SMM July 29 News:
Metals market,
as of midday close, domestic base metals showed mixed performance. SHFE copper fell 0.27%, SHFE aluminum gained 0.88%. SHFE lead rose 0.38%. SHFE zinc declined 0.28%. SHFE tin advanced 0.44%. SHFE nickel dropped 0.3%.
Additionally, cast aluminum the most-traded contract futures rose 0.61%, alumina the most-traded contract gained 0.19%. Lithium carbonate the most-traded contract advanced 1.91%. Silicon metal the most-traded contract fell 0.73%. Polysilicon the most-traded contract futures continued the decline from the previous trading day to fall further 1.16%.
Ferrous metals mostly fell. Iron ore dropped 0.61%, rebar edged down, hot-rolled coil rose 0.15%. Stainless steel declined 0.17%. In coking coal and coke: coking coal the most-traded contract fell 0.12%, coke the most-traded contract gained 0.85%.
In overseas base metals, as of 11:38, LME metals nearly all rose. LME copper fell 0.13%, LME aluminum gained 0.19%. LME lead rose 0.24%. LME zinc edged up, LME tin advanced 1.12%. LME nickel increased 0.65%.
In precious metals, as of 11:38, COMEX gold fell 0.34%, COMEX silver rose 0.31%. In domestic precious metals: SHFE gold declined 0.8%, SHFE silver the most-traded contract dropped 0.83%.
Additionally, as of midday close, platinum the most-traded contract futures fell 0.78%, palladium the most-traded contract futures declined 0.94%.
As of midday close, the most-traded European container freight futures contract rose 2.63%, to 2,870 points.
As of 11:38 on July 29, some futures midday market conditions:
Spot and Fundamentals
Zinc: Today, #0 zinc mainstream transaction prices concentrated at 24,685-24,790 yuan/mt, Shuangyan mainstream traded at 24,815-24,910 yuan/mt, and #1 zinc mainstream traded at 24,615-24,720 yuan/mt. Early in the session, the market was at a premium of 30 yuan/mt against the SMM average price for cargoes with invoices dated next month, and no quotes were available against the contract……
Macro Front
Domestic:
[China's Total Social Logistics Value in H1 Exceeds 180 Trillion Yuan] The China Federation of Logistics and Purchasing released today (29th) the logistics operation data for H1 this year. In H1, the scale of logistics demand continued to expand, with prominent features of structural optimization and momentum shift. In H1 this year, China's total social logistics value reached 181.1 trillion yuan, up 5.1% YoY, 0.4 percentage points higher than the GDP growth rate in the same period. The supporting and leading role of logistics demand in national economic growth continues to strengthen. On a quarterly basis, growth was 6.2% in Q1 and 4.4% in Q2, showing an overall trend of stable growth with incremental advances.（CCTV News)
[CO2 emissions per unit of GDP to drop by 17% during the 15th Five-Year Plan period] The Ministry of Ecology and Environment, together with 18 departments including the National Development and Reform Commission (NDRC), jointly released the National Climate Change 15th Five-Year Plan. According to the Plan, by 2030, CO2 emissions per unit of GDP will be reduced by 17% from 2025 levels, and CO2 emissions per unit of product in industries covered by the national carbon emissions trading market will drop by around 3% compared with 2025. A nationwide voluntary greenhouse gas emission reduction trading market that is transparent and credible, with unified methodologies, broad participation, and aligned with international practices will be established. A product carbon footprint management system will be basically in place. Monitoring and control of non-CO2 greenhouse gases will be strengthened, forming a carbon dioxide equivalent (CO2e) emission reduction capacity of 30 million tonnes. Climate change adaptation work systems will become more complete, phased progress will be made in building a climate-resilient society, and awareness and capacity to address climate change will continue to strengthen. China’s influence, guiding power, shaping power, and moral appeal in global climate governance will be significantly enhanced. (from Wall Street News APP)
The PBOC today conducted 206.5 billion yuan of 7-day reverse repo operations at an interest rate of 1.40%. On the same day, 253 billion yuan of reverse repos matured. The PBOC also conducted 600 billion yuan of overnight reverse repo operations.
