[SMM Magnesium Weekly Review: Cost Support Keeps Magnesium Ingot Bottom Firm; Weak Domestic and Overseas Demand Keeps the Market Consolidating] This week, domestic magnesium ingot prices drifted lower overall. 99.90% magnesium ingot in Fugu and Shenmu was quoted at 15,950-16,050 yuan/mt, down 350 yuan/mt from the previous week. After the holiday, market pessimism spread. Smelters sold actively, while downstream made only just-in-time procurement. Amid strong supply and weak demand, prices continued to grind lower. The average FOB price at Tianjin port was $2,365/mt. Domestic smelters were unable to hold prices firm, and FOB offers were lowered accordingly. As the summer break approached outside China, new orders were scarce, and foreign trade transactions were sluggish. Dolomite cost support was limited. Magnesium powder and magnesium alloy weakened in tandem. Downstream off-season demand weakness dragged on the market. In the short term, magnesium ingot prices are likely to consolidate on a subdued note.

Aug 6, 2026 Guangdong region: This week, premiums in the region consolidated at lows. Spot premiums had rebounded slightly due to consecutive declines in inventory but subsequently edged lower again as copper prices continued to rise, weakening downstream demand. As of Thursday, high-quality copper was quoted at 90 yuan/mt, down 60 yuan/mt WoW; standard-quality copper was at a premium of 10 yuan/mt, down 70 yuan/mt WoW; and SX-EW copper was at a discount of 30 yuan/mt, down 50 yuan/mt WoW. As of Thursday, the premium spread for standard-quality copper between Shanghai and Guangdong stood with Shanghai higher by 30 yuan/mt. The relatively small price difference meant no cross-regional shipments this week. According to SMM statistics, as of Thursday, total inventory in Guangdong warehouses stood at 18,900 mt, up 1,900 mt WoW, while total warrants reached 4,300 mt, up 400 mt WoW. Specifically, weekly arrivals into warehouses were 11,800 mt/week, up 900 mt/week WoW, below the annual average of 14,000 mt/week, with the decline in domestically produced copper arrivals being the main reason. Warehouse withdrawals were 9,900 mt/week, edging up 100 mt/week WoW, far below the annual average of 14,200 mt/week. As copper prices continued to rise and hit recent highs, downstream processing enterprises generally held a wait-and-see stance, with subdued purchasing appetite. Looking ahead to next week, based on our understanding, arrivals of both imported and domestically produced copper are expected to be relatively low, and some smelters have plans to export. Meanwhile, downstream consumption is expected to be slightly better than this week. As a result, inventory may edge down, and premiums may edge up. (The above information is based on market collection and comprehensive assessment by the Shanghai Metals Market research team. The information provided is for reference only. This article does not constitute direct investment, research, or decision-making advice. Clients should make decisions with caution and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.)

SMM, August 6 – Lead ingot transactions have not improved significantly, and smelters are relatively restrained in their raw material purchasing quotes. Meanwhile, secondary lead smelters are taking a wait-and-see attitude towards lead price trends, so they have little willingness to adjust their purchase quotes for scrap battery raw materials. Currently, shipment sentiment among recyclers is mixed; the market mainly revolves around just-in-time demand circulation. Large-volume transactions are scarce, and overall trading is sluggish. In the short term, scrap battery prices are unlikely to see wild swings.

SMM August 6 news: The secondary refined lead market showed clear sentiment divergence. Upstream smelters, long mired in losses, had a strong willingness to hold prices firm, with some shipments quoted at a premium to sell. However, downstream enterprises' purchasing willingness was sluggish, and procurement was relatively cautious. Market quotations varied significantly, with some spot orders against the SMM #1 lead average price at parity or at a slight discount ex-factory. Actual transaction volume was limited, mostly consisting of small immediate-demand orders, and the market remained in a deadlock in the short term. Today, the SMM secondary refined lead average price was reported at 15,500 yuan/mt, at a discount of 25 yuan/mt to the SMM #1 lead average price. The supplier shipment sentiment was 1.28, and today's secondary refined lead purchase sentiment was 1.32 (historical data can be queried by logging into the database).

As of now, the FOB price of Indonesian MHP nickel stands at $15,337/mt Ni, and the FOB price of Indonesian MHP cobalt stands at $49,106/mt Co. The MHP payables (against the SMM battery-grade nickel sulphate index) stand at 83-84, and the MHP cobalt payables (against SMM refined cobalt (Rotterdam warehouse)) stand at 91. The FOB price of Indonesian high-grade nickel matte stands at $15,765/mt Ni.

On August 6, the SMM battery-grade nickel sulphate average price remained stable.

The warrant average price on August 6 fell $2/mt from the previous trading day to $104/mt (price range: $98-110/mt); the B/L average price fell $1/mt from the previous trading day to $100/mt (price range: $95-105/mt); the EQ copper (CIF B/L) average price fell $1/mt from the previous trading day to $67/mt (price range: $62-72/mt), with quotations referencing cargoes arriving from August to early September. The SHFE/LME price ratio was significantly inverted, and coupled with stronger copper prices weighing on downstream consumption, the market was relatively quiet today, with spot premiums showing a retreat from highs. However, as the North American siphoning effect persists, the overall supply of imported copper is expected to remain limited, providing support for spot premiums on the downside. In addition, some smelters are showing export expectations, so the domestic export situation in the future warrants close attention. The mainstream quotations for August registered warrants were heard at $105-110/mt today, with mainstream quotations for registered B/L arriving from August to early September around $105/mt.

