US dollar declines, base metals generally rise, with alumina and LME tin leading gains, while most ferrous metals series fall [[SMM Midday Review]]

SMM May 8 News:

Metal Market:

As of the midday close, domestic base metals generally rose, with SHFE copper down 0.24%, SHFE nickel up 0.2%, SHFE tin up 0.42%, SHFE lead up 0.36%, SHFE zinc up 0.18%, and SHFE aluminum down 0.25%.

In addition, alumina rose 2.37%, lithium carbonate fell 0.99%, silicon metal fell 0.54%, and polysilicon rose 0.61%.

The ferrous metals series mostly fell, with iron ore down 2.17%, rebar down 1%, HRC down 0.87%, and stainless steel up 0.12%. In terms of coking coal and coke: coking coal fell 2.35%, and coke fell 2.58%.

In the overseas metal market, as of 11:45 a.m., LME base metals nearly all rose. LME tin rose 1.04%, LME zinc rose 0.42%, LME lead fell 0.28%, LME copper rose 0.5%, LME aluminum rose 0.55%, and LME nickel rose 0.43%.

In precious metals, as of 11:45 a.m., COMEX gold rose 0.37%, COMEX silver rose 0.59%. Domestically, SHFE gold rose 0.47%, and SHFE silver fell 0.22%.

As of the midday close, the most-traded contract of the European Containerized Freight Index fell 5.14%, closing at 1,263 points.

As of 11:45 a.m. on May 8, midday futures market movements for some contracts:

》SMM Metal Spot Prices on May 8

Spot and Fundamentals

Copper: Today, the spot #1 copper cathode in Guangdong was quoted at a premium of 140 yuan/mt to 250 yuan/mt against the front-month contract, with an average premium of 195 yuan/mt, down 25 yuan/mt from the previous trading day. SX-EW copper was quoted at a premium of 80 yuan/mt to 100 yuan/mt, with an average premium of 90 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,305 yuan/mt, down 295 yuan/mt from the previous trading day, and the average price of SX-EW copper was 78,200 yuan/mt, down 290 yuan/mt from the previous trading day. Spot Market: Inventories in Guangdong have declined for two consecutive days, mainly due to reduced arrivals... 》Click for details

Macro Front

Domestic:

[Zheng Bei, Deputy Director of the National Development and Reform Commission (NDRC): High-quality projects with a total investment of about 3 trillion yuan will be launched this year]At a press conference held by the State Council Information Office, Zheng Bei, Deputy Director of the National Development and Reform Commission (NDRC), stated that the full text of the Private Enterprise Promotion Law embodies the principles of equal treatment, fair competition, equal protection, and common development. The NDRC will focus on promoting implementation in areas such as breaking down barriers, expanding opportunities, and optimizing services. In terms of expanding opportunities, support will be given to private enterprises to actively participate in the "implementation of major national strategies and the development of security capabilities in key areas" and the "program of large-scale equipment upgrades and consumer goods trade-ins," and efforts are being accelerated to improve the long-term mechanism for private enterprises to participate in major national projects.The National Development and Reform Commission (NDRC) has launched a batch of major projects in the fields of nuclear power and railways, with private capital accounting for 20% in some nuclear power projects. In the areas of industrial equipment renewal and recycling, private enterprises' funds account for over 80%. Zheng Bei revealed that this year, high-quality projects with a total investment scale of about 3 trillion yuan will be launched in key areas such as transportation, energy, water conservancy, new-type infrastructure, and urban infrastructure.

【Deputy Director of the Financial Regulatory Authority, Cong Lin: 12.6 trillion yuan in new loans have been issued to small and micro entities through the coordination mechanism for supporting small and micro enterprise financing】Deputy Director of the Financial Regulatory Authority, Cong Lin, stated at a press conference of the State Council Information Office that the Financial Regulatory Authority has collaborated to create an information sharing mechanism. Offline, the Financial Regulatory Authority, together with the NDRC, has established a coordination mechanism for supporting small and micro enterprise financing, promoting the direct delivery of credit funds to the grassroots level, which is fast, convenient, and with appropriate interest rates. Through this mechanism, 12.6 trillion yuan in new loans have been issued to small and micro entities, with an average interest rate of 3.66%. Online, the authority has promoted the establishment of credit information sharing and comprehensive financial service platforms in multiple regions, allowing data to travel more and enterprises and banks to travel less, using data information to support banks in issuing credit loans. By the end of Q1, the balance of credit loans for private enterprises was 18.1 trillion yuan, up 15.4% YoY.

