Metals: domestic market outperforms overseas market; alumina, coking coal and coke, SHFE gold rise over 1%; lithium carbonate falls over 2%; SHFE silver and palladium lead the gains [SMM Midday Review]

SMM, September 4:

In the metals market:

As of the midday close, base metals on the domestic market mostly rose. SHFE copper gained 0.49%, and SHFE aluminum rose 0.12%. SHFE lead fell 0.12%. SHFE zinc rose 0.6%. SHFE tin gained 0.54%. SHFE nickel fell 0.6%.

In addition, the most-traded cast aluminum futures contract rose 0.23%, and the most-traded alumina contract gained 1.81%. The most-traded lithium carbonate contract fell 2.48%. The most-traded silicon metal contract rose 1.32%. The most-traded polysilicon futures contract gained 0.29%.

Ferrous metals all rose. Iron ore gained 1.04%, rebar rose 1.02%, and hot-rolled coil gained 0.71%. Stainless steel rose 0.18%. For coking coal and coke: the most-traded coking coal contract rose 1.9%, and the most-traded coke contract gained 1.83%.

In overseas base metals, as of 11:37, LME metals mostly fell. LME copper fell 0.17%, and LME aluminum fell 0.29%. LME lead fell 0.16%. LME zinc rose 0.37%. LME tin fell 0.17%. LME nickel fell 0.71%.

In precious metals, as of 11:37, COMEX gold fell 0.43%, and COMEX silver fell 0.55%. In domestic precious metals: SHFE gold rose 1.79%, and the most-traded SHFE silver contract gained 2.14%.

In addition, as of the midday close, the most-traded platinum futures contract rose 1.91%, and the most-traded palladium futures contract gained 3.92%.

As of the midday close, the most-traded European shipping route containerized freight index futures contract rose 0.27% to 1,851.5 points.

As of 11:37 on September 4, some futures midday quotes:

Spot and Fundamentals

Copper: Today, Guangdong #1 copper cathode spot against the front-month contract: high-quality copper was quoted at a premium of 340 yuan/mt, up 20 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 240 yuan/mt, up 20 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 180 yuan/mt, up 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 110,020 yuan/mt, up 575 yuan/mt from the previous trading day, and the average price of SX-EW copper was 109,910 yuan/mt, up 575 yuan/mt from the previous trading day. Spot market: Guangdong inventory has declined for 14 consecutive trading days, hitting a new low for the year again...

Macro Front

Domestic:

[Liu Min, Chief Engineer of the State Administration for Market Regulation: Prevention of "involution-style" competition has been incorporated into the comprehensive rectification framework] At the 2026 World Power Battery Conference, Liu Min, Chief Engineer of the State Administration for Market Regulation, said that prevention of "involution-style" competition has been incorporated into the comprehensive rectification framework, and that the administration is working with the Ministry of Industry and Information Technology, the National Development and Reform Commission, and other departments to continuously carry out capacity early warning and regulation, standardize price competition, strengthen product quality supervision, and strive to build a market environment of high quality at reasonable prices and fair competition. (Jin10 Data APP)

[H1 tax and fee cuts, exemptions, and refunds to support urban renewal reached RMB487 billion]The latest tax data released by the State Taxation Administration shows that since the beginning of this year, tax authorities have implemented various preferential tax and fee policies to support urban renewal, with cumulative tax and fee cuts, exemptions, and refunds totaling RMB487 billion in H1. By category, in H1, VAT and deed tax were exempted for public rental housing; personal income tax incentives for residents swapping homes were continued, along with other policies supporting rigid and improvement-oriented housing demand, resulting in tax and fee cuts, exemptions, and refunds of RMB209.8 billion. Investment in special equipment for environmental protection, energy and water conservation, and work safety was credited against corporate income tax payable at a certain percentage; vehicle purchase tax was exempted for public buses and electric vehicles purchased by urban public transport enterprises, along with other policies supporting the development of green and low-carbon cities, resulting in tax and fee cuts, exemptions, and refunds of RMB168.4 billion. (CCTV News)

PBOC: Based on the needs of primary dealers in open market operations, the volume of 7-day reverse repo operations on September 4, 2026 was zero.

US dollar:

As of 11:37, the US dollar index rose 0.02% to 99.02.

