[SMM Stainless Steel Daily Review] SS Futures Prices Pull Back on Macro Headwinds, Stainless Steel Spot Transactions Weaken According to SMM on July 1, SS futures moved in a downward, consolidating trend. Pressured by rising expectations for US Fed interest rate hikes and the continued decline in SHFE nickel, SS futures fell in tandem. By the midday close, the most-traded SS contract had settled at 14,590 yuan/mt. In the spot market, the generally cautious market sentiment was driven by both the weakness in SS futures and the disturbance from Indonesian policies. Although traders showed a strong willingness to sell, the sluggish transaction scenario remained unchanged. The most-traded SS futures contract: At 10:15 AM, SS2608 was quoted at 14,550 yuan/mt, up 10 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi stood in the range of 470-970 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was flat; the average prices for cold-rolled unedged 304/2B coil were flat in both Wuxi and Foshan; the price for cold-rolled 316L/2B coil in Wuxi was flat; quotations for hot-rolled 316L/NO.1 coil in Wuxi were also flat; and the average prices for cold-rolled 430/2B coil in both Wuxi and Foshan were flat. This week, stainless steel futures and spot prices were in the doldrums. Macro headwinds outside China, coupled with industrial sentiment disturbance, intensified market pessimism, fully highlighting the off-season fundamentals. The overall picture showed that macro factors suppressed the futures, off-season demand weakened, traders cut prices to reduce inventory, supply contraction provided some support to inventory levels, and steel mill profits shrank. Futures were dragged lower by monetary policies and raw material rumors. Spots maintained resilience relying on steel mills holding prices firm, but terminal transactions were sluggish, and the overall market …

[Mideast Situation Adds New Uncertainties, Aluminum Prices Continue in the Doldrums] The dispute over control of the Strait of Hormuz persists, and the resumption of navigation through the strait remains uncertain. The hawkish shift by the US Fed has boosted the US dollar index, weighing on nonferrous metal prices. Under macro headwinds, aluminum prices in and outside China have fallen. In the short term, bearish factors dominate, and aluminum prices are expected to continue in the doldrums.

[SMM Silicon-based PV Morning Meeting Summary] Silicon metal: Yesterday, SMM oxygen-blown #553 silicon in east China was at 9,000-9,200 yuan/mt, and #441 silicon was at 9,200-9,400 yuan/mt. On the futures market, the most-traded contract consolidated at 8,400 yuan/mt. With strong support below prices, there is limited downside room, while upside bullish drivers are insufficient. The silicon metal market was stagnant and consolidating at lows. Wafers: In the wafer market, 18X wafer prices are at 0.85-0.88 yuan/piece, 210RN wafers at 0.96-0.98 yuan/piece, and 210N wafers at 1.16-1.18 yuan/piece. Wafer prices have temporarily stopped falling and stabilized.

Futures: Overnight, the LME lead 3M contract opened at $1,890.5/mt. In initial trading, prices consolidated repeatedly, hitting an intraday high of $1,898/mt. Subsequently, the bulls’ upward momentum faded, and prices drifted lower. During the European session, the decline accelerated, with prices touching a low of $1,871/mt. Towards the end of the session, prices stabilized slightly and rebounded, eventually settling at $1,872/mt, forming a bearish candlestick, down $20.5/mt, a decline of 1.08%. Overnight, the SHFE lead 2608 contract opened slightly lower at 16,040 yuan/mt. After briefly rising to 16,065 yuan/mt in early trading, the bulls lacked momentum, and bears entered to push prices lower. The price continued to pull back, hitting a low of 15,950 yuan/mt. At the low, some buying support led to a minor rebound, and it eventually settled at 15,975 yuan/mt, down 75 yuan/mt, a decline of 0.47%. Trading volume expanded, and open interest saw a slight increase of 238 lots. The trend was a retreat after a rapid rise, showing overall weakness. On the macro front: Trump disclosed a 927-page fundraising financial report exceeding $1 billion. The US Fed’s Hammack: Inflation is still too high and may require considering interest rate hikes. Japan stated that no intervention was made in the foreign exchange market from April 28 to May 27. US Treasury Secretary Bessent: I would not be surprised if the June employment data is very strong. An MIIT official: Step up efforts in tackling key materials such as lithium-rich manganese-based cathodes, silicon-based anodes, and solid-state electrolytes. The National Bureau of Statistics: In June, the manufacturing PMI returned to expansion territory. Spot fundamentals: The SHFE lead center shifted further downward, and in early trading it once briefly broke below the 16,000 yuan/mt level. Suppliers showed widening divergence in selling, with some raising their offer premiums, while others kept selling at parity. Meanwhile, EXW cargo quotations from primary lead smelters also diverged, with regional price spreads narrowing. Mainstream production area quotations against the SMM #1 lead average price were at discounts of 25 yuan/mt to premiums of 25 yuan/mt. In the secondary lead sector, smelters showed strong reluctance to sell at low prices, and quotations were scarce. Some secondary refined lead was quoted at premiums of 0-50 yuan/mt against SMM #1 lead ex-works, with a few at premiums of 100 yuan/mt, but there were also some discounted cargoes. Today was the last trading day of end-June, and downstream enterprises showed pronounced risk-averse wait-and-see sentiment. Some were looking to buy at lower prices on demand, and trading activity in the spot order market improved slightly. Inventory: As of June 30, LME lead inventory increased by 375 mt to 297,375 mt. As of June 29, SMM statistics showed that total social inventory of lead ingots across five regions in China climbed to 71,200 mt, hitting a stage high since June, with visible inventory buildup pressure continuing to manifest. As of June 29, SMM statistics showed that total social inventory of lead ingots across five regions in China climbed to 71,200 mt, hitting a stage high since June, with visible inventory buildup pressure continuing to manifest. Lead Price Forecast Today: Expectations for US Fed interest rate hikes continued to weigh on lead prices from a macro perspective; although LME inventory pulled back slightly, the Q2 consumption off-season outside China brought demand-side bearishness. China's primary smelters cut production slightly due to ore supply constraints, while secondary smelters' operating rates declined, dragged by losses and scrap battery raw material shortages, resulting in a market with weak supply and demand. Downstream maintained a wait-and-see sentiment, only making on-demand purchases and buying the dip. In the short term, lead prices are expected to consolidate largely in the doldrums.

