platforms are encouraged to provide manufacturing enterprises with low-code agent development platforms and free trials of industrial agents, distribute platform token trial coupons, and introduce computing power benefit packages for enterprises. Support will be given for renting non-affiliated intelligent computing resources to carry out the R&D and application of industrial large models and industrial agents, with a maximum subsidy of 40 million yuan. Support will be provided for the deployment of industrial vertical applications by calling on third-party large models or adopting privately deployed third-party large models, with a maximum subsidy of 5 million yuan. Support will also be given for the procurement of high-quality corpora to facilitate the R&D and application of industrial vertical large models, industrial AI agents, etc., with a maximum subsidy of 5 million yuan. (Jin10 Data App) In terms of the US dollar: Last Friday overnight, the US dollar index rose 0.03% to 100.76. On the weekly chart: the US dollar index fell, dropping 0.2% for the week. According to the latest survey, US consumer sentiment surged to a five-month high in early July, boosted by falling gasoline prices. The survey results released on Friday showed that the University of Michigan's preliminary consumer sentiment index for July rose to 54.4 from 49.5 in June, compared to market expectations of 51. From June through early July, gasoline prices fell steadily, effectively easing household budget pressures. However, renewed tensions in the Middle East have since begun to push oil prices higher and clouded the inflation outlook further. The survey's coverage period was from June 23 to July 13, though the report noted that more than 70% of responses were completed before the US carried out airstrikes on Iran in early July. The improvement in consumer confidence was broad-based across age and income groups as well as political party affiliations. (from Wall Street News App) US housing starts surged in June after a sharp decline in the previous month, driven primarily by a rebound in apartment construction. Official data released on Friday showed that housing starts increased 19% to a 1.43 million annualized rate, the highest level since March and exceeding economists' expectations. Multifamily housing starts jumped more than 76% to a 532,000 annualized rate, following a nearly 40% plunge the previous month. Meanwhile, single-family housing starts fell 0.2%, declining again after builders experienced an overall sluggish spring. The rebound in multifamily construction underscores the month-to-month fluctuations in the data, especially in the apartment sector. However, high home prices and high mortgage rates have been suppressing demand for single-family homes, and these factors may also be supporting apartment demand. At the same time, single-family homebuilders have generally been facing high inventory and weak demand. This has forced many builders to entice buyers through sales incentives. Simona Mocuta, chief economist at State Street Global Advisors, said the US dollar has been supported this year by safe-haven inflows and market pricing of US Fed rate hikes, but these factors have already been priced into the exchange rate, so the dollar is set to resume its multi-year depreciation trend. Her baseline forecast is that the US Fed will keep interest rates unchanged for the entire year, but Mokuta says the risk of one rate hike remains. Even if a hike occurs, it has already been priced into the US dollar and would thus have little additional impact; if a hike fails to materialize, it would weaken the US dollar. As concerns over the US fiscal outlook persist, the US dollar will return to its long-term depreciation trend. (from Wallstreetcn APP) On the macro front: This week will see the release of China's one-year loan prime rate as of July 20, Germany's June PPI MoM, Canada's June CPI MoM, US June Conference Board Leading Index MoM, Switzerland's June trade balance, UK ILO unemployment rate for the three months to May, UK June public sector net borrowing, UK June unemployment rate, UK June claimant count change, Germany's July ZEW economic sentiment index, Eurozone's July ZEW economic sentiment index, US ADP employment change for the week ending July 4, UK June CPI MoM, UK June RPI MoM, China's June SWIFT RMB global payment share, Australia's seasonally adjusted unemployment rate for June, UK July CBI industrial orders balance, Eurozone's ECB deposit facility rate as of July 23, Eurozone's ECB main refinancing rate as of July 23, Canada's May retail sales MoM, US initial jobless claims for the week ending July 18, Eurozone's July consumer confidence index flash estimate, UK July GfK consumer confidence index, Japan's June core CPI YoY, Germany's August GfK consumer confidence index, UK June seasonally adjusted retail sales MoM, France's July manufacturing PMI flash estimate, Germany's July manufacturing PMI flash estimate, Eurozone's July manufacturing PMI flash estimate, UK July manufacturing PMI flash estimate, UK July services PMI flash estimate, US July S&P Global manufacturing PMI flash estimate, US July S&P Global services PMI flash estimate, and US June new home sales annualized, among other data. Additionally, this week: The ECB will announce its interest rate decision; ECB President Lagarde will hold a press conference