SMM, July 2: Metals market: As of the midday close, most base metals in the domestic market moved downward. SHFE copper and SHFE aluminum both fell by less than 0.2%. SHFE lead dropped 0.72%. SHFE zinc declined 1.04%. SHFE tin edged up 0.15%. SHFE nickel fell 0.41%. Additionally, the most-traded casting aluminum futures fell 0.97%, while the most-traded alumina contract rose 0.21%. Lithium carbonate’s most-traded contract extended its gains from the previous three trading sessions, rising another 1.26%. Silicon metal’s most-traded contract fell 0.18%. Polysilicon’s most-traded futures contract rose 0.36%. Ferrous metals mostly fell. Iron ore rose 0.54%. HRC and rebar both fell by less than 0.5%, while stainless steel dropped 0.92%. Coking coal and coke: the most-traded coking coal contract rose 0.28%, while the most-traded coke contract fell 0.96%. In the overseas base metals market, as of 11:39, LME metals were nearly all falling. LME copper fell 0.31%, LME aluminum fell 0.19%, and LME lead was parity at $1,866.5/mt. LME zinc fell 0.2%, and LME tin edged down. LME nickel fell 0.4%. In precious metals, as of 11:39, COMEX gold fell 0.16%, while COMEX silver rose 0.03%. In the domestic precious metals market: SHFE gold rose 1.28%; SHFE silver’s most-traded contract rose 2.06%. Additionally, as of the midday close, platinum’s most-traded futures contract rose 5.12%, and palladium’s most-traded futures contract rose 2.82%. As of the midday close, the most-traded container shipping (Europe) futures contract fell 2.12% to 2,561 points. Selected futures midday prices as of 11:39, July 2: Spot Market and Fundamentals Aluminum: In early trading, the price center of the SHFE aluminum 2606 contract was higher than the same period of the previous trading day. Warranted supply continued to flow out, keeping circulating spot supply ample overall. Downstream restocking was only sporadic, and with bearish futures sentiment spreading, end-user purchase willingness was generally weak. Mainstream transactions were at parity to a premium of 20 yuan/mt against the SHFE aluminum 07 contract... Macro Front China: [Mandatory National Standard on Safety Requirements for Combined Driver-Assistance Systems of Intelligent Connected Vehicles Officially Released] On June 27, the mandatory national standard GB 47955—2026, Safety Requirements for Combined Driver-Assistance Systems of Intelligent Connected Vehicles, developed and managed by the Ministry of Industry and Information Technology, was approved and released by the State Administration for Market Regulation and the Standardization Administration of China. It is scheduled for official implementation on January 1, 2027. Based on China's industrial development and regulatory needs, and balancing technical feasibility, product compatibility, and practical operability, this document presents a clear, comprehensive, and nationally relevant safety indicator system. First, it fully accounts for different product forms and technical paths, setting applicable safety requirements for three types of combined driver-assistance system products: basic single-lane, basic multi-lane, and navigation pilot assist. Second, integrating China's road traffic characteristics, it establishes baseline requirements for the safe operation of combined driver-assistance systems from aspects including functional requirements, data recording, and vehicle manufacturer safety assurance. Third, considering the core positioning of the system as "assisting" driving, it proposes user operation and use requirements regarding human-machine interaction, usage instructions, and user training, thereby laying a foundation for proper cooperation between users and systems. Fourth, aligned with the practical needs of China's industry management, it establishes a multi-tiered evaluation method covering site tests, road tests, and document inspections to comprehensively assess the safety capability of the systems. The PBOC conducted 288.5 billion yuan in 7-day reverse repo operations today, with an operation rate of 1.4%, unchanged from the previous period. Today, 370.5 billion yuan in reverse repos matured. US Dollar: As of 11:39, the US dollar index fell 0.03% to 101.39. Fed Chairman Warsh stated on Wednesday that inflation expectations and inflation risks have lessened in recent weeks; he reiterated the US Fed's commitment to reducing inflation to its 2% target. "During the initial weeks of this period, inflation expectations have edged down, and inflation risks have been reduced," Warsh said. "If anyone in a household, business, or financial market thinks