[SMM Analysis: Price Spread Between Copper Cathode and Copper Scrap Widens by Over 2,000 Yuan, Driving Dominance of Hedging-Based Procurement] This week (July 13 – July 16), the copper scrap market operated under a triple framework of retreat after rapid rise in copper prices, ongoing compliance constraints from reverse invoicing, and intensifying high-temperature off-season. The most-traded SHFE copper contract surged to 105,020 yuan/mt mid-week, gaining nearly 2,000 yuan/mt for the full week compared to the start of the week. However, copper scrap was supported by compliance costs and suppliers holding prices firm, with full-week price fluctuations of less than 1,000 yuan/mt. The price spread between copper cathode and copper scrap widened from 2,445 yuan/mt at the start of the week to 3,923 yuan/mt, a WoW increase of over 2,200 yuan/mt, entirely driven by the unilateral rise in copper cathode prices. The resilience of copper scrap itself was the key supply-side feature this week, which directly gave rise to hedging-based procurement demand from secondary copper rod enterprises.....

SMM copper wire and cable enterprise inventory this week, affected by high copper prices and the price spread between futures contracts, wire and cable enterprises' willingness to stockpile raw materials remained sluggish, with raw material inventories falling 3.13% MoM. The rise in copper prices stimulated downstream end-users to rush to pick up goods amid the price rise, leading end-users to concentrate on consuming their existing finished product inventories, which fell 1.89% MoM.

Non-oriented Silicon Steel Price Dynamics Shanghai B50A800 Grade: 4,380-4,380 yuan/mt Guangzhou B50A800 Grade: 4,200-4,200 yuan/mt Wuhan 50WW800 Grade: 4,280-4,280 yuan/mt Shanghai market: This week, spot prices of cold-rolled non-oriented silicon steel in Shanghai were in the doldrums, and overall transaction performance remained sluggish. Market feedback indicated that the market was currently in the demand off-season, and downstream motor enterprises’ purchase willingness was weak. Although leading steel mills raised the base price of non-oriented silicon steel by 50 yuan/mt, transaction improvement remained unapparent. Most traders only maintained routine inventory levels, with low willingness to stockpile, and held a cautious wait-and-see sentiment overall. Overall, spot prices of cold-rolled non-oriented silicon steel in Shanghai are expected to stay in the doldrums next week. Guangzhou market: This week, the cold-rolled non-oriented silicon steel market in Guangzhou was in the doldrums, with mediocre transaction performance. Market feedback indicated that traders’ spot quotes were weak and stable, and there was room for negotiation in actual transactions. Downstream purchasers showed weak willingness to purchase, and overall market trading atmosphere was mediocre. Steel mills raised the base price of non-oriented silicon steel by 50 yuan/mt, but market acceptance was limited, and prices of mid- and low-grade products did not follow with noticeable adjustments yet. Overall, spot prices of cold-rolled non-oriented silicon steel in Guangzhou are expected to remain in the doldrums next week. Wuhan market: This week, the cold-rolled non-oriented silicon steel market in Wuhan trended weakly, with poor transaction performance. Market feedback indicated that demand remained persistently weak; downstream motor enterprises’ purchase willingness was weak, and they mostly adopted small-batch, batch-by-batch just-in-time procurement. Insufficient demand support led spot prices to edge down, and a strong wait-and-see atmosphere prevailed in the market. Overall, spot prices of cold-rolled non-oriented silicon steel in Wuhan are expected to remain in the doldrums next week. Data Source Statement: (Data other than public information in this report are all from public information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, broker reports, National Bureau of Statistics (NBS) data, customs import and export data, various data published by major associations and institutions, etc.), market communication, and based on SMM’s internal database models, comprehensively analyzed and reasonably inferred by the research team, for reference only and do not constitute decision-making advice. Shanghai Metals Market (SMM) reserves the final interpretation right of this statement and the right to adjust and modify the statement content according to actual circumstances.

