Most Metals Fell; Alumina Led the Declines; Casting Aluminum and Coking Coal Dropped by Over 1%; European Route Container Shipping Rose by Nearly 2% [SMM Midday Commentary]

SMM News on August 13:

Metals market:

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

In addition, the most-traded casting aluminum futures contract 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 contract rose 0.75%.

Ferrous metals all fell. 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%.

Overseas base metals: as of 11:45, LME metals were down nearly across the board. LME copper fell 0.2%, LME aluminum fell 0.89%, and LME zinc fell 0.4%. LME tin fell 0.18%. LME nickel fell 0.59%. LME lead rose 0.21%

Precious metals: as of 11:45, COMEX gold rose 0.02%, and COMEX silver fell 0.08%. 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 contract fell 0.52%, and the most-traded palladium futures contract fell 0.57%.

As of the midday close, the most-traded Europe route container shipping contract rose 1.75% to 1,630 points.

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

Spot and Fundamentals

Copper:Guangdong #1 copper cathode spot prices against the front-month contract today: 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, while the average price of SX-EW copper was 108,100 yuan/mt, down 200 yuan/mt from the previous trading day. Spot market: Guangdong inventory declined for two consecutive days, arrivals decreased, and warehouse withdrawals increased slightly…

Macro front

China:

[China Is Formulating a New Round of Action Plan for Sustained Air Quality Improvement]The State Council Information Office held a themed press conference today (the 13th) as part of the “Fifteenth Five-Year Plan” series, titled “A Good Start and Solid First Steps.” At the conference, it was noted that China has achieved encouraging results in air pollution control, but it is still not the time to relax or take a breather, and patience and resolve must be maintained. At present, a new round of the action plan for sustained air quality improvement was being formulated on an accelerated basis, and the Blue Sky Protection Campaign will focus on making efforts that are “higher, more precise, and more scientific.” (CCTV News)

[Cumulative Trading Volume in the National Carbon Emissions Trading Market Surpassed 930 Million mt]At a themed press conference of the “Getting Off to a Good Start for the 15th Five-Year Plan” series held by the State Council Information Office on August 13, Minister of Ecology and Environment Huang Runqiu said that as of month-end July, cumulative trading volume in the national carbon emissions trading market had surpassed 930 million mt, which, while promoting low-cost emissions reduction across industries, also strongly advanced the green and low-carbon transition. (Xinhua News Agency)

[Shanghai: Promoted the Issuance of “Computing Power Vouchers,” “Model Vouchers,” and “Corpus Vouchers” to Reduce the Cost of Using Digital Factors Such as Public Data, Computing Power, Models, and Corpora]Shanghai issued the Action Plan for Implementing the “Several Measures on Further Promoting the Development of Private Investment.” It noted that computing power subsidies will be carried out in accordance with laws and regulations, supporting private enterprises in leasing intelligent computing resources for large-model R&D, training, and applications, and encouraging higher-education institutions, research institutes, and state-owned enterprises to use data storage and computing resources built by various business entities, including private enterprises. It will release and dynamically update a public data open-access list, support private enterprises in deep development and scenario-based utilization of specific public data, promote the issuance of “computing power vouchers,” “model vouchers,” and “corpus vouchers,” and reduce the cost of using digital factors such as public data, computing power, models, and corpora. It will cultivate benchmark enterprises and platform enterprises for urban digital transformation, and guide private enterprises to participate in the construction of digital transformation projects and scenario operations in areas such as transportation, logistics, and public services. It will encourage private enterprises to build demonstration projects for new-type infrastructure such as blockchain applications and scaled-up robot applications. (Jinshi Data APP)

[PBOC Reverse Repo Operations Recorded a Net Drain of 1 Billion yuan on the Day]The PBOC conducted no reverse repo operations today; as 1 billion yuan of 7-day reverse repos matured today, it recorded a net drain 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 US Fed to raise interest rates. Data released by the US Bureau of Labor Statistics on Wednesday showed that, excluding the more volatile food and energy categories, core CPI in July rose 0.2% MoM. The YoY increase was 2.5%, unchanged from the lowest pace since March 2021. Overall, July CPI rose 0.1% MoM and 3.4% YoY. The report showed that the energy-price shock triggered by the Iran war continued to fade in July. As the US Fed debated whether to raise rates at its September meeting, these figures may have given it more room to balance inflation pressures against the recent hiring slowdown. Ahead of the September meeting, policymakers were set to see more reports on employment and inflation, and investors closely watched a speech that Fed Chairman Wosh was expected to deliver later this month at the annual Jackson Hole symposium. US equity index futures rose, and US Treasury yields were basically flat. Investors pared back bets on a September rate hike.

