SMM News, July 7:
Metals market:
As of the midday close, base metals in the domestic market mostly fell, with SHFE copper down 0.12% and SHFE aluminum up 0.48%. SHFE lead fell 0.41%. SHFE zinc rose 1.06%. SHFE tin fell 0.26%. SHFE nickel fell 0.02%.
In addition, the most-traded casting aluminum futures contract rose 0.42%, while the most-traded alumina contract fell 0.44%. The most-traded lithium carbonate contract fell 2.22%. The most-traded silicon metal contract fell 0.24%. The most-traded polysilicon futures contract edged down.
Ferrous metals were mostly in the red. Iron ore rose 0.27%, rebar was flat at 3,074 yuan/mt, and hot-rolled coil edged down. Stainless steel rose 1.83%. For coking coal and coke: the most-traded coking coal contract fell 0.93%, and the most-traded coke contract fell 0.38%.
Overseas base metals: as of 11:42, LME metals mostly fell. LME copper fell 0.32%, LME aluminum rose 0.22%, and LME lead fell 0.19%. LME zinc rose 0.25%, LME tin fell 0.92%, and LME nickel fell 0.79%.
Precious metals: as of 11:42, COMEX gold fell 0.57% and COMEX silver fell 1.48%. Domestic precious metals: SHFE gold fell 0.83%, and the most-traded SHFE silver contract fell 2.3%.
In addition, as of the midday close, the most-traded platinum futures contract fell 1.72%, and the most-traded palladium futures contract fell 0.98%.
As of the midday close, the most-traded European shipping container futures contract extended the previous trading day’s decline, falling a further 5.03% to 2,446.5 points.
As of 11:42 on July 7, midday moves in some futures:
Spot and Fundamentals
Aluminum: Today, futures continued to rise, while spot in South China was under pressure and weaker. Yesterday, the spot-futures price spread briefly strengthened sharply, coupled with the absolute price rising for four consecutive sessions to a higher level. With both elevated, most suppliers actively sold to cash in, and price cuts became increasingly common; some chose to hold prices firm but with little effect. Mainstream quotations were at a discount of -10 to 0 yuan/mt, and circulation loosened...
Macro Front
China:
[World Bank Keeps Its 2026 China GDP Growth Forecast Unchanged] On July 7, the World Bank released the latest China Economic Update in Beijing. The report said that despite facing strong supply, weak demand, and shocks to global energy supplies, China’s economic growth overall maintained resilience, and China’s economic growth in 2026 is expected to be 4.4%. Compared with the previous update released in December last year, the growth forecast remained unchanged. (Xinhua News Agency)
[PBOC Reverse Repo Operations Resulted in a Net Drain of 59.5 billion yuan on the Day] Today, the PBOC conducted 10 billion yuan of 7-day reverse repo operations. As 69.5 billion yuan of 7-day reverse repos matured today, it resulted in a net drain of 59.5 billion yuan on the day. (Jinshi Data APP)
[John Lee: Hong Kong’s Gold Central Clearing System Begins Trial Operation Today; New RMB-Denominated Gold Futures Contracts Under Consideration] On July 7, John Lee announced that Hong Kong’s Gold Central Clearing System began trial operation today and that the development of new RMB-denominated gold futures contracts is under consideration. Hong Kong Exchanges and Clearing Limited will sign a memorandum of understanding with the PBOC on cross-border RMB payment and clearing. The Hong Kong gold market saw a critical upgrade at the infrastructure level, with the gold clearing and settlement system officially launched on July 7. To support the new system and simultaneously invigorate the local gold futures market, HKEX announced a one-year fee waiver for gold futures, effective from July 7. (Wall Street CN) 》Click for details
On the US dollar front:
As of 11:42, the US dollar index rose 0.03% to 100.89. Fed Governor Waller stated that the US Fed would not deliberately maintain low interest rates to help the US government finance its fiscal deficit. Waller noted that the US labor market had stabilized, while inflation had re-accelerated, meaning the risk from inflation now exceeds the risk to employment—a complete reversal from policy considerations a year ago. He pointed out that while he supported an interest rate cut last year due to labor market weakness, the policy focus should now shift back toward curbing inflation. The market’s attention has turned to the June CPI, due on July 14, the last critical inflation data before the Fed’s July 28-29 meeting. Although international oil prices have pulled back to around $70/barrel, Fed officials still expect inflation to be significantly above the 2% target at year-end. According to the CME "FedWatch" tool: The probability of the US Fed maintaining the current interest rate in July is 74.3%, while the probability of a cumulative 25-basis-point rate hike is 25.7%. For September, the probability of the rate remaining unchanged is 42.9%, the probability of a cumulative 25-basis-point hike is 46.2%, and the probability of a cumulative 50-basis-point hike is 10.8%. (Jinshi Data APP)