the Fed will be comfortable with inflation above our 2% target—well, they should be disappointed: we will ensure price stability across the United States." Fed Chairman Warsh skirted a question on whether a rate hike is possible at the Fed's July meeting. "I expect that when we meet in four weeks' time, we will have a good family argument," he said. "When we get in that room behind closed doors, we will have a robust debate. Beyond that, I have nothing for you." Warsh made the remarks at the ECB's annual policy retreat in Sintra, Portugal—his first public appearance since his inaugural Fed press conference last month. Since then, investors have come to expect more rate increases from the US Fed, but markets currently price in a less than 50% probability of a first hike this month. According to CME's "FedWatch": The probability that the US Fed holds rates steady in July is 71.7%, while the probability of a cumulative 25 basis point hike is 28.3%. The probability that the US Fed holds rates steady through September is 36.1%, the probability of a cumulative 25 bps hike is 49.8%, and the probability of a cumulative 50 bps hike is 14.1%. (Jin10 Data APP) Data: US manufacturing expanded for the sixth consecutive month in June, with war-driven surges in input costs easing. Printing, electrical equipment, and textiles led the gains, while paper products, furniture, and wood products contracted. Market attention has now shifted to Thursday’s US employment report. Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management, noted that with Warsh making inflation his number one focus, the June non-farm payrolls data is "unlikely to shift the interest rate outlook on its own," adding that FIFA World Cup-related hiring is expected to distort the figure. (Wall Street CN) Data: Today's data releases include the US June unemployment rate, June seasonally adjusted non-farm payrolls, initial jobless claims for the week ending June 27, June average hourly earnings (y/y) and (m/m), and May factory orders (m/m); Switzerland's June CPI (m/m); and the Eurozone's May unemployment rate. Also, monitor for: the Ministry of Commerce holds its first regular press briefing for July; 2027 FOMC voter and San Francisco Fed President Daly participates in a conference on the Spanish economy. Due to the US Independence Day holiday (July 3), the US June non-farm payrolls data will be released early at 20:30 Beijing time on Thursday, July 2. US stock markets will be closed on Friday, July 3. Trading in CME precious metals, energy, FX, US Treasury, and equity index futures contracts will close early at 01:00 Beijing time on July 4. Trading in ICE Brent crude oil futures contracts will close early at 01:30 Beijing time on July 4. Investors, please take note. (Jin10 Data APP) Crude Oil: As of 11:39, oil prices in both benchmarks extended their declines from the previous two trading sessions, with US oil falling 1.4% and Brent oil falling 1.24%. International crude oil prices pulled back, influenced by progress in Middle East peace talks. (Wall Street CN) OCBC Group Research has lowered its quarterly crude oil forecasts through Q2 2027, as supplies through the Strait of Hormuz rebound. Two OCBC strategists noted in a research report: "Shipping and crude supply through the Strait of Hormuz have rebounded following the US-Iran memorandum of understanding." They added: "Market expectations for a normalization of crude supply quickly pushed oil prices back to pre-conflict levels, reviving oversupply rhetoric." OCBC lowered its Q3 2026 Brent forecast to $75/bbl from $85/bbl; Q4 2026 to $75/bbl from $80/bbl; Q1 2027 to $73/bbl from $75/bbl; and Q2 2027 to $71/bbl from $75/bbl. (Jin10 Data APP) Rising energy shipping volumes through the Strait of Hormuz have prompted UBS to lower its 2026-2027 oil price forecasts. UBS now expects Brent to average $84/bbl this year, a $9/bbl cut from its previous forecast. The bank also cut its 2027 forecast to $75/bbl from $85/bbl. UBS stated: "Reduced geopolitical risk and a rapid supply rebound are pushing prices down faster than we expected." The bank expects a modest rebound to $80/bbl in H2 this year as floating storage in the Gulf normalizes and demand recovers. UBS also sees a higher risk premium, as the path to normalization may remain bumpy. UBS said: "The need to restock should continue to support prices through end-2027, but the required inventory rebuild is smaller than the 1 billion barrels we previously estimated." (Jin10 Data APP) Spot Market Overview: ► ► ► Other metals' spot midday reviews will be updated later; please refresh to check