【Deputy Director of the NDRC, Zheng Bei: A batch of supporting systems for the Private Economy Promotion Law are being accelerated for implementation】Deputy Director of the NDRC, Zheng Bei, stated at a press conference of the State Council Information Office that during the legislative process of the Private Economy Promotion Law, the NDRC, together with relevant departments, planned ahead and simultaneously carried out the establishment, revision, abolition, and interpretation of related systems. A batch of supporting systems has already been issued. She stated that another batch of supporting systems is being accelerated for implementation; meanwhile, in promoting technological innovation, service guarantees, and rights protection, many localities are actively improving related supporting measures based on local realities.

【Central Bank Lowers 7-Day Reverse Repo Rate by 10 Basis Points】The central bank conducted 158.6 billion yuan in 7-day reverse repo operations today, with an operation rate of 1.40%, down from 1.50%. As there were no 7-day reverse repo operations maturing today, a net injection of 158.6 billion yuan was achieved.

►On May 8, the central parity rate of the RMB in the interbank foreign exchange market was 7.2073 yuan per US dollar.

US dollar side:

As of 11:45, the US dollar index fell 0.23% to 99.65. The US Fed maintained interest rates unchanged on Wednesday but noted increased risks of US inflation and unemployment rate rise, further clouding the US economic outlook as the Fed assesses the impact of US tariff policies.Fed Chairman Powell stated that it is currently unclear whether the US economy will continue to maintain a stable growth pace or falter amidst growing uncertainties and a potential surge in inflation. Traders expect the US Fed to cut interest rates by 77 basis points this year, starting from September.

In other currencies:

The GBP/USD exchange rate remained flat, and only an unexpected move by the Bank of England (BoE) could break it out of its range. Affected by Trump's tariffs, the BoE is expected to cut interest rates by 25 basis points to 4.25%. The BoE will maintain its cautious, meeting-by-meeting decision-making guidance, similar to the US Fed. The tone of Governor Bailey's press conference will be crucial for the market. (Huitong Finance)

On the data front:

Today, data such as Germany's March seasonally adjusted industrial production month-on-month rate, Germany's March working-day adjusted industrial production year-on-year rate, Germany's March seasonally adjusted export month-on-month rate, the UK's May central bank benchmark interest rate, the US initial jobless claims for the week ending May 3, the US continuing jobless claims for the week ending April 26, the final value of the US March wholesale inventories month-on-month rate, the US April New York Fed 1-year inflation expectations, and the US April New York Fed 3-year inflation expectations will be released. Attention should also be paid to: the US Fed's FOMC announcing its interest rate decision; Fed Chairman Powell holding a monetary policy press conference; and the BoE announcing its interest rate decision.

In crude oil:

As of 11:45, crude oil futures rose, with US oil up 0.81% and Brent oil up 0.65%. Oil prices stabilized after falling in the previous trading session due to global economic uncertainties and supply concerns.

An increase in US gasoline inventories last week exacerbated market concerns about weak demand, triggering analysts' worries about a lack of consumption growth when the US enters the summer demand period later this month. The inventory report released by the US Energy Information Administration (EIA) showed that US crude oil and distillate inventories fell, while gasoline inventories rose, for the week ending May 2. The EIA reported that US commercial crude oil inventories decreased by 2 million barrels to 438.4 million barrels for the week ending May 2, compared to market expectations of an 833,000-barrel decrease. Crude oil inventories in Cushing, Oklahoma, US, decreased by 740,000 barrels to 24.96 million barrels. For the week ending May 2, US gasoline inventories increased by 200,000 barrels to 225.7 million barrels, compared to market expectations of a 1.6 million-barrel decrease. US distillate inventories, including diesel and heating oil, decreased by 1.1 million barrels to 106.7 million barrels, compared to market expectations of a 1.3 million-barrel decrease.

Meanwhile, the Organization of the Petroleum Exporting Countries and its allies (OPEC ) will increase oil production, thereby adding pressure on prices. (Webstock Inc.)

Spot Market Overview:

►Price spread between futures contracts continues to widen; downstream players reluctant to restock, forcing suppliers to cut prices to sell [SMM Spot Copper in South China]

►[SMM Daily Nickel Ore Review] Overseas mine prices for Philippine nickel ore ease; tight supply of {{Indonesia's local ore}} persists

►April sees "lackluster peak season" for aluminum plate/sheet, strip and foil, with overcapacity and international trade frictions as main themes [SMM Analysis]

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