[SMM Cast Aluminum Alloy Morning Comment: Contract Hits New Stage High, Aluminum Alloy Market Consolidates at Highs, Drifting Higher] Overnight, the aluminum alloy 2610 contract opened at 23,435 yuan/mt, shot up to 23,540 yuan/mt, hitting a new stage high, then pulled back to a low of 23,380 yuan/mt, and closed at 23,450 yuan/mt, up 20 yuan, or 0.09%, from the settlement price.

[China's Aluminum Inventory Pullback, Multiple Factors in Play, Aluminum Prices Drift Higher] Overall, recently the macro front has improved, the US Fed's near-term hold on rate hikes has eased the marginal constraint on the non-ferrous metals sector, and China's proportion of liquid aluminum continues to rise while aluminum inventory destocking has resumed, together underpinning aluminum prices. However, the continuous rollout of long-term aluminum capacity outside China, weak traditional end-use demand in China during the off-season, and the recent easing of geopolitical tensions in the Middle East are putting some upward pressure on aluminum prices. It is expected that aluminum prices will maintain a trend of consolidating on a strong note.

Today, the DCE iron ore futures trended higher today. DCE’s most-traded 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 quoted actively, while steel mills purchased as needed, leaving overall spot trading moderate.

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.

[SMM Daily Review: Aug 5 Spot Lithium Carbonate Prices Consolidate Higher] Today, SMM battery-grade lithium carbonate spot price consolidated higher compared to the previous trading day. The lithium carbonate 2609 contract opened lower at 139,700 yuan/mt, briefly dipped to 138,300 yuan/mt after opening and then found support, with bulls stepping in to push prices to consolidate and rebound; in the morning session, prices fluctuated on the strong side in the 140,000-142,000 yuan/mt range, and the center gradually moved higher despite some back-and-forth; near midday, bulls and bears consolidated in a tug-of-war in the 141,500-142,500 yuan/mt range; in the afternoon, bulls continued to push, and prices consolidated higher; near the close, concentrated capital inflows drove prices quickly up to 144,300 yuan/mt, hitting an intraday high, then pulled back slightly on some profit-taking, settling around 143,200 yuan/mt, finally closing up 2.61% at 143,200 yuan/mt. Open interest decreased by 9,640 lots. In the spot market, downstream buyers purchased as needed on dips. Some downstream buyers saw increased spot order demand as upstream lithium chemical plants' maintenance reduced long-term contract volumes; upstream lithium chemical plants remained cautious in selling spot cargoes, with those having maintenance plans focusing on securing long-term contract supplies this month, while some lithium chemical plants showed signs of loosening their intent to hold prices firm. Overall, market inquiries and actual transactions were relatively stable.

[SMM Stainless Steel Daily Review] SS Futures Retreat after Rapid Rise; Spot Stainless Steel Trades Cool Down According to SMM on August 5, SS futures generally pulled back, ending yesterday's shot up, and followed SHFE nickel to slump sharply. As of close, the most-traded SS contract settled at 14,475 yuan/mt. In the spot market, dragged by the renewed decline in SS futures, trading sentiment weakened notably, and traders lowered their quotes. Under the sentiment of rushing to buy amid continuous price rise and holding back amid price downturn, transactions turned visibly quiet. The most-traded SS futures contract: at 10:15 am, SS2609 was at 14,480 yuan/mt, down 390 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 490-890 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi held steady; for cold-rolled 304/2B coil with raw edges, the average price in Wuxi fell by 75 yuan/mt, and in Foshan also fell by 75 yuan/mt; the price for cold-rolled 316L/2B coil in Wuxi was flat; for hot-rolled 316L/NO.1 coil, quotes in Wuxi were unchanged; and cold-rolled 430/2B coil in both Wuxi and Foshan remained flat. This week, macro sentiment turned bearish, dominating metals market trends, and stainless steel futures consolidated on a subdued note under overall pressure. The US Fed's interest rate meeting this week kept rates unchanged as expected, but the overall stance was hawkish, weighing on commodity valuations broadly, and the nonferrous metals sector weakened collectively. Affected by the transmission of macro headwinds, SS futures consolidated on a subdued note in tandem, with the center of futures moving lower and overall market trading sentiment cautious. Spot and inventory side, futures...

