Metals mostly fell, LME copper rose nearly 1%, coking coal and coke dropped over 2%, SHFE silver gained for two consecutive days [Overnight Market]

SMM July 21 News:

Metals Market:

Overnight, base metals on the domestic market mostly fell. SHFE copper rose 0.69%, SHFE aluminum fell 0.78%, SHFE lead edged up 0.06%, SHFE zinc fell 0.16%, and SHFE tin fell 0.21%. SHFE nickel fell 0.35%. In addition, the most-traded alumina futures contract fell 0.8%, while the most-traded cast aluminum contract rose 0.63%.

Overnight, ferrous metals mostly fell. Stainless steel edged up, iron ore fell 1.12%, rebar fell 0.77%, and hot-rolled coil fell 0.7%. Coking coal and coke: the most-traded coking coal futures contract fell 2.73%, and the most-traded coke futures contract fell 2.23%.

Overnight, on the overseas market, LME base metals nearly all moved lower. LME copper rose 0.86%. LME aluminum fell 0.96%, LME lead fell 0.53%, LME zinc fell 0.37%, LME tin fell 0.18%, and LME nickel fell 0.79%.

Overnight, Precious Metals : COMEX gold fell 0.17%, and COMEX silver rose 0.6%. Overnight, the most-traded SHFE gold futures contract edged up 0.05%, and the most-traded SHFE silver futures contract continued its upward momentum from the previous trading day, rising 1.13%.

As of 7:03 AM on July 21, overnight closing prices:

Macro Front

China:

[Zheng Shanjie chairs private enterprise symposium: accelerate cultivation of new consumption growth points, promote smooth transition between old and new growth drivers] On July 20, Zheng Shanjie, head of the National Development and Reform Commission (NDRC), chaired a private enterprise symposium to communicate with five enterprises—Sanquan Food, HYC (Hua Xing Yuan Chuang), Yeahmobi, Galbot, and Feishang Technology—covering sectors such as food processing, industrial automation test equipment manufacturing, marketing services, humanoid robot R&D, and IoT services. The discussion focused on the H1 economic situation and H2 economic work. The NDRC will thoroughly implement the decisions and deployments of the CPC Central Committee and the State Council, leverage the combined effects of existing and incremental policies, accelerate the cultivation of new consumption growth points, continue promoting the implementation of major projects under the 15th Five-Year Plan, promote a smooth transition between old and new growth drivers, accelerate scenario cultivation and openness, further build a high-quality data supply system, and push forward with the construction of a unified national market, continuously strengthening the endogenous driving forces of economic development and stimulating market vitality.

[National teleconference on mid-year work progress for consumer goods trade-ins held in Beijing] On July 17, the Ministry of Commerce held a national teleconference on mid-year work progress for consumer goods trade-ins, summarizing the progress and results of policy implementation in H1 and deploying key tasks for the next step. Assistant Minister of Commerce Yuan Xiaoming attended and delivered a speech, and commerce departments from Hebei, Henan, Hubei, and Sichuan made exchange speeches. The meeting noted that since 2026, the Ministry of Commerce has earnestly implemented the decisions and deployments of the CPC Central Committee and the State Council, working with various regions and relevant departments to solidly and orderly promote the implementation of the consumer goods trade-in policy, continuously expanding its coverage to benefit over 150 million person-times, effectively driving consumption upgrading and promoting resource recycling, achieving multiple policy effects. The meeting emphasized that all regions and departments should further enhance their political stance, establish and practice a correct view of performance, and meticulously implement the trade-in policy; further intensify efforts, strengthen inter-departmental coordination, widely publicize the policy, and broaden its coverage; and continue to enrich offline consumption scenarios, optimize the process for subsidy review and disbursement, making it easier for the public to participate in and benefit from the policy, thereby enhancing their sense of gain. (Ministry of Commerce website)

[Just now, Wu Qing speaks out: fully maintain stable market operations] On the morning of July 21, Wu Qing, Party Secretary and Chairman of the China Securities Regulatory Commission, conducted a survey at a securities business department in Beijing and chaired an investor symposium, engaging in face-to-face exchanges with eight representatives of various investors, including large, medium, and small retail investors, to solicit opinions and suggestions on promoting stable and healthy development of the capital market.

