1、 Trend analysis
Copper prices fluctuated and rose unilaterally in July. At the beginning of the month, the copper price was 102195 yuan/ton. At the end of the month, the copper price fell to 106055 yuan/ton, with an overall increase of 3.78% and a year-on-year increase of 34.95%.
The copper spot price in July was higher than the main contract price, indicating strong support for copper prices in the future.
According to LME inventory, LME copper inventory fell significantly in July. As of the end of the month, LME copper inventory was 249850 tons, down 23.09% from the beginning of the month.
Macroscopically, in July, the Federal Reserve kept interest rates unchanged at 3.5% -3.75%, but the wording was hawkish. Three insiders advocated a 25 basis point rate hike, while Walsh clarified that the 2% inflation target remained unchanged and retained the option of subsequent rate hikes. The lower than expected CPI in June in the United States once cooled down expectations of interest rate hikes, but the ongoing escalation of the US Iran conflict in the Middle East and restricted passage through the Strait of Hormuz have pushed up oil prices, fueling concerns about inflationary trading and policy shifts. The annualized quarter on quarter GDP growth in the United States was 1.5%, lower than the previous value of 2.1%. At the interest free meeting in August, the market will search for policy clues from economic data. The US dollar index remained stagnant at a high level near 101 points in July, and the pressure on copper prices from the expectation of the Federal Reserve raising interest rates has weakened. However, oil prices remain high, and the US dollar index may continue to operate at a high level.
Supply side: In June, China’s electrolytic copper production was 1.145 million tons, a decrease of 2.1% compared to the previous month; According to data from the National Bureau of Statistics, the refined copper production in June was 1.334 million tons, with a cumulative output of 7.608 million tons from January to June, an increase of 5.20% year-on-year. In July, China added 300000 tons of crude refining capacity, but the supply of copper mines is difficult to match the expansion speed of smelting. Smelting plants exhibit the characteristics of “many maintenance enterprises, long maintenance periods, and significant impact on production”. Due to the shortage of raw materials and shrinking profits, the production enthusiasm of smelting plants has declined, and a turning point in refined copper production is emerging.
Downstream: July is the traditional seasonal off-season, and the overall operating rate of copper material enterprises is under pressure. As of July 30th, the operating rate of electrolytic copper rods was 60.07%, a decrease of 2.49 percentage points from the previous week; The operating rate of recycled copper rods is only 18.9%. The operating rate of copper cable enterprises recorded 68.96%, a decrease of 1.88 percentage points compared to the previous period. High copper prices have a certain degree of suppression on downstream new orders, and downstream enterprises have slowed down their procurement pace, mainly focusing on replenishing inventory for essential needs, resulting in relatively flat overall demand performance.
There is a clear differentiation in segmented fields. Air conditioning/copper pipes showed weak performance, with household air conditioning production declining by 13.4% year-on-year in July and further weakening in August; Copper foil has shown impressive performance, with a production rate of 91.48% in June. The high prosperity of the AI and lithium battery industries continues to drive demand growth; The power grid/cables maintain resilience, and the power grid brings stable operation of copper rods at over 75%; The production and sales of new energy vehicles maintain high prosperity, and the demand for power batteries is strong. It is predicted that the apparent consumption of refined copper in China will decline by 0.6% in July and August, with the growth rate dropping from 4.4% in the first half of the year to 1.0% in July.

According to the annual price comparison chart, copper prices have fluctuated strongly in August over the past five years.
Comprehensive analysis of influencing factors
Positive factors: ① TC depth negative value hits a historic low, global copper ore increment significantly reduced to 260000 tons, and the shortage of hard minerals at the mining end provides solid bottom support; ② Domestic social inventory has hit a new low this year, with LME cancellations accounting for over 60% of warehouse receipts, and global circulating inventory continues to tighten; ③ The “siphon” effect in the United States has led to even tighter supply in non American regions; ④ AI computing infrastructure continues to increase copper demand, bringing new demand increments; ⑤ The “15th Five Year Plan” for power grid construction is clear, and domestic policies provide support for mid-term demand expectations.
