SMM September 28 news:
In the metals market:
As of the midday close, base metals in the domestic market fell across the board. SHFE copper fell 0.72%. SHFE aluminum fell 0.68%. SHFE lead fell 0.77%. SHFE zinc fell 0.97%. SHFE tin fell 1.25%, and SHFE nickel fell 1.18%.
In addition, the most-traded foundry aluminum futures contract fell 0.51%, while the most-traded alumina contract rose 0.33%. The most-traded lithium carbonate contract fell 4.15%. The most-traded silicon metal contract fell 0.58%. The most-traded polysilicon futures contract rose 1.23%.
Ferrous metals mostly fell. Iron ore fell 0.91%, while rebar and hot-rolled coil both fell within 0.4%. Stainless steel rose 0.36%. In coking coal and coke: the most-traded coking coal contract fell 2.64%, and the most-traded coke contract fell 0.59%.
In overseas base metals, as of 11:41, LME metals fell across the board. LME copper fell 1.01%, and LME aluminum fell 0.92%. LME lead fell 0.57%, and LME zinc fell 0.86%. LME tin fell 1.72%. LME nickel fell 0.36%.
In precious metals, as of 11:41, COMEX gold fell 2.12%, and COMEX silver fell 3.74%. In domestic precious metals: SHFE gold fell 2.07%, and the most-traded SHFE silver contract fell 4.09%.
In addition, as of the midday close, the most-traded platinum futures contract fell 1.72%, and the most-traded palladium futures contract fell 2.95%.
As of the midday close, the most-traded European shipping route containerized freight index futures contract rose 5.11% to 2,888 points.
As of 11:41 on September 28, some futures midday quotes:
Spot and fundamentals
Zinc: Today, mainstream transaction prices for #0 zinc were concentrated at 26,355-26,650 yuan/mt, with no transactions for Shuangyan. Mainstream transaction prices for #1 zinc were at 26,285-26,580 yuan/mt. In the morning session, cargoes with invoices dated next month were quoted at a premium of 60-70 yuan/mt against the SMM average price, with no quotes against the contract yet...
Macro front
Domestic:
[National Bureau of Statistics: Profits of industrial enterprises above designated size rose 15.7% from January to August, with the electronics industry providing a notable boost to profit growth] NBS data showed that from January to August, driven by steady industrial production growth and widening industrial product price increases, operating revenue of industrial enterprises above designated size rose 6.6% YoY, boosting profits of industrial enterprises above designated size by 15.7% YoY, with cumulative growth maintaining double-digit rates this year. By sector, mining profits rose 35.1%, manufacturing profits rose 17.4%, and electricity, heat, gas, and water production and supply profits fell 12.0%. In August, affected by the high base from the same period last year, profit growth of industrial enterprises above designated size pulled back somewhat, up 4.2% YoY. In terms of gross profit calculated by deducting operating costs from operating revenue, gross profit of industrial enterprises above designated size grew 7.5%, 1.9 percentage points faster than the previous month.
[PBOC reverse repo operations achieved a net withdrawal of 160.3 billion yuan on the day]The PBOC conducted 139 billion yuan of 7-day reverse repo operations, 661 billion yuan of overnight reverse repo operations, and 300 billion yuan of 14-day reverse repo operations today. With 600 billion yuan of 1-year medium-term lending facility (MLF) and 660.3 billion yuan of 7-day reverse repos maturing today, a net withdrawal of 160.3 billion yuan was achieved on the day. (Jin10 Data APP)
US dollar:
As of 11:41, the US dollar index rose 0.08% to 101.11.
According to CME "FedWatch": The probability of the Fed keeping rates unchanged at 3.75%-4.00% at the October meeting is 35.2%, and the probability of a 25bp hike is 64.8%. The probability of the Fed keeping rates unchanged at 3.75%-4.00% by December is 7.6%, the probability of a cumulative 25bp hike is 41.6%, and the probability of a cumulative 50bp hike is 50.9%.
