US Dollar Fell for 9 Consecutive Days, Metals Rose Nearly Across the Board, SHFE Aluminum Up Nearly 3%, Lithium Carbonate Up Over 4% [SMM Daily Review]

SMM April 16:

Metal market:

As of the daytime close, domestic base metals generally rose, with SHFE tin being the only decliner, down 0.07%. SHFE aluminum led the gains with a 2.89% increase, while the rest of the metals gained less than 1%. The alumina front-month contract rose 1.44%, and the foundry aluminum front-month contract rose 1.62%.

In addition, the lithium carbonate front-month contract rose 4.2%, polysilicon rose 1.08%, silicon metal rose 0.89%, and the Europe containerized freight front-month contract rose 4.75% to close at 2,044.7.

Ferrous metals all posted gains to varying degrees except for stainless steel, which fell 0.03%. Iron ore rose 3.1%. Hot-rolled coil and rebar rose over 1%, with hot-rolled coil up 1.22% and rebar up 1.06%. Coking coal and coke side, coking coal rose 2.32% and coke rose 1.94%.

Overseas market, as of 15:04, overseas base metals generally rose, with LME tin leading the gains at 1.41%, LME aluminum up 1.31%, and the rest of the metals gaining less than 1%.

Precious metals, as of 15:04, COMEX gold rose 0.51% and COMEX silver rose 1.08%. In China, SHFE gold rose 0.17% and SHFE silver rose 1.43%.

In addition, the platinum front-month contract rose 0.45%, and the palladium front-month contract fell 0.66%.

Market data as of 15:04 today

Macro Front

China:

[NBS: Q1 GDP Up 5% YoY! National Economy Off to a Good Start with Accelerating Industrial Production Growth]According to preliminary estimates by the NBS, Q1 GDP reached 33,419.3 billion yuan, up 5.0% YoY in real terms, accelerating by 0.5 percentage points from Q4 last year. By industry, the primary sector's value added was 1,194.1 billion yuan, up 3.8% YoY; the secondary sector's value added was 11,613.5 billion yuan, up 4.9%; and the tertiary sector's value added was 20,611.7 billion yuan, up 5.2%. On a QoQ basis, Q1 GDP grew 1.3%. In Q1, the value added of China's above-scale industrial enterprises rose 6.1% YoY, accelerating by 1.1 percentage points from Q4 last year. By three major categories, the value added of the mining industry rose 6.0% YoY, manufacturing rose 6.4%, and the production and supply of electricity, heat, gas, and water rose 4.3%. The value added of equipment manufacturing rose 8.9% YoY, and that of high-tech manufacturing rose 12.5%, outpacing the overall above-scale industrial value added by 2.8 and 6.4 percentage points, respectively. By economic type, value added of state-controlled enterprises increased 4.8% YoY; joint-stock enterprises rose 6.6%, foreign-funded enterprises and those with investment from Hong Kong, Macao, and Taiwan rose 3.9%; and private enterprises rose 6.1%. By product, production of 3D printing equipment, lithium-ion batteries, and industrial robots increased 54.0%, 40.8%, and 33.2% YoY, respectively. In March, value added of industrial enterprises above designated size increased 5.7% YoY and 0.28% MoM. In March, the manufacturing PMI was 50.4%, up 1.4 percentage points from the previous month; the enterprise production and business activity expectations index was 53.4%. In January–February, industrial enterprises above designated size nationwide recorded total profits of 1,024.6 billion yuan, up 15.2% YoY.

[National Bureau of Statistics (NBS): China’s Imports and Exports Are Well Positioned to Maintain Solid Growth] Mao Shengyong, Deputy Director of the National Bureau of Statistics (NBS), said at a press conference held by the State Council Information Office that, based on years of practice, regardless of how the external environment changes, even during the pandemic when the market worried about whether China’s foreign trade could be sustained, China’s imports and exports have remained very strong. This was attributable to enterprises working hard to strengthen their fundamentals, enhance the technological content of products, and improve overall competitiveness. Overall, China’s imports and exports are still well positioned to maintain relatively solid growth. (Wallstreetcn)

The PBOC conducted 500 million yuan of 7-day reverse repo operations in the open market, with the operation rate unchanged at 1.40%; 500 million yuan of reverse repos matured today.

