[SMM Aluminum Weekly Review: Geopolitical Premium Recedes, Coupled with Hawkish US Fed, Aluminum Prices Fall Under Pressure Both at Home and Abroad]

This week (6.12–6.18), the operating rate of China’s brass billet industry stood at 52.17%, down 0.42 percentage points WoW. Copper prices continued to rally this week, while the traditional off-season set in. End-user purchase willingness from sectors such as home appliances, sanitary ware, and hardware remained subdued, leading to fewer new orders for enterprises, which still relied on prior backlogged orders to sustain production. As a result, operating rates edged slightly lower. Rising copper prices pushed up production costs, and some imported brass raw materials were already priced higher than finished billet prices in an inverted market, further squeezing enterprises’ processing margins. With the Dragon Boat Festival holiday approaching, some producers engaged in minor stockpiling, lifting days of raw material inventories slightly to 3.67 days. However, tight supply of secondary brass meant enterprises lacked the impetus for large-scale restocking. End-user transactions continued to be mediocre, downstream cargo pick-up remained slow, and days of finished product inventories climbed to 5.41 days, intensifying pressure to destock elevated inventories. Looking ahead to next week (6.19–6.25), orders are expected to stay on a weakening trend, with the fundamentals of high costs, soft demand, and inverted raw material prices unlikely to improve. SMM projects the operating rate will fall another 1.18 percentage points WoW to 50.99%, extending the pressure on industry production.

Jun 2026 Guangdong Region: Premiums in the region trended persistently lower this week, with increased arrivals and demand weakened by production cuts downstream during the Dragon Boat Festival. As of Thursday, high-quality copper was quoted at 200 yuan/mt, down 40 yuan/mt WoW; standard-quality copper was quoted at a premium of 140 yuan/mt, down 40 yuan/mt WoW; and SX-EW copper was quoted at a premium of 80 yuan/mt, down 40 yuan/mt WoW. The price spread for standard-quality copper premiums between Shanghai and Guangdong stood at Guangdong being higher by 160 yuan/mt on Thursday, a relatively small spread that triggered no interregional cargo transfers. SMM data indicated that as of Thursday, total inventory in Guangdong warehouses was 15,400 mt, up 3,000 mt WoW, with warrants totaling 3,100 mt, down 1,400 mt WoW. In detail: weekly warehouse arrivals were 17,700 mt, up 10,000 mt WoW, surpassing the annual average of 14,000 mt/week; smelter shipments increased early in the week ahead of contract expiry. Warehouse withdrawals were 14,300 mt, down 4,000 mt WoW, in line with the annual average of 14,200 mt/week, as production cuts downstream during the Dragon Boat Festival curtailed demand. Looking ahead to next week, post-holiday downstream demand is expected to gradually recover while the supply side remains tight; inventories are likely to decline again, with premiums expected to trend higher once more. (The above information is derived from market data collected and assessed comprehensively by the SMM research team. The information provided is for reference only. This article does not constitute direct investment, research, or decision-making advice. Clients should exercise prudent judgment and not rely on this as a substitute for independent decision-making. Any decisions made by clients are unrelated to Shanghai Metals Market.)

[Tianjin Premiums Rise]: Spot premiums in Tianjin rose this week, up 10 yuan/mt WoW. As of Thursday, ordinary brands in China were quoted at a discount of 70-90 yuan/mt against the 2607 contract, high-end brands at a discount of 20-30 yuan/mt against the 2607 contract, and the Tianjin market at a discount of 40 yuan/mt against the Shanghai market. The Shanghai-Tianjin price spread narrowed.

During the week of June 12-18, the operating rate of enamelled wire industry machines rebounded WoW...

[SMM Silver Weekly Review] Silver consumption has gradually picked up since June, with photovoltaic orders increasing and transactions mostly concentrated in the range of parity to a premium of RMB 10/kg. Last week's silver price drop to near-term lows attracted bargain buying from some downstream enterprises, strengthening holders' willingness to offer, and spot premiums have shown a slight firming trend this week. Overall, silver consumption in the PV sector has declined year-on-year, while non-PV industrial demand such as semiconductors and AI servers has yet to see notable growth, leaving the domestic silver market facing surplus pressure. A premium of RMB 10/kg is now considered relatively stable, with limited likelihood of returning to the high premium levels seen in Q1 this year. On the price front, silver fell continuously last week due to stronger-than-expected US non-farm data and geopolitical tensions. This week, news of a potential US-Iran memorandum of understanding has boosted sentiment, and precious metals are expected to see a modest rebound. Looking ahead to the second half of the year, further upside for precious metals remains possible amid evolving macroeconomic policies and geopolitical dynamics.

