Base metal: domestic market outperforms overseas market, SHFE aluminum falls nearly 2%, polysilicon, lithium carbonate, and NYMEX gold among top decliners [SMM Midday Review]

SMM May 7 News:

Metal Market:

As of the midday close, domestic base metals generally rose, with SHFE copper and SHFE nickel up 0.13% and 0.11%, respectively. SHFE tin and SHFE lead edged higher, while SHFE zinc fell 0.4%. SHFE aluminum dropped 1.84%.

In addition, alumina edged higher. Lithium carbonate fell 1.47%, silicon metal declined 1.08%, and polysilicon dropped 2.65%.

The ferrous metals series mostly fluctuated rangebound, with iron ore flat at 705.5 yuan/mt, rebar down 0.13%, HRC up 0.12%, and stainless steel flat at 12,700 yuan/mt. In terms of coking coal and coke: coking coal fell 0.77%, and coke dropped 0.36%.

In overseas metal markets, as of 11:43 a.m., overseas base metals fell across the board. LME zinc fell 0.91%, LME zinc dropped 0.44%. LME lead declined 0.18%, LME copper fell 0.73%, and LME aluminum dropped 0.91%. LME nickel fell 0.11%.

In precious metals, as of 11:43 a.m., COMEX gold fell 1.07%, and COMEX silver dropped 0.54%. Domestically, SHFE gold rose 0.43%, and SHFE silver gained 0.06%.

As of the midday close, the most-traded contract for the Europe Containerized Freight Index rose 1.58% to 1,332.9 points.

As of 11:43 a.m. on May 7, midday futures market movements for some contracts:

》SMM Metal Spot Prices on May 7

Spot and Fundamentals

Nickel: Philippine nickel ore: Today, the domestic market for Philippine laterite nickel ore showed mediocre performance, with mainstream transaction prices continuing at pre-holiday levels... 》Click for details

Macro Front

Domestic:

[Pan Gongsheng, Li Yunze, and Wu Qing Make Major Statements! Covering RRR Cuts, Interest Rate Cuts, Stock Market, and Real Estate...] At 9 a.m. on May 7, the State Council Information Office will hold a press conference, inviting the heads of the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission to introduce the "package of financial policies to support market stability and expectations". PBOC Governor Pan Gongsheng, NFRA Director Li Yunze, and CSRC Chairman Wu Qing will attend the conference. Pan Gongsheng stated that, the reserve requirement ratio (RRR) will be cut by 0.5 percentage point, which is expected to provide approximately 1 trillion yuan of long-term liquidity to the market. The policy interest rate will be lowered by 0.1 percentage point, with the 7-day reverse repo operation rate in the open market adjusted from the current 1.5% to 1.4%. This is expected to drive the loan prime rate (LPR) to decline by approximately 0.1 percentage point in tandem. The interest rates for structural monetary policy tools will be lowered by 0.25 percentage point, including: the interest rates for various special structural tools and re-lending rates for supporting agriculture and small businesses, which will all be reduced from the current 1.75% to 1.5%; the interest rate for pledged supplementary lending (PSL) will be reduced from the current 2.25% to 2%.Li Yunze stated that a total of eight incremental policies have been introduced recently, including accelerating the rollout of a series of financing systems tailored to the new model of real estate development, further expanding the scope of pilot programs for long-term investment by insurance funds to introduce more incremental funds into the market, adjusting and optimizing regulatory rules, reducing the risk factor for insurance companies' stock investments to support a stable and vibrant capital market, promptly launching a package of policies to support financing for small and micro enterprises and private enterprises, formulating a series of policy measures for the banking and insurance industries to safeguard the development of foreign trade, providing targeted services to market entities significantly affected by tariffs, revising the management measures for merger and acquisition loans to increase investment in science and technology innovation enterprises, and formulating opinions on the high-quality development of technology insurance. Wu Qing, Chairman of the China Securities Regulatory Commission, stated at a press conference held by the State Council Information Office that efforts would be made to consolidate the momentum of market stabilization and improvement, dynamically improve work plans to address various external risk attacks, and fully support the role of Central Huijin Investment Ltd. as a quasi-stabilization fund. 》Click to view details

