SMM Aluminum Billet Market: In July, the operating rate of aluminum billet rose 1.1 percentage points MoM to 58.3%, up sharply by 5.2 percentage points YoY. Benefiting from the strong performance of aluminum billet processing fees in Q2...

[Weekly Magnesium Ingot Prices Rise on Strong Upstream Support; Insufficient Downstream Follow-Through Limits Upside Room] This week, mainstream quotations for magnesium ingot in major producing areas were 15,900-16,000 yuan/mt, up 100 yuan/mt WoW, with FOB prices at $2,250-2,350/mt. This round of magnesium ingot price gains was driven by three factors: supply-side maintenance-related production cuts, cost push from coal and ferrosilicon, and concentrated delivery and restocking by traders. However, after the price increase, downstream fear of high prices emerged and transactions returned to mediocre levels; foreign trade remained weak, constrained by exchange rate fluctuations and the uncertain recovery of summer break orders. Upstream dolomite prices were stable, with sufficient supply from multiple channels; downstream magnesium powder and magnesium alloy prices followed the increase, but demand follow-through was insufficient. Magnesium alloy processing fees remained under pressure due to ample inventory, the impact of non-standard supply sources, high-temperature maintenance at die-casting enterprises, plastic substitution in two-wheelers, and other factors. In the short term, cost support is pitted against weak demand, and magnesium prices continue to move sideways.

This week, HRC prices strengthened compared with the previous week, and overall transactions improved from the previous week. Supply side, the impact from rolling-line maintenance declined WoW this week, and overall HRC production increased. Demand side, apparent demand rose WoW this week. Inventory side, total HRC inventory fell 74,000 mt WoW this week, and mill inventory rose 2,400 mt WoW. Social inventory side, SMM-tracked HRC social inventory at 86 warehouses nationwide (large sample) stood at 4.4432 million mt this week, down 76,300 mt WoW (-1.69% WoW) and up 34.48% YoY on a Gregorian calendar basis. By region, except for small inventory buildups in Central China and Northeast China, all other markets were destocking. Cost side, coking coal and coke prices showed strong performance this week, boosting HRC cost support. Looking ahead, expectations for the first round of coke price hikes remain, and combined with lingering disturbances from iron ore long-term contract negotiation news, cost support has strengthened somewhat. From a fundamentals perspective, the impact from HRC maintenance will gradually decrease going forward, and HRC production is expected to continue rebounding; on the demand side, however, downstream demand has yet to recover, and demand remains mainly rigid at a weak level. Next week, HRC inventory is expected to remain in the late-off-season inventory buildup phase, and fundamental pressure remains. HRC prices are expected to follow cost-side fluctuations next week, and the most-traded contract is expected to trade in the 3,230-3,300 range.

This week nickel prices exhibited a weak pattern overall, with the price center continuing to shift lower. At the start of the week, the most-traded SHFE nickel contract (NI2609) edged up, supported by an unexpectedly weak US July nonfarm payrolls report and a softer US dollar index. Subsequently, however, expectations of looser Indonesian supply built, and SHFE nickel ground lower for four consecutive trading days, with losses accelerating on Friday. The contract closed at about 127,040 yuan/mt, down 1.29% on the day, after touching an intraweek low of 126,720 yuan/mt; it fell about 2.6% WoW. The LME nickel 3M contract weakened in tandem, with the latest close at $16,675/mt, down about 1.8% WoW. In the spot market, the average SMM #1 refined nickel price this week was 129,110 yuan/mt, down 2,250 yuan/mt WoW. Jinchuan refined nickel premiums held steady in the range of 1,250-1,300 yuan/mt. Mainstream electrodeposited nickel premiums/discounts were between -200 and 500 yuan/mt, with discounts narrowing somewhat during the week. Spot market trading recovered slightly amid the continued decline in futures this week, and downstream users’ willingness to restock improved from previous levels. On the macro front, cooling US inflation data and hawkish remarks from Fed officials offset each other this week. US July unadjusted CPI rose 3.4% YoY and core CPI rose 2.5% YoY, both in line with market expectations, weakening investor expectations for a Fed rate hike in September. However, Cleveland Fed President Hammack said the Fed may need to raise rates several times to bring inflation back to its 2% target, and the US dollar index briefly touched a two-week high, weighing on nonferrous metal valuations. On the geopolitical front, US-Iran tensions flared up again—US forces opened fire in the Gulf of Oman on a Panamanian-flagged cargo ship attempting to breach the blockade against Iran. Iran’s Supreme National Security Council reiterated that the Strait of Hormuz will not reopen as long as the US does not accept its terms. However, with the concentrated arrival of sulfur cargoes, production schedules at some Indonesian HPAL projects recovered, easing the earlier marginal pressure from tight sulfur supply. On the domestic front, China’s July CPI rose 0.5% YoY and core CPI rose 0.9% YoY, while overall CPI fell 0.1% MoM. The central bank released its Q2 2026 monetary policy implementation report, stressing that it would continue to implement moderately loose monetary policy, plan and introduce practical and effective incremental policies in a timely manner, and strengthen countercyclical adjustment. On the inventory front, Shanghai Bonded Zone inventory this week was about 1,400 mt, flat WoW. China’s social inventory was about 134,000 mt, with an inventory buildup of about 300 mt WoW. Nickel prices are currently in a weak window where expectations of looser supply, wavering macro sentiment, and high inventories are intertwined. On the downside, losses on electrodeposited nickel production provide cost support, while the upside is capped by off-season demand and inventories. Prices are expected to consolidate on a subdued note in the near term. The most-traded SHFE nickel contract is expected to trade mainly within 124,000-130,000 yuan/mt next week.

