The pace of copper inventory drawdown has surpassed market expectations, signaling that the supply-demand tightness narrative is gradually materializing. According to data from the Shanghai Futures Exchange, copper inventories across various locations dropped significantly on July 20th, totaling 35,091 tonnes, a decrease of 4,561 tonnes from the previous day, representing a decline of approximately 11.5%.
Hongyuan Futures noted that tight supply-demand expectations for global copper ore and sulfur are disrupting production and smelting, while domestic social inventories of electrolytic copper continue to fall. However, concerns about potential U.S. inflation resurgence have heightened expectations for a Federal Reserve rate hike in September, which may lead to volatile price movements for Shanghai copper futures at elevated levels.
Dongxing Securities pointed out that although domestic social inventories of electrolytic copper in early March 2026 were significantly higher than the 2022-2025 period, the pace of inventory drawdown after the March copper price drop has exceeded market expectations. As of July 10th, domestic copper social inventories have fallen from a peak of 577,200 tonnes to 165,000 tonnes, a reduction of 71%. The rapid destocking reflects the gradually materializing logic of supply-demand tightness, indicating that the trading rationale for the copper sector is shifting from expectations to actual fundamentals.
Hong Kong-listed copper-related stocks include: JIANGXI COPPER (HKEX: 00358), CHINFMINING (HKEX: 01258), MMG (HKEX: 01208), CMOC (HKEX: 03993), and ZIJIN MINING (HKEX: 02899).
Market Overview
The three major U.S. stock indices collectively rose overnight, with large-cap technology stocks broadly gaining. At the close, the Dow Jones Industrial Average increased by 385.38 points, or 0.74%, to 52,224.64. The S&P 500 index rose by 65.92 points, or 0.89%, to 7,509.2. The Nasdaq Composite Index advanced by 329.14 points, or 1.29%, to 25,837.21.
Large-cap tech stocks were mostly higher, with Intel and AMD gaining over 8%, ARM rising more than 7%, TSMC up over 5%, Oracle increasing over 4%, SpaceX climbing more than 3%, Tesla gaining over 2%, and Nvidia rising nearly 2%. The memory chip sector staged a strong rebound, with SanDisk surging over 14% and SK Hynix up over 13%. The optical communications sector rose across the board, with Coherent gaining over 11% and Lumentum up over 9%.
Most popular U.S.-listed Chinese stocks declined, with the Nasdaq Golden Dragon China Index falling 0.68%. Hong Kong's Hang Seng Index ADRs also fell, indicating a potential opening drop of 95.12 points, or 0.38%, to 25,037.17.
In commodities, the front-month WTI crude oil futures contract on the New York Mercantile Exchange rose by $2.06, or 2.50%, to $84.54 per barrel. The front-month COMEX gold futures contract increased by $66.30, or 1.65%, to $4,082.2 per ounce.
Key Developments to Watch
InnoLight Technology has set the maximum offer price for its Hong Kong IPO at HK$1,010 per share. According to its Hong Kong exchange filing, the company plans to issue 54.5 million H shares (subject to the over-allotment option), with the final offer price not exceeding HK$1,010 per share. Pricing is expected on July 28th, with trading on the Hong Kong exchange commencing on July 30th.
CHINA RAILWAY (HKEX: 00390) announced that it has recently won bids for several major projects, with a total contract value of approximately RMB 56.043 billion. This amount represents about 5.14% of the company's operating revenue for the 2025 fiscal year under Chinese accounting standards.
Mindray Medical issued a positive profit alert, expecting its adjusted net profit for the first half of the year to be no less than RMB 70 million, representing a year-on-year increase of at least 104.7%. The expected growth is primarily attributed to revenue growth driven by broader recognition of the group's products among its customer base, leading to sustained growth in end-user demand; further expansion of the group's hospital coverage during the reporting period; and rapid revenue growth in its three core business segments (ischemic stroke, hemorrhagic stroke, and vascular closure). The growth in adjusted net profit is mainly due to an increased contribution from higher-margin products leading to an improved overall gross margin compared to the same period last year, and enhanced operational efficiency with effective control over sales, distribution, and administrative expenses.
Modern Dairy announced that it has received valid acceptances for approximately 4.182 billion shares of China Shengmu under the offer. Taking into account (i) the 2.62 billion China Shengmu shares that Modern Dairy Holdings and its concert parties will hold upon completion of the share purchase agreements, and (ii) the accepted shares, Modern Dairy Holdings and its concert parties will hold a total of approximately 6.803 billion China Shengmu shares, representing about 81.17% of the total issued shares of China Shengmu as of the date of the joint announcement. Based on the current level of acceptances, China Shengmu's public float may fail to comply with the requirements of Listing Rule 13.32B.
Biotheus announced a collaboration with Qilu to advance the development, production, and commercialization of the new drug candidate TY-9591, with the latter making a strategic investment of RMB 400 million. The company disclosed that on July 21, 2026 (after trading hours), it entered into a license and collaboration agreement as well as a supply and commercialization agreement with Qilu or its designated affiliate to cooperate on the development, production of the active pharmaceutical ingredient (TY-9591 API), and commercialization of TY-9591 in China, aiming to advance the development, production, and commercialization of the innovative drug. Under the license and collaboration agreement, the company will receive a total upfront payment of approximately RMB 700 million, including about RMB 400 million from the subscription agreement, and up to a cumulative RMB 2.06 billion in milestone payments related to regulatory approvals and indication expansions for TY-9591.
Wuhan Youji Holdings issued a positive profit alert, expecting its attributable profit for the interim period to be between approximately RMB 87 million and RMB 90 million, representing a year-on-year increase of about 124.81% to 132.56%. The expected increase is mainly attributable to significant price increases for several of the group's products and the group's control over costs and expenses.
AustAsia Group announced its intention to acquire all shares of a company engaged in dairy product manufacturing. The consideration includes a base purchase price of RMB 320 million and an adjustment amount, with a cap of RMB 350 million. Following a pre-completion restructuring, the target company will operate the target business previously run by the seller. Upon completion of the transaction, the target company will become a wholly-owned subsidiary, and the financial performance, assets, and liabilities of the target group will be consolidated into the group's financial statements.
Company in Focus
Feisixin Technology issued a positive profit alert, expecting to achieve a net profit of approximately RMB 437.4 million to RMB 464.7 million for the first half of the year, representing a year-on-year increase of about 60.1% to 70.1%. The fluctuation in the group's performance is primarily attributed to the following reasons: (a) The sustained release of global demand for AI computing clusters and high-speed data center construction is driving an upturn in the enterprise-level high-speed network infrastructure industry. The group continues to deepen its focus on the network communication hardware and integrated solution sector, persisting with product technology iteration and solution architecture optimization, which has driven continuous expansion in the scale of its core business orders and achieved steady revenue growth; (b) The business structure continues to optimize, with strong market demand for high-value-added, high-performance solutions tailored for enterprise data centers and AI high-performance computing scenarios. Revenue growth for this segment is expected to be around 45.4%, significantly higher than the group's overall revenue growth rate. Furthermore, the revenue contribution of this business to the group's total revenue has been increasing year by year, consistently driving the expansion of the overall revenue scale; and (c) As the group's operating revenue scale continues to expand, the full release of economies of scale at the operational level has diluted the fixed costs per unit of revenue. The group's overall cost structure continues to optimize, with economies of scale becoming prominent, effectively widening the profit margin.
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