on monetary policy. On the crude oil front: Last Friday, both crude oil futures surged in overnight trading, with WTI up 4.46% and Brent up 4.78%. On the weekly chart: WTI futures posted a second straight weekly gain, rising 14.51% for the week; Brent futures also rose for a second consecutive week, jumping 16.12% for the week. On Friday, the Middle East situation further deteriorated, and escalating geopolitical tensions drove crude oil sharply higher. Data released by international services provider Kpler on the 17th showed that vessel traffic through the Strait of Hormuz continued to weaken on the 16th, with the confirmed number of ships passing through the strait that day dropping to 8, the lowest level in nearly three weeks. (From Wallstreetcn APP) IEA Executive Director Birol Fatih warned on the 16th that if oil shipments via the Strait of Hormuz are not restored within weeks, global energy security will be in jeopardy. According to UK sources, Birol said at an event held by the Council on Foreign Relations that oil supply security remains a key concern, and if the situation in the Strait of Hormuz does not improve in the coming weeks, the world should be worried. He said the measures taken by some countries "cannot last forever"; even if the US significantly increases oil production, it will be far from enough to offset the supply gap caused by the blockage in the Strait of Hormuz. (CCTV News) Oilfield services company Baker Hughes said US energy firms this week added oil and natural gas rigs for the fifth consecutive week, the first such streak since early June, bringing the total count to its highest since April 2025. As an early indicator of future output, the total rig count rose by 7 to 588 in the week to July 17. Baker Hughes said this week's increase pushed the total rig count up by 44 rigs, or 8%, compared to the same period last year. Baker Hughes said oil rigs rose by 7 to 452 this week, the highest since May 2025; natural gas rigs were unchanged at 126, and miscellaneous rigs were unchanged at 10. (From Wallstreetcn APP) Notably: NYMEX WTI August crude oil futures will be affected by contract rollover, with the final floor trading completed at 2:30 on July 22 and the final electronic trading completed at 5:00 AM. Please pay attention to the exchange's expiry and rollover announcements to manage risks. In addition, for some trading platforms, the WTI contract expiry is typically one day earlier than the official NYMEX expiry; please be attentive. Recommended Reading:

Futures: Last Friday, LME lead opened at $1,869.5/mt and moved sideways during the Asian session. Entering the European session, it dipped first before rebounding, hitting a low of $1,863.5/mt, then climbed to a high of $1,890.5/mt near the close as bears cut positions, finally settling at $1,887/mt, up 0.96%. Last Friday evening, the most-traded SHFE lead 2609 contract opened at 15,875 yuan/mt, briefly touching a low of 15,855 yuan/mt in early trading, then rebounded to a high of 15,980 yuan/mt as bears reduced positions, finally closing at 15,945 yuan/mt, up 0.44%. On the macro front: US media reports: US-Iran conflict intensifies, the Pentagon is rushing additional F-16 and F-35 fighter jets to the Middle East. The Eurozone's May current account surplus expanded, as primary income growth offset a narrowing trade surplus. The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) stated that central state-owned enterprises must continue to achieve breakthroughs in original technologies such as foundational algorithms, physical AI, intelligent computing chips and quantum communication. The National Development and Reform Commission (NDRC) released an action plan for AI cooperation and development. The Ministry of Finance adjusted some battery consumption tax policies, gradually resuming collection of consumption tax on certain new energy batteries. Spot fundamentals: SHFE lead consolidated on a strong note. Suppliers showed moderate selling enthusiasm, but circulating cargoes in the Jiangsu, Zhejiang and Shanghai markets were limited, with few quotes available. Meanwhile, primary lead smelters sold EXW cargoes following the market trend, with quotes at wider discounts in some regions; mainstream producing areas quoted at discounts of 50-0 yuan/mt against the SMM #1 lead average price for ex-works sales, with a few deals done at even larger discounts. In secondary lead, smelters offered more quotes, with secondary refined lead quoted at discounts of 50-0 yuan/mt against the SMM #1 lead average price ex-works. Downstream enterprises mostly shifted to long-term contract procurement or paused to observe the market, muting the trading atmosphere in the spot order market. Inventory: On July 17, LME lead inventory decreased by 1,950 mt to 452,075 mt. As of July 16, total social inventory of SMM lead ingots across five regions decreased by about 500 mt WoW from July 13. Lead price forecast for today: Due to delivery factors and downstream procurement, visible lead ingot inventory rose first and then fell last week. With the bearish overseas inventory buildup factor now priced in, the Chinese market's focus shifted to the production of secondary lead enterprises and downstream purchasing trends. If lead ingot inventory continues to destock this week, lead prices are expected to return to and consolidate above the 16,000 yuan/mt level.