This week (July 10–July 16) the SMM copper wire and cable enterprise operating rate recorded 68.96%, down 1.88 percentage points WoW and down 3.94 percentage points YoY. Industry production loads continued to weaken. During the week, copper prices kept climbing, suppressing downstream willingness to sign new orders. Coupled with the traditional consumption off-season, overall end-use demand was weak, and market order performance was generally mediocre. Demand across sub-sectors mostly lacked highlights, with only State Grid orders being released steadily. Rising copper prices drove some end-users to place rush-buy replenishment retail orders, providing bottom support for this week’s operating rate. On the inventory side, affected by high copper prices and the futures monthly spread structure, wire and cable enterprises’ willingness to stockpile raw materials remained subdued, with raw material inventories down 3.13% WoW. Rising copper prices prompted downstream end-users to pick up goods in phases to chase prices; end-users concentrated on consuming on-hand finished product supplies, sending finished product inventories down 1.89% WoW. Looking ahead to next week, the traditional demand off-season is not yet over, and the end-use market shows no signs of recovery. SMM expects next week (July 10–July 16) the copper wire and cable operating rate will continue to decline by 1.56 percentage points WoW to 67.4%, and by 3.43 percentage points YoY.

Today, the trading atmosphere in the central China market continued to rebound compared to the previous two days. Coinciding with Friday, stockpiling demand from downstream processing enterprises was somewhat released, and the stockpiling sentiment among trading firms engaging in both spot and futures market remained strong, providing strong support to market prices. Moreover, suppliers showed a notable willingness to hold prices firm and hold back from selling. As a result, the actual transaction price range in the central China market was at a premium of -110 to -140 yuan/mt against the SHFE aluminum August contract, with a trend of continuously moving higher.

[SMM Analysis: Surge in Copper Prices Drives Widening Price Difference Between Copper Cathode and Copper Scrap; Supply Side Holds Prices Firm Amidst Declines + Arbitrage-Driven Purchases Dominate Transactions] The most-traded SHFE copper contract surged to 105,020 yuan/mt mid-week, rising nearly 2,000 yuan/mt from the beginning of the week. However, as copper scrap was supported by compliance costs and suppliers held prices firm, resisting declines, its price fluctuated by less than 1,000 yuan/mt throughout the week. Consequently, the price difference between copper cathode and copper scrap widened consistently from 2,445 yuan/mt at the start of the week to 3,923 yuan/mt, a WoW increase of over 2,200 yuan/mt. This widening spread was entirely driven by the isolated rise in copper cathode prices. The inherent resilience of copper scrap against price declines was the core feature on the supply side this week......

This week, the operating rate of leading aluminum downstream processors in China recorded 61.3%, down 0.6 percentage points WoW.

[SMM Weekly Magnesium Review: China Magnesium Market Retreats After Rapid Rise; Foreign Trade Remains Sluggish] This week, the magnesium ingot market in the main producing areas retreated after a rapid rise. At the beginning of the week, maintenance provided support to quotations, but downstream high inventory and fear of high prices suppressed transactions. Some producers offered discounts to sell, and magnesium prices weakened under pressure. Tianjin port FOB prices followed the decline of domestic EXW prices passively. Outside China, summer break led to weak demand, and high ocean freight rates suppressed transactions. Dolomite prices remained stable, with limited cost support. Magnesium powder and magnesium alloy followed magnesium ingot by falling first and then stabilizing. Downstream steel mill desulfurization, titanium sponge, and die-casting enterprises entered the off-season, with sluggish transactions. The oversupply pattern remained unchanged. In the short term, the magnesium market is expected to continue moving sideways.