June 12: Northern ports: South African high-iron ore: 31.4-32.1 yuan/mtu, down from last Friday; South African semi-carbonate ore: 37.8-38.3 yuan/mtu, flat from last Friday; Gabonese ore: 41-41.6 yuan/mtu, down from last Friday; 46% Australian lumps: 43.5-44 yuan/mtu, flat from last Friday; South African medium-iron ore: 37.5-38 yuan/mtu, down from last Friday. Southern ports: South African high-iron ore: 34.1-34.6 yuan/mtu, down from last Friday; South African semi-carbonate ore: 36.5-37 yuan/mtu, flat from last Friday; Gabonese ore: 41.5-42 yuan/mtu, down from last Friday; 46% Australian lumps: 43.5-44 yuan/mtu, flat from last Friday; South African medium-iron ore: 37-37.5 yuan/mtu, down from last Friday. The manganese ore market is steady but stagnant, end-use demand is sluggish, and a wait-and-see sentiment prevails.

SMM, June 12 – This week, SHFE lead fluctuated downward, and secondary refined lead premiums and discounts continuously changed with futures. At the start of the week, lead prices declined, with quotations ranging from a discount of 25 yuan/mt to a premium of 25 yuan/mt, and trading was sluggish. Mid-week, the market was under pressure, smelters held prices firm, and quotations rose to parity to a premium of 50 yuan/mt, forming an inversion with primary lead, with only sporadic just-in-time procurement. In the latter half of the week, futures slightly recovered, and quotations pulled back to parity to a premium of 25 yuan/mt. Downstream maintained just-in-time procurement as the primary approach throughout, and overall trading was weak. This week, the SMM #1 lead ingot spot price continued to decline, while scrap battery raw material prices remained firm, further intensifying smelters' loss pressure. As of June 12, large smelters incurred a loss of 510 yuan/mt, and small and medium-sized smelters incurred a loss of 710 yuan/mt. Affected by price cuts at the recycling end, stores notably held back from selling, scrap battery circulating supplies tightened, and smelters' raw material inventory stayed low. Scrap battery purchase prices are expected to remain strong next week, smelting enterprises' profits will continue to be under pressure, and the loss trend is unlikely to reverse. Meanwhile, next week, smelters will see both production resumptions and production cuts/suspensions, resulting in a mix of bullish and bearish factors on the secondary refined lead supply side, and spot premiums are expected to stay at current levels.

As of June 11, the in-factory inventory of primary lead’s major delivery brands stood at 11,000 mt, down by 4,800 mt WoW. This week, primary lead smelters in east China underwent minor maintenance, causing a temporary tightening of lead ingot supply. Meanwhile, lead prices weakened and once fell below the 16,000 mark, prompting active dip-buying from downstream enterprises. After the price decline, secondary lead smelters suffered deeper losses, either suspending shipments or selling at a premium (against SMM #1 lead), forming an inversion with primary lead prices and shifting downstream procurement toward primary lead. By Friday, inventories at lead smelters in Henan, one of the main production areas, had declined further, with queues forming for cargo pick-up and some orders scheduled into next Thursday. In-factory inventories at smelters are expected to remain low going forward.

This week, end-use consumption in the lead-acid battery market showed no improvement, and some enterprises even reported worse orders, making the production and sales plan for June difficult to fulfill. As it is mid-year, some enterprises implemented sales promotions for finished batteries to stimulate demand, for example, the wholesale price of the main e-bike lead-acid battery model 48V20Ah was quoted at 370 yuan per unit, and a top-tier player plans to conduct live-streaming sales promotions during the "618" event. Meanwhile, lead prices have been falling recently, and during the week, spot lead even fell below 16,000 yuan. Downstream enterprises showed moderate purchasing enthusiasm, with rigid demand shifting more to the primary lead sector, and trading activity in the spot market improved.