SMM Nickel July 2 News: Macro and Market News: (1) US June ADP employment increased by 98,000, the lowest gain since March, missing market expectations of a 118,000 increase. (2) New US Fed Chair Warsh reiterated on Wednesday (July 1) his preference to shrink the central bank’s balance sheet, but stressed that any such steps would be implemented only after thorough public communication and preparation. Spot Market: On July 2, SMM #1 refined nickel price rose 1,050 yuan/mt from the previous trading day. As for spot premiums, Jinchuan #1 refined nickel averaged 2,150 yuan/mt, up 200 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -400 to 400 yuan/mt. Futures Market: The most-traded SHFE nickel 2609 contract moved sideways in the morning session, ending at 125,880 yuan/mt, down 0.41%. The strength of the US dollar and a hawkish shift in market expectations for US Fed policy kept the macro environment challenging. Markets are focused on this week’s US ADP and non-farm payrolls data. In the near term, nickel prices are expected to be in the doldrums in the 125,000-135,000 yuan/mt range.

[SMM Daily Review: Silver Prices Consolidate and Rebound, Spot Premiums Hold Steady] SMM, July 2 – The US Fed’s dovish remarks and the ADP data falling short of expectations cooled interest rate hike expectations, lending support to silver prices. Spot premiums held mostly steady with thin trading, and the market awaited guidance from the non-farm payrolls data.

[Geopolitical Risk Premium Continues to Narrow, Aluminum Prices in the Doldrums] Progress has been made in indirect technical talks between the US and Iran, with discussions on fund repatriation and Strait security. Consultations on the nuclear issue are about to begin. The geopolitical risk premium continues to narrow. The dispute over management rights of the Strait of Hormuz persists, and uncertainty remains over the resumption of Strait navigation. The Federal Reserve's hawkish pivot boosted the US dollar index, weighing on nonferrous metal prices. Under macro headwinds, aluminum prices fell in and outside China. In the short term, bearish factors dominate, and aluminum prices are expected to stay in the doldrums.

[SMM Morning News on Tin: Macro Headwinds Weigh on Tin Prices, Retreat After Rapid Rise; Spot Cargoes Plunge Into "High Prices Suppressing Demand" Dilemma]

[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2608 contract opened at 24,400 yuan/mt. At the beginning of the session, bears reduced positions, driving the price up to hit a high of 24,535 yuan/mt. However, bears then added positions, causing the futures to drift lower and touch a low of 24,305 yuan/mt. Towards the end of the session, the price edged up and then maintained a consolidating trend, finally closing down at 24,375 yuan/mt, down 25 yuan/mt, or 0.10%. Trading volume decreased to 60,970 lots, and open interest fell by 1,001 lots to 94,484 lots.

[SMM Morning Meeting Summary: ADP Data Below Expectations, LME Zinc Maintains Fluctuating Trend] Overnight, LME zinc opened at $3,542/mt. In early trading, the price briefly touched a high of $3,551.5/mt; subsequently, the futures came under pressure and pulled back, dipping to $3,476/mt during the session. Entering the night session, LME zinc rose above the daily average line; however, lacking upward momentum, it then drifted lower, slowly moving lower towards the close, finally closing down at $3,492/mt, down $59.5/mt, a decline of 1.68%. Trading volume decreased to 97,682 lots, while open interest increased by 3,263 lots to 266,000 lots.