SMM July 16 news: Metal market: Overnight, base metals on both domestic and overseas markets generally fell. Only LME nickel rose, up 0.48%. SHFE tin led the decline with a 2.04% drop. LME tin and SHFE zinc both fell over 1%, with LME tin down 1.33% and SHFE zinc down 1.03%. Gains in other metals were all within 1%. Alumina main contract rose 0.18%, while cast aluminum main contract fell 0.28%. Overnight in the ferrous metals sector, iron ore closed flat at 759.5 yuan/mt. Rebar, HRC, and stainless steel all saw slight fluctuations in gains. For coking coal and coke, coking coal fell 0.11%, while coke rose 0.63%. Overnight in precious metals, COMEX gold fell 0.07%, while COMEX silver fell 1.7%. Domestically, SHFE gold rose 0.03%, while SHFE silver fell 1.43%. As of 6:49 a.m. on July 16, overnight closing prices: Macro Front Domestic side: [National Bureau of Statistics (NBS): H1 GDP Up 4.7% YoY, National Economy Operating Within a Reasonable Range, New Momentum Growing Rapidly] NBS data showed that preliminary estimates indicate H1 GDP reached 69,570.4 billion yuan, up 4.7% YoY based on constant prices. By industry, primary industry added value was 3,152.2 billion yuan, up 3.7% YoY; secondary industry added value was 25,047.3 billion yuan, up 3.9% YoY; and tertiary industry added value was 41,370.9 billion yuan, up 5.2% YoY. In terms of quarters, Q1 GDP rose 5.0% YoY, while Q2 grew 4.3% YoY. On a QoQ basis, Q2 GDP increased 0.9%. Overall, the national economy operated within a reasonable range in H1, with new quality productive forces being cultivated and strengthened, and high-quality development progressing with new improvements. However, we must also note that external uncertainties and destabilizing factors remain abundant, and the contradiction between strong domestic supply and weak demand is still pronounced; the foundation for economic improvement needs to be further consolidated. In the next stage, we will adhere to the principle of seeking progress while maintaining stability, improving quality and efficiency, intensifying counter-cyclical and cross-cyclical adjustments, continuously expanding domestic demand and optimizing supply, enhancing growth drivers while revitalizing existing resources, focusing on building a strong domestic market, accelerating the cultivation of new growth momentum, and intensifying efforts to stabilize employment, enterprises, markets, and expectations, so as to promote effective qualitative improvement and reasonable quantitative growth of the economy. [PBoC: H1 Aggregate Social Financing Increased by 20.84 Trillion, New Loans 10.72 Trillion, June M2 Up 8% YoY] Preliminary PBoC statistics show that the outstanding stock of aggregate social financing at end-June 2026 was 462.06 trillion yuan, and the cumulative increase in aggregate social financing in H1 was 20.84 trillion yuan, up 7.4% YoY. In H1, RMB loans increased by 10.72 trillion yuan. At end-June, the balance of broad money (M2) was 356.71 trillion yuan, up 8% YoY. That of narrow money (M1) was 118.48 trillion yuan, up 4% YoY. The balance of currency in circulation (M0) was 14.74 trillion yuan, up 11.8% YoY. In H1, net cash injection was 641.7 billion yuan. On the dollar front: As of the overnight close, the US dollar index fell 0.42% to 100.51, recording a two-session losing streak. The US Fed's latest Beige Book showed that from late May through June, US economic activity improved mildly, with 11 of the 12 Fed districts achieving growth. Inflation was mild overall, but forecasts for the inflation outlook varied across districts, and uncertainty over energy prices was the biggest variable affecting the outlook. The labour market was solid, with employment expanding slightly, but a shortage of skilled workers pushed up wages. (Wall Street Insights) Buffett Warren said that the new Fed Chairman Warsh Kevin is the "right person" for the position. "I think he will do his best to fulfil the task entrusted to him, which is to achieve 2% inflation and maintain full employment." "He cannot be perfect, just as I know I cannot be perfect in managing other people's money and earning excess returns." "He has the country's interests at heart, and I believe many Fed officials do as well. That does not mean their decisions are always perfect, but sometimes those decisions are indeed extremely difficult." (CNBC) President Trump Donald stated that pausing rate action would be better than raising rates for the Fed. He reiterated his desire for (policy) rates to fall, saying, "we should have the lowest interest rates in the world." "I respect Fed Chairman Warsh." Fed Governor Cook Lisa stated that as artificial intelligence (AI) buildouts continue and recent supply shocks push up prices, the risk of persistently high inflation outweighs the risk of a weakening labour market. In a speech prepared for an event in Washington on Wednesday, Cook Lisa said, "If we do not soon see signs that inflation continues to pull back, I am prepared to act. I am firmly committed to achieving the inflation target, and this commitment will not waver." (from the Wall Street Insights APP) According to the CME "FedWatch": The probability of the Fed keeping rates unchanged in July was 88.8%, and the probability of a cumulative 25bp rate hike was 11.2%. The probability of the Fed keeping rates unchanged in September was 51.2%, that of a cumulative 25bp hike was 44%, and that of a cumulative 50bp hike was 4.7%. (Jin10 Data APP) On the macro front: Today, data to be released include the US initial jobless claims for the week ending July 11, US June retail sales MoM, US July Philadelphia Fed manufacturing index, US July NAHB housing market index, US May business inventories MoM, US June pending home sales index MoM, as well as UK May three-month GDP MoM, UK May manufacturing output MoM, UK May seasonally adjusted goods trade balance, UK May industrial production MoM, etc. Furthermore, the Ministry of Commerce held its second regular press conference of July, US Fed Governor Lisa Cook spoke on the economic outlook, US Vice President Vance delivered remarks, the US Fed released its Beige Book on economic conditions, US President Trump delivered a speech, 2028 FOMC voting member and St. Louis Fed President Musalem gave a speech, and TSMC held its Q2 2026 earnings call. Crude oil: As of the overnight close, oil prices on both sides of the Atlantic rose, with WTI up 1.13% and Brent up 0.39%, both recording a third consecutive session of gains as the market continued to monitor US-Iran developments. Goldman Sachs: If the prolonged disruption to Gulf exports persists and delays the production rebound, Brent crude prices could break above $110 per barrel in Q4 2026. (Jin10 Data) US Energy Information Administration (EIA): US EIA crude oil inventories fell by 1.69 million barrels last week. Bloomberg users had expected a draw of 2 million barrels, analysts had forecast a decline of 1.962 million barrels, following an increase of 2.998 million barrels the prior week. Gasoline inventories on the US Gulf Coast hit their lowest level since September 2017. Fuel stockpile supply fell to its lowest since May 2025. (From Wall Street CN App) As the US reinstated its maritime blockade against Iran, two tankers carrying Iranian crude that appeared to be bound for Pakistan have turned back. Vessel-tracking data compiled by Bloomberg show the Rani and Amil, carrying a combined 1 million barrels of crude, briefly signaled Karachi as their destination before turning around on Wednesday. The two tankers were already outside the Persian Gulf when the US reimposed the maritime blockade on Iranian shipping. US Central Command said Wednesday that it had diverted two merchant vessels attempting to breach the blockade since the operation resumed, without naming the ships. According to data intelligence firm Kpler, Pakistan has not imported Iranian crude for at least a decade due to US sanctions risk. One possibility is that the two tankers selected Karachi as a waypoint for waiting or transferring cargo to other vessels. Both are under US sanctions and belong to Iran's "shadow fleet" used to ship oil. (Jin10 Data)