Fed Governor Waller said his next interest rate decision will "depend heavily" on the August inflation data to be released next week, adding that only a certain degree of warming in inflation data could prompt him to support a rate hike at the Fed's upcoming policy meeting. He said: "If we continue to make progress toward the 2% target, then I am willing to support keeping the policy rate at its current level. But if inflation data comes in higher than expected, I would consider raising rates." Waller described current policy as slightly restraining economic growth, adding: "An acceleration in inflation may not prompt me to support tightening. If August evidence shows that momentum toward the 2% target has reversed, then a small adjustment to our policy stance would help ensure inflation resumes." He also said: "Although inflation remains well above the FOMC's 2% target, recent data shows we are finally seeing some signs of cooling inflation."

According to CME "FedWatch": The probability of the Fed keeping rates unchanged through September is 49.8%, and the probability of a cumulative 25 basis point hike is 50.2%. The probability of the Fed keeping rates unchanged through October is 35.5%, the probability of a cumulative 25 basis point hike is 50.1%, and the probability of a cumulative 50 basis point hike is 14.5%.

US Vice President Vance said he believes the US Fed should lower interest rates. He said that if you look at the inflation data, you can be fairly confident that a US Fed interest rate cut is the "appropriate and responsible" thing to do. Vance said current data supports the US Fed taking action to cut interest rates. (Jin10 Data APP)

Other currencies:

Reserve Bank of New Zealand Assistant Governor Silk said the RBNZ is more likely to wait until December to hike rates again. The RBNZ raised the official cash rate for the second consecutive meeting this week, and Governor Briman said further rate hikes may still be needed in the future, but policymakers want to take time to assess the impact of the hikes so far. The signal from the statement led investors to lower the probability of a rate hike at the next meeting in October, while placing heavy bets on a December hike. "We have been very clear that, based on the economic outlook, we do think further rate hikes may be necessary in the future," Silk said in an interview on Friday. "Whether it is in October or December is still undecided, but based on the current rate path, the latter is more likely than the former." Investors share the same view. Swap data shows the market now prices in only a 31% probability of a 25bp hike to 3% in October, and a 100% probability of a hike to 3% by December. Silk reiterated that the RBNZ does not have a preset rate hike path. (Jin10 Data APP)

Data:

Today will see the release of Eurozone July retail sales m/m, Canada August employment change, US August unemployment rate, US August seasonally adjusted non-farm payrolls, US August average hourly earnings y/y, US August average hourly earnings m/m, and US August Global Supply Chain Pressure Index. In addition, watch for: 2026 FOMC voter and Cleveland Fed President Hammack delivering opening remarks at a "Fed Communities" event; 2027 FOMC voter and Chicago Fed President Goolsbee delivering closing remarks at a "Fed Communities" event; and Bank of England Governor Bailey speaking.

Crude oil:

As of 11:37, oil prices rose in both markets, with WTI up 0.69% and Brent up 0.44%. US-Iran tensions persist, and market concerns over supply disruptions continue to support oil prices.

Iran's oil minister said: During the first blockade, we successfully shipped oil out of the blockade line many times and sold it thousands of kilometers away. Iraq's State Oil Marketing Organization SOMO: Iraq's August oil exports were 73 million barrels, the highest level since the Iran war. (Jin10 Data APP)

US Vice President Vance said: About 15 million barrels of oil passed through the Strait of Hormuz yesterday. No commitment will be made on a timetable for lowering oil prices. (Jin10 Data APP)

The Russia sanctions bill that previously passed the US Senate by a wide margin is now stalled in the House of Representatives. Amid mounting opposition, deliberation of the bill is likely to be postponed until after the November election. Lawmakers worry the bill could expand President Trump's tariff authority and push up oil prices. The bill, introduced by the late Senator Lindsey Graham, would authorize Trump to impose tariffs of up to 100% on major buyers of Russian oil and natural gas, as well as countries that help Russia evade energy sanctions. House Speaker Mike Johnson said all sides support sanctioning Russia, but the bill needs to be passed "the right way." Currently, some Democratic and Republican lawmakers have concerns about the bill, mainly over whether the tariff provisions could expand presidential trade authority and affect energy prices. House Foreign Affairs Committee Chairman Brian Mast said the committee is assessing whether Russian crude buyers shifting to other sources could push up oil prices. (Jin10 Data APP)

Citi: Maintains Q4 2026 Brent oil price forecast at $70/bbl and 2027 at $65/bbl, as the reopening of the Strait of Hormuz will lead to a larger oil oversupply than pre-conflict levels. We have raised our Q3 2026 Brent crude price forecast to $86/bbl. (Jin10 Data APP)

Spot market overview:

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