Metals Rise Across the Board, with SHFE Nickel Up Nearly 2%; Stainless Steel, SHFE Lead, and SHFE Aluminum Lead Gains; Iron Ore Up Over 2% [SMM Midday Review]

SMM May 12 News:

Metal Market:

As of the midday close, domestic base metals rose across the board, with SHFE aluminum up 1.02%. SHFE lead rose 1.19%, SHFE copper rose 0.52%, and SHFE tin and SHFE zinc both rose less than 0.5%. SHFE nickel rose 1.84%.

In addition, alumina fell 0.99%. Lithium carbonate fell 0.13%, silicon metal was flat at 8,300 yuan/mt, and polysilicon rose 0.95%.

The ferrous metals series mostly rose, with iron ore up 2.15% and stainless steel up 1.26%. Rebar and HRC rose nearly 1%. In the coking coal and coke sector: coking coal fell 0.51%, and coke rose 0.17%.

In the overseas metal market, as of 11:47 a.m., LME base metals rose nearly across the board. LME tin rose 0.33%, LME zinc rose 0.38%, LME lead rose 0.73%, LME copper rose 0.42%, and LME aluminum rose 0.56. LME nickel fell slightly.

In the precious metals sector, as of 11:47 a.m., COMEX gold fell 1.7%, and COMEX silver rose 0.17%. Domestically, SHFE gold fell 1.73%, and SHFE silver rose 0.28%.

As of the midday close, the most-traded contract for the European Containerized Freight Index rose 6.16% to 1,341.9 points.

As of 11:47 a.m. on May 12, midday futures market movements for some contracts:

》SMM Metal Spot Prices on May 12

Spot and Fundamentals

Copper: Today, spot #1 copper cathode in Guangdong was quoted at a premium of 20 yuan/mt to a premium of 150 yuan/mt against the front-month contract, with an average premium of 85 yuan/mt, down 70 yuan/mt from the previous trading day. SX-EW copper was quoted at a discount of 40 yuan/mt to a discount of 20 yuan/mt, with an average premium of 30 yuan/mt, down 70 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,340 yuan/mt, up 25 yuan/mt from the previous trading day, and the average price of SX-EW copper was 78,225 yuan/mt, up 25 yuan/mt from the previous trading day. Spot Market: Guangdong inventory ended a three-day decline and rose again, mainly due to weaker downstream consumption... 》Click for details

Macro Front

Domestic:

[PBOC Net Injection of 43 Billion Yuan via Open Market Operations] The People's Bank of China (PBOC) conducted 43 billion yuan in 7-day reverse repo operations today, with an operating interest rate of 1.40%, unchanged from the previous rate. As there were no reverse repos maturing today, a net injection of 43 billion yuan was achieved.

[Multiple Regions Release Housing Development Plans Focusing on "High-Quality Housing" Construction] Recently, the "2025 Annual Plan for Housing Development in Beijing" released by the Beijing Municipal Commission of Housing and Urban-Rural Development mentioned that 240 to 300 hectares of land for commercial housing will be supplied in 2025, 50,000 sets of affordable rental housing will be constructed and collected, and 80,000 sets of various types of affordable housing will be completed, accelerating the pace of "high-quality housing" construction.Prior to this, cities such as Guangzhou and Chengdu had also released their 2025 housing development plans. Many localities have expressed their intention to accelerate the construction of "high-quality housing." Industry insiders have stated that it is expected that detailed indicators for the construction of "high-quality housing" across various regions will be expedited in their release and implementation.

►On May 12, the central parity rate of the RMB exchange rate in the interbank foreign exchange market was set at 7.2066 yuan per US dollar.

US dollar:

As of 11:47 a.m., the US dollar index rose by 0.17%, closing at 100.58. Substantial progress was made in the high-level economic and trade talks between China and the US, which has alleviated market anxiety. Beth Hammack, President of the Federal Reserve Bank of Cleveland, stated on Friday that the US Fed needs more time to observe how the economy responds to President Trump's tariffs and other policies before it can identify the correct response measures. According to the CME "FedWatch": The probability of the Fed maintaining interest rates unchanged in June is 82.7%, while the probability of a 25-basis-point interest rate cut is 17.3%. The probability of the Fed maintaining interest rates unchanged in July is 40.8%, the cumulative probability of a 25-basis-point interest rate cut is 50.7%, and the cumulative probability of a 50-basis-point interest rate cut is 8.7%. The US Consumer Price Index (CPI) for April, to be released on Tuesday, will provide new clues regarding the path of the Fed's monetary policy, a matter of great concern to traders.