SMM Weekly Stainless Steel Futures Review — week of August 10–14, 2026. Chinese stainless steel futures fell for a fourth straight week, settling at RMB 14,245/mt (about $2,114/mt) on August 14.

[SMM Stainless Steel Daily Review] News Disruption Sends SS Sharply Lower; Stainless Steel Spot Prices Weaken, Trading Sluggish According to SMM on August 14, SS futures saw a sharp pullback. In the night session, the nonferrous metals sector was broadly in the doldrums. SS was already pulling back in tandem with the sector. Coupled with the morning disruption caused by news that Indonesian nickel ore quotas may be increased significantly, SHFE nickel and SS fell sharply in tandem. As of the close, the most-traded SS contract settled at 14,120 yuan/mt. In the spot market, driven by the pullback in SS futures and lower offers from steel mill agents, stainless steel spot prices pulled back significantly. The price drop further reinforced market pessimism, and market trading remained in the doldrums. The Most-Traded SS Futures Contract. At 10:15 a.m., SS2610 traded at 14,245 yuan/mt, down 150 yuan/mt from the previous trading day. In Wuxi, spot premiums for 304/2B were in the 425-825 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was flat; for cold-rolled 304/2B mill-edge coil, the average price in Wuxi fell 100 yuan/mt and that in Foshan fell 150 yuan/mt; cold-rolled 316L/2B coil prices in Wuxi fell 300 yuan/mt; hot-rolled 316L/No.1 coil offers in Wuxi fell 350 yuan/mt; and cold-rolled 430/2B coil prices in both Wuxi and Foshan were flat. This week, stainless steel futures were repeatedly disrupted by macro sentiment and generally maintained a weak pullback trend. During the week, news on Indonesia’s RKAB nickel ore approvals repeatedly disturbed industry expectations. Coupled with the US Fed's hawkish policy stance, the US-Iran geopolitical conflict still...

[Liquidity Tightening Concerns Ease Marginally, Aluminum Prices Stay Under Pressure at Highs in Near Term] Overall, on the macro front, US PPI and core PPI for July both declined YoY, coming in below both expectations and previous readings. Inflationary pressure eased further, and market expectations for a US Fed rate hike in September were scaled back, marginally easing concerns over liquidity tightening. On the fundamentals front, aluminum ingot inventories continued to destock, but destocking was expected to slow down in the second half of the month. The pace of production resumptions at Middle Eastern aluminum smelters was faster than the market had previously expected, and the supply-tightness premium priced in earlier faced pressure to unwind. Although macro recovery and continued destocking in the first half of August supported stronger aluminum prices, market sentiment shifted, and aluminum prices are expected to remain under pressure at high levels in the near term, with upside room likely to be capped to some extent by production resumption expectations.

[SMM Magnesium Express]This week, social inventory of magnesium ingot rose 3.57% WoW, indicating slight inventory buildup. The magnesium ingot market was stable initially before strengthening this week, mainly due to stronger cost-side support—coal and ferrosilicon prices continued to climb, producers’ sentiment to hold prices firm increased accordingly, and market expectations for price declines weakened. Meanwhile, with some orders nearing delivery dates, traders made phased stockpiling purchases this week. However, of the volumes bought by traders this week, only a small portion flowed directly to domestic downstream end-users, while most was held in inventory to meet delivery needs in mid-to-late August. It was precisely this pace mismatch of “front-loaded procurement and delayed warehousing” that caused social inventory data to accumulate this week. Overall, the current inventory buildup is driven more by phased stockpiling behavior than by a substantial recovery in end-use demand. Going forward, cost-side trends and delivery pace still need to be watched for their further impact on inventory changes.

SMM Morning Meeting Summary: Overnight, LME copper opened at $14,071/mt, dipped to a low of $14,066/mt in early trading, then saw its price center drift higher to touch $14,151.5/mt before closing at $14,135.5/mt, up 0.18%. Trading volume reached 20,000 lots, with open interest at 266,000 lots, up 2,423 lots from the previous trading day, reflecting an increase in long positions. Overnight, the most-traded SHFE copper 2609 contract opened at 107,930 yuan/mt, initially rose to 107,990 yuan/mt, then saw its price center move straight down to touch a low of 107,660 yuan/mt, and subsequently swung wildly before closing at 107,790 yuan/mt, down 0.03%. Trading volume reached 28,000 lots, with open interest at 206,000 lots, down 3,254 lots from the previous trading day, reflecting long liquidation.

[SMM Lead Morning Meeting Minutes: Inventory Buildup Ahead of Lead Ingot Delivery, Supply-Side Increases and Decreases Coexist, Limiting Upside in Lead Prices] US July PPI YoY growth narrowed to 4.7%, with lower energy costs as the main driver, and the market was no longer fully pricing in a rate hike by the US Fed this year. Recently, as delivery neared, suppliers accelerated the transfer of lead ingots to delivery warehouses...