【PBOC: Reduces personal housing provident fund loan interest rates by 0.25 percentage points from May 8】The People's Bank of China (PBOC) issued a notice on reducing personal housing provident fund loan interest rates. The PBOC has decided to reduce personal housing provident fund loan interest rates by 0.25 percentage points from May 8, 2025. The interest rates for first-home personal housing provident fund loans with terms of five years or less (including five years) and over five years will be adjusted to 2.1% and 2.6%, respectively. The interest rates for second-home personal housing provident fund loans with terms of five years or less (including five years) and over five years will be adjusted to no less than 2.525% and 3.075%, respectively.

The PBOC conducted 195.5 billion yuan of 7-day reverse repo operations today, with a bidding volume of 195.5 billion yuan, a winning bid volume of 195.5 billion yuan, and an operating interest rate of 1.50%, unchanged from the previous rate.

►The central parity rate of the RMB exchange rate in the interbank foreign exchange market on May 7 was 7.2005 RMB per US dollar.

US dollar:

As of 11:43, the US dollar index rose slightly by 0.3% to 99.54. Market focus is on the Federal Open Market Committee (FOMC) meeting held later in the day, with expectations that the US Fed will maintain interest rates unchanged at this meeting. Since December last year, the Fed's policy interest rate has remained in the range of 4.25%-4.50%. The market awaits remarks from Fed Chairman Powell for clues on the potential timing of future interest rate cuts. The US Department of Commerce reported on Tuesday that the US trade deficit widened by 14% in March to a record $140.5 billion, as companies increased imports ahead of tariffs imposed by Trump.

Data updates:

Today, data including New Zealand's Q1 unemployment rate, New Zealand's Q1 labor force participation rate, China's foreign exchange reserves in April, Russia's SPGI Services PMI in April, France's trade balance in March, the Eurozone's month-on-month retail sales growth in March, the Eurozone's year-on-year retail sales growth in March, and Canada's month-on-month leading indicator growth in April will be released.

Crude oil market:

As of 11:43, crude oil futures rose, with US crude oil up 0.76% and Brent crude oil up 0.64%. Signs of reduced US production and increased European demand supported oil prices.

After OPEC decided to accelerate production increases, both benchmark oil prices fell to four-year lows. However, the recent decline in oil prices in recent weeks has prompted some US energy companies to announce cuts to some drilling rigs. Analysts said that over time, this should lead to reduced production and, in turn, higher oil prices.

Signs of improving demand also supported oil prices. Data released by the American Petroleum Institute (API) showed a decrease in US crude oil and gasoline inventories last week, while distillate inventories increased. The API reported that for the week ending May 2, US crude oil inventories fell by 4.494 million barrels, gasoline inventories fell by 1.974 million barrels, and distillate inventories rose by 2.242 million barrels. Previously, analysts surveyed had expected, on average, a decrease of 800,000 barrels in US crude oil inventories, a decrease of about 1.6 million barrels in gasoline inventories, and a decrease of about 1.3 million barrels in distillate inventories. (Webstock Inc.)

Spot market overview:

►Widening price spread between futures contracts, sluggish downstream restocking, spot premiums jump initially and then pull back [SMM South China Spot Copper]

►Shanghai zinc: Traders maintain sentiment to stand firm on quotes, downstream firms purchase based on immediate needs [SMM Midday Review]

►[SMM Daily Nickel Ore Review] Rainy season continues to affect nickel ore supply, strong sentiment to stand firm on quotes among Indonesian mines

►[SMM Survey] Divergence in operating rates of rolling lines in Central China, significant inventory accumulation, what are the subsequent changes?

Midday reviews of other metal spot markets will be updated later. Please refresh to view.