Base Metals Fell Broadly, SHFE Nickel and Stainless Steel Dropped Over 2%, Alumina and LME Tin Fell Over 1%, SHFE Silver Rose Nearly 3% [SMM Midday Review]

SMM May 8:

Metals market:

As of the midday close, base metals on the domestic market mostly fell. SHFE copper dropped 0.21%. SHFE aluminum edged down. SHFE lead fell 0.86%, SHFE zinc rose 0.39%. SHFE tin gained 0.65%. SHFE nickel dropped 2.46%.

In addition, the most-traded casting aluminum futures fell 0.2%, the most-traded alumina contract dropped 1.29%. The most-traded lithium carbonate contract rose 0.16%. The most-traded silicon metal contract fell 0.72%. The most-traded polysilicon futures dropped 1.91%.

Ferrous metals mostly rose. Iron ore gained 0.25%, rebar rose 0.34%, hot-rolled coil edged up 0.03%, and stainless steel fell 2.45%. Coking coal and coke: the most-traded coking coal contract rose 0.12%, and the most-traded coke contract fell 0.41%.

Overseas base metals, as of 11:38, LME metals nearly all declined. LME copper rose 0.19%. LME aluminum and LME zinc edged down, LME lead fell 0.66%. LME tin dropped 1.26%. LME nickel fell 1.39%.

Precious metals, as of 11:38, COMEX gold rose 0.39%, COMEX silver gained 0.22%. Domestic precious metals: the most-traded SHFE gold contract rose 0.19%, the most-traded SHFE silver contract gained 2.73%.

In addition, as of the midday close, the most-traded platinum futures fell 1.5%, and the most-traded palladium futures dropped 2.56%.

As of the midday close, the most-traded Europe containerized freight index contract rose 2.65%, closing at 2,351.4 points.

As of 11:38 on May 8, 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 200 yuan/mt to a discount of 120 yuan/mt, with the average discount at 160 yuan/mt, down 10 yuan/mt from the previous trading day. The average transaction price was 102,540 yuan/mt, down 90 yuan/mt from the previous trading day.

Macro front

Domestic:

[MIIT Approved Trial Frequencies for Sixth-Generation Mobile Communication System Technology] To further advance China's 6G technology R&D, standard development, and industrialisation, the Ministry of Industry and Information Technology recently approved 6G trial frequency licenses in the 6GHz band to the IMT-2030 (6G) Promotion Group, supporting it in conducting 6G technology trials in selected regions. The trials target the typical scenarios and key performance indicators identified by the International Telecommunication Union for 6G, carrying out technology R&D and testing verification. (Wallstreetcn)

The PBOC conducted 500 million yuan of 7-day reverse repo operations in the open market, with the operation rate at 1.40%, unchanged from the previous day. No reverse repo matured today.

US dollar:

As of 11:38, the US dollar index fell 0.06% to 98.21. Data released by the US Department of Labor on Thursday showed that for the week ending May 2,initial jobless claims rose by 10,000 from the previous week to 200,000, below Bloomberg economists' survey expectations of 205,000.The previous week, the figure had fallen to its lowest level since 1969. (Wall Street CN)

New York Fed President Williams said on Thursday that demand for US Treasuries remained strong despite the government's massive borrowing. Williams said the US Fed was watching the government's extremely high borrowing levels "very closely." He noted that while it might be surprising, demand for US Treasuries remained "enormous," and "the US is still seen as the strongest economy in the world" and an ideal safe haven for capital, "even with all the geopolitical issues and other factors, that hasn't changed." Williams also said the US economy had shown considerable resilience in the face of the energy shock triggered by the Middle East war. He said given the surge in energy prices, "the biggest question" was how things would develop, adding that regarding inflation that continued to stay high, the US Fed would "make sure" and work to bring inflation back down to the 2% target. (Jin10 Data)

According to the CME "Fed Watch": the probability of the US Fed holding rates unchanged through June was 96.4%, with a cumulative 25-basis-point interest rate cut probability of 3.6%. The probability of the US Fed holding rates unchanged through July was 90.2%, with a cumulative 25-basis-point interest rate cut probability of 9.5% and a cumulative 50-basis-point interest rate cut probability of 0.2%. (Jin10 Data)

Data:

Data to be released today include the US April unemployment rate, US April seasonally adjusted nonfarm payrolls, US April average hourly earnings year-over-year, US April average hourly earnings month-over-month, US May preliminary one-year inflation rate expectations, US May preliminary University of Michigan consumer sentiment index, US March wholesale sales month-over-month, Germany March seasonally adjusted industrial output month-over-month, Germany March seasonally adjusted trade balance, Switzerland April consumer confidence index, UK April Halifax seasonally adjusted house price index month-over-month, and Canada April employment figures.

In addition, China's refined oil products will enter a new round of price adjustment window. 2026 FOMC voter and Minneapolis Fed President Kashkari will participate in a fireside chat, 2026 FOMC voter and Cleveland Fed President Hammack will deliver a speech, permanent FOMC voter and New York Fed President Williams will deliver a speech, Fed Governor Lisa Cook will deliver a speech, and Bank of England Governor Bailey will deliver a speech on global imbalances.

Crude oil:

As of 11:38, oil prices in both markets rose, with WTI up 0.9% and Brent up 1.15%. A conflict erupted between the US and Iran near the strait, with the Strait of Hormuz crisis escalating sharply, and market concerns over crude oil supply underpinned oil prices.

In addition, IEA Executive Director Birol stated that the IEA has so far released only about 20% of its total oil reserves and is "prepared to act again" if necessary.

US President Trump stated that there was no need to restrict US oil or jet fuel exports. "We don't need them," Trump told reporters in Washington on Thursday. "And we have a lot of oil." The blockage of the Strait of Hormuz, a critical shipping lane, significantly increased US energy exports, enabling the US to surpass Saudi Arabia as the world's largest crude oil exporter. However, experts have been warning that US supply buffer capacity is nearing its limits, and it remains unclear how long exports at this level can be sustained. Trump dismissed such concerns and praised the surge in exports. "Ships are turning around from routes that used to head to the Strait of Hormuz," he said. "Hundreds of ships are heading to Texas, Louisiana, and Alaska, loading up and heading back, making a fortune." (Jin10 Data)

Spot market overview:

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