Metals rise across the board, with polysilicon up over 5%, and silicon metal, lithium carbonate, alumina, and rebar leading the gains [SMM midday review]

SMM July 2 Report:

Metals Market:

As of the midday close, domestic base metals mostly rose, with SHFE copper up 0.89%, SHFE nickel up 0.56%, and SHFE aluminum up 0.61%. SHFE zinc fell 0.09%, while SHFE tin rose 0.44%. SHFE lead remained flat at 17,135 yuan/mt.

Additionally, the most-traded aluminum casting futures rose 0.53%, alumina futures surged 2.01%, lithium carbonate gained 2.19%, silicon metal rose 3.38%, and polysilicon jumped 5.27%.

The ferrous metals series all rose: iron ore up 0.77%, rebar up 1.44%, HRC up 1.12%, and stainless steel up 1.04%. For coking coal and coke: coking coal rose 0.92%, while coke gained 0.72%.

Overseas metals also saw broad gains as of 11:40 Beijing time: LME copper up 0.3%, LME aluminum up 0.29%, LME nickel up 0.26%, LME zinc up 0.33%, while LME tin fell 0.37% and LME lead posted slight losses.

Precious metals: COMEX gold fell 0.01% and COMEX silver declined 0.12% as of 11:40 Beijing time. Domestically, SHFE gold rose 0.86% and SHFE silver gained 0.47%.

As of midday close, the most-traded European container shipping futures rose 0.58% to 1,863.4 points.

Partial futures market performance as of 11:40 on July 2:

》July 2 SMM Metal Spot Prices

Spot & Fundamentals

Copper: Copper prices breached the 80,000 yuan/mt threshold. With last year's delayed demand release vs this year's potential demand pull-forward, how are operating rates and inventories faring among downstream copper wire and cable enterprises? 》Click for details

Macro Front

Domestic Updates:

[Business Volume Maintains Expansion: China's Logistics Industry Climate Index Rises Slightly MoM in June] The China Federation of Logistics & Purchasing (CFLP) released June's China Logistics Industry Climate Index today (July 2). As demand continues to improve, logistics business volume maintained expansion with the climate index rising further to 50.8%, up 0.2 percentage points MoM. Breaking down sub-indices, the total business volume index has remained in expansion territory for four consecutive months this year. Regionally, central and western regions outperformed the national average. By sector, road, rail, air transport, and express delivery industries all registered expansion. Driven by e-commerce shopping and seasonal demand for fresh/cold chain goods, the express delivery and air transport sectors posted particularly strong growth with indices at 69.3% and 52% respectively. (CCTV News)

The People's Bank of China conducted reverse repo operations worth 98.5 billion yuan for a 7-day term today, with an operating interest rate of 1.4%. As 365.3 billion yuan worth of 7-day reverse repos matured today, a net withdrawal of 266.8 billion yuan was realized on the day.

►The central parity rate of the RMB against the US dollar in the interbank foreign exchange market on July 2 was 7.1546 yuan per US dollar.

US dollar:

As of 11:40, the US dollar index rose by 0.04% to 96.68. Fed Chairman Powell delivered a highly anticipated speech at the central bank forum held in Sintra, Portugal, on Tuesday (July 1), conveying a series of key messages regarding the US economy, monetary policy, and the controversy surrounding the Fed's independence. Facing pressure from President Trump to implement a significant and immediate interest rate cut, Powell demonstrated a steady policy stance, emphasizing the need to "wait and see more data" before cutting interest rates, particularly the impact of tariffs on inflation. Meanwhile, he did not completely rule out the possibility of taking action at the July meeting, a statement that quickly fueled market expectations for an interest rate cut, with the market focusing on upcoming employment and inflation data.

Other currencies:

In the three months ending May, UK wage growth rose to 3.4%. Bank of England Governor Bailey emphasized the weakness of the job market and the impact of uncertainty on the economy, reiterating his view that interest rates may gradually decline. (Huitong Finance)

Data:

Today, data such as the eurozone's May unemployment rate, the number of job cuts by US companies in June as reported by Challenger, Gray & Christmas, and the change in US ADP employment in June will be released. It is worth noting that the European Central Bank held a central bank forum in Sintra.

Crude oil:

Both oil futures dropped slightly. As of 11:40, US crude oil fell by 0.49%, and Brent crude oil fell by 0.45%. Oil prices were under pressure due to expectations of an OPEC production increase in August and concerns about an economic slowdown caused by the prospect of higher US tariffs.

According to data from the Petroleum Supply Monthly Report released by the US Energy Information Administration (EIA), US crude oil production reached a record high of 13.47 million barrels per day in April, up from 13.45 million barrels per day in March. The EIA had previously estimated US crude oil production for March at 13.49 million barrels per day.

A preliminary survey released on Monday showed that US crude oil and distillate fuel oil inventories were expected to decline last week, while gasoline supplies were expected to increase. Before the release of weekly inventory data, the average forecast of four surveyed analysts was that US crude oil inventories were expected to decline by approximately 230,000 barrels for the week ending June 27. The American Petroleum Institute (API) will release its weekly inventory report at 4:30 Beijing time on Wednesday, and the US Energy Information Administration (EIA) will release its weekly inventory report at 22:30 Beijing time on Wednesday. ((Webstock Inc.)

Spot Market Overview:

►Copper prices surged, further impacting consumption, with market activity remaining sluggish [SMM North China Spot Copper]

►High copper prices dampen demand during off-season! Cable operating rate dropped significantly MoM in June [SMM Analysis]

►Shanghai Zinc: Futures market fluctuated, premiums held steady MoM [SMM Midday Review]

►Ningbo Zinc: Ample market supply, premiums continued to decline [SMM Midday Review]

►[SMM Nickel Midday Review] Nickel prices rebounded on July 2, meeting emphasized lawful regulation of low-price disorderly competition among enterprises

►[SMM Nickel Sulphate Daily Review] Nickel salt prices remained stable on July 2

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