Metals Show Mixed Performance, SHFE Silver Gains for Sixth Straight Day, Coking Coal and Coke Rise More Than 1%, Market Awaits Release of Key US Inflation Data [Overnight Quotes]

SMM News, August 12:

Metals Market:

Overnight, base metals on both domestic and overseas markets showed mixed performance. SHFE lead closed flat at 15,860 yuan/mt, LME aluminum rose 0.82%, SHFE aluminum gained 0.58%, and other metals saw slight fluctuations in their % changes. The most-traded alumina contract rose 0.93%, and cast aluminum ticked up 0.42%.

In the ferrous metals sector overnight, all contracts gained except stainless steel. Stainless steel fell 0.07%, iron ore rose 0.76%, rebar and hot-rolled coil both edged up within 0.5%, while coking coal and coke gained 1.64% and 1.01%, respectively.

In precious metals, COMEX gold rose 0.18% overnight, while COMEX silver fell 0.63%. On the domestic front, SHFE gold dropped 0.28% and SHFE silver slid 0.42%.

Overnight closing prices as of 6:38 am, August 12:

Macro Front

China:

[Zhengzhou Adjusts Housing Provident Fund Contribution Base] On August 11, the Zhengzhou Housing Provident Fund Management Center issued a notice on adjusting the 2026 housing provident fund contribution base. The notice specified that Zhengzhou's 2026 contribution base would be adjusted starting July 1, 2026. Both employee and employer contribution ratios must be no lower than 5% of an employee's average monthly salary from the previous year, and no higher than 12%. Employers may independently determine the ratio within the 5%-12% range based on their actual circumstances. (From Wall Street CN APP)

[Weihai, Shandong Optimizes and Adjusts Housing Provident Fund Usage Policies] The Weihai Housing Provident Fund Management Center in Shandong Province has optimized and adjusted its policies. The maximum loan amount for a single depositor was raised from 600,000 to 800,000 yuan, and for dual depositors from 1 million to 1.2 million yuan. After stacking multiple preferential policies, the ceiling reaches up to 1.6 million yuan for a single depositor and 2 million yuan for dual depositors. (From Wall Street CN APP)

[Shanghai Aims to Expand Software and IT Services Industry to 4 Trillion Yuan by 2030] Shanghai issued the "15th Five-Year Plan for the Development of Shanghai's Software and Information Services Industry." By 2030, the city aims to build the industry into a "power source" for economic growth, a "main arena" for AI-enabled applications, and a "bridgehead" for global competition, with the following key targets: total industry scale is expected to reach 4 trillion yuan, and industry added value to exceed 1.1 trillion yuan. Industry quality and efficiency will further improve, with a batch of breakthrough achievements in key areas such as artificial intelligence and critical software. The number of enterprises with revenue exceeding 10 billion yuan is projected to rise to 35, fostering a group of high-quality enterprises with industrial ecosystem dominance and emerging firms with potential leading influence. The industry structure will be further optimized, with the proportion of high-end software, digital content, and digital-intelligent services increasing, and the formation of several internationally competitive industrial bases and regional clusters. (From Wall Street CN APP)

US Dollar:

As of the overnight close, the US dollar index rose 0.01% to 99.82. Business Insider analyst William Edward noted two possible scenarios following the Wednesday CPI release: ① If inflation runs hot, stocks may fall. This could be the worst-case market scenario: stagflation. Investors had hoped the weak July jobs data would provide the US Fed with the rationale to cut interest rates. Hence, stocks surged sharply on Friday—bad news on the jobs front was actually good news for markets. However, given Warsh's outspokenness on curbing inflation, a hot CPI report could prompt him to raise interest rates even amid a soft employment outlook. In any case, it is hard to imagine stocks continuing to rally if inflation comes in higher than expected. Unlike employment data, bad news on CPI is truly bad news. ② If inflation eases, stocks could soar. While inflation is unlikely to drop below the Fed's 2% target, investors would likely welcome any reading below 3%, seeing it as a sign that CPI growth is slowing down, allowing the Fed to cut interest rates comfortably—or at least hold steady. Even the latter case alone could unwind the rate-hike expectations priced in for later this year, letting investors breathe a little easier. (Jin10 Data APP)

