Metals Mostly Trended Down; SHFE Aluminum, SHFE Nickel, and Stainless Steel Led Declines; Lithium Carbonate Rose Over 2%; Gold, Silver, Platinum, and Palladium All Fell [SMM Midday Commentary]

SMM August 14 News:

Metals market:

As of the midday close, most domestic base metals moved lower. SHFE copper fell 0.2%, SHFE aluminum fell 1.2%. SHFE lead fell 0.81%. SHFE zinc fell 0.51%. SHFE tin rose 0.17%. SHFE nickel fell 1.12%.

In addition, the most-traded cast aluminum futures contract fell 1.43%, and the most-traded alumina contract edged lower. The most-traded lithium carbonate contract rose 2.23%. The most-traded silicon metal contract rose 1.63%. The most-traded polysilicon futures contract rose 1.27%.

Ferrous metals mostly rose. Iron ore rose 0.42%, rebar rose 0.43%, and hot-rolled coil rose 0.71%. Stainless steel fell 1.97%. Coking coal and coke: the most-traded coking coal contract rose 1.25%, while the most-traded coke contract fell 0.29%.

On the overseas base metals front, as of 11:39, LME base metals fell across the board. LME copper fell 0.32%, LME aluminum fell 0.23%, and LME lead fell 0.37%. LME zinc fell 0.45%. LME tin fell 0.24%. LME nickel fell 0.3%.

In precious metals, as of 11:39, COMEX gold fell 0.9% and COMEX silver fell 1.16%. Domestic precious metals: SHFE gold fell 1.94%, and the most-traded SHFE silver contract fell 2.36%.

In addition, as of the midday close, the most-traded platinum futures contract fell 2.21%, and the most-traded palladium futures contract fell 3.33%.

As of the midday close, the most-traded European container shipping futures contract fell 1.3% to 1,593.5 points.

As of 11:39 on August 14, midday quotes for selected futures:

Spot and Fundamentals

Platinum: On the spot side, mainstream platinum quotations are at a discount of 3-2 yuan/g against the PT2610 contract, accompanied by the clearing of some deeply discounted cargoes and the narrowing of import price spreads...

Macro Front

China:

[PBOC reverse repo operations achieved a net injection of 348 billion yuan on the day and 250.5 billion yuan this week] The PBOC conducted 349 billion yuan of overnight reverse repos and 1 trillion yuan of outright reverse repos today. As 1 billion yuan of 7-day reverse repos and 1 trillion yuan of outright reverse repos matured today, the PBOC made a net injection of 348 billion yuan on the day. This week, the PBOC conducted 18 billion yuan of 7-day reverse repos, 349 billion yuan of overnight reverse repos and 1 trillion yuan of outright reverse repos. As 116.5 billion yuan of 7-day reverse repos and 1 trillion yuan of outright reverse repos matured this week, the PBOC made a net injection of 250.5 billion yuan for the week. (Jin10 Data App)

US dollar:

As of 11:39, the US dollar index fell 0.07% to 99.89. US July PPI data showed inflation was cooling, and along with falling oil prices, markets further added to bets that the US Fed will not hike rates next month. (Wallstreetcn)

US July PPI data came in below expectations, helped by further declines in energy and food costs. The PPI report followed consumer price data—which showed inflation was slowing—further confirming signs that the energy shock from the early days of the war was continuing to fade. However, renewed Middle East tensions raised concerns about stubborn inflation. US Fed officials will also receive additional consumer and producer price data and another labour market report before their next policy decision in mid-September. For now, policymakers need to weigh persistent inflation pressures against the recent slowdown in hiring. Several PPI components are also closely watched by the US Fed because they feed into its preferred inflation measure—the personal consumption expenditures price index. These components released mixed signals. Portfolio management fees posted their largest increase in more than a year, hospital outpatient care costs also rose sharply, while physician services and hospital inpatient care prices were mild. (Jin10 Data App)

According to CME FedWatch: at the US Fed's September meeting, the probabilities are no change (65.2%) and a cumulative 25bp hike (34.8%). At the US Fed's October meeting, they are no change (50.1%), a cumulative 25bp hike (41.8%), and a cumulative 50bp hike (8.1%). (Jin10 Data App)

Other currencies:

Speculative investors are increasingly betting that the Reserve Bank of Australia will raise rates again in November, as inflation remains above the central bank’s target. Swap market pricing currently implies around a 45% probability that the RBA will raise rates by 25bp by November, up from 38% before Tuesday’s RBA rate decision. The November 2026 interbank cash rate futures traded on the Australian Securities Exchange derivatives market saw trading activity jump on the day to the highest level in more than three months, signalling increased speculative interest. These bets suggest that the market increasingly doubts that the RBA's tightening cycle is over. Although policymakers kept rates unchanged this week, with inflation still above the RBA's 2%-3% target range, traders will continue to monitor upcoming price and labour market data for clues on whether another rate hike is needed this year. (Jin10 Data App)

On the data front:

Releases due today include China's July total electricity consumption YoY (TBD), China's July total electricity consumption (TBD), US July retail sales MoM, US August preliminary 1-year inflation expectations, US June business inventories MoM, US August preliminary University of Michigan consumer sentiment index, France July CPI MoM final, Eurozone Q2 GDP YoY revised, Eurozone Q2 seasonally adjusted employment QoQ final, Eurozone June seasonally adjusted trade balance, and Canada June wholesale sales MoM, among other data.

In addition, China will open a new round of refined oil product price adjustment window (TBD), and the National Energy Administration will release total electricity consumption data around the 15th of each month (TBD).

Crude oil:

As of 11:39, both crude oil benchmarks edged up, with WTI up 0.09% and Brent up 0.06%.

IEA and OPEC successively lowered demand expectations, while Iran-related tensions, though intense, did not escalate further, limiting oil price gains. The refined product market was under more severe pressure, as the US diesel crack spread approached $100 per barrel, near the peak levels seen in the early stages of the US-Iran conflict in March this year. US Energy Secretary Chris Wright said on Tuesday that crude oil flows through the Strait of Hormuz averaged about 9 million barrels per day over the past week, higher than most industry estimates, leaving considerable uncertainty over the size of the actual supply gap. Francisco Blanch, head of global research at Bank of America, said in a Bloomberg Television interview, “Unless the geopolitical situation improves, it is hard for me to see oil prices pulling back quickly. If inventories are depleted, price fluctuations will inevitably amplify sharply, and demand will be forced to contract.” (Wallstreetcn)

Spot Market at a Glance:

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