Metals show mixed performance; lithium carbonate fell over 4%, coking coal and coke, SHFE gold and silver led declines, iron ore rose more than 1% [SMM Midday Commentary]

SMM, September 7:

In the metals market:

As of the midday close, base metals on the domestic market showed mixed performance. SHFE copper was flat at 109,110 yuan/mt, while SHFE aluminum edged up 0.06%. SHFE lead rose 0.74%. SHFE zinc gained 0.97%. SHFE tin and SHFE nickel both edged lower, with declines within 0.1%.

In addition, the most-traded cast aluminum futures contract rose 0.06%, while the most-traded alumina contract fell 0.69%. The most-traded lithium carbonate contract dropped 4.04%. The most-traded silicon metal contract fell 1.36%. The most-traded polysilicon futures contract declined 0.98%.

Ferrous metals mostly fell. Iron ore rose 1.45%, rebar fell 0.32%, and hot-rolled coil dropped 0.41%. Stainless steel gained 0.4%. In coking coal and coke: the most-traded coking coal contract fell 3.23%, and the most-traded coke contract dropped 2.81%.

In overseas base metals, as of 11:43, LME metals showed mixed performance. LME copper fell 0.06%, and LME aluminum dropped 0.15%. LME lead rose 0.37%. LME zinc gained 0.2%. LME tin edged up 0.09%. LME nickel fell 0.33%.

In precious metals, as of 11:43, COMEX gold fell 0.51%, and COMEX silver dropped 0.38%. In domestic precious metals: SHFE gold fell 1.75%, and the most-traded SHFE silver contract dropped 1.61%.

In addition, as of the midday close, the most-traded platinum futures contract fell 0.18%, and the most-traded palladium futures contract dropped 1.31%.

As of the midday close, the most-traded European shipping futures contract rose 2.37% to 1,900.5 points.

As of 11:43 on September 7, midday quotes for some futures contracts:

Spot and fundamentals

Copper: Today in Guangdong, spot #1 copper cathode against the front-month contract: high-quality copper was quoted at a premium of 280 yuan/mt, down 60 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 200 yuan/mt, down 40 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 140 yuan/mt, down 40 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 109,955 yuan/mt, down 65 yuan/mt from the previous trading day, and the average price of SX-EW copper was 109,855 yuan/mt, down 55 yuan/mt from the previous trading day. In the spot market: Guangdong inventory finally increased after the weekend, mainly due to higher arrivals...

Macro front

Domestic:

[PBOC reverse repo nets a withdrawal of 4.5 billion yuan today] The PBOC conducted 500 million yuan of 7-day reverse repo operations and 500 billion yuan of outright reverse repo operations today. With 5 billion yuan of 7-day reverse repos and 500 billion yuan of outright reverse repos maturing today, the day saw a net withdrawal of 4.5 billion yuan. (Jin10 Data APP)

[Chengdu: By 2028, the number of national and provincial-level specialized and sophisticated enterprises that produce new and unique products will increase significantly]The Implementation Opinions of the General Office of the CPC Chengdu Municipal Committee and the General Office of the Chengdu Municipal People's Government on Optimizing the Science and Technology Innovation Ecosystem were released. The development goals are to make simultaneous efforts in advancing technological innovation and the commercialization of scientific and technological achievements, focus on the key links of entity cultivation, platform empowerment, achievement transformation, and factor support, strengthen organized innovation, carry out systematic matchmaking, promote high-quality transformation, and build an innovation ecosystem featuring "active entities, well-developed platforms, smooth transformation, concentrated factors, and inclusive institutions," forming a pattern in which technological innovation leads industrial innovation and development. By 2028, the number of national and provincial-level specialized and sophisticated enterprises that produce new and unique products will increase significantly, R&D spending intensity will reach 4.3%, and the number of high-value invention patents per 10,000 people will reach 30. (Chengdu Release)

US dollar:

As of 11:43, the US dollar index rose 0.04% to 99.19. According to CME "FedWatch": The probability that the Fed will keep interest rates unchanged through September is 41.7%, and the probability of a cumulative 25 basis point hike is 58.3%. The probability that the Fed will keep interest rates unchanged through October is 30.1%, the probability of a cumulative 25 basis point hike is 53.7%, and the probability of a cumulative 50 basis point hike is 16.1%.

CITIC Securities said in a research report that the increase in US non-farm payrolls in August 2026 was significantly higher than expected, with the leisure and hospitality and healthcare sectors contributing notably, and local government education positions rebounding. In terms of private sector structure, goods-producing sectors added jobs for the sixth consecutive month, possibly reflecting demand from US data center construction. The decline in employment in the financial and information technology sectors reflects the impact of AI. The unemployment rate remained at 4.1% in August, or 4.14% to two decimal places, and the labor force participation rate rebounded from 61.4% to 61.6%. The continued decline in the participation rate for the 45-54 age group still needs to be monitored. The strong August non-farm payrolls data and the dovish remarks by Fed Governor Waller offset each other, and the market again priced in a roughly 60% probability of a rate hike in September. Next, the focus will be on the August CPI to be released on September 11.

Data:

Today will see the release of Germany's July seasonally adjusted industrial output month-on-month, the UK's August Halifax seasonally adjusted house price index month-on-month, Switzerland's August seasonally adjusted unemployment rate, the Eurozone's September Sentix investor confidence index, the Eurozone's final Q2 GDP year-on-year, the Eurozone's final Q2 seasonally adjusted employment change quarter-on-quarter, and China's August foreign exchange reserves.

It should be noted that on Monday, September 7, US markets were closed for Labor Day, including the New York Stock Exchange and the Toronto Stock Exchange in Canada. Trading in precious metals and US crude oil futures contracts under the CME Group ended early at 02:30 Beijing time on September 8 due to Labor Day, while stock index futures trading ended early at 01:00 Beijing time on September 8. Trading in Brent crude oil futures contracts under the Intercontinental Exchange ended early at 01:30 Beijing time on September 8 due to Labor Day.

Crude oil:

As of 11:43, oil prices rose in both markets, with WTI up 0.64% and Brent up 0.57%. Persistent US-Iran tensions heightened concerns over supply disruptions.

Goldman Sachs said oil prices could rebound to $120 per barrel if attacks on shipping in the Middle East increase, and recommended investors gain exposure through long positions in natural gas and diesel. Struyven, co-head of global commodities research at Goldman Sachs, said: "Events over the past few days do indicate that the risk of widening and intensifying shipping disruptions cannot be ignored." Struyven said that in addition to the upside scenario of $120 per barrel, Goldman Sachs also set a downside target of $80 per barrel if exports from the region return to normal. "While we think there is significant upside room for crude oil prices, we do recommend investors hedge geopolitical risks through long positions in European natural gas and refined products. Supply shocks in these markets are larger than in the crude oil market." (Jin10 Data APP)

Spot market overview:

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