Wall Street Journal reporter Nick Timiraos noted that the market will focus heavily on the MoM change in the July inflation data due Wednesday, as a growing number of FOMC members say the inflation readings over the coming months will determine whether their forecast of "inflation falling back to 2% over the next two years" remains achievable without further rate hikes. However, new Fed Chair Warsh has recently dismissed this framework that ties policy-sensitive forecast revisions closely to high-frequency data. He previously stated he sees little practical value in the Fed's current "data-dependent" approach. Nick also mentioned that part of the working group established by Warsh seems aimed at helping build a framework to replace the old one. But until a new framework is clearly defined, the old one still appears to be operating. (Jin10 Data APP)

According to CME "Fed Watch": the probability of the US Fed holding rates unchanged in September stands at 52.0%, while the probability of a cumulative 25bp rate hike is 48.0%. For October, the probability of holding rates unchanged is 38.7%, a cumulative 25bp hike 49.0%, and a cumulative 50bp hike 12.2%. (Jin10 Data APP)

Bank of America analysts believe that if the US CPI report surprises to the downside, the US dollar could see a relatively stronger reaction, as it would "essentially rule out" a Fed rate hike in September and challenge current market pricing. Analysts including Alex Cohen, Stephen Juneau, and Meghan Swiber wrote in a Tuesday note: "Following the clearly soft June CPI data, we expect the July CPI to be more in line with recent trends, with headline CPI up 0.1% MoM and core CPI up 0.2% MoM." (From Wall Street CN APP)

Macro:

Today, data including the US July unadjusted CPI YoY, US July seasonally adjusted CPI MoM, US July seasonally adjusted core CPI MoM, US July unadjusted core CPI YoY, and Germany July final CPI MoM will be released. In addition, Tencent will hold its Q2 earnings conference call, MSCI will announce its August index adjustment notice, EIA will publish its monthly Short-Term Energy Outlook, IEA will release its monthly crude oil market report, and OPEC will release its monthly crude oil market report (exact release time TBD, generally around 18-21 Beijing time).

Crude Oil:

Overnight, oil prices on both sides of the Atlantic rose, with WTI up 1.34% and Brent up 1.8%. Doubts over the prospect of a potential peace deal between the US and Iran fueled concerns that Middle East supply disruptions will persist.

The US now expects that the about 600,000 bbl/day of oil supply disruptions caused by the US-Iran war will last until the end of next year, as the conflict continues to impede oil shipments through the critical Strait of Hormuz. According to the EIA's Short-Term Energy Outlook, an average of about 4.9 million bbl/day of oil were transported through the Strait of Hormuz in Q2 this year. That compares with a daily average of 21.6 million barrels in Q4 2025, before the US and Israel attacked Iran. As the conflict enters its sixth month, global consumers again face the risk of higher fuel prices and elevated inflation. The EIA raised its 2026 gasoline and diesel price forecasts by 3.7% and 5.4%, respectively, and lifted its 2027 retail gasoline price estimate by 6.5% from a month ago. The agency also estimated that the scale of Middle East production outages fell to around 5.5 million bbl/day in July, down from 7.5 million bbl/day in June. Outages are expected to widen again in Q3 to an average of 6.6 million bbl/day. The report assumes that recent threats against vessels carrying Saudi crude through the Bab el-Mandeb strait have not caused additional supply disruptions. If this assumption holds, the agency expects that most production and trade activities may not return to pre-war levels until early 2027. (Wall Street CN)

The EIA released its Short-Term Energy Outlook (STEO): it forecasts Brent crude prices at $87/bbl in 2026 (previously $82/bbl) and $69/bbl in 2027 (previously $65/bbl). US oil production is projected at 13.8 million bbl/day in 2026 (previously 13.8 million bbl/day) and 14.2 million bbl/day in 2027 (previously 14 million bbl/day). The roughly 600,000 bbl/day of crude oil supply disruptions in the Middle East are expected to persist through the end of 2027. US LNG exports are forecast at 17.4 billion cubic feet per day in 2026 (previously 17.4 billion cubic feet per day) and 18.6 billion cubic feet per day in 2027 (previously 18.6 billion cubic feet per day). The next STEO will be released on September 9. (Wall Street CN)

API data showed that last week, US API crude inventories rose by 9.072 million barrels, following a 2.69 million-barrel increase the prior week. API Cushing crude inventories rose by 157.1 barrels, after a 2.358 million-barrel increase previously. API gasoline inventories fell by 1.531 million barrels (compared with a 156,000-barrel build the prior week), while distillate inventories decreased by 596,000 barrels (versus a draw of 118,000 barrels the week before).