Negative factors: ① In the traditional off-season of July and August, air conditioning production declined significantly, and downstream new orders were weak; ② The US Iran conflict remains unresolved, with fluctuating expectations of interest rate hikes and high macroeconomic uncertainty; ③ The results of the US copper 232 investigation are still pending, and if tariffs are imposed, it will impact the global copper trade pattern; ④ At the end of July, there was a slight accumulation of domestic social inventory, which restricted the upward space of copper prices.
In summary, the “shortage of mining resources and low inventory levels” provide bottom support, but the traditional off-season of consumption and signs of inventory stabilization constrain upward space. There will be no Federal Reserve interest rate meeting in August, but the US Iran conflict continues, oil prices remain high, and expectations of interest rate hikes remain unchanged. Looking ahead to August, copper prices lack strong drivers of significant unilateral fluctuations and are expected to mainly fluctuate in the high range.

As of July 31st, the price of 0 # zinc was 24841 yuan/ton, an increase of 2.05% compared to the zinc price of 24342 yuan/ton on July 1st.
fundamentals
At the macro level, the July Federal Reserve interest rate meeting kept interest rates unchanged, and the weakening of the US dollar index provided pricing support for zinc prices. However, the manufacturing PMI fell to 49.2% in July, and the domestic economic outlook declined, which suppressed expectations for industrial metal demand.
Supply side: The tight mining side is currently the most core bullish factor
The processing fee for zinc concentrate continues to operate at a low level, and the domestic processing fee in July continued to decline compared to June, reflecting that the tight situation on the raw material side has not eased. The dependence on domestic zinc concentrate imports has risen to over 40%, and the sustained low domestic and foreign price ratios have led to import losses expanding to nearly -2000 yuan/ton. The limited inflow of imported ore has further exacerbated the tension in the domestic mining sector. Low processing fees continue to squeeze smelting profits, suppressing the willingness of some smelting enterprises to start production. Domestic refineries are expected to reduce production by the end of the second and third quarters. Due to the expected decrease in smelting production, zinc prices may experience strong fluctuations in the short term.
Demand side: in the traditional off-season of consumption
The operating rate of the galvanizing industry has slightly decreased compared to last week. Downstream acceptance of the current price is limited, and cautious purchasing mentality dominates, with companies only maintaining rigid procurement. The overall inventory of galvanized sheet is high, and there is no significant improvement in terminal orders.
Inventory end
There is a significant differentiation of internal looseness and external tightness: LME zinc inventory continues the pace of destocking, and as of July 31, it has dropped to 99800 tons, providing temporary bottom support for zinc prices; However, the domestic inventory base is relatively high, and there is a huge gap between the internal and external inventory bases, which hinders the transmission path from tight mining to shortage of ingots. Domestic high inventory continues to suppress the upward elasticity of zinc prices.
comprehensive analysis
The zinc price is expected to continue its range oscillation pattern in August, with an expected operating range of 24200-25200 yuan/ton. The support below is solid. The tight mining situation is difficult to reverse in the short term, and the low operation of processing fees will continue to squeeze smelting profits. If the expected production reduction is gradually realized, the supply side will form a substantial tightening. The continuous depletion of LME inventory also provides bottom support for prices. The space above is limited. The high suppression of domestic social inventory, weak demand during the off-season of consumption, and high inventory of galvanized sheet jointly constrain the upward trend of zinc prices.

Aluminum prices rise in July
In July 2026, domestic aluminum ingot prices stopped falling and rebounded. As of July 30, 2026, the average price of domestic aluminum ingots in the East China market was 23643.33 yuan/ton, an increase of 6.17% from the market average price of 22270 yuan/ton on July 1.
The rise in aluminum prices in July is a market driven by the resonance of multiple factors: the oversold repair caused by the significant decline in prices in the early stage has built the bottom of the market, coupled with the marginal improvement of overseas macro liquidity expectations driving prices up, and the rigid and difficult expansion of electrolytic aluminum supply, as well as the overall low inventory operation of the market, forming solid support. At the same time, downstream enterprises are replenishing inventory at low prices to further match spot demand. The overall industry fundamentals continue to tighten and tighten, effectively compressing the space for market correction.
