[Shanghai Spot Copper] Looking ahead to tomorrow, the early-month procurement cycle is continuing, downstream demand is still being released, and both buying and selling sentiment have been rebounding, keeping market trading activity relatively brisk. On the supplier side, after low-priced cargoes were rapidly absorbed, discounted cargoes became hard to find in the market, and suppliers developed a stronger willingness to hold prices firm. Buyers’ parity bids could not be executed. Due to scarce availability, premiums for high-quality copper held at the high level of 80-100 yuan/mt, providing support to overall premiums. On the inventory front, SMM data showed that social inventory in the Shanghai region recorded 126,500 mt, down 7,700 mt WoW from Monday; in the Jiangsu region, social inventory recorded 36,200 mt, down 5,000 mt WoW from Monday, with both regions showing a destocking trend. Overall, driven by the confluence of early-month demand release, suppliers holding prices firm, and inventory destocking, spot Shanghai copper against the SHFE 2607 contract is expected to remain at a premium tomorrow, maintaining an overall strong trend.

[Guangdong Zinc: Zinc Prices Continue to Consolidate at Highs, Downstream Procurement Enthusiasm Insufficient] Guangdong 0# zinc was mainly traded at 24,185-24,350 yuan/mt, with mainstream brands quoted at a discount of 75-55 yuan/mt against the 2608 contract and at a premium of 0 yuan/mt against Shanghai spot zinc; the Shanghai-Guangdong price spread narrowed...

SMM, July 2: The futures market stopped falling and surged today, while spot prices in South China struggled to stay firm. Spot-futures price spread expectations remained at relatively high levels, setting a tone of slightly ample circulation, and along with the rebound of absolute prices from lows prompting short-term speculative cargo to flow out and further supplement supply, suppliers' efforts to hold prices firm gradually weakened, with mainstream quotations at a premium of -10 to +10 yuan/mt, gradually declining. Demand side, downstream procurement pace remained largely unchanged, with considerable replenishments proceeding steadily but incremental volume insufficient; traders shifted from pushing for lower prices and a wait-and-see stance to partially increasing market purchases, and overall demand was not particularly weak. Momentum on both supply and demand sides was not prominent, and overall trading was tepid. Spot transaction prices were concentrated at a discount of 20 yuan/mt to a premium of 20 yuan/mt against the SHFE aluminum 2607 contract.

July 2, 2026 Guangdong region: This week, premiums and discounts bottomed out and then rebounded. At the beginning of the week, due to mid-year financial constraints at enterprises, suppliers actively cut prices to monetize, but downstream buyers were reluctant to purchase, causing premiums to continue to decline. After the contract rollover, suppliers stopped cutting prices, and spot premiums surged. As of Thursday, high-quality copper was quoted at 50 yuan/mt, down 40 yuan/mt from last Thursday; standard-quality copper was quoted at a premium of 0 yuan/mt, down 20 yuan/mt from last Thursday; SX-EW copper was quoted at a discount of 60 yuan/mt, down 20 yuan/mt from last Thursday. On Thursday, the price spread for standard-quality copper premiums between Shanghai and Guangdong was 0 yuan/mt, which was relatively small and led to no inter-regional shipments. According to SMM statistics, as of Thursday, total inventory in Guangdong warehouses stood at 31,700 mt, up 11,100 mt from last Thursday, with warrant holdings totaling 5,800 mt, up 3,134 mt from last Thursday. Specifically, this week's warehouse arrivals were 20,900 mt/week, up 3,300 mt/week from last week, significantly above the annual average of 14,000 mt/week. Mid-year, smelters faced pressure to monetize and actively shipped out, and with downstream consumption weak, deliveries to warehouses increased. Warehouse withdrawals were 10,100 mt/week, down 2,200 mt from last week, below the annual average of 14,200 mt/week, mainly due to weak downstream consumption this week. Looking ahead to next week, it is reported that arrivals of both domestic and imported copper will be limited, while downstream consumption is expected to gradually recover. Inventory is likely to decline again, and spot premiums are expected to gradually pick up. (The above information is based on market collection and the comprehensive assessment of the SMM research team. The information provided is for reference only. This article does not constitute direct investment research decision advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.)

[SMM Secondary Aluminum Alloy Flash] This week, China's social inventory of secondary aluminum alloy ingots fell 6,100 mt WoW to 44,300 mt, marking the fifth consecutive week of destocking, with the destocking speed accelerating WoW. Tight tax invoices and restricted procurement of compliant aluminum scrap continued to constrain enterprise production, keeping new warehouse inflows at a low level. Meanwhile, order deliveries and the recent widening of spot-futures price spreads boosted manufacturers' repurchase demand, driving inventories down further. It is expected that in the short term, affected by tight aluminum scrap supply, secondary aluminum enterprises will struggle to significantly ramp up operating rates, and social inventory will remain low.

[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, July 1: SMM A00 spot aluminum prices closed at 22,260 yuan/mt today, down 240 yuan/mt from the previous trading day, and aluminum scrap market prices generally followed the decline. By product, bare bright aluminum wire and white-grade scrap fell by 200-300 yuan/mt, while aluminum tense scrap generally dropped 100 yuan/mt. The supply side remained tight, supervision of the reverse invoicing policy tightened, and production cuts or shutdowns spread among small and medium-sized scrap utilization enterprises in Anhui, Jiangxi, Hubei and other regions, increasing the scarcity of compliant, invoiced aluminum scrap. On the import side, due to a 1-3 month shipping lag, June-August port arrivals of aluminum scrap are expected to remain low. Additionally, the UAE implemented a temporary ban on aluminum scrap exports for four months starting June 3, further intensifying expectations of tight high-quality scrap supply in Asia. Regarding price spreads, on July 1, the price difference between A00 aluminum and mixed aluminum extrusion scrap free of paint in Foshan was 1,867 yuan/mt, and that between A00 aluminum and shredded aluminum tense scrap was 559 yuan/mt. Against the backdrop of tight invoice availability and the recent rapid decline in aluminum prices, the price spread for aluminum tense scrap narrowed quickly, and some cast aluminum alloy enterprises have started using aluminum ingots instead of aluminum scrap as raw material for production. This week, the aluminum scrap market is expected to continue consolidating at high levels with a weak bias, but downside room is limited. The mainstream range for shredded aluminum tense scrap (priced based on aluminum content) is expected at 19,300-19,900 yuan/mt (excluding tax). Constraints from the reverse invoicing policy and the lagging contraction in aluminum scrap imports continue to provide bottom support, but weak off-season demand and low downstream operating rates are suppressing upside room. Going forward, attention should be paid to the pace of policy compliance, progress in US-Iran peace talks and navigation through the Strait of Hormuz, the pace of ex-China aluminum scrap port arrivals, and changes in downstream operations in China.

[SMM Shanghai Spot Copper] Tomorrow, today was the first trading day of July, a new monthly procurement cycle began, downstream enterprises’ restocking demand at the beginning of the month was released to some extent, and both buying and selling sentiment rebounded markedly, lifting market trading activity. Supplier side, after low-priced cargoes dwindled, suppliers’ willingness to hold prices firm became evident, with the premium for high-quality copper staying at a high of 50-80 yuan/mt. The inter-month price spread was near parity, limiting suppliers’ delivery profits from holding positions, weakening their willingness to sell at low prices, and providing support for spot discounts. Overall, driven by the release of month-start restocking demand, buying interest spurred by low copper prices, and suppliers’ resolve to hold prices firm, spot prices against the SHFE copper 2607 contract tomorrow are expected to edge up.

[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.