The US ISM Services PMI report showed that economic activity in the services sector continued to expand in June. The Services PMI registered 54, marking the 24th consecutive month in expansion territory. Miller, Chair of the ISM Services Business Survey Committee, stated that the June Services PMI of 54 was down 0.5 from May’s 54.5. The Business Activity Index remained in expansion territory, falling 2.3 from May’s 57.7 to 55.4. The Prices Index dropped to 67.7 in June, a decrease of 3.6 from May’s 71.3, falling below 70 for the first time since February. The index has been above 60 for 19 consecutive months, with a 12-month average of 68. Diesel, gasoline, oil and related commodities were again cited as the items with the largest price increases in June, but some other respondents reported price declines. This may be due to differing contract terms for these commodities across companies. Some respondents said the prices paid for gasoline and diesel fell, but this was not a universal phenomenon. We expect this situation to persist for several months as rising oil prices filter through the supply chain, but assuming the recent progress in oil shipments through the Strait of Hormuz continues, there should be some relief by autumn. (Jin10 Data APP)
In other currencies:
Japanese Minister of Economic and Fiscal Policy Kiuchi Minoru said that media reports suggesting Prime Minister Takaichi Sanae’s government is trying to guide interest rates lower are completely inaccurate. Kiuchi told a regular press conference in Tokyo on Tuesday, “The report that the government will encourage low interest rates as part of fiscal expansionary policy is groundless. If our intentions were not accurately conveyed, we will work harder to deepen understanding.” Kiuchi’s remarks come as financial markets are closely watching how Takaichi will implement her economic strategy through massive investment without aggravating the already heavy debt burden. Kiuchi attended the Bank of Japan’s policy board meeting last month as a government representative, where policymakers raised the benchmark interest rate to 1%, the highest in 31 years. (Jin10 Data APP)
On the data front:
Today will see the release of Germany’s seasonally adjusted industrial output month-on-month for May, the UK’s Halifax seasonally adjusted house price index month-on-month for June, France’s May trade balance, the US weekly change in ADP employment for the week ending June 20, the US May trade balance, China’s June foreign exchange reserves, and other data. In addition, the focus will also be on: Turkey hosting the NATO Summit through July 8; the Office of the United States Trade Representative holding a public hearing on a proposal to impose additional tariffs on 60 economies worldwide; and Samsung Electronics releasing its Q2 earnings guidance.
On the crude oil front:
As of 11:42, both oil benchmarks were higher, with WTI up 0.54% and Brent up 0.61%. The market focused on geopolitical developments and changes in the supply-demand outlook.
The number of vessels transiting the Strait of Hormuz continued to rebound. A reported 160 ships passed through the strait from Monday to Saturday last week, but the overall level remains well below the pre-war norm. (Wall Street CN)
Amid a surge in global supply that intensified competition for buyers, Saudi Arabia cut its official selling prices for key crude grades to Asian clients for August by the largest margin in at least 26 years. According to a price list, Saudi Aramco lowered the price of Arab Light crude for Asian buyers in August by $11 per barrel to a discount of $1.5 per barrel against the regional benchmark, a larger cut than the $8 per barrel expected in a survey of analysts. Middle East crude oil prices have recently fallen. After resuming exports from the Ras Tanura port in the Persian Gulf, Saudi Aramco once raised crude oil shipments to about 90% of pre-war levels. Pre-war, Ras Tanura was the main loading port for Saudi crude oil exports. Due to the war blocking the Strait of Hormuz, Saudi Aramco diverted most of its crude oil flow to the Yanbu port on the Red Sea. Previously, the OPEC+ producer group agreed to continue moderate production increases in August. Now, as shipping resumes in the Strait of Hormuz, Gulf oil producers such as Saudi Arabia, Iraq, and Kuwait will be able to leverage their higher quotas. (Jinshi Data APP)
Spot Market Overview:
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