According to CME “FedWatch,” the probability that the US Fed would keep rates unchanged through September was 59.9%, while the probability of cumulative hikes totaling 25 bps was 40.1%. The probability that the US Fed would keep rates unchanged through October was 45.3%, while the probabilities of cumulative hikes totaling 25 bps and 50 bps were 44.9% and 9.8%, respectively. (Jin10 Data APP)

A CITIC Securities research note said that the US July CPI fully met expectations; core inflation maintained a mild performance; and secondary inflation effects were weak, helping further ease market concerns about inflation risks. We still believe US inflation lacks strong stickiness, and the headline CPI YoY is expected to broadly maintain a mild slowdown through Q3 and hit bottom in September, then rebound slightly in Q4 this year and fall rapidly by next March. We still expect the US Fed to stay on hold throughout this year, and there remains room for further downward revisions to rate-hike expectations priced in by the derivatives market.

A CICC research note said that US July CPI rose 0.1% MoM seasonally adjusted and 3.4% YoY; core inflation was 0.2% MoM and 2.5% YoY—both in line with market expectations. Energy prices continued to pull back, but since August international oil prices have risen again, increasing uncertainty over future energy prices. For core inflation, goods were relatively strong while services were relatively weak; in particular, prices of information technology products such as computers and software kept rising, reflecting that the supply-demand mismatch driven by the expansion of AI capex was gradually transmitting to the consumer side. We believe US inflation may have entered a new stage, with its drivers gradually shifting from supply shocks such as tariffs and oil prices to demand expansion brought by AI investment, which may correspondingly extend the duration of inflation. For the US Fed, these data eased short-term pressure to hike rates, but compared with supply-driven inflation, demand boost–driven inflation requires greater attention from policymakers.

Other currencies:

RBA Assistant Governor Kent said Australia’s monetary policy was currently restrictive; three consecutive rate hikes earlier this year were now weighing on the economy, and a stronger Australian dollar had further reinforced this effect. He said, “Evidence suggests that Australia’s monetary policy is somewhat restrictive, and the tightening implemented earlier this year is taking effect. 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 that growth in aggregate demand appeared to be slowing down, adding that this was what policymakers wanted to see and was necessary to bring inflation back to target. (Jin10 Data APP)

Data:

Today will see the release of the US 10-year Treasury auction (Aug 12) high yield, the US 10-year Treasury auction (Aug 12) bid-to-cover ratio, US initial jobless claims for the week ending Aug 8, the US July PPI y/y, the US July PPI m/m; the UK preliminary Q2 GDP y/y, the UK three-month GDP m/m for June, the UK June manufacturing output m/m, the UK June seasonally adjusted trade balance in goods, the UK June industrial output m/m; and the eurozone June industrial output m/m, among other data. In addition, JD.com will hold its Q2 earnings conference call; 2026 FOMC voting member and Cleveland Fed President Hammack will deliver remarks; and 2027 FOMC voting member and Richmond Fed President Barkin will speak on the economic outlook.

Crude oil:

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

Oil prices edged down as traders awaited signs of progress toward the reopening of the Strait of Hormuz. On the Middle East situation, there were virtually no signs of any progress toward reopening the Strait of Hormuz, and US President Trump said the US had “complete control” over the waterway. The International Energy Agency (IEA) said that as the US-Iran war continued, the global oil market faced a supply shortfall of 1.8 million barrels per day this quarter, more than double its previous forecast; the oil supply shortfall in 2026 could reach the highest level in five years. According to the American Automobile Association, in the US, gasoline and diesel prices had never been as high as they were at this time of year. (Jin10 Data APP)

Spot Market Snapshot:

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