SMM, Jul 2: Metals Market: Overnight, base metals on overseas and China markets showed mixed performance. Only LME nickel, SHFE copper, and SHFE tin rose, with SHFE tin up 0.99%, LME nickel up 0.49%, and SHFE copper up 0.07%. SHFE aluminum closed flat at 22,485 yuan/mt. LME zinc led the decline, down 1.68%, while losses in other metals were within 1%. The most-traded alumina contract rose 0.11%, and the most-traded aluminum casting contract rose 0.4%. In the ferrous metals sector overnight, iron ore led gains, up 1.7%. Rebar rose 0.1%, while stainless steel fell 0.54% and hot-rolled coil edged down 0.09%. Coking coal and coke, coking coal closed flat at 1,265 yuan/mt, and coke fell 1.12%. In the precious metals sector overnight, COMEX gold rose 0.15% and COMEX silver fell 0.53%. On the domestic front, SHFE gold rose 1.23% and SHFE silver rose 1.44%. As of 6:43 a.m. on Jul 2, overnight closing quotes: Macro Front China: The Caixin China Manufacturing PMI, compiled by RatingDog, came in at 51.7 in June, staying in expansion territory for the seventh consecutive month. [Shenzhen Housing Market Trading Volume Hits Near 6-Year High in June] Data released today by the Shenzhen Centaline Research Center showed that combined new and second-hand residential home sales in Shenzhen reached 8,878 units in June, down 11.9% MoM but up 14.2% YoY. This was the highest transaction volume for the same period since 2021. Specifically, online registrations of new homes (pre-sale and move-in) totaled 3,785 units, down 16.7% MoM but up 15.6% YoY. Second-hand home transfers reached 5,093 units, down 8% MoM but up 13.1% YoY. (Jinshi Data APP) US Dollar: As of the overnight close, the US dollar index rose 0.24% to 101.41. Fortress Securities stated that investors are underestimating the likelihood of the Fed raising interest rates as early as this month, as Chairman Kevin Warsh appears ready to take a more preemptive approach to fighting inflation. The firm's head of macro strategy, Frank Flight, continues to view two rate hikes this year—in September and December—as his base case. Even so, he noted that the market is pricing in a roughly 30% probability of a July hike, a level he considers too low. (From Wallstreetcn APP) Fed Chairman Kevin Warsh set an ambitious timetable for the US central bank to "discover" and begin relying on real-time economic data, which he argues would be superior to what he described as "problematic government reports." "My aspiration is that in nine to 12 months, we will be leveraging new technologies to understand what is happening in the real economy in a synchronous, real-time manner, enabling us as central bank policymakers to make better decisions. We will no longer rely solely on data from government agencies that suffer from statistical biases and where surveys have lost their relevance," Warsh said at a monetary policy forum in Portugal. "My ideal data is 'what's happening now.' If we do our jobs well, a year from today we will say: we have uncovered data that helps us make better decisions." Fed Chairman Kevin Warsh stated at the ECB Forum on Central Banking (the final day of the Sintra annual conference) that inflation risks have receded over the past four weeks, while he reaffirmed his commitment to price stability. He declined to provide any forward guidance on future interest rate policy. He described the labour market as "holding steady," noting robust economic demand and strong supply-side performance. Deutsche Bank analysis pointed out that Fed officials' public remarks have declined notably since the Jun 17 FOMC meeting, confirming Warsh's earlier policy stance that "US central bank officials talk too much" and that there is a need to reduce forward guidance and push for "institutional change." (Wallstreetcn) Data: US private-sector job growth slowed in June but increased for the 12th consecutive month, showing the labour market cooldown has yet to evolve into a sharp slowdown. Data released Wednesday by ADP Research showed US private payrolls rose by 98,000 in June, below the 119,000 estimated by economists. The prior month's figure was an increase of 122,000. Although the gain missed expectations, the data still supports the judgment that the labour market has been stabilizing this year. Macro Front: Data releases today include the US June unemployment rate, US June seasonally adjusted non-farm payrolls, US initial jobless claims for the week ended Jun 27, US June average hourly earnings YoY, US June average hourly earnings MoM, US May factory orders MoM, Switzerland June CPI MoM, and the Eurozone May unemployment rate. Due to the US Independence Day holiday (Jul 3), US June non-farm payrolls data will be released earlier, at 8:30 p.m. Beijing time on Thursday, Jul 2. The US stock market will be closed on Friday, Jul 3. Trading in CME precious metals, energy, foreign exchange, US Treasury, and equity index futures contracts will end early at 1:00 a.m. Beijing time on Jul 4. Trading in ICE Brent crude oil futures contracts will end early at 1:30 a.m. Beijing time on Jul 4. Investors are advised to take note. (Jinshi Data APP) In addition, the Ministry of Commerce will hold its first regular press conference for July. 2027 FOMC voter and San Francisco Fed President Daly will attend a conference on the Spanish economy. Crude Oil: Overnight, oil prices fell across both benchmarks, with WTI crude down 2.03% and Brent crude down 2.41%. The immediate driver of the heavy sell-off was a rapid easing of geopolitical tensions in the Middle East. A White House spokesperson explicitly stated there is a strong chance of reaching a deal between the US and Iran, with delegations from both sides having held indirect talks in Doha on Jul 1 on topics including unfreezing assets and ensuring maritime security in the strait. Both Goldman Sachs and Morgan Stanley concluded that the global oil market is about to return to severe oversupply. Even accounting for the massive global demand to replenish strategic petroleum reserves, the daily average net surplus in the crude oil market next year will still approach 2 million barrels, exerting long-term pressure on oil prices. (Wallstreetcn) Official data showed US crude oil inventories fell from 415 million barrels at the end of February to 331 million barrels as of Jun 19, hitting their lowest level since 1983. Although these depleted reserves urgently need to be rebuilt, this is not enough to reverse the surplus pattern. Samantha Dart, Goldman Sachs' co-head of global commodities research, estimated global demand to replenish strategic petroleum reserves is slightly above 1 million barrels per day. While this will tighten the market to some extent, it can only partially offset the anticipated surplus, with the market ultimately still facing a net surplus of nearly 2 million barrels per day. Regarding market concerns over future shipping costs in the Strait of Hormuz, Goldman Sachs believes the material impact on global energy prices would be limited. (Wallstreetcn)