[SMM Stainless Steel Daily Review] SS Futures Hold Up Well, Low-Price Restocking of Stainless Steel Spot Cargoes Increases According to SMM on June 30, SS futures consolidated with an upward bias. Although the night session was weak, futures drifted higher after the daytime session opened. By the close, the most-traded SS futures contract settled at 14,740 yuan/mt. In the spot market, prices dipped in early trading due to weakness in the night session, but as SS futures continued to strengthen during the daytime session, transactions recovered somewhat, and low-price restocking demand increased. SS Futures: The most-traded contract. At 10:15 AM, SS2608 was at 14,540 yuan/mt, down 175 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area were in the 480-980 yuan/mt range. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was flat; for cold-rolled 304/2B coil with raw edges, the average price was flat in Wuxi and flat in Foshan; the price for cold-rolled 316L/2B coil in the Wuxi area was flat; for hot-rolled 316L/NO.1 coil, the quoted price in Wuxi was flat; cold-rolled 430/2B coil prices were flat in both Wuxi and Foshan. Stainless steel futures and spot markets were in the doldrums this week. Macro headwinds from outside China, coupled with sentiment disturbances in the industry, led to heightened market pessimism, fully highlighting off-season fundamentals. The overall pattern was one of macro pressures weighing on futures, weakening off-season demand, traders cutting prices to reduce inventory, supply tightening helping to support inventory levels, and shrinking steel mill profits. Futures were dragged lower by monetary policy and raw material rumors, while spot prices showed resilience, supported by steel mills holding prices firm; however, end-user transactions were sluggish, and the overall market sentiment was bearish. On the futures side, this week's price movements were driven by macro headwinds. The de-escalation of the US-Iran conflict...

SMM June 30 News: During the day, the SHFE lead 2608 contract was under pressure overall, opening at 16,134 yuan/mt. After the opening, prices weakened quickly in early trading, and the contract remained in the doldrums throughout the day. In the late session, it dipped to an intraday low of 15,925 yuan/mt and closed at 15,995 yuan/mt, registering a small bearish candlestick, down 235 yuan/mt, or 1.45%. Trading volume continued to expand during the day, with activity picking up significantly in early trading, cooling slightly in the afternoon, and overall volume staying steady. The intraday moving average capped the futures throughout the session, and bulls lacked strong upward momentum. Currently, the primary lead smelting sector is weighed by both tightening ore supply and weakening lead prices. This month, some smelters have already carried out production cuts or halted operations. Secondary lead enterprises are constrained by insufficient supply of scrap battery raw materials, and the number of smelters cutting or halting production continues to rise. The pattern of synchronized weakening in both supply and demand has continued to suppress lead prices. Coupled with the persistent accumulation of social inventory of lead ingots, the current inventory level has reached a new high since June. Looking ahead to the lead price trend in July, the actual recovery of downstream end-use consumption will be a key variable to watch. Data Source Statement: Apart from publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only. They do not constitute decision-making advice.

[Strait of Hormuz Control Dispute Continues; Bearish Factors Dominate Short-Term Aluminum Prices] The Strait of Hormuz control dispute continues, and the resumption of navigation in the strait remains uncertain. The US Fed’s hawkish pivot boosted the US dollar index, and non-ferrous metal prices were suppressed. Under macro headwinds, aluminum prices in and outside China fell. In the short term, bearish factors dominate, and aluminum prices are expected to remain in the doldrums.