July 15, global mining giant Rio Tinto officially released its production and operating report for Q2 and H1 2026: In the core Pilbara region of Australia, production: H1 total Pilbara production was 162.3 million mt, marking the best half-year performance since the record year of 2018. The ongoing rollout of equipment efficiency improvements and logistics optimization plans across all mines helped offset short-term disruptions from cyclones and maintenance. Shipments: Q2 global iron ore sales totaled 88.8 million mt, up 5% YoY; quarterly Pilbara sales were 85.3 million mt, surging 7% YoY and up 18% QoQ, setting a peak for quarterly shipments since 2020. Cost side: The surge in diesel prices pushed up unit cash costs. It is estimated that for every $10/barrel increase in crude oil, Pilbara ore cash cost per mt rises by $0.15. The full-year Pilbara FOB cash cost guidance remains unchanged at $23.5–25/wmt. The full-year sales volume target remains unchanged: global iron ore of 343–366 million mt, Pilbara at 323–338 million mt. At the IOC iron ore operation in Canada, affected by pit modifications and replacement of train unloading equipment, Q2 production and sales fell 31% YoY. The full-year sales guidance of 15–18 million mt remains unchanged, with Canadian wildfires continuing to be a short-term variable of disruption. Major breakthrough at Simandou (Guinea) Construction completion of the SimFer mine and port infrastructure at Simandou exceeded 75%, and the full railway line completed commissioning for train operations in Q1. Raw ore production at the mine steadily resumed in Q2, with total H1 shipments of 4.2 million mt, all sent to China. Key industry characteristic: Simandou ore requires three-stage crushing in China, creating a 2–3 month lag from mine output to actual sales. As of month-end June, raw ore stockpiles awaiting crushing at the mine site stood at 7.6 million mt, with total system inventory at 9.6 million mt. The concentrated release of this growth in H2 will significantly increase global supply of low-alumina, high-grade iron ore.