US dollar falls for two consecutive days, metals mostly fall; polysilicon, coking coal drop by over 3%, with alumina and lithium carbonate leading the declines [SMM Midday Review]

SMM May 16 News:

Metal Market:

As of the midday close, domestic base metals fell across the board. SHFE zinc dropped 0.97%, SHFE aluminum fell 0.54%. SHFE lead declined 0.62%, SHFE copper edged down slightly, and SHFE tin fell 0.2%. SHFE nickel dropped 0.24%.

In addition, alumina fell 2.94%, lithium carbonate dropped 2.88%, silicon metal fell 2.77%, and polysilicon dropped 3.45%.

The ferrous metals series all fell, with iron ore dropping 0.95% and stainless steel declining 0.27%. Rebar and HRC both fell 0.77%. In the coking coal and coke sector: coking coal fell 3.05%, and coke dropped 1.73%.

In the overseas metal market, as of 11:42 a.m., LME metals showed mixed performance. LME copper and LME tin edged up slightly, while LME aluminum edged down slightly. LME tin edged up slightly, LME lead fell 0.6%, LME zinc dropped 0.28%, and LME nickel rose 0.29%.

In the precious metals sector, as of 11:42 a.m., COMEX gold fell 0.36%, and COMEX silver dropped 0.32%. Domestically, SHFE gold rose 0.75%, and SHFE silver increased 0.72%.

As of the midday close, the most-traded contract for the European Containerized Freight Index fell 5.65%, closing at 1,697.9 points.

As of 11:42 a.m. on May 16, the midday futures market movements for some contracts were as follows:

》SMM Metal Spot Prices on May 16

Spot and Fundamentals

Iron Ore: This week, the imported iron ore market surged significantly before pulling back slightly. On Monday, the "Joint Statement of the China-U.S. Geneva Economic and Trade Talks" was released, with both sides agreeing to significantly reduce bilateral tariff levels, each retaining a 10% tariff. Since February, market sentiment regarding tariff wars had improved significantly, stimulating a sharp rise in iron ore futures. Subsequently, an accident occurred at a Peruvian iron ore company's port facility, requiring 4-5 months of repairs, raising market concerns about future supply reductions and pushing iron ore prices to highs again. However, ... 》Click for details

Macro Front

Domestic:

[Announcement] The State Council Information Office will hold a press conference with Chinese and foreign journalists titled "Strivers on the New Journey" at 3:00 p.m. on Tuesday, May 20, 2025. Representatives from the civil affairs system will meet and exchange views with Chinese and foreign journalists on the theme of "Fulfilling the Mission of Civil Affairs and Enhancing People's Well-being."

The People's Bank of China conducted 106.5 billion yuan in 7-day reverse repo operations today, with an operating interest rate of 1.40%, unchanged from the previous rate. As 77 billion yuan in 7-day reverse repos matured today, a net injection of 29.5 billion yuan was achieved.

[Export-Import Bank of China: Medium and Long-Term Manufacturing Loans Exceeded 180 Billion Yuan from January to April] Data released by the Export-Import Bank of China today showed that from January to April, the bank disbursed over 180 billion yuan in medium and long-term manufacturing loans. As of the end of April, the outstanding balance of medium and long-term manufacturing loans was 1.8 trillion yuan, with a focus on supporting the export of manufacturing products such as ships and construction machinery. The bank also actively met the full-cycle financial needs of technology-based enterprises, fully supporting the construction of a modern industrial system.

[Cui Dongshu from CPCA: China's power battery installations reached 54.1 GWh in April, up 52.8% YoY]Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), released an analysis of the lithium battery market for new energy vehicles (NEVs) in April. In April, China's power battery installations reached 54.1 GWh, down 4.3% MoM and up 52.8% YoY. Among them, ternary battery installations were 9.3 GWh, accounting for 17.2% of total installations, down 7.0% MoM and 6.3% YoY. LFP battery installations were 44.8 GWh, accounting for 82.8% of total installations, down 3.8% MoM and up 75.9% YoY. From January to April, China's cumulative power battery installations reached 184.3 GWh, up 52.8% YoY. Among them, cumulative ternary battery installations were 34.3 GWh, accounting for 18.6% of total installations, down 15.9% YoY. Cumulative LFP battery installations were 150.0 GWh, accounting for 81.4% of total installations, up 88.0% YoY. (Cailian Press)

►On May 16, the central parity rate of the RMB exchange rate in the inter-bank foreign exchange market was 7.1938 RMB per US dollar.

US dollar:

As of 11:42, the US dollar index extended its decline from the previous trading day, falling by 0.16% to 100.65. Data released by the US Department of Labor showed that the US Producer Price Index (PPI) for April rose 2.4% YoY, lower than expected and the previous reading, marking the third consecutive month of slowing growth and the lowest since September last year. The PPI fell 0.5% MoM in April, the largest decline in five years. The continued cooling of the US PPI largely reflects a decline in corporate profit margins, indicating that US companies are absorbing some of the impact of tariff increases and have not yet passed them on to consumers. In addition, US retail sales growth slowed sharply in April as the boost from households rushing to buy cars before tariff implementation faded, while US consumers cut spending in other areas amid uncertainty about the economic outlook. US Fed Governor Barr said the economy was on a solid footing, but trade disputes were casting a shadow over the outlook.

Macro:

Today, data to be released include China's total electricity consumption for April (monthly), the preliminary monthly rate of US building permits for April, the preliminary annualized total of US building permits for April, the monthly rate of the US import price index for April, the annual rate of the US import price index for April, the annualized total of US housing starts for April, the preliminary May University of Michigan consumer sentiment index for the US, the Eurozone's seasonally adjusted trade balance for March, the preliminary QoQ seasonally adjusted real GDP growth rate for Japan in Q1, the preliminary QoQ seasonally adjusted nominal GDP growth rate for Japan in Q1, the preliminary QoQ seasonally adjusted annualized real GDP growth rate for Japan in Q1, New Zealand's inflation expectations for the next two years in Q2, and New Zealand's inflation expectations for the next year in Q2.

Crude Oil:

As of 11:42, crude oil futures dropped slightly, with both WTI and Brent crude falling by 0.03%. Oil prices fluctuated rangebound, supported by optimistic sentiment about the global trade situation, but pressure was exerted by the return of Iranian supply to the market.

The International Energy Agency (IEA) stated that despite lower forecasts for US shale oil production, the growth rate of global oil supply this year will be faster than previously expected, as Saudi Arabia and other OPEC member countries cancel production cuts. In its monthly report, the IEA said it expects global oil supply to increase by 1.6 million barrels per day this year, an increase of 380,000 barrels per day from previous forecasts. (Webstock Inc.)

Spot Market Overview:

►Spot premiums/discounts surged after contract rollover, with overall market activity rebounding. [SMM North China Spot Copper]

►[SMM Analysis] Supported by fundamentals and sentiment, iron ore prices are expected to continue rising next week.

Updates on other metal spot market reviews will be available later. Please refresh to view.