SMM May 25 News:
Metals market:
As of the midday close, domestic base metals mostly rose. SHFE copper gained 1.06%. SHFE aluminum fell 0.47%. SHFE lead rose 0.06%, SHFE zinc rose 0.34%. SHFE tin gained 1.22%. SHFE nickel rose 0.23%.
In addition, the most-traded foundry aluminum futures fell 0.54%, the most-traded alumina contract rose 0.37%. The most-traded lithium carbonate contract rose 0.58%. The most-traded silicon metal contract rose 1.07%. The most-traded polysilicon futures contract rose 0.48%.
Ferrous metals all rose. Iron ore gained 0.25%, rebar rose 1.23%, hot-rolled coil rose 1.03%, and stainless steel edged up. Coking coal and coke: the most-traded coking coal contract and the most-traded coke contract hit the daily limit up with gains of 7.97% and 7.99%, respectively.
Overseas base metals:The London Metal Exchange (LME) was closed on May 25 for the UK bank holiday and will resume trading on May 26.
Precious metals: as of 11:38, COMEX gold rose 0.86% and COMEX silver gained 2.44%. Domestic precious metals: the most-traded SHFE gold contract rose 0.64% and the most-traded SHFE silver contract gained 2.27%.
In addition, as of the midday close, the most-traded platinum futures fell 0.2% and the most-traded palladium futures rose 0.01%.
As of the midday close, the most-traded Europe containerized freight index contract fell 3.36% to 2,901 points.
As of 11:38 on May 25, midday futures quotes for selected contracts:
Spot and Fundamentals
Copper:Today, #1 copper cathode spot prices against the front-month contract in North China were reported at an average discount of 360 yuan/mt to a discount of 280 yuan/mt, with the average price down 10 yuan/mt from the previous trading day. The average transaction price was 105,230 yuan/mt, up 1,035 yuan/mt from the previous trading day.
Macro Front
China:
[PBOC net injected 257 billion yuan via reverse repos today]The PBOC conducted 258 billion yuan of 7-day reverse repos in the open market at an operation rate of 1.40%, unchanged from the previous day. A total of 1 billion yuan of reverse repos matured today.
US dollar:
As of 11:38, the US dollar index fell 0.3% to 99.03. Kevin Hassett, chief economic adviser to US President Trump, said he believed the eventual decline in oil prices would create room for the US Fed to cut interest rates. "We again expect energy prices to plunge once a deal is reached," Hassett said. "When that happens, the Fed will have plenty of room to do the right thing and lower rates." He stressed that he respected the Fed's independence and praised Kevin Warsh, who was sworn in as Fed Chairman last Friday. While surging US fuel prices caused by Iran's closure of the Strait of Hormuz posed a growing political risk for Trump and his Republicans ahead of November's midterm elections, Hassett argued that accelerating inflation was primarily driven by energy prices. "If you look at the recent data reports, energy prices are absolutely concerning, but core prices have barely moved at all," he said. "I think once we see energy prices pull back, you could actually see negative inflation due to the decline in energy prices." (Jin10 Data)
According to CME FedWatch: the probability of the US Fed keeping rates unchanged through June was 97.3%, with a 2.7% probability of a cumulative 25-basis-point hike. The probability of rates remaining unchanged through July was 84.8%, with a 14.8% probability of a cumulative 25-basis-point hike and a 0.3% probability of a cumulative 50-basis-point hike. (Jin10 Data)
Data:
China's January-April year-to-date installed power generation capacity and the year-on-year rate of China's January-April year-to-date installed power generation capacity are scheduled for release today. In addition, attention should be paid to the maturity of 500 billion yuan of 1-year medium-term lending facility (MLF) and 1 billion yuan of 7-day reverse repos today.
Additionally, it is worth noting that:Due to the Memorial Day holiday, US stock markets were closed on Monday, May 25. CME Group's precious metals and WTI crude oil futures trading ended early at 02:30 Beijing time on May 26, while US equity and Treasury futures trading ended early at 01:00 Beijing time on May 26. Due to the Buddha's Birthday holiday, Hong Kong stock markets were closed on Monday, May 25, with southbound and northbound trading suspended. South Korean stock markets were also closed on the same day. In addition, due to the Spring Bank Holiday, UK stock markets were closed on Monday, May 25. ICE Brent crude oil futures trading ended early at 01:30 Beijing time on May 26. Investors are advised to take note.(Jin10 Data)
Overseas exchange closure schedule (all in Beijing time):
Crude oil:
As of 11:38, both benchmarks declined, with WTI crude falling 5.92% and Brent crude dropping 5.32%. Rising expectations of a US-Iran deal boosted global risk sentiment, putting oil prices under pressure. The immediate catalyst for the oil price decline was signs of improvement in actual passage through the Strait of Hormuz. According to the Islamic Republic News Agency citing a statement from the Islamic Revolutionary Guard Corps (IRGC), 33 vessels — including tankers, container ships, and other commercial vessels — passed through the Strait of Hormuz within 24 hours on Sunday after receiving authorization from the IRGC Navy. (Wallstreetcn)
The Washington Post reported on May 24 that the US and Iran had agreed on a framework for a memorandum of understanding (MOU) that, once signed, would fully restore shipping through the Strait of Hormuz within 30 days. Citing an anonymous senior US government official, the report said the US and Iran had developed an MOU "framework" that included a 60-day ceasefire extension to allow both sides to reach a "final agreement" to permanently end the Iran conflict, during which the Strait of Hormuz would be demined and reopened. The official said the MOU included a "commitment" that Iran would not possess nuclear weapons. Over the next two months, the US and Iran would discuss the "mechanism" for implementing this commitment. However, neither side signed any agreement on May 24. (Xinhua)
Trump said on social media on Saturday that a US-Iran deal was largely agreed upon, including the opening of the Strait of Hormuz, and told US negotiators there was no rush to finalize the deal. However, on Sunday he said the deal was "not fully finalized." US Secretary of State Marco Rubio had previously said there could be "some good news" on the Hormuz issue in the coming hours. Iran remained cautious. Iran's Tasnim News Agency warned that the draft agreement could still fall apart due to US obstacles on several key terms, including Iran's demand for the unfreezing of assets. (Wallstreetcn)
Spot market overview:
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Midday spot reviews for other metals will be updated shortly. Please refresh to check~
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