Reasons for the rebound and rise in aluminum prices in July:
1. Macro funding benefits:
US data weakens, expectations of interest rate hikes cool down, and the US dollar falls. In July, the US CPI and non farm payroll data fell short of market expectations, and the market significantly lowered the probability of the Federal Reserve raising interest rates. The real interest rate of US bonds declined, and the US dollar index weakened. Aluminum is priced in US dollars, and Lunan Aluminum is the first to repair its valuation, driving Shanghai Aluminum to strengthen synchronously; Funds have shifted from fixed income to commodities, and the non-ferrous sector has collectively rebounded. Low end aluminum has ushered in a capital allocation market.
In June, there was a deep oversold, with short positions concentrated on replenishing and buying funds entering the market. At the end of June, the disappearance of geopolitical premiums coupled with panic over interest rate hikes led to a concentrated sell-off in the market, with prices severely oversold and short positions accumulating. At the beginning of July, a large number of short positions were liquidated and left the market, and industrial funds were replenishing at a low level to go long, giving rise to the first wave of technical rebound market.
Positive news in the sector stimulates sentiment. Aluminum Corporation of China has launched a plan to increase its holdings by 1-2 billion yuan, coupled with the significant increase in profits reported by major electrolytic aluminum companies in the first half of the year, the valuation of the aluminum sector has been restored, and the upward momentum has been amplified.
2. Fundamental rigid support:
There is no incremental elasticity in domestic supply. Domestic electrolytic aluminum has implemented a permanent production capacity red line of 45 million tons, with a current industry operating rate close to 98% and operating capacity basically at full capacity, with no new capacity released; The proportion of direct supply of aluminum water continues to rise, and the number of circulating aluminum ingots in the market is shrinking; Combined with the expected increase in energy consumption control in various regions during the summer, there is a potential expectation of production reduction in the market, and the supply side continues to be rigid.
Overseas supply has been tight for a long time. The Middle East accounts for about 9% of the world’s electrolytic aluminum production capacity. The slow resumption of production capacity caused by previous geopolitical conflicts has resulted in a restart cycle of several months for smelting facilities, which cannot make up for the supply gap in the short term. Geopolitical risks have repeatedly brought premium support. European electricity prices have remained high for a long time, and local aluminum plants have maintained regular production cuts; The production and ramp up progress of new overseas production capacity is slow, and the overall global supply increment is very limited. LME aluminum inventory has fallen to a nearly four-year low, with Russian aluminum accounting for over 90% of warehouse receipts. Due to the impact of sanctions, circulation is restricted, and real deliverable spot goods are scarce. Foreign spot goods continue to be held at high prices.
3. Abnormal destocking during the off-season and strengthening of spot fundamentals:
Traditionally, July belongs to the off-season for aluminum consumption, but the social inventory of electrolytic aluminum in China continues to steadily decrease, breaking the seasonal accumulation pattern and causing a tight supply of spot goods; The inventory of the previous period fell synchronously, and the spot premium rose, providing solid bottom support to the market and preventing prices from weakening again.

4. Demand resilience exceeds expectations, downstream low-level replenishment to support the bottom:
Traditional building profiles are weakening during the off-season, but the demand for photovoltaics, lightweight new energy vehicles, and ultra-high voltage power grids remains stable, offsetting the weakness of traditional consumption. Aluminum export data remains high, with overseas orders forming external demand to support the bottom; After the sharp drop in aluminum prices, downstream processing plants concentrated on stocking up and purchasing at low prices, and spot buying increased, driving transaction recovery.
Aluminum price forecast for the future:
In August, the electrolytic aluminum market relied on rigid production capacity constraints, phased supply contraction at home and abroad, sustained destocking during the off-season, and macro liquidity marginal easing to form a stable bottom support. Coupled with downstream pre stocking during peak season and hedging against traditional consumption off-season demand for new energy, the overall market maintained a high and strong operation; However, due to the weak performance of terminal spot prices during the off-season, expectations of the National Reserve’s reserve sales regulation, and pressure from previous bullish profit realization, prices are difficult to break out of a continuous unilateral upward trend, showing an overall trend of range oscillation and upward movement. The center of gravity of the operation steadily shifts upward, and the space for correction is very limited.

