This week (June 5–June 11), the SMM copper wire and cable enterprise operating rate recorded 71.03%, up 2.65 percentage points WoW and down 5.28 percentage points YoY. Falling copper prices this week effectively boosted end-user purchase willingness, and enterprises saw an increase in new orders, driving the operating rate to rebound. From the end-use demand perspective, orders in the power sector performed well, offshore wind power orders remained stable, and construction sector orders also showed marginal recovery. On the inventory side, some enterprises remained optimistic about the future copper price outlook and took the opportunity to restock during the price pullback, with raw material inventories rising 3.73% WoW; finished product inventories fell 2.95% WoW, mainly because the initial copper price decline spurred end-user cargo pick-up enthusiasm. Looking ahead to next week, as copper prices continued to decline toward the end of this week, end-user wait-and-see sentiment intensified, waiting for lower prices to enter the market, and order growth lacked sustainability. However, with new orders gradually entering the production schedule, overall operations will remain stable. SMM expects that next week (June 12–June 18) the copper wire and cable operating rate will continue to increase by 0.3 percentage points WoW to 71.33%, down 1.93 percentage points YoY.

[SMM Copper Cathode Rod Flash] This week, the operating rate of copper cathode rod producers rose 1.6 percentage points WoW, beating expectations by 6.16 percentage points. The sharp retreat in copper prices spurred concentrated price fixings among downstream wire, cable, and enamelled wire users, and new orders at copper rod mills drove an above-expectation recovery in operating rates. Demand from top-tier wire and cable players rebounded markedly, while enamelled wire orders recorded only a mild improvement, without explosive growth.

[U.S.-Iran Conflict Sees Dramatic Reversal, ECB Rate Hike Weighs on Metal Prices] On the fundamentals side, the supply gap outside China is expected to provide strong bottom support for aluminum prices, and expectations of rising energy costs also create a bullish driver for aluminum prices; this Thursday, the destocking pace of China's aluminum ingot social inventory noticeably accelerated, effectively alleviating the previous high inventory pressure. However, China's high inventory pressure remains relatively pronounced and is expected to limit the upside room for domestic aluminum prices. In the short term, domestic aluminum prices are expected to mainly undergo volatile adjustments.

[SMM Weekly Aluminum Price Review: Expectations for US Fed Rate Hikes Remain Contested, China Accelerates Destocking, Signaling Short-Term Stabilization]

[Aluminum Ingot Social Inventory Destocking Accelerates Significantly, Relative High Level Still Caps Aluminum Price Upside Room] On the fundamentals side, the supply gap outside China is expected to provide strong bottom support for aluminum prices, and expectations of rising energy costs also form a bullish driver. This Thursday, the destocking pace of China’s social inventory of aluminum ingots accelerated notably, effectively easing the earlier high inventory pressure. However, China’s high inventory pressure remains relatively prominent, which is expected to cap the upside room for domestic aluminum prices. In the short term, domestic aluminum prices are expected to mainly fluctuate and consolidate.

[Geopolitical Disturbances Marginally Weaken, Accelerating Destocking Supports Aluminum Prices Fluctuating Upward] On the macro front, Trump once again claimed that US-Iran negotiations have entered the "final moment," but the market has become desensitized to his repeated similar statements, and the geopolitical risk premium is marginally weakening. On the fundamentals side, the supply gap outside China is expected to provide strong bottom support for aluminum prices, and expectations of rising energy costs also form a bullish driver for aluminum prices; however, the high inventory pressure in China remains relatively evident, which is expected to limit the upside room for China's aluminum prices, and in the short term, China’s aluminum prices are expected to mainly fluctuate and adjust.

[Middle East Situation Calms Temporarily, Aluminum Prices Fluctuate and Adjust at Highs] Amid geopolitical risks in the Middle East, a wait-and-see sentiment in the market is expected to persist. The overseas supply gap is expected to provide strong underlying support for aluminum prices, while expectations of rising energy costs also serve as a bullish driver for aluminum prices. However, high inventory pressure in China remains relatively evident, which is expected to cap the upside room for domestic aluminum prices. In the short term, China's aluminum prices are expected to primarily fluctuate and adjust.

[Geopolitical Risks and Accelerating Destocking Drive SHFE Aluminum Volatile Adjustment] The Middle East geopolitical situation remains volatile, market wait-and-see sentiment is expected to persist, the ex-China supply gap is expected to provide strong bottom support for aluminum prices, US Fed interest rate hikes remain uncertain, and rising energy cost expectations also form a bullish driver for aluminum prices; but high inventory pressure in China remains relatively prominent, which is expected to limit the upside room of domestic aluminum prices, with short-term domestic aluminum prices expected to mainly see volatile adjustment.

[SMM Aluminum Express] The proportion of liquid aluminum rebounded by 0.12 percentage points WoW this week, with moderate demand for liquid aluminum. Downstream processing sectors showed divergent performance. Although in the consumption off-season, strong export demand in some sectors partly offset weak domestic demand. Weekly operating rates of secondary alloy, aluminum plate/sheet and strip, and aluminum foil weakened, while primary alloy operating performance recovered. The aluminum wire and cable and aluminum extrusion sectors generally stabilized. Overall, the weekly operating rate of downstream leaders edged down 0.1 percentage point WoW this week.

This week (May 29 – June 4), the operating rate of SMM copper wire and cable enterprises recorded 68.37%, up 2.27 percentage points WoW and down 7.71 percentage points YoY. The increase this week was mainly due to the fulfillment of backlog orders scheduled for production, driven by the copper price pullback at the end of last week. Meanwhile, with copper prices fluctuating at highs this week, new order follow-up was sluggish. End-use demand side, grid orders weakened. Only demand for submarine cables and cables in the communications sector showed notable resilience, while demand in other sectors was relatively sluggish. Inventory side, the copper price pullback at the end of the week prompted enterprises to make periodic restocking. Raw material inventories increased 1.42% WoW, and finished product inventories increased 1.22% WoW, mainly because rising copper prices dampened end-user cargo pick-up enthusiasm. Looking ahead to next week, copper prices edged down again toward the end of this week but did not reach the psychological price level for end-user purchases. The market only released rigid demand, and new orders were scarce. SMM expects that next week (June 5 – June 11), the operating rate of copper wire and cable enterprises will decline further by 2.39 percentage points WoW to 65.98%, down 10.33 percentage points YoY.