SMM Morning Briefing: Overnight, LME copper opened at $13,341/mt. In early trading, it drifted higher to touch a high of $13,379/mt. Then the center of copper prices drifted lower to touch a low of $13,252.5/mt. Afterwards, it drifted higher again and eventually closed at $13,344.5/mt, up 0.17%. Trading volume reached 14,200 lots, and open interest stood at 246,000 lots, down 256 lots from the previous trading day, which reflected bears reducing positions. Overnight, the most-traded SHFE copper 2608 contract opened at 102,710 yuan/mt. In early trading, it quickly rose to a high of 102,850 yuan/mt. Then the price center drifted lower to touch a low of 102,100 yuan/mt. Afterwards, it drifted higher and finally ended at 102,340 yuan/mt, down 0.79%. Trading volume was 31,000 lots, and open interest stood at 152,000 lots, down 1,906 lots from the previous trading day, which reflected bulls reducing positions.

Futures: Overnight, the LME lead 3M contract opened at $1,903.5/mt. During the Asian session, funds steadily pushed up futures, with prices drifting higher continuously and reaching an intraday high of $1,914/mt. In the European session, bullish momentum faded quickly, and futures came under pressure, drifting lower in a continuous decline and hitting bottom at a low of $1,890/mt. Near the close, losses narrowed slightly, and it finally settled at $1,892.5/mt, down $9/mt, or 0.47%. Overnight, the most-traded SHFE lead 2608 contract opened at 16,180 yuan/mt, briefly dipped to a low of 16,125 yuan/mt in early trading, then bulls quickly fought back, pushing prices to drift higher to 16,200 yuan/mt. After the spike, upward momentum faded quickly, and futures remained under pressure below the intraday moving average, drifting lower to finally settle at 16,130 yuan/mt, down 60 yuan/mt, or 0.37%. Macro front: The US Supreme Court blocked Trump’s dismissal of Fed Governor Cook. Trump: Will immediately take action on Fed Governor Cook’s eligibility to serve. Iran: The current focus is on implementing the memorandum of understanding, and no talks with the US will be held in the near term. China and the EU officially confirmed the establishment of a China-EU trade and investment consultation mechanism. Chinese air conditioners sold out in Europe, with Midea doubling sales and Gree fully sold out. Starting July 1, nearly 20 semiconductor companies initiated a new round of price hikes with concentrated adjustments. Spot fundamentals: SHFE lead remained in the doldrums, and suppliers sold at prevailing rates. Price premiums in Jiangsu, Zhejiang, and Shanghai were basically flat WoW. EXW cargoes from primary lead smelters were quoted lower in the south and higher in the north, with mainstream producing area quotations ranging from a discount of 50 yuan/mt to a premium of 50 yuan/mt against the SMM #1 lead average price. For secondary lead, smelters held back from selling at low prices and were less willing to quote; some secondary refined lead was quoted at premiums of 0-50 yuan/mt against SMM #1 lead on an EXW basis, remaining in an inverted state versus primary lead. For downstream enterprises, demand was limited at month-end. Most enterprises only made just-in-time procurement or used long-term contracts, with limited inquiries and thin transactions in the spot market. Inventory: On June 29, LME lead inventory decreased by 450 mt to 297,000 mt; SMM lead ingot social inventory in five regions rose by 3,700 mt to 71,200 mt. Today's lead price forecast: Recently, the secondary lead supply side has seen a tug-of-war between longs and shorts: on one hand, several previously maintenance-hit secondary lead smelters have delayed their production resumptions; on the other hand, some smelters have gradually resumed production, with supply increases and decreases offsetting each other. The demand side is visibly under pressure, with a slow downstream consumption recovery pace and low willingness among enterprises to purchase and pick up goods. Combined with the dual impact of the traditional off-season and high temperatures, many downstream processing enterprises plan to halt production for holidays, further dragging down end-use demand. Currently, lead prices remain on a downward trajectory, but primary and secondary lead prices have inverted, coupled with scrap battery raw material costs staying high, providing bottom support for lead prices.

[SMM Morning Comment] Overnight, the most-traded SHFE zinc 2608 contract opened at 24,330 yuan/mt, briefly touching a high of 24,360 yuan/mt at the beginning of the session before bulls reduced positions, sending prices rapidly down to a low of 24,205 yuan/mt. The contract consolidated during the session, then stabilized and rebounded slightly near the close, ultimately closing lower at 24,290 yuan/mt, down 180 yuan/mt, or 0.74%. Trading volume decreased to 56,884 lots, and open interest fell by 2,677 lots to 99,375 lots.