US Fed’s Kashkari expects rate hikes this year — May PCE YoY at 4.1% stays elevated, December rate hike probability surges to 79-86%, US dollar index at 101.39 holds at 13-month high.

SMM, July 1: Today, SHFE aluminum 2608 contract opened at 22,565 yuan/mt, rose to a high of 22,755 yuan/mt, dipped to a low of 22,245 yuan/mt, and finally settled at 22,370 yuan/mt, down 215 yuan/mt or 0.95% from the previous trading day. Trading volume was 272,000 lots, and open interest stood at 287,000 lots, with a daily position decrease of 4,467 lots. The price has broken below all moving averages, widening the gap with MA5 (22,777) to over 400 points. MA10 (23,299.5), MA30 (24,013.67), and MA60 (24,421.75) are in a standard bearish alignment, accelerating the downtrend. In the MACD indicator, DIFF (-470.46) and DEA (-320.9) continue to diverge downward, with the histogram bar widening to -299.12, indicating persistently strengthening bearish momentum and no sign of the decline halting. Trading volume of 272,000 lots was below MA5 (317,300 lots), and the decline on shrinking volume suggests diminishing market participation. The daily position decrease of 4,467 lots indicates some bear profit-taking, but the trend has not yet reversed. SMM Comment: The dispute over administrative rights in the Strait of Hormuz persists, and the resumption of navigation through the strait remains uncertain. The US Fed’s hawkish pivot boosted the US dollar index, putting pressure on nonferrous metal prices. Macro headwinds drove aluminum prices lower both in and outside China. Bearish factors dominate in the short term, and aluminum prices are expected to remain in the doldrums. Today, alumina 2609 contract opened at 2,782 yuan/mt, rose to a high of 2,805 yuan/mt, dipped to a low of 2,771 yuan/mt, and finally settled at 2,786 yuan/mt, down 4 yuan/mt or 0.14% from the previous trading day. Trading volume was 158,800 lots, and open interest stood at 286,200 lots, with a daily position decrease of 569 lots. The price has broken below MA5 (2,803.6), MA30 (2,835.07), and MA60 (2,822.95), only temporarily holding below MA10 (2,846.4). MA5 has turned downward and is about to cross below MA60, a clear signal of a weakening moving average system. In the MACD indicator, DIFF (-6.18) has turned negative and is below DEA (6.65), with the histogram bar widening to -25.65, spreading downward after a death cross, indicating that short-term bearish momentum is dominant. Trading volume of 158,800 lots was below average volumes across all timeframes, and the decline on shrinking volume suggests a strong wait-and-see sentiment in the market. SMM Comment: According to SMM statistics, as of last Thursday, China’s total alumina inventory edged down WoW. Inventory structure showed that aluminum smelters’ raw material inventory continued to destock slightly, but due to recent significant price fluctuations and divergent market outlooks, restocking willingness was weak, and end-users mostly stayed on the sidelines. In-factory inventory at alumina refineries decreased, mainly affected by phased maintenance at some northern enterprises, which prioritized consuming in-factory inventory amid production constraints. This impact is expected to gradually fade after maintenance concludes next week. Port inventory, meanwhile, continued to build up, with overseas port arrivals staying high and imported resources supplementing spot supply, adding market pressure. Overall, the oversupply pattern remains unchanged. Before Guinea’s bauxite quota policy is implemented, the market lacks clear bullish drivers. Next week, inventory is expected to shift from mild destocking to slight buildup, supply and demand will remain loose, and alumina prices will continue to consolidate in the doldrums. [The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make prudent decisions and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.]