Easing trade tensions lead to mixed performance in metals, with LME aluminum rising over 2% and New York gold plunging more than 3% [overnight market moves]

SMM May 13 Report:

Metal Market:

Overnight, metals in both domestic and overseas markets showed mixed performance. Domestically, SHFE tin led the gains with a 1.33% increase, while SHFE nickel fell by 1.26%. Overseas, LME aluminum led the gains with a 2.17% increase, LME tin rose by 1.69%, and LME nickel fell by 1.61%. The % change for other metals was within 1%. The main alumina futures contract rose by 0.6%.

Most ferrous metals series prices rose, with iron ore, HRC, and rebar all increasing by over 1%. Iron ore rose by 1.77%, HRC by 1.1%, and rebar by 1.28%. In the coking coal and coke sector, coking coal fell by 0.68%, and coke fell by 0.03%.

In the precious metals sector, COMEX gold fell by 3.06% overnight, and CIOMEX silver fell by 0.36%. Domestically, SHFE gold fell by 2.52%, and SHFE silver fell by 0.75%. Previously, China and the US reached a series of important consensus in the economic and trade fields, gradually heating up risk sentiment.

Overnight closing prices as of 6:45 a.m. on May 13

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Macro Front

Domestic:

The Ministry of Commerce website released a joint statement on the China-US Geneva Economic and Trade Talks. Both sides committed to taking the following measures before May 14, 2025: The US will (1) revise the ad valorem tariffs imposed on Chinese goods (including goods from the Hong Kong Special Administrative Region and the Macao Special Administrative Region) as specified in Executive Order 14257 of April 2, 2025. Among these, a 24% tariff will be suspended for the initial 90 days, while retaining the right to impose the remaining 10% tariff on these goods as stipulated in the executive order; (2) Cancel the tariffs imposed on these goods under Executive Order 14259 of April 8, 2025, and Executive Order 14266 of April 9, 2025. China will (1) correspondingly revise the ad valorem tariffs imposed on US goods as specified in Announcement No. 4, 2025, of the Customs Tariff Commission. Among these, a 24% tariff will be suspended for the initial 90 days, while retaining the right to impose the remaining 10% tariff on these goods, and cancel the tariffs imposed on these goods under Announcement No. 5 and No. 6, 2025, of the Customs Tariff Commission; (2) Take necessary measures to suspend or cancel non-tariff countermeasures against the US implemented since April 2, 2025. After taking the above measures, both sides will establish a mechanism to continue consultations on economic and trade relations.

The spokesperson of the Ministry of Commerce made a statement on the joint statement on the China-US Geneva Economic and Trade Talks. The Ministry of Commerce stated that substantial progress was made in this round of high-level economic and trade talks between China and the US, significantly reducing bilateral tariff levels. The US canceled a total of 91% of the tariff hikes, and China correspondingly canceled 91% of the countermeasures tariffs. The US suspended the implementation of 24% of the "reciprocal tariffs," and China also correspondingly suspended the implementation of 24% of the countermeasures tariffs.This move aligns with the expectations of producers and consumers in both countries, as well as with the interests of both countries and the shared interests of the world.

US dollar:

The US dollar index surged overnight, rising by 1.38%, as trade tensions eased on May 12 (Monday), alleviating concerns about a global economic recession. Despite the US dollar's three-week strengthening streak amid rising optimism over a potential trade deal, it has still fallen by 2.2% since April 2.

This week's focus will also be on the US Consumer Price Index (CPI) released on Tuesday and April's retail sales data released on Thursday, to gauge the impact of global trade conflicts on the economy and on expectations for further interest rate cuts by the US Federal Reserve (Fed/FED). Traders lowered their expectations for interest rate cuts by the Fed and the European Central Bank on Monday, as the economic outlook improved following the trade deal. The market now believes that the Fed is likely to cut interest rates by at least 25 basis points for the first time at its September meeting, compared to last week's view of a July cut. (Wenhua Comprehensive)

Other currencies:

The US dollar index, which measures the US dollar against a basket of currencies including the Japanese yen and the euro, surged by 1.5% to 101.91. The euro fell by 1.54% against the US dollar to $1.1074, poised for its largest one-day drop since November 6.

Risk appetite drove US stocks sharply higher, with the S&P 500 index surging over 3%, weighing on safe-haven currencies. The US dollar rose 2.19% to 148.50 yen against the Japanese yen in late New York trading, after touching 148.64, its highest level since April 3.

The US dollar rose 1.86% to 0.847 against the Swiss franc, touching an intraday high of 0.8475, its highest level since April 10.

The British pound fell 1.07% to $1.3162 against the US dollar, poised for its largest one-day drop since April 7.

Macro:

Today, data including China's April M2 money supply year-on-year rate, China's April total social financing year-to-date, China's April new yuan loans year-to-date, the US April CPI year-on-year rate (not seasonally adjusted), the US April core CPI year-on-year rate (not seasonally adjusted), the US April energy CPI year-on-year rate (not seasonally adjusted), the Eurozone's May ZEW Economic Sentiment Index, Germany's May ZEW Economic Sentiment Index, Australia's ANZ Consumer Confidence Index for the week ending May 11, the UK's March unemployment rate (ILO standard), and the UK's March average weekly earnings including bonuses year-on-year rate will be released.

In addition, the Bank of Japan will release the summary of opinions from its April monetary policy meeting, Bank of England Governor Bailey will deliver a speech, and US President Trump will visit Saudi Arabia, Qatar, and the UAE from May 11 to 14.

Crude oil:

Oil prices on both the New York and London markets rose overnight, with U.S. crude gaining 1.54% to close at a two-week high amid easing concerns over the trade outlook. Brent crude also rose 1.69%, hitting a two-week peak. In April, oil prices fell to their lowest level in four years as investors worried that trade disputes would curb economic growth and oil demand. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) decided to increase oil production by a larger margin than previously expected. Saudi Aramco stated that it expects oil demand to remain resilient this year and could rise further if trade disputes end.

In Iraq, OPEC's second-largest oil producer, crude oil exports are expected to fall to around 3.2 million barrels per day (bpd) in May and June, a significant drop from previous months. Analysts from Goldman Sachs said in a report that OPEC+ may pause further increases in oil production due to deteriorating global economic conditions. Goldman Sachs expects OPEC to make a "final" decision in July to raise daily production by 411,000 bpd, but actual economic data may prompt a reassessment and a pause in production increases.

Previously, OPEC+ decided to increase daily crude oil production by 411,000 bpd in June, bringing the organization's total production target for April, May, and June to 960,000 bpd. This means that 44% of the 2.2 million bpd in production cuts will be reversed. (Wenhua Comprehensive)