Most Metals Fell; Alumina Led Losses; Cast Aluminum and Coking Coal Fell Over 1%; Europe Container Shipping Rose Nearly 2% [SMM Midday Commentary]

SMM News, August 13:

Metals Market:

As of the midday close, most base metals in the domestic market were lower. SHFE copper fell 0.5%, SHFE aluminum fell 0.9%, SHFE lead rose 0.63%, SHFE zinc fell 0.27%, SHFE tin fell 0.86%, and SHFE nickel fell 0.16%.

In addition, the most-traded cast aluminum futures fell 1.33%, and the most-traded alumina contract fell 1.62%. The most-traded lithium carbonate contract was flat at 148,840 yuan/mt. The most-traded silicon metal contract fell 0.64%. The most-traded polysilicon futures rose 0.75%.

Ferrous metals were all lower. Iron ore fell 0.14%, rebar fell 0.5%, and hot-rolled coil fell 0.37%. Stainless steel fell 0.93%. Coking Coal and Coke: the most-traded coking coal contract fell 1.27%, and the most-traded coke contract fell 0.73%.

In overseas base metals, as of 11:45, LME metals were nearly all lower. LME copper fell 0.2%, LME aluminum fell 0.89%, LME zinc fell 0.4%, LME tin fell 0.18%, LME nickel fell 0.59%, and LME lead rose 0.21%.

In precious metals, as of 11:45, COMEX gold rose 0.02%, and COMEX silver fell 0.08%. In domestic precious metals, SHFE gold rose 0.34%, and the most-traded SHFE silver contract rose 0.28%.

In addition, as of the midday close, the most-traded platinum futures fell 0.52%, and the most-traded palladium futures fell 0.57%.

As of the midday close, the most-traded European shipping futures contract rose 1.75% to 1,630 points.

As of 11:45 on August 13, midday quotes for some futures:

Spot and Fundamentals

Copper: Today, Guangdong #1 copper cathode spot against the front-month contract: high-quality copper was quoted at a discount of 20 yuan/mt, down 40 yuan/mt from the previous trading day; standard-quality copper was quoted at a discount of 120 yuan/mt, down 40 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 200 yuan/mt, down 60 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 108,250 yuan/mt, down 160 yuan/mt from the previous trading day, and the average price of SX-EW copper was 108,100 yuan/mt, down 200 yuan/mt from the previous trading day. Spot Market: Guangdong inventories fell for two consecutive days, with fewer arrivals and a slight increase in warehouse withdrawals...

Macro Front

China:

[China Is Formulating a New Round of Action Plans for Continuous Air Quality Improvement] The State Council Information Office held a press conference today (the 13th) as part of the "Launching the 15th Five-Year Plan" series of themed press conferences. The conference noted that China has made encouraging achievements in air pollution control, but it cannot yet afford to relax or take a breather, and must remain patient and resolute. A new round of action plans for continuous air quality improvement is being formulated at an accelerated pace, and the battle to protect blue skies will focus on "higher, more accurate, and more scientific" efforts. (CCTV News)

[National Carbon Emissions Trading Market Cumulative Trading Volume Exceeds 900 Million Mt] Huang Runqiu, Minister of Ecology and Environment, said at the State Council Information Office press conference on August 13 as part of the "Launching the 15th Five-Year Plan" series that as of end-July, cumulative trading volume in the national carbon emissions trading market exceeded 930 million mt, promoting low-cost carbon reduction in industries while strongly advancing the green and low-carbon transition. (Xinhua News Agency)

[Shanghai: Promote Issuance of "Computing Power Vouchers," "Model Vouchers," and "Corpus Vouchers" to Lower Usage Costs of Digital Factors Such as Public Data, Computing Power, Models, and Corpora] Shanghai issued the Action Plan for Implementing the Several Measures to Further Promote Private Investment Development. It mentioned that computing power subsidies will be provided in accordance with laws and regulations, private enterprises will be supported in renting intelligent computing resources for large model R&D, training, and applications, and higher education institutions, research institutions, and state-owned enterprises will be encouraged to use data storage and computing power resources built by various types of business entities, including private enterprises. A public data opening list will be released and updated dynamically, private enterprises will be supported in deep development and scenario-based utilization of specific public data, and the issuance of "computing power vouchers," "model vouchers," and "corpus vouchers" will be promoted to lower the usage costs of digital factors such as public data, computing power, models, and corpora. Benchmark and platform enterprises for urban digital transformation will be cultivated, and private enterprises will be guided to participate in digital transformation project construction and scenario operation in areas such as transportation, logistics, and public services. Private enterprises will be encouraged to build new-type infrastructure demonstration projects such as blockchain applications and large-scale robot applications. (Jin10 Data APP)

[PBOC Reverse Repo Operations Result in Net Withdrawal of 1 Billion Yuan on the Day] PBOC did not conduct reverse repo operations today. As 1 billion yuan of 7-day reverse repos matured today, this resulted in a net withdrawal of 1 billion yuan on the day.