SMM, Aug 5: Metals market: As of the midday close, domestic base metals rose almost across the board. SHFE copper rose 0.79%, SHFE aluminum rose 0.15%. SHFE lead rose 2.61%. SHFE zinc rose 1.38%. SHFE tin rose 0.5%. SHFE nickel fell 0.78%. In addition, foundry aluminum most-traded futures were flat at 23,365 yuan/mt, alumina most-traded contract rose 0.99%, lithium carbonate most-traded contract rose 1.45%, silicon metal most-traded contract rose 0.72%, and polysilicon most-traded futures rose 1.83%. Ferrous metals mostly rose. Iron ore rose 0.93%, rebar rose 0.34%, hot-rolled coil rose 0.5%. Stainless steel fell 2.09%. Coking coal and coke: coking coal most-traded contract rose 3.27%, and coke most-traded contract rose 2.13%. In overseas base metals, as of 11:45, LME metals broadly rose. LME copper was flat at $14,043/mt, LME aluminum rose 0.22%, LME lead rose 0.71%, LME zinc rose 0.59%, LME tin rose 0.13%, and LME nickel fell 0.2%. Precious metals: as of 11:45, COMEX gold rose 0.8% and COMEX silver rose 1.33%. Domestic precious metals: SHFE gold rose 1.92%, and SHFE silver most-traded contract rose 5.35%. In addition, as of the midday close, platinum most-traded futures rose 7.04%, and palladium most-traded futures rose 6.01%. As of the midday close, the most-traded European container shipping freight index futures contract fell 8.96% to 1,635 points. As of 11:45 Aug 5, selected futures midday quotes: Spot and Fundamentals Copper: Spot prices of #1 copper cathode in Guangdong against the front-month contract: high-quality copper quoted at 110 yuan/mt, up 10 yuan/mt from the previous trading day; standard-quality copper quoted at a premium of 30 yuan/mt, up 30 yuan/mt; SX-EW copper quoted at a discount of 30 yuan/mt, up 30 yuan/mt. The average price of #1 copper cathode in Guangdong was 106,990 yuan/mt, up 450 yuan/mt, and SX-EW copper averaged 106,890 yuan/mt, up 460 yuan/mt. Spot market: Guangdong inventories ended a two-day rising streak and declined again, mainly due to fewer arrivals... Macro Front China: [PBOC net drains 201.5 billion yuan from the open market today] The PBOC conducted 5 billion yuan of 7-day reverse repos, with an operation rate of 1.40%, unchanged from last. Today, 206.5 billion yuan of reverse repos mature. US Dollar: As of 11:45, the US dollar index fell 0.05% to 99.82. Oil prices fell further, with markets betting that the tight energy supply situation will ease, potentially reducing inflationary pressures, and cooling expectations for US Fed interest rate hikes. (Wall Street CN) According to the CME "FedWatch," the probability that the US Fed will keep rates unchanged in September is 41.6%, while there is a 58.4% probability of a cumulative 25bp rate hike. For October, the probability of rates staying unchanged is 30.5%, with a 53.9% probability of a cumulative 25bp hike and a 15.5% probability of a cumulative 50bp hike. (Jin10 Data APP) "Fed mouthpiece" Nick Timiraos wrote that US Treasury Secretary Bessent’s policy reaction function has shifted to a less dovish stance. His remarks this year suggest that the Fed should continue to hold rates steady. Earlier this year, Bessent cited models showing that the Fed’s policy rate could be anywhere from more than 25bp to over 100bp above the neutral rate. Today (August 4), he put forward two points. He first defended Warsh’s decision last week not to articulate any policy reaction function: "I believe every meeting should be open, and market participants should judge for themselves... I think Warsh wants to keep his options open to achieve the best outcome." Secondly, he did propose a policy reaction function that could be seen as dovish, arguing that near-term shocks should be ignored: "What exactly will be the impact of rising short-term rates? We’ll have to wait and see." He raised this question, but then responded by noting that underlying inflation is "very mild... very steady." "In core inflation, after stripping out the more volatile components influenced by energy, the rest has been very steady. I expect this to continue." (Jin10 Data APP) On the economic data front, US job openings declined somewhat in June, but hiring rebounded slightly, indicating that labour market demand remained relatively stable. eToro’s Bret Kenwell noted that this Friday’s non-farm payrolls report will be the next key period: "If the data is strong, especially amid still-elevated inflation, it will reinforce expectations for a September rate hike; but if the data is weak, combined with last week’s lower-than-expected GDP growth, it could provide more justification for the Fed to stay on hold." (Wall Street CN) Data: Today will see the release of France’s June industrial production m/m, final July services PMIs for France, Germany, the Eurozone, and the UK, Eurozone June PPI m/m, US July ADP employment change, final US July S&P Global services PMI, and US July ISM non-manufacturing PMI, among other data. Watch: 2028 FOMC voter and Kansas City Fed President Schmid will speak on the Fed, monetary policy, and the agricultural economic outlook. Crude Oil: As of 11:45, oil prices in both markets extended the declines from the previous two trading days, continuing to fall, with WTI down 1.36% and Brent down 1.06%. Qatar stated that both the US and Iran are optimistic about an agreement to reopen the Strait of Hormuz, and the relevant proposal has been drafted. US Treasury Secretary Bessent publicly stated that the agreement could be finalized on Tuesday or Wednesday. Affected by this, crude oil futures continued their downward trend. The Strait of Hormuz is a critical chokepoint for global energy supply; if reopened, it is expected to promote the normalization of global oil supply. According to Xinhua News Agency, Iranian Foreign Ministry spokesperson Baqaei said on August 4 that Iran is still in negotiations with Oman over the Strait of Hormuz, with "positive progress" on technical and political levels. US Treasury Secretary Bessent stated that an agreement could be reached as soon as Tuesday or Wednesday this week. According to a report by the US news website Axios on August 4, regional sources and US officials indicated that the US, Iran, and Oman are "close to reaching" an interim agreement to reopen the Strait of Hormuz, and the US side hopes to announce the deal on August 5. (From Wallstreetcn APP) Spot Market: ► ► ► ► ► ► ► ► ► ► ►

