US dollar falls, metals almost across the board fall, lithium carbonate drops over 4%, polysilicon and alumina fall over 3% [SMM Daily Review]

SMM News on May 16:

Metal Market:

As of the daytime close, domestic market base metals generally declined, with SHFE zinc down 1.06%, SHFE nickel down 0.78%, and SHFE lead down 0.76%. The declines in other metals fluctuated slightly. The main alumina contract fell by 3.34%.

In addition, the main lithium carbonate contract dropped by 4.19%, the main silicon metal contract fell by 3.89%, and polysilicon declined by 3.26%. The main European container shipping contract fell by 6.37%.

The ferrous metals series collectively declined, with rebar down 1.15%. In the coking coal and coke sector, coking coal fell by 3.84%, and coke declined by 1.93%.

In the overseas market, as of 15:05, overseas base metals collectively declined, with all declines within 1%. LME lead fell by 0.85%, and LME zinc dropped by 0.61%. The declines in other metals fluctuated slightly.

In precious metals, as of 15:05, COMEX gold fell by 0.25%, and COMEX silver declined by 0.54%. Domestically, SHFE gold rose by 0.88%, and SHFE silver increased by 0.61%.

Market conditions as of 15:05 today

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Macro Front

Domestic Aspects:

[Preview]The State Council Information Office will hold a press conference for 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 with Chinese and foreign journalists to discuss "Fulfilling the Mission of Civil Affairs and Enhancing People's Well-being."

[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. The balance of medium and long-term manufacturing loans at the end of April was 1.8 trillion yuan, with a focus on supporting the export of manufacturing products such as ships and construction machinery. The bank actively met the full-cycle financial needs of technology-based enterprises, fully supporting the construction of a modern industrial system.

[CPCA's Cui Dongshu: China's Power Battery Installations Reached 54.1 GWh in April, Up 52.8% YoY]CPCA Secretary General Cui Dongshu released an analysis of the new energy vehicle lithium battery market 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, the cumulative installed capacity of ternary batteries was 34.3 GWh, accounting for 18.6% of the total installed capacity, with a cumulative year-on-year decrease of 15.9%. The cumulative installed capacity of LFP batteries was 150.0 GWh, accounting for 81.4% of the total installed capacity, with a cumulative year-on-year increase of 88.0%. (Cailian Press)

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

US dollar:

As of 15:05, the US dollar index fell by 0.22%. Fed Chairman Powell stated that the US may be entering a period of more frequent and longer-lasting supply shocks. The narrative of tariff easing has been somewhat absorbed, and trade disputes have left the US economic outlook uncertain, leading to a weaker US dollar and a decline in US bond yields.

The monthly rate of US retail sales in April rose by 0.1%, against expectations of no change, with the previous figure revised from a 1.4% increase to a 1.5% increase. The sluggish growth in US retail sales in April indicates that the boost from households purchasing cars ahead of tariff implementation has faded, and households have cut back on other spending amid an uncertain economic outlook, with concerns about slowing economic growth intensifying. In addition, the US PPI in April rose by 2.4% YoY, lower than expected and the previous figure, with the growth rate declining for the third consecutive month and hitting a new low since September last year. The PPI in April fell by 0.5% MoM, the largest decline in five years. The number of Americans filing initial claims for unemployment benefits remained stable last week, with the layoff rate staying at a low level.

On May 15 local time, Fed Chairman Powell delivered a speech at the second Thomas Laubach Research Conference. Powell stated that inflation may become more volatile in the future, and the US may be entering a period of more frequent and longer-lasting supply shocks, posing a daunting challenge to the economy and the central bank. Powell indicated that the Fed is adjusting its overall policy framework to address significant changes in the inflation and interest rate outlook following the 2020 pandemic. Fed Governor Barr said on Thursday that the US economy is on a solid footing, with inflation returning towards the Fed's 2% target, but trade policies are casting a shadow over the outlook.

Macro:

Today, data such as China's total electricity consumption in April - monthly, the initial monthly rate of US housing starts in April, the initial annualized total of US housing starts in April, the monthly rate of the US import price index in April, the annual rate of the US import price index in April, the annualized total of US housing starts in April, the initial value of the University of Michigan Consumer Sentiment Index for the US in May, the seasonally adjusted trade balance of the Eurozone in March, the initial value of the seasonally adjusted real GDP quarterly rate for Japan in Q1, the initial value of the seasonally adjusted nominal GDP quarterly rate for Japan in Q1, the initial value of the seasonally adjusted real GDP annualized quarterly rate for Japan in Q1, the expected inflation rate for New Zealand over the next two years in Q2, and the expected inflation rate for New Zealand over the next year in Q2 will be released.

Crude Oil Market:

As of 15:05, oil prices in both markets fell simultaneously, with US crude down 0.41% and Brent crude down 0.34%. The International Energy Agency (IEA) {{yesterday}} forecast that global oil inventories would surge in 2025 and 2026, as trade uncertainties exacerbate the decline in oil demand from the Organisation for Economic Co-operation and Development (OECD), and Saudi Arabia and its partners ease production cuts. The report stated that policy uncertainty remains high, putting pressure on consumer and business confidence. The tariff supply shock appears less severe than previously anticipated, prompting an upward revision of the economic growth assumptions underpinning demand forecasts. Despite recent economic weakness, emerging economies are expected to continue driving demand growth, with total demand forecasted to average 103.9 million barrels per day (bpd) in 2025. However, oil consumption data from non-OECD countries has been disappointing. The IEA forecasts an accelerated decline in overall oil demand from advanced OECD economies, with a drop of 120,000 bpd in 2025 and 240,000 bpd in 2026. The report noted that, despite continued growth in emerging market demand, "the latest delivery data from non-OECD countries, particularly major consumers like India, have consistently fallen short of expectations." The IEA stated that after global oil inventories declined at a rate of 140,000 bpd in 2024, they are expected to increase by 720,000 bpd in 2025 and 930,000 bpd in 2026. (Wenhua Comprehensive)

SMM Daily Review

►May 16: Aluminum prices end their upward streak, while aluminum billet processing fees continue to face downward pressure amid adjustments [Daily Review of Spot Aluminum Billet]

►[SMM MHP Daily Review] May 16: MHP prices in Indonesia increase slightly

►[SMM Nickel Sulphate Daily Review] May 16: Demand for nickel salts weakens

SMM Weekly Review

►Mixed sentiments in the Asian offshore market, with Yangshan copper premiums peaking and pulling back [SMM Weekly Review of Yangshan Copper]

►Domestic processing fees remain stable, while import processing fees rise slightly [SMM Weekly Review of Zinc Concentrates]

►Orders on hand support production at copper wire and cable enterprises, but new orders raise concerns [SMM Weekly Review of Wire and Cable Market]

►First-round inquiries for mainstream steel tenders fall short of expectations, with SiMn prices stabilizing after a slight increase [SMM Weekly Review]

►Favourable macro front spurs firm quotes from manganese plants [SMM Weekly Review of EMM]