This week, spot premiums for copper cathode in Shandong pulled back significantly. As of Thursday, spot was reported at a discount of 110 yuan/mt, with the market quickly shifting from premium to discount, marking a steep decline. Affected by the sharp surge in copper prices, procurement by downstream end-users was sluggish. Suppliers proactively cut prices to facilitate transactions, and offers in the market diverged notably, with the spread between high and low prices widening. Smelters in the province completed maintenance and resumed production, and some suppliers showed strong willingness to sell, choosing to quickly cut prices to move goods; however, other suppliers with tight spot supply prioritized long-term contract deliveries and were reluctant to sell spot orders or offer significant discounts. Overall, the regional market exhibited an oversupply condition, with the continuously surging copper prices suppressing downstream purchase willingness to near freezing. Looking ahead to next week, if copper prices stay high, demand will be hard to improve, and there is still further downside room for spot premiums in Shandong.

SMM August 6 news: Overnight, LME lead opened at $1,893/mt, drifted higher to $1,907.5/mt during Asian trading hours before weakening. Entering the European session, it gave back most gains and dipped to $1,883.5/mt, eventually closing at $1,890/mt, flat from the previous close. Overnight, the most-traded SHFE lead 2609 contract opened at 15,735 yuan/mt, briefly touched a high of 15,745 yuan/mt then drifted lower. Bulls reduced positions, pushing the contract to a low of 15,600 yuan/mt in late trading, and it finally settled at 15,640 yuan/mt, down 0.73%. Supply side, primary lead smelters saw additional maintenance in August, with production expected to decline. Secondary lead output also has a downside expectation, but attention should be paid to the recovery in lead prices lifting smelter production enthusiasm, with some enterprises likely to resume production ahead of schedule. Moreover, lead ingot social inventory is staying high, and we need to be wary of the pullback risk from suppliers moving ingots out of warehouses before delivery. Overall domestic consumption was neutral: demand in the e-bike segment was conservative and relatively stable from July to August; auto sector demand was mixed, with enterprises handling export orders performing well, while those serving the domestic market underperformed. In summary, the exit of bears has led to a short-term rebound in lead prices to catch up, but the consumption picture will determine how much room this rebound has.

Futures: Overnight, LME lead opened at $1,893/mt, drifted higher in Asian trading to touch a high of $1,907.5/mt before weakening, and entering European trading, LME lead gave back most of its gains, dipping to a low of $1,883.5/mt, and finally closing at $1,890/mt, unchanged with a 0% change. Overnight, the most-traded SHFE lead 2609 contract opened at 15,735 yuan/mt, early in the session touched a session high of 15,745 yuan/mt before drifting lower, bulls reduced positions on SHFE lead, dipping to a low of 15,600 yuan/mt in late trading, and finally closing at 15,640 yuan/mt, down 0.73%. Macro Front: US July ADP employment came in at 44,000, below market expectations of a 70,000 increase and the downwardly revised 95,000 in June, marking the smallest gain since January this year. The US Treasury Department will maintain its buyback program at the same pace as the previous quarter and keep auction sizes unchanged at least for the coming few quarters. China's Ministry of Commerce: Countermeasures taken against US compliance testing companies. China's designated certification body for CCC certification suspended entrusting US certification organizations to conduct factory follow-up inspections. The "15th Five-Year Plan for Promoting the Development of Small and Medium-Sized Enterprises," jointly formulated by MIIT and multiple departments, is about to be released. The Ministry of Foreign Affairs responded to the US plan to ban Chinese optical modules: China firmly opposes the US generalization of the national security concept and will continue to firmly safeguard the legitimate rights and interests of Chinese enterprises. Spot Fundamentals: In Shanghai, Chihong lead was quoted at 15,730-15,830 yuan/mt, representing premiums of 50-100 yuan/mt against the most-traded SHFE lead 2609 contract. SHFE lead rose sharply, suppliers sold cargoes as the market moved, and premium quotes in Jiangsu, Zhejiang, Shanghai remained unchanged. However, quotes for EXW cargoes from primary lead smelters diverged; smelters held prices firm while selling, while traders widened discounts on sales, with mainstream producing regions quoting premiums of 0-50 yuan/mt against SMM #1 lead average price. In secondary lead, as lead prices rebounded, secondary lead smelters showed slightly improved willingness to sell, secondary refined lead quotes were at discounts of 25-0 yuan/mt against SMM #1 lead average price, with a few at a premium of 75 yuan/mt. Downstream enterprises exhibited strong wait-and-see sentiment, inquiries significantly decreased from yesterday, some suppliers indicated almost no inquiries, and spot market trading volume plummeted. Inventory: On August 5, LME lead inventory decreased by 3,325 mt to 431,550 mt; as of August 3, SMM lead ingot social inventory across five locations totaled 72,100 mt, up 3,700 mt from July 27 and 3,600 mt from July 30. Lead Price Forecast Today: Supply side, primary lead saw additional maintenance in August, with production expected to decline; while secondary lead production also has expectations of decline, attention should be paid to the boost from the rebound in lead prices on smelter production enthusiasm, with some enterprises having the probability of early production resumptions. In addition, currently lead ingot social inventory stays high, be cautious of the pullback risk for lead prices due to suppliers' lead ingot warehouse transfers before delivery. Domestic consumption is neutral overall, with conservative demand in the e-bike sector and relatively stable demand in July-August; in the automobile sector, demand is experiencing a tug-of-war: enterprises handling export orders are doing well, while those serving the Chinese market are underperforming. Overall, the exit of bears has led to a short-term lead price rebound and catch-up rally, but the performance of the consumption side determines the room for the lead price rebound.