Metals show mixed performance, with polysilicon, coking coal and coke, and iron ore rising by over 2%, while silicon metal falls by nearly 1% [SMM Daily Review]

SMM July 3 News:

Metals Market:

As of day session close, domestic base metals mostly rose, with only SHFE copper and SHFE tin declining - SHFE copper fell 0.07% while SHFE tin dropped 0.33%. SHFE nickel led gains with a 0.8% increase, and SHFE lead/zinc both rose 0.5%. Alumina main contract gained 0.93%, while aluminum casting main contract added 0.33%.

Additionally, lithium carbonate main contract rose 0.91%, polysilicon gained 2.14%, and silicon metal fell 0.93%. Containerized freight main contract (Europe route) advanced 0.11%.

Ferrous metals series collectively rose: iron ore surged 2.45%, rebar/HRC both gained 1.45%. For coking coal and coke, coking coal jumped 3.76% while coke rose 2.05%.

Overseas markets showed mixed performance as of 15:03: LME zinc led losses with a 0.45% decline, LME copper fell 0.3%, and LME aluminum dropped 0.31%. LME nickel led gains with a 0.44% rise, with other metals showing relatively small fluctuations.

Precious metals: COMEX gold rose 0.28% and COMEX silver gained 0.85% as of 15:03. Domestically, SHFE gold increased 0.47% and SHFE silver jumped 1.83%.

Market snapshot as of 15:03 today

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Macro Front

Domestic Developments:

[June China Warehousing Index at 51% - Operating in Expansion Territory for 8th Consecutive Month] China Federation of Logistics & Purchasing released June's China Warehousing Index on the 3rd. The index remained in expansion territory for eight straight months, indicating sustained positive performance in the warehousing sector. June's index reached 51%, up 0.5 percentage points MoM. Key sub-indices including new orders, average inventory turnover, business profits, and business activity expectations all rebounded. Specifically, new orders index reached 51.6%, rising 0.7 percentage points MoM, showing active demand and continued growth in new orders. Consumer goods warehousing performed particularly well, with significant increases in new orders for food, home appliances, and agricultural products.

The People's Bank of China conducted 57.2 billion yuan in 7-day reverse repo operations at 1.4% interest rate. With 509.3 billion yuan in reverse repos maturing today, the net withdrawal reached 452.1 billion yuan.

► July 3 PBOC central parity rate: USD/CNY 7.1523

US Dollar:

As of 15:03, the US dollar index remained flat at 96.78. US June ADP shock: Private sector employment unexpectedly contracted by 33,000 jobs, far below the 95,000 forecast. May's figure was revised down to 29,000 from 37,000, marking the first negative growth since March 2023 and the largest monthly decline since April 2020. The market is focused on the official non-farm payrolls report to assess the US Fed's next move. A poll of economists showed that they expected 110,000 new jobs to be created in June, down from 139,000 in May. The unemployment rate is expected to climb to 4.3% from 4.2% the previous month.

The ADP report released on Wednesday prompted traders to revise their expectations for the timing of the US Fed's interest rate cut. The CME FedWatch tool showed that traders believed there was a 25% chance of the US Fed taking action in July, up from 20% the day before. (Wenhua Comprehensive)

Macro:

Today, data including Australia's May goods and services trade balance, Australia's May export monthly rate, Australia's May import monthly rate, Russia's June SPGI Services PMI, Switzerland's June CPI annual rate, the final value of the UK's June SPGI Services PMI, the UK's June government official net reserve change, the US's June non-farm payroll change (seasonally adjusted), the US's June average hourly earnings annual rate, the US's June private sector non-farm payroll change, the US's June labor force participation rate, the US's June manufacturing employment change (seasonally adjusted), the US's June unemployment rate, the US's May trade balance, the US's initial jobless claims for the week ending June 28, the US's continued jobless claims for the week ending June 21, Canada's May trade balance, Brazil's June SPGI Services PMI (seasonally adjusted), Brazil's June SPGI composite PMI (seasonally adjusted), the revised value of the US's May durable goods orders monthly rate, the US's May factory orders monthly rate, and the US's June ISM non-manufacturing PMI will be released.

Notably, the Ministry of Commerce will hold its first regular press conference in July; the European Central Bank will release the minutes of its June monetary policy meeting; and Bostic, the 2027 FOMC voter and president of the Atlanta Fed, will deliver a speech on US monetary policy.

In addition, it is worth noting that: Due to the US Independence Day holiday, the US stock market will be closed in the afternoon on July 3. The New York Stock Exchange and the Nasdaq will close early at 01:00 Beijing time on July 4, and trading of stock index futures contracts under the Chicago Mercantile Exchange (CME) will end early at 01:15 Beijing time on July 4.

Crude oil:

As of 15:03, oil prices in both markets fell by 0.74% as investors worried that the US might restore higher tariffs, which could lead to a decline in fuel demand, and that major oil-producing countries are expected to announce production increases.

The OPEC group, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, is expected to agree to increase production by 411,000 barrels per day at its meeting this weekend. ING analysts said in a report on Thursday: "Given the uncertainties surrounding these events and the US Independence Day holiday on Friday, market participants may not want to take on too much risk in the market ahead of the long weekend in the US."

The unexpected increase in US crude oil inventories also highlights demand concerns in the world's largest oil consumer. Inventory data released by the US Energy Information Administration (EIA) showed unexpected rises in crude oil and gasoline inventories last week, while distillate inventories declined. The EIA report indicated that US commercial crude oil inventories rose by 3.8 million barrels to 419 million barrels in the week ending June 27, against market expectations of a 1.8 million barrel drawdown. Gasoline demand during the week slipped to 8.6 million barrels per day, raising worries about demand conditions during the US summer driving peak. (Comprehensive reporting by Wenhua)

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