US dollar:

As of 15:04, the US dollar index fell 0.05% to 98.03, marking a nine-session decline. Musalem of the US Fed said on Wednesday that high oil prices could push the underlying inflation rate for the remainder of this year to nearly one percentage point above the US Fed’s 2% target, and the US Fed may need to keep interest rates unchanged. Musalem said, “We are very likely to see some pass-through from oil prices to core inflation.” By the end of this year, the core measure of price increases would be “slightly below 3%, perhaps around 3%,” and there were risks of a further rise. Musalem said the US Fed may keep its policy rate in the current 3.50%–3.75% range “for some time,” while monitoring inflation, employment, and economic data in the coming months, and many of his colleagues shared the same view. The impact of last year’s tariff increases may gradually fade this quarter, and housing price inflation is also easing. As oil prices rise, inflation in a range of services has stayed high; if inflation begins to rise and could boost inflation expectations, he would be open to raising rates. Musalem also stated that the oil market is experiencing "the third negative supply shock in 12 months," which, combined with rising tariff rates and stricter immigration regulations, poses risks to both inflation prospects and the job market, potentially impacting economic growth. He predicted this year's economic growth would slow down but remain between 1.5% and 2%. (Jin10 Data APP)

According to CME's "FedWatch," the probability of the US Fed raising interest rates by 25 basis points in April stands at 1.6%, while the likelihood of maintaining unchanged rates is 98.4%. For June, the probability of a cumulative 25-basis-point interest rate cut is 0%, with a 98% chance of unchanged rates and a 2% chance of a cumulative 25-basis-point hike. (Jin10 Data APP)

On the macro front:

Today, the UK will release February's three-month GDP monthly rate, manufacturing output monthly rate, seasonally adjusted goods trade balance, and industrial output monthly rate. The eurozone will announce March's final CPI annual and monthly rates. The US will report initial jobless claims for the week ending April 11, the Philadelphia Fed Manufacturing Index for April, and March's industrial output monthly rate. Additionally, key events include: US Fed Governor Bowman speaking at the IIF forum; the Fed releasing its Beige Book; Bank of England Governor Bailey discussing global economic imbalances during IMF meetings; China's NBS publishing the monthly report on residential property prices in 70 major cities; a State Council press conference on national economic performance; the ECB releasing March's monetary policy meeting minutes; FOMC permanent voter and New York Fed President Williams delivering remarks; US Fed Governor Milan speaking; and the G20 finance ministers and central bank governors meeting.

Crude oil side:

As of 15:04, oil prices showed mixed performance, with WTI down 0.06% and Brent up 0.2%. Market uncertainty persists over whether US-Iran peace talks will yield an agreement.

Last week, US crude exports surged to near-record highs to meet demand from Asian and European buyers seeking alternatives to disrupted Middle Eastern supplies due to the Iran conflict. This brought the US close to becoming a net crude exporter for the first time since WWII. However, analysts and traders noted the US is rapidly approaching its export capacity limit. Government data released Wednesday showed net crude imports (exports minus imports) narrowed to 66,000 barrels per day, the lowest since weekly records began in 2001, while exports rose to 5.2 million barrels per day, a seven-month high. Annual data indicates the US last achieved net exporter status in 1943. Jin10 Data APP)

Documents released by the White House show that US President Trump issued multiple oil pipeline permits on Wednesday, including one for a new pipeline aimed at facilitating the transportation of crude oil and petroleum products between the US and Canada. The construction permit has been granted to Bakken Pipeline for pipeline facility construction in Burke County, North Dakota. Additionally, he issued other permits for the maintenance and operation of existing pipelines near border areas in North Dakota and Michigan. (Jin10 Data APP)

SMM Daily Review

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