US Treasury Secretary Bessent said Fed policymakers should remain "open-minded" on interest rates. He believes that productivity gains from AI and deregulation will help curb US inflation. Bessent said Trump-appointed Fed Chairman Warsh is already "fully aware" that the US economy is achieving growth results similar to the 1990s internet boom, or even "more significant." Bessent noted that then-Fed Chairman Greenspan "let the economy run" at the time, and "the Fed Board and policymakers should keep an open mind because this involves deregulation factors." Bessent also said: "Core inflation has been very stable, and in fact has declined somewhat over the past few months."
Cleveland Fed President Beth Hammack said the recent sharp rise in US Treasury yields was not driven by the market losing confidence in inflation pulling back, but mainly by rising real rates, a strong economic outlook, fiscal policy, and competition for investor funds. She said inflation expectations remain "basically well anchored," but inflation persistently above the Fed's 2% target still imposes real costs and may affect economic planning and wage pressures. Hammack stated that the biggest inflation risk currently is the formation of an "inflation mentality," where the public begins to believe high inflation will persist for a long time. She noted that inflation has remained above target for several consecutive years, and the US Fed needs to ensure monetary policy stays restrictive to drive inflation back down to the 2% target. In the bond market, Hammack said rising yields partly reflect market repricing of US Fed policy and government fiscal policy, while investment demand in AI and the tech sector is also competing with the bond market for investment capital. She also said the current US fiscal path is unsustainable.
Apollo Global Management chief economist Torsten Slok warned that the inflation threat from record diesel prices could exceed the US Fed's current expectations, as fuel costs are feeding through into core consumer price indices. Slok said diesel-related transportation costs have a different impact from gasoline prices. Because transporting goods is critical to business activity, from retail supply chains to data center construction, demand is highly inelastic, and price increases will ultimately be passed on to enterprises and consumers. As the US Fed formulates monetary policy following its first rate hike since 2023, the impact of rising diesel prices is particularly critical. Inflation remains well above the central bank's 2% target. So-called core inflation measures strip out energy factors, and Slok believes the US Fed cannot simply treat rising diesel prices as a temporary phenomenon, because they will affect core inflation categories through spillover effects. (Jinshi Data APP)
Data:
Today will bring US September Dallas Fed business activity index and other data. Also watch for: Bank of England Deputy Governor Ramsden speaking on quantitative tightening; US Fed Governor Bowman speaking; ECB President Lagarde testifying at the quarterly dialogue of the European Parliament's Committee on Economic and Monetary Affairs.
Crude oil:
As of 11:41, both oil benchmarks were higher, with WTI up 1.19% and Brent up 1.07%.
As Iran's seven-day proposal to reopen the Strait of Hormuz was rejected by Trump, threats of further delays in reopening this key waterway intensified, with WTI crude and Brent crude opening up more than 1% at one point. Traders will continue to monitor actual flows through the Strait of Hormuz. Trump said "record" amounts of oil were extracted from the strait on Saturday night. Regional tensions remain elevated. (Jinshi Data APP)
US President Trump said he has spoken with Ukrainian President Zelensky, asking him to "take it easy" on attacking refineries, and blamed the diesel shortage on Ukrainian attacks on Russian refineries. The US is "very seriously" considering a ban on diesel exports, a measure it may implement, though the move could cause gasoline prices to edge up. (Jin10 Data APP)
Spot Market Overview:
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![Weakening coking coal and coke prices drag down the ferrous sector; steel prices may continue to move sideways in the short term [SMM Steel Industry Chain Weekly Report]](https://imgqn.smm.cn/usercenter/DAXnr20251217171746.jpg)
![Arrivals of imported supply combined with limited pre-holiday demand keep spot premiums expected to remain under pressure [SMM Shanghai Spot Copper]](https://imgqn.smm.cn/usercenter/tXxfd20251217171713.jpg)
![SHFE aluminum falls, spot trading sentiment continues to rise during the day [SMM Aluminum Spot Midday Review]](https://imgqn.smm.cn/usercenter/yOYEC20251217171653.jpg)