US Dollar:

As of 11:45, the US dollar index rose 0.01% to 100. US core inflation in July was mild, which likely eased pressure on the Fed to raise interest rates. Data released by the US Bureau of Labor Statistics on Wednesday showed that, excluding volatile food and energy categories, core CPI rose 0.2% MoM in July. The YoY increase was 2.5%, matching the slowest pace since March 2021. Overall, CPI rose 0.1% MoM in July and 3.4% YoY. The report indicated that the energy price shock from the Iran war continued to fade in July. As the Fed discusses whether to raise rates at its September meeting, these data may give it more room to balance inflation pressures against the recent slowdown in hiring. Before the September meeting, policymakers will see more reports on employment and inflation, while investors will pay close attention to the speech that Fed Chairman Warsh is expected to deliver at the annual Jackson Hole symposium later this month. US stock index futures moved higher, while US Treasury yields were basically flat. Investors reduced bets on a September rate hike.

According to the CME "FedWatch": the probability that the Fed will keep interest rates unchanged at the September meeting is 59.9%, and the probability of a cumulative 25bp hike is 40.1%. The probability that the Fed will keep rates unchanged at the October meeting is 45.3%, the probability of a cumulative 25bp hike is 44.9%, and the probability of a cumulative 50bp hike is 9.8%. (Jin10 Data APP)

CITIC Securities said in a research note that US July CPI was fully in line with expectations, core inflation remained mild, and second-round inflation effects were weak, which helped further ease market concerns about inflation risks. We still believe US inflation is not very sticky, and expect headline CPI YoY to continue a mild slowdown trend through Q3 and hit bottom in September, then rebound slightly in Q4 this year and fall rapidly in March next year. We still expect the Fed to stay on hold throughout this year, and there is room for rate-hike expectations priced into derivatives markets to be revised further downward.

CICC said in a research note that US July CPI rose 0.1% MoM on a seasonally adjusted basis and 3.4% YoY, while core inflation rose 0.2% MoM and 2.5% YoY, all in line with market expectations. Energy prices continued to pull back, but international oil prices have moved higher again since August, adding uncertainty to future energy prices. In core inflation, goods were on the strong side while services were weak; in particular, prices of information technology products such as computers and software continued to rise, reflecting that the supply-demand mismatch caused by expanding AI capital spending is gradually transmitting to the consumption side. We believe US inflation may have entered a new phase, with its drivers gradually shifting from supply shocks such as tariffs and oil prices to demand expansion from AI investment, and the duration of inflation may be extended accordingly. For the Fed, these data eased pressure for near-term rate hikes, but compared with supply-driven inflation, demand-driven inflation requires more attention from policymakers.

Other Currencies:

Reserve Bank of Australia Assistant Governor Kent said Australian monetary policy is currently restrictive, and the three consecutive rate hikes earlier this year are now restraining the economy, while the stronger Australian dollar is reinforcing that effect. He said: "Evidence suggests that monetary policy in Australia is somewhat restrictive, and the tightening earlier this year is working. Borrowing costs have risen, mortgage repayments have increased, conditions in the established housing market have weakened, and the Australian dollar has also appreciated year to date." He said aggregate demand growth appears to be slowing, adding that this is what policymakers want to see and is necessary to return inflation to target. (Jin10 Data APP)

Data:

Data due today include the US 10-year Treasury auction yield for August 12, the US 10-year Treasury auction bid-to-cover ratio for August 12, US initial jobless claims for the week ending August 8, US July PPI YoY, US July PPI MoM, UK Q2 GDP YoY preliminary, UK June three-month GDP MoM, UK June manufacturing output MoM, UK June seasonally adjusted goods trade balance, UK June industrial output MoM, and Eurozone June industrial output MoM. In addition, JD.com will hold its Q2 earnings call; 2026 FOMC voter and Cleveland Fed President Hammack will speak; and 2027 FOMC voter and Richmond Fed President Barkin will speak on the economic outlook.

Crude Oil:

As of 11:45, oil prices in both markets fell, with WTI crude down 0.96% and Brent crude down 0.82%.

Oil prices edged lower as traders awaited signs of progress on reopening the Strait of Hormuz. On the Middle East situation, there was almost no sign of progress on reopening the Strait of Hormuz, and US President Trump said the US has "full control" over the waterway. The International Energy Agency (IEA) said that as the US-Iran war continues, the global oil market faces an average daily supply gap of 1.8 million barrels this quarter, more than double its previous forecast; the oil supply gap in 2026 could be the largest in five years. According to AAA, in the US, gasoline and diesel prices have never been this high at the same time of year. (Jin10 Data APP)

Spot Market at a Glance:

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