Iron ore futures trended strong today. The most-traded DCE I2609 contract closed at 706 yuan/mt, up 0.93% from the previous trading session. Spot prices at Qingdao Port rose 3-8 yuan/mt from the prior trading day. Traders offered actively, steel mills purchased as needed, and overall spot cargo transactions were mediocre. The latest SMM survey data showed blast furnace operating rates at steel mills at 89.04%, up 0.11 percentage point WoW. Blast furnace capacity utilization rate was 88.80%, down 0.1 percentage point WoW. Daily average hot metal production at sampled steel mills stood at 2.4058 million mt, down 2,900 mt WoW. With increased steel mill maintenance, pig iron production is expected to edge down next week. Yet the maintenance cycles are short, keeping near-term iron ore demand relatively stable. In news, as the false invoice incident continues to unfold, credit institutions are expected to tighten risk exposure, potentially hampering near-term iron ore trade liquidity. On balance, ore prices are likely to consolidate in the short run.

According to SMM's tracking survey data, daily average pig iron production in July fell by more than 20,000 mt compared with June. The average daily hot metal production in August is expected to be on par with July, facing significant resistance to growth.

[Market Slump Drives Production Cuts; August Silicon Metal Output Expected to Fall] According to SMM data, silicon metal production in July stood at 388,000 mt, up 8.3% MoM and up 14.7% YoY. Cumulative silicon metal output from January to July 2026 reached 2.3783 million mt, up 8% YoY.

[SMM Analysis: Off-Season Demand Combined with High Copper Prices Puts July Copper Wire and Cable Production Under Pressure] In July, the operating rate of the copper wire and cable industry recorded 69.82%, down 2.4 percentage points MoM and down 1.79 percentage points YoY. Among them, the operating rate of large enterprises was 75.13%, that of medium-sized enterprises was 47.75%, and that of small-sized enterprises was 46.93%......

[Pr-Nd Oxide Continues to Decline, Dragging Metals Down, Magnetic Material Scrap Waits and Sees, Medium-Heavy Rare Earths Stable] Yesterday, some traders continued to sell at low prices, but metal plants' purchase willingness remained poor. Pr-Nd oxide prices further dropped, market confidence was unstable, and downstream inquiries and trading continued to be sluggish. For medium-heavy rare earths, downstream purchasing enthusiasm for dysprosium oxide and terbium oxide markets remained relatively low, plant quotations remained firm, and prices fluctuated relatively little for the time being.

[Aluminum Divergence Consolidation Recovery Inside and Outside China; Middle East Tensions Ease, Disturbing Aluminum Price Risk Premium] Overall, recent improvement on the macro front, interest rate hike expectations remaining on hold and easing the marginal constraints on the nonferrous metals sector, along with the continued rise in the proportion of liquid aluminum in China, have supported aluminum prices. However, the continued rollout of long-term aluminum capacity outside China, weak traditional end-use demand in China during the traditional off-season, and disturbances from Middle East geopolitical uncertainties are expected to result in aluminum prices consolidating on a strong note.

As of August 4, the operating rate of 50 EAF steel mills in China primarily producing construction steel stood at 33.58%, down 1.96% WoW; capacity utilization rate was 33.67%, down 1.64% WoW; and daily average production of construction steel was 75,000 mt, down 3,600 mt WoW.

[SMM Silicon-based PV Morning Meeting Minutes] Silicon metal: Yesterday, SMM east China oxygen-blown #553 silicon was around 9,000-9,100 yuan/mt, and #441 silicon was near 9,200-9,300 yuan/mt. The most-traded futures contract was disturbed by supply-side production cut news and PV anti-involution bullish sentiment, causing the most-traded silicon metal futures contract to trend stronger. Silicon enterprises' quotes were generally stable, with a strong willingness to sell. Watch for the impact of variables on short-term price spikes, with resistance above focused on silicon enterprises' willingness to sell. Polysilicon: N-type recharging polysilicon was quoted at 31.6-33.5 yuan/kg. Currently, most manufacturers continue to hold back from selling, market transactions are very few, but expectations for price hikes are relatively common. Some forward traders received higher quotes, with some prices even exceeding 40 yuan. However, this is limited to forward traders. Spot trading is currently basically at a standstill, awaiting the outcome of today's meeting.

[SMM Cast Aluminum Alloy Morning Comment: Night Session Retreats After Rapid Rise, Closes Lower; Firm Aluminum Scrap Prices, Downstream High-Temperature Holidays Weigh on Orders] On Tuesday, the SMM ADC12 price rebounded by 100 yuan/mt, mainly driven by a rebound in aluminum prices and strengthened cost support. However, improvement in market demand is not yet evident. Some downstream enterprises are gradually entering high-temperature holidays, leading to weak order performance, and purchases remain primarily for immediate needs.

[SMM Tin Morning Update: Dollar Pullback Hedges Pre-NFP Rate Hike Pricing, Battle for the 430,000 Mark Begins]