US Dollar:
As of 11:38 am, the US dollar index fell 0.11 to 101.3. Market attention returned to the Strait of Hormuz, as the risk of energy supply disruptions complicated the inflation outlook, coinciding with the Fed’s interest rate decision due this Wednesday, further increasing uncertainty. Markets currently price in about a 70% probability that the Fed will hold rates steady this Wednesday, with the current target range at 3.5% to 3.75%. JPMorgan analysts believe the probability of a rate hike "may be lower than the roughly 30% currently priced in by markets," citing that "while inflation is elevated, there is no risk of it surging further." The bank assigns a 50% probability to a "hawkish hold," believing the Fed will remain vigilant while noting the downward signal on inflation from recent energy price movements. (from Wall Street News APP)
BNP Paribas Markets 360 team expects the Fed to keep rates unchanged, "although the possibility of an unexpected rate hike cannot be completely ruled out." The bank’s base case is for one rate hike in December, but "there is a significant risk that policymakers will strengthen the inflation language in the FOMC statement, which would be tantamount to hinting that a September rate hike is on the table." Wording on price stability will be the focus of discussion at this meeting, while the statement will reflect a willingness to act when necessary. However, even if the statement lacks such wording, a September rate hike cannot be ruled out; conversely, if it includes such wording, that does not necessarily guarantee a rate hike in September. At the press conference, Warsh is expected to broadly follow the June pattern: a brief opening statement, concise answers, and very limited forward guidance. Assuming the statement changes little from June, we believe the opening remarks will closely track Warsh's congressional testimony, and his comments on inflation and labor market data, the economic outlook, and his commitment to restoring price stability will also be consistent with that testimony. (Jin10 Data APP)
Gary Pzegeo, Chief Investment Officer at CIBC Private Wealth US, said that Warsh's hawkish stance on price stability, along with a batch of weak data (CPI and nonfarm payrolls), could be enough to keep the Fed on hold. This is consistent with market sentiment. "Interest rate futures are pointing to a hold at the July meeting," Pzegeo said, "but expectations for a September rate hike have been rising. In the current geopolitical environment, September is still a long way off, and the Fed will have more data to process between now and September 16." (Jin10 Data APP)
According to CME "FedWatch": The probability that the Fed keeps rates unchanged in July is 69.5%, and the probability of a cumulative 25bp rate hike is 30.5%. The probability that the Fed keeps rates unchanged through September is 23.4%, the probability of a cumulative 25bp hike is 56.4%, and the probability of a cumulative 50bp hike is 20.2%. (Jin10 Data APP)
On the data front:
Today, Australia's June unadjusted CPI y/y, Switzerland's July ZEW investor sentiment index, UK June mortgage approvals, and other data will be released. In addition, SK Hynix will release its Q2 earnings.
Crude oil:
As of 11:38, oil prices on both exchanges surged, with WTI up 3.92% and Brent up 3.55%. Renewed geopolitical tensions in the Middle East fueled a sharp rebound in oil prices. The immediate trigger for this rebound was a statement released by US Central Command. Ryan McKay, Senior Commodity Strategist at TD Securities, said, "We remain cautious on any potential deal that does not specifically address the Strait of Hormuz issue, as disagreements over control of the strait have previously led to aggressive actions by Iran and caused earlier memorandums of understanding to fall apart prematurely." (From Wall Street Insights APP)
Spot market at a glance:
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![Month-End Covering Demand Provides Support, Center of Shanghai Spot Copper Premiums Moves Slightly Higher [SMM Shanghai Spot Copper]](https://imgqn.smm.cn/usercenter/mqFqG20251217171710.jpg)
![Guangdong Zinc: Downstream just-in-time procurement, spot premiums maintained a fluctuating trend [SMM Midday Review]](https://imgqn.smm.cn/usercenter/EMwoI20251217171753.jpg)
![Strong macro wait-and-see sentiment intertwined with mediocre spot trades, the most-traded SHFE tin contract moves sideways [SMM Tin Midday Review].](https://imgqn.smm.cn/usercenter/cUElw20251217171752.jpg)