[Aluminum Alloy Daily Comment] Today, ADC12 market prices remained generally stable, with a weak willingness across the industry to adjust prices. On the cost side, aluminum prices pulled back, but the extent was limited, leaving enterprises with insufficient willingness to actively follow the decline. The demand side remained in the off-season, and spot prices were constrained by weak demand, limiting upside room.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, today the SHFE copper price center rose further above 107,000 yuan/mt. High copper prices significantly dampened downstream purchases, and the market was still dominated by rigid demand buying. However, suppliers’ willingness to sell strengthened, and they continuously lowered their offers throughout the day to facilitate deals. As standard-quality copper prices pulled back, downstream purchase willingness improved, and some low-priced cargoes were traded gradually. Meanwhile, available cargoes of high-quality copper and registered SX-EW copper remained scarce, with relatively firm offers providing some support to spot premiums. Overall, against the backdrop of high copper prices suppressing demand and active price cuts by suppliers to sell, Shanghai spot copper prices against the SHFE 2608 contract are expected to remain at a premium tomorrow. The overall center may continue to be in the doldrums, but improved transactions at low prices may limit the extent of further pullbacks in premiums.

Deutsche Bank says gold's current rally, running since August 2024, is one of only five such episodes since 1975. Analysts at the bank see the recent pullback as largely complete and reiterates its $4,600/oz Q4 2026 forecast.