[China Coal Transportation and Marketing Association: Key monitored coal enterprises saw decreases in both ten-day production and sales in early July] The China Coal Transportation and Marketing Association released its ten-day coal market dispatch report. In early July, due to stricter safety supervision, mine maintenance, and rainfall in producing areas, overall coal supply contracted somewhat, with key monitored coal enterprises seeing decreases in both ten-day production and sales. Looking at demand by sector: In the power sector, increased rainfall boosted hydropower generation, and combined with increased new energy output, thermal power generation and power plant coal consumption pulled back. The steel industry showed clear off-season characteristics, with weak demand; pig iron production and coal consumption by key monitored coke and steel enterprises were below levels seen in the same period last year.

US Dollar:

Overnight, the US dollar index continued its upward momentum from the previous two trading days, rising another 0.21% to 100.97. Recurring US-Iran tensions drove wild swings in oil prices, which intensified market concerns about inflation and raised expectations for US Fed interest rate hikes. Fed’s Hammack stated that inflation is too high and broad-based, and persistently high inflation is a greater concern. According to CME "FedWatch": The probability of the Fed keeping rates unchanged in July is 84.5%, while the probability of a cumulative 25-basis-point rate hike is 15.5%. For September, the probability of the Fed keeping rates unchanged is 36%, the probability of a cumulative 25-basis-point hike is 55.1%, and the probability of a cumulative 50-basis-point hike is 8.9%. (Jinshi Data APP)

The spread between 10-year and 2-year US Treasury yields will narrow further in the coming months, and rising tensions in the Strait of Hormuz could lead to a full inversion of the yield curve, according to Capital Economics. "One reason for this difference is that short-term real rate expectations have risen more than long-term real rate expectations, likely reflecting strong economic data," Capital Economics also expects that the 2-year and 10-year yield curve will flatten further as investors price in additional rate hikes. "We forecast the Fed will hike rates by 75 basis points over the next year, compared to the 40 basis points currently priced in by markets," they said. (Jinshi Data APP)

Macro Front:

Today, data releases include Switzerland's June trade balance, the UK's May ILO unemployment rate (3-month), UK June public sector net borrowing, UK June unemployment rate, UK June claimant count change, Germany's July ZEW economic sentiment index, the Eurozone's July ZEW economic sentiment index, and the US weekly change in ADP employment for the week ending July 4, among others.

Crude Oil:

Overnight, both oil futures contracts continued their upward momentum from the previous trading day, with WTI oil rising 0.78% and Brent oil rising 0.81%.

The oil market experienced significant swings on Monday. The ninth round of bombing by Iran pushed oil prices initially higher, but subsequent diplomatic statements regarding a 10-day ceasefire negotiation caused prices to pull back. According to Xinhua News Agency, Trump hinted that the US military would launch a tough retaliation against Iran. However, the Trump administration has not completely ruled out seeking a diplomatic solution. US Secretary of State Rubio stated in an interview on the evening of the 19th that the Trump administration "remains open to diplomatic solutions." According to Xinhua, a senior Iranian official said that mediators in the US-Iran talks have proposed an initiative to Iran aimed at de-escalating the current situation, suggesting a 10-day ceasefire to seek the resumption of the memorandum of understanding reached between the two nations last month. However, a Wallstreetcn article pointed out that shipping in the Strait of Hormuz had nearly stalled, with a Greek shipowner reporting that two oil tankers had been attacked. Data from the monitoring website Hormuz Strait Monitor shows that transits on July 20 were around 12 vessels per day, a plunge of over 89% from the pre-conflict daily average of 110 vessels, severely restricting the shipment of crude oil and LNG. (Wallstreetcn)

Additionally, according to Bloomberg, as the US continues to strike Iran, vessels in the Strait of Hormuz are being targeted by Iran, bringing traffic in this vital waterway to a near standstill on Monday. Ship tracking data showed a Marshall Islands-flagged bulk carrier was one of the few vessels apparently attempting to transit the strait, switching off its transponder as it moved from the Persian Gulf toward Omani waters near the strait. An LPG carrier flagged as part of the "dark fleet" involved in Iranian exports also appeared to head toward the strait. Another bulk carrier registered in the Marshall Islands began emitting signals from the Gulf of Oman after previously indicating it was in the Persian Gulf on Sunday morning, suggesting it had transited the Strait of Hormuz with its transponder switched off. (Bloomberg)