At the beginning of July, relying on a slight rebound in crude oil and the early entry of PX units into maintenance cycles, PTA fluctuated upwards and continued to rise in the middle and late stages. The escalation of geopolitical conflicts in the Middle East pushed Brent crude oil to break through $100 per barrel; At the same time, domestic and Asian PX major overhauls have been concentrated, and the operating rate of Asian PX has fallen to a low of 56.6% this year; PTA’s own multiple large factories have synchronously stopped production, with the industry’s lowest operating rate dropping to 53% to 57%, and port spot goods continue to be depleted. Although there was a slight correction at the end of the month, it was later stopped and repaired under the support of crude oil and low inventory. As of July 29th, the spot price of PTA in East China was 6017 yuan/ton, an increase of 4.15% from the beginning of the month.
In July, the million ton PX plant underwent centralized maintenance, and the tightening of supply led to a strengthening of PX quotations; Combined with the disturbance of the US Iran conflict, the cost side is supported by favorable factors. In addition, the main PTA facilities were shut down in July, causing monthly production to drop to the lowest point of the year. Social inventory and factory raw material inventory continued to decline. However, the downstream is in the traditional off-season for textiles, with a high temperature off-season in July and a weaving machine operating rate of only about 59%. The finished product inventory of polyester factories is high, and the end users have no intention of actively hoarding goods, only maintaining sporadic purchases for essential needs, dragging down the PTA market. Combined with the expectation of centralized restart of PTA maintenance facilities, a total of 10 million ton PTA facilities are planned to resume production from the end of July to early August. The expectation of loose supply has led to capital taking profits and leaving, causing a rapid drop at the end of the month.
In the future, analysts believe that the short-term PTA maintenance will be completed and the production of facilities will gradually resume, which will slightly relax the supply. However, the pace of PX facility resumption will be slower, and the PX shortage pattern will continue, with costs still providing a bottom line for prices; Combined with the low inventory after the previous destocking, it is difficult for prices to experience a deep decline. With the concentrated replenishment of autumn and winter fabrics in the textile industry starting in late August, the downstream polyester production rate will steadily rise, and the marginal improvement on the demand side will be achieved; Although PTA supply has recovered, the downstream demand growth rate will temporarily exceed the supply growth rate, and the industry will return to a tight balance. The price focus is expected to shift moderately again. We still need to pay attention to the changes in the geopolitical situation of Middle East crude oil, the progress of PX maintenance and restart, and the landing of downstream weaving autumn and winter orders.

Polyethylene showed a pattern of first rising and then fluctuating at a high level in mid to late July. LLDPE (7042) had an average price of 7308 yuan/ton on July 1st and 8198 yuan/ton on July 28th, an increase of 12.18%. LDPE (2426H) had an average price of 9266 yuan/ton on July 1st and 10383 yuan/ton on July 28th, an increase of 12.05%. HDPE (5000S) had an average price of 9837 yuan/ton on July 1st and 10450 yuan/ton on July 28th, an increase of 6.23%.
The situation between the United States and Iran has repeatedly disrupted shipping in the Strait of Hormuz, causing international crude oil to fluctuate and strengthen, providing strong cost support for polyethylene. However, the uncertainty of oil price fluctuations is significant, making it difficult to sustain a unilateral upward trend in prices and limiting the upward space of the market.
The supply side presents a short-term tight and long-term loose pattern. In early July, the maintenance of multiple sets of equipment dragged down the industry’s construction, and the continuous destocking of ports provided market support. In the second half of the year, the maintenance equipment will gradually resume production, and the subsequent increase in supply will be evident. Long term new production capacity investment continues to limit upward space.
July is the traditional off-season for polyethylene demand, which has become the main suppressing factor in the market. The demand for agricultural film has fallen into a gap, and downstream industries such as packaging and injection molding have been affected by high temperatures, resulting in weak production. The profitability of downstream products is poor, and the procurement maintains a on-demand procurement model, making it difficult for the price increase of raw materials to be smoothly transmitted downwards.
Short term polyethylene is unlikely to rise sharply unilaterally, with a high probability of wide fluctuations at high levels. If crude oil does not further rise significantly, driven by the lack of centralized stocking orders, there is limited room for further upward movement.