【SHFE Copper(68370, -100.00, -0.15%)】

Spot Price: The spot price of electrolytic copper in Shanghai is at a premium of 220-280 yuan/ton to the current month's contract, with an average price of 250 yuan/ton, down 35 yuan/ton from the previous day. The transaction price for flat copper is 69740~69940 yuan/ton, and the transaction price for premium copper is 69770~69960 yuan/ton. Trading in copper prices rebounded but was suppressed, and spot premiums were slightly pressured.

SHFE copper showed weak fluctuations during Friday's night session. The US July non-farm payrolls report was slightly worse than expected, and the State Council's executive meeting again mentioned the optimization of real estate policies. Market expectations for future government efforts in real estate have been continuously increasing.

Fundamentals: In July, SMM's China electrolytic copper output was 925,900 tons, a month-on-month increase of 8,000 tons (0.9%), and a year-on-year increase of 10.2%, exceeding the expected 902,100 tons by 23,800 tons. Cumulative output from January to July was 6,485,100 tons, a year-on-year increase of 639,300 tons (10.94%).

Demand: Last week, the operating rate of refined copper rods was 64.92%, a week-on-week increase of 5.19 percentage points; the operating rate of recycled copper rods was 47.08%, a week-on-week increase of 6.88 percentage points.

Inventory: As of August 4, SMM's copper inventory in major domestic regions decreased by 1.03 million tons to 89,300 tons compared to Monday, and decreased by 0.099 million tons compared to Friday, marking four consecutive weeks of weekly destocking.

In summary, China's current supply and demand of electrolytic copper are both strong, and copper prices have surged due to macroeconomic stimulus. It is not advisable to chase higher prices at present.

【SHFE Aluminum(18515, 20.00, 0.11%)】

Spot Price: The price in Foshan is 18540~18580 yuan/ton, up 60 yuan/ton from the previous day; the price in Wuxi is 18520~18540 yuan/ton, up 80 yuan/ton from the previous day; the price in Hangzhou is 18520~18540 yuan/ton, up 80 yuan/ton from the previous day; the price in Chongqing is 18510~18530 yuan/ton, up 40 yuan/ton from the previous day; the price in Shenyang is 18470~18490 yuan/ton, up 80 yuan/ton from the previous day; the price in Tianjin is 18540~18560 yuan/ton, up 50 yuan/ton from the previous day.

SHFE aluminum showed weak fluctuations during Friday's night session. Fundamentals: Since the end of June, the increase in hydropower generation in Yunnan has been significant, and the province has entered the flood season, with relatively optimistic expectations for future hydropower supply. So far, some companies have basically completed their restart work, and the total restart scale in the province has reached 1.3 million tons, of which more than 1.04 million tons have been restarted since July. Domestic electrolytic aluminum operating capacity is approaching a high of 42 million tons.

Demand: Due to sluggish sales of aluminum rods and weak processing fees in June, the operating rate of primary processed aluminum products such as aluminum rods has declined, and the aluminum water ratio of domestic electrolytic aluminum companies has decreased. In June, the aluminum water ratio of the domestic electrolytic aluminum industry decreased by 3.5 percentage points month-on-month to about 72%.

In the week of July 28, the operating rate of aluminum profiles was 61.9%, up 0.2 percentage points week-on-week; the operating rate of aluminum plates and strips was 76%, up 1.6 percentage points week-on-week; the operating rate of aluminum wires and cables was 58.6%, up 0.8 percentage points week-on-week.

Inventory: As of August 3, SMM's statistics show that domestic electrolytic aluminum ingot social inventory was 525,000 tons, down 16,000 tons from Monday and 11,000 tons from Thursday of last week, and down 153,000 tons from August 2022, continuing to be at a low level for the same period in the past five years.

In summary, the resumption of production on the supply side has suppressed aluminum prices, and it is expected that aluminum prices will remain volatile in the future.

【SHFE Zinc】

Spot Price: The price of Shanghai #0 zinc ingots is 21040~21140 yuan/ton, up 110 yuan/ton from the previous day; the price of Guangdong #0 zinc ingots is 21020~21120 yuan/ton, up 100 yuan/ton from the previous day; the price of Tianjin #0 zinc ingots is 21050~21150 yuan/ton, up 120 yuan/ton from the previous day.

SHFE zinc showed weak fluctuations during Friday's night session. Fundamentals: In July 2023, SMM's China refined zinc output was 551,100 tons, a month-on-month decrease of 14,000 tons (0.26%), and a year-on-year increase of 15.79%, slightly exceeding expectations.

Cumulative refined zinc output from January to July reached 3.777 million tons, a year-on-year increase of 9.59%. Demand: End-user consumption remains sluggish, infrastructure and real estate recovery is less than expected, and there is a risk of further decline after entering the off-season.

Inventory: As of August 4, SMM's total zinc inventory in seven regions was 126,900 tons, an increase of 4,400 tons compared to Friday (July 28) and an increase of 4,400 tons compared to Monday (July 31).

In summary, short-term macroeconomic benefits continue to stimulatezinc prices(20755, -120.00, -0.57%) upward movement, pay attention to the upper pressure level of 22000.