Metals Show Mixed Performance SHFE Copper and Aluminum Rise Over 1% NY Gold and SHFE Gold Hit New Highs European Line Container Shipping Falls More Than 5% [SMM Daily Review]

SMM March 20 News:

Base Metals Market:

As of the day's close, domestic base metals showed mixed performance. SHFE copper and SHFE aluminum both rose over 1%, with SHFE copper up 1.26% and SHFE aluminum up 1.11%. SHFE nickel saw the largest decline, down 0.55%, while other metals experienced minor fluctuations. Alumina main contract fell 1.55%, closing below the 3,000 yuan/mt mark.

Additionally, silicon metal main contract fell 0.61%, polysilicon main contract rose 1.05%, marking two consecutive days of gains. Lithium carbonate main contract fell 2.81%, recording three consecutive days of declines. The main contract for European line container shipping fell 5.54%.

Ferrous metals series also showed mixed performance, with iron ore down 0.46% and stainless steel down 0.26%. HRC rose 0.12%, and rebar rose 0.22%. Both coking coal and coke declined, with coking coal down 0.15% and coke down 1.17%.

In precious metals, as of 15:06, COMEX gold rose 0.52%, reaching a high of $3,065.2 per ounce, setting a new historical record; COMEX silver rose 0.58%. Domestically, SHFE gold rose 0.55%, hitting a high of 710.12 yuan/gram, also setting a new historical record, while SHFE silver fell 0.42%.

Market conditions as of 15:06 today

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Macro Front

Domestic:

[March LPR Quotations Released: 5-Year and 1-Year Rates Remain Unchanged] The People's Bank of China authorized the National Interbank Funding Center to announce that the March Loan Prime Rate (LPR) quotations were released: the 5-year LPR remained at 3.6%, the same as last month. The 1-year LPR also remained at 3.1%, unchanged from last month.

[National Energy Administration: As of End-February, Total Installed Power Generation Capacity Up 14.5% YoY] Data from the National Energy Administration showed that as of the end of February, the total installed power generation capacity in the country reached 34 billion kW, up 14.5% YoY. Among them, solar power generation capacity was 9.3 billion kW, up 42.9% YoY; wind power generation capacity was 5.3 billion kW, up 17.6% YoY. In January-February, the cumulative average utilization hours of national power generation equipment were 505 hours, a decrease of 61 hours compared to the same period last year; major power generation enterprises completed 75.3 billion yuan in power supply engineering investment, up 0.2% YoY; grid engineering investment reached 43.6 billion yuan, up 33.5% YoY.

►On March 20, the central parity rate of the RMB against the US dollar in the interbank foreign exchange market was 7.1754 yuan per US dollar

US Dollar:

As of 15:06, the US dollar index rose 0.06%. The US Fed announced on March 19 local time that it would maintain the benchmark interest rate unchanged, still within the 4.25%-4.5% range. This is the second time since the end of January that the Fed has decided to keep rates unchanged. The Fed released its latest economic outlook, with policymakers raising this year's inflation expectations, predicting that their preferred inflation measure will reach 2.7% by year-end. Policymakers also revised down this year's economic growth forecast from 2.1% to 1.7% and slightly raised the unemployment rate forecast. The Fed's projections show that among 19 policymakers, four believe there will be no rate cuts in 2025, four expect one rate cut, nine expect two rate cuts, and two expect three rate cuts. Meanwhile, the Fed slowed the pace of balance sheet reduction (quantitative tightening, QT).

Fed Chairman Powell stated in the subsequent press conference that the US economy remains strong, with inflation significantly declining over the past two years but still above the Fed's long-term target of 2%. He emphasized that the Fed's policy path remains data-dependent, and if the labour market unexpectedly weakens or inflation falls faster than expected, the Fed will adjust its policies accordingly. (Comprehensive by Wenhua)

Data:

Today, the following data will be released: the upper and lower limits of the federal funds rate target as of March 19, US Q4 current account, US March Philadelphia Fed Manufacturing Index, US initial jobless claims for the week ending March 15, US February existing home sales, UK January unemployment rate (ILO standard), UK March CBI industrial order difference, UK January average earnings including bonuses, UK March central bank base rate, Australia February seasonally adjusted unemployment rate, Australia February employment change, Switzerland Q1 central bank policy rate, New Zealand Q4 GDP annual rate (production method, seasonally adjusted).

Additionally, the FOMC will release its interest rate decision and economic projections summary, and Fed Chairman Powell will hold a monetary policy press conference. ECB President Christine Lagarde will speak at the European Parliament's Economic and Monetary Affairs Committee hearing, the Swiss National Bank will announce its interest rate decision, and the Bank of England will announce its interest rate decision.

Crude Oil:

As of 15:06, both oil prices rose, with US crude up 0.69% and Brent crude up 0.64%. OPEC+ production cuts are gradually being reduced, with the UAE and Iraq producing beyond their quotas. According to OPEC+'s latest plan, the organization expects to gradually reduce its voluntary production cuts of 2.2 million barrels per day starting from April 2025. Under the established schedule, OPEC+ crude oil production is expected to increase by 180,000 barrels per day in April. Surveys show that the UAE's crude oil production in February reached 3.05 million barrels per day, exceeding its quota of 2.91 million barrels; Iraq's production was 4.07 million barrels per day, also above its quota limit of 4 million barrels. The UAE and Iraq submitted plans to compensate for previous overproduction to the OPEC Secretariat on March 19.

Inventory buildup pressure still exists, and downward pressure on oil prices remains. Global crude oil inventories increased by 4.9% in Q1, mainly due to an increase in floating storage, with onshore tank inventories also rising by 1.2% moderately. The latest EIA weekly report shows that US commercial crude oil inventories have climbed seasonally for three consecutive weeks, but the increase was lower than API's previous estimate. At the same time, refined product inventories continued to decline, leading to a further pullback in total petroleum inventories. Specifically, as of the week ending March 14, US commercial crude oil inventories increased by 1.745 million barrels; gasoline inventories decreased by 527,000 barrels; distillate inventories fell by 2.812 million barrels; Cushing region crude oil inventories decreased by 1.009 million barrels; strategic petroleum reserves increased slightly by 275,000 barrels to 395.863 million barrels. (Comprehensive by Wenhua)

SMM Daily Review

►Aluminum scrap followed primary aluminum's rise, but market purchase sentiment remained sluggish [Aluminum Scrap Daily Review]

►SHFE aluminum bottomed out and rebounded, aluminum billet processing fees fluctuated downward [Aluminum Billet Spot Daily Review]

►[SMM Nickel Sulphate Daily Review] March 20: Nickel salt smelter inventory at low levels

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Market transactions were quiet, spot prices remained stable [SMM Electrolytic Manganese Daily Review] ►

Intense back-and-forth negotiations between upstream and downstream, rare earth prices stabilized [SMM Rare Earth Daily Review] ►

Silver prices pulled back from highs, spot-futures price spread turned positive, suppliers slightly raised premiums and discounts [SMM Daily Review]