Most metals fell across the board, with SHFE tin leading the decline by over 2%, while polysilicon rose nearly 3% for four consecutive days [SMM Daily Review]

SMM News on July 7:

Metal Market:

As of the day session close, domestic base metals mostly declined. SHFE tin led the losses with a 2.03% decline, while SHFE copper, aluminum, zinc and nickel all fell over 1% - SHFE copper dropped 1.12%, SHFE aluminum fell 1.11%, SHFE zinc declined 1.16%, and SHFE nickel decreased 1.58%. SHFE lead fell 0.35%. Alumina main contract rose 0.2%, while aluminum casting main contract fell 0.78%.

Additionally, lithium carbonate main contract closed unchanged at 63,660 yuan/mt. Polysilicon main contract rose 2.86%, marking the fourth consecutive daily gain, and silicon metal main contract increased 0.69%. European shipping main contract fell 0.2% to close at 1,888.5.

Ferrous metals series collectively declined, with stainless steel down 0.94%, rebar and iron ore both falling 0.68%, and HRC declining 0.62%. For coking coal and coke, coking coal fell 1.76% while coke decreased 0.94%.

Overseas market: As of 15:09, overseas base metals also collectively declined, with LME aluminum, tin and nickel all falling over 1% - LME aluminum dropped 1.12%, LME tin fell 1.36%, and LME nickel declined 1.34%. Other metals posted losses within 1%.

Precious metals: As of 15:09, COMEX gold fell 0.71% and COMEX silver declined 0.81%. Domestically, SHFE gold decreased 0.54% and SHFE silver fell 0.5%.

Market conditions as of 15:09 today

》Click to view SMM Market Dashboard

Macro Front

Domestic Developments:

[First 5 Months Raw Coal Output Reached 1.99 Billion Tons - Strong Energy Supply Guarantee for Summer Peak] Latest data from China National Coal Association shows raw coal production reached 1.99 billion tons in the first five months, providing solid support for energy supply during summer peak demand. May's raw coal output from enterprises above designated size reached 400 million tons, up 4.2% YoY, with daily average output hitting 13.01 million tons - a record high for the same period - and increasing 0.2% MoM from April. The association indicates advanced capacity releases in coal-producing provinces like Shanxi, Shaanxi, Inner Mongolia and Xinjiang will likely drive 5% annual coal production growth. Analysis of major coal-consuming sectors suggests moderate growth in power coal consumption, slight declines in steel and building materials sectors, and continued moderate growth in chemical sector, with total coal demand projected to rise approximately 1.5% YoY.

[Financial Association C50 Wind Index Survey: June New Social Financing Likely Increased More YoY; M1/M2 Growth Rates Continued to Rebound] Latest "C50 Wind Index" results show market expects June credit growth to slightly lag behind last year, while government bonds continue to support social financing expansion. Among them, the median forecast by market institutions for new RMB loans in June was 2.03 trillion yuan, a decrease of 100 billion yuan compared to the 2.13 trillion yuan in the same period last year. Additionally, the median forecast for new aggregate financing in June was 3.9 trillion yuan, representing a YoY increase of 600 billion yuan. With improved market liquidity, combined with the impact of a low base, and the gradual allocation and use of fiscal funds, the market expects the YoY growth rates of M1 and M2 to continue rising in June. In terms of prices, the market expects the CPI YoY reading in June to hover near zero, while the PPI YoY decline may remain unchanged from the previous month. Specifically, the median forecast by market institutions for the CPI YoY growth rate in June is 0%, and for the PPI YoY growth rate in June is -3.3%.

The People's Bank of China conducted reverse repo operations worth 106.5 billion yuan for 7 days today, with an operating interest rate of 1.40%, unchanged from the previous rate. As 331.5 billion yuan of 7-day reverse repos matured today, a net withdrawal of 225 billion yuan was realized.

►The central parity rate of the RMB against the US dollar in the inter-bank foreign exchange market on July 7 was 7.1506 yuan per US dollar.

US dollar:

As of 15:09, the US dollar index rose 0.23% to close at 97.21. Xinhua News Agency reported that US President Trump posted on social media on the 6th that the US government would release tariff letters or tariff agreements with trading partners starting at 12 noon local time on the 7th. Trump had previously indicated plans to impose tariffs of up to 70% on goods from certain countries starting August 1. CCTV News reported that on the 4th, India notified the World Trade Organization of its plan to impose retaliatory tariffs on the US due to the impact of US tariffs on automobiles and parts on India's exports. (Comprehensive report from Wenhua)

Macro:

Today, data such as Germany's May seasonally adjusted industrial production monthly rate, Germany's May working-day adjusted industrial production annual rate, China's June foreign exchange reserves, the Eurozone's July Sentix investor confidence index, the Eurozone's May retail sales monthly rate, the Eurozone's May retail sales annual rate, the leading indicator for the turning point of the global industrial production cycle in June, and the global supply chain pressure index in June will be released.

Crude oil:

As of 15:09, oil prices in both markets fell simultaneously, with US oil down 0.87% and Brent oil down 0.2%. Previously, the OPEC+ group, composed of the Organization of Petroleum Exporting Countries (OPEC) and its allies, unexpectedly exceeded expected production increases in August, and uncertainties surrounding US tariff policies and their potential impact on global economic growth dampened demand expectations.

OPEC+ oil-producing countries agreed on Saturday to increase production by 548,000 barrels per day in August, further accelerating the pace of production increases. Tim Evans of Evans Energy stated in a report: "Increased production clearly represents fiercer competition for market share and a certain tolerance for the resulting price and revenue declines."

On August 5 local time, partial members of the "OPEC+" alliance comprising OPEC and non-OPEC oil producers held an online meeting, with representatives from Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman ultimately deciding to raise daily crude oil production by 548,000 barrels starting in August. According to the arrangement, OPEC+ had already accumulated production increases totaling 1.918 million barrels per day by August since April this year, leaving only 280,000 barrels per day remaining to fully exit the 2.2 million barrels per day production cut agreement. Additionally, UAE will be permitted to increase production by an extra 300,000 barrels per day.

The RBC Capital Markets analyst team noted in a report that this decision would return nearly 80% of the voluntary 2.2 million barrels per day production cuts from eight OPEC producers to the market. However, actual production growth remains below expectations, with most incremental supply originating from Saudi Arabia, they added. Goldman Sachs analysts project that OPEC+ will announce a final production increase of 550,000 barrels per day for September at its next meeting on August 3. (Wenhua Comprehensive)

SMM Daily Review

►[SMM MHP Daily Review] July 7: Indonesian MHP Prices Rise Slightly

►Manganese Plant Quotations Remain Firm, Spot Prices Rise Slightly [SMM EMM Daily Review]

►Rare Earth Prices Continue Upswing, Metal Market Transactions Under Pressure [SMM Rare Earth Daily Review]

►Silver Price Trend Remains Unclear, Spot Market Transactions Sluggish [SMM Daily Review]