Macro side:

[He Lifeng: China firmly supports multilateralism and free trade, and supports the World Trade Organization in playing a greater role in global economic governance] Vice Premier of the State Council He Lifeng met with World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala in Geneva on the evening of the 11th. He Lifeng stated that the multilateral trading system centered around the WTO is the cornerstone of international trade and plays a vital role in global economic governance. All parties should resolve differences and disputes through equal dialogue within the framework of the WTO, jointly uphold multilateralism and free trade, and promote the stability and smooth operation of global industrial and supply chains. China will continue to participate comprehensively and deeply in the reform of the WTO, support the WTO in playing the role of a "stabilizer" for global trade, safeguard the legitimate rights and interests of developing members, and make greater contributions to addressing global common challenges. He Lifeng also provided information on the high-level economic and trade talks between China and the US in response to inquiries. Ngozi Okonjo-Iweala stated that the current global economic and trade growth is facing severe challenges, and WTO members should jointly defend an open and rules-based multilateral trading system, strengthen dialogue and cooperation on international trade issues, and promote the WTO in playing a greater role in facilitating trade liberalization and achieving global sustainable development.

►He Lifeng: China and the US Reach Important Consensus, Talks Make Substantial Progress

Today, data including China's M2 money supply YoY for April, China's total social financing (TSF) for the year to date (YTD) in April, China's new RMB loans for the YTD in April, changes in Canada's employment for April, and Canada's unemployment rate for April will be released. Additionally, attention should be paid to the following: Vice Premier of the State Council He Lifeng visited Switzerland from May 12 to 12 (Note: This appears to be a typo, likely intended to be a different date range) and held talks with Swiss leaders and relevant parties. During his visit, as the Chinese lead negotiator for China-US economic and trade issues, Vice Premier He Lifeng will hold talks with the US lead negotiator, US Treasury Secretary Bessent. Furthermore, Federal Reserve Governor Cooker delivered a speech; the National Energy Administration's monthly release of total electricity consumption data around the 15th of each month is also worth noting.

Crude Oil:

As of 11:47, crude oil futures rose, with US crude up 0.59% and Brent crude up 0.52%. The easing of global trade tensions boosted market sentiment and supported oil prices. However, a potential nuclear deal between the US and Iran could alleviate concerns about a reduction in global oil supply, which would also put pressure on oil prices and limit their gains.

In other news, US energy services company Baker Hughes stated in its closely watched report that the number of oil and natural gas rigs operated by US energy companies fell to its lowest level since January this week. Data showed that as of the week ending May 9, the total number of US oil and natural gas rigs, a leading indicator of future production, declined by 6 to 578. This brought the total number of active rigs down by 25, or 4%, YoY. During the week, the number of active US oil rigs fell by 5 to 474, while the number of natural gas rigs remained steady at 101.

Data released by the US Commodity Futures Trading Commission (CFTC) showed that as of the week ending May 6, fund managers reduced their net long positions in US crude oil futures and options. The data indicated that speculators cut their net long positions in WTI crude oil futures and options in both New York and London by 23,002 lots to 93,596 lots. (Webstock Inc.)

Spot Market Overview:

►Large Monthly Spread, Lower Contango, Overall Trading Activity Average [SMM South China Copper Spot]

►Weak Downstream Demand, Poor Purchase Willingness, Sluggish Spot Trading Activity [SMM North China Copper Spot]

►[SMM Iron Ore Shipping Data] Global Shipments Continue to Decline Slightly, Port Arrivals Increase Slightly

►[SMM Steel Shipping] China's Total Steel Exports Fell 18% WoW Last Week

►[SMM Coking Coal Shipping] SMM Total Coal Port Arrivals Reached 7.101 Million mt

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