US dollar declines, metals generally fall, alumina surges over 6%, lithium carbonate and coking coal and coke lead the declines [SMM Daily Review]

SMM News on May 19:

Metal Market:

As of the daytime close, domestic market base metals collectively declined. SHFE copper and SHFE nickel both fell by over 0.6%, with SHFE copper down 0.63% and SHFE nickel down 0.67%. The declines of other metals were all within 0.5%, while the main alumina contract surged by 6.25%.

In addition, the main lithium carbonate contract fell by 2.27%, the main silicon metal contract dropped by 1.87%, and the main polysilicon contract rose by 0.51%. The main European container shipping contract jumped by 5.84%.

In the ferrous metals series, prices collectively fell, with iron ore down 0.89%. Rebar fell by 1%, and HRC declined by 1.02%. In the coking coal and coke sector, coke fell by 1.79%, and coking coal dropped by 2.2%.

In the overseas market, as of 15:04, only LME copper and LME tin among overseas base metals rose, with LME copper up 0.4% and LME tin up 0.24%, while the declines of other metals fluctuated slightly.

In precious metals, as of 15:04, COMEX gold rose by 1.27%, and COMEX silver increased by 0.82%. Domestically, SHFE gold rose by 0.53%, and SHFE silver increased by 0.35%.

Market conditions as of 15:04 today

》Click to view SMM Market Dashboard

Macro Front

Domestic Aspects:

[National Bureau of Statistics (NBS): In the next stage, the significant reduction of tariffs between China and the US will be conducive to trade growth between the two sides] ① Fu Linghui, spokesperson for the NBS, stated that the fundamental aspects of China's economy remaining positive have not changed, and there are many favorable conditions for sustained economic rebound. ② In the next stage, it is necessary to implement special actions to boost consumption, continue to enhance residents' consumption capacity, increase high-quality supply, improve the consumption environment, and better unleash consumption potential. ③ In the next stage, the significant reduction of tariffs between China and the US will be conducive to trade growth between the two sides and also beneficial to the global economic recovery. 》Click to view details

[National Bureau of Statistics (NBS): In April, the national economy withstood pressure and maintained stable growth, with the value-added of industrial enterprises above designated size increasing by 6.1% YoY] In April, the national economy withstood pressure and maintained stable growth, continuing the development trend towards innovation and improvement. In April, the value-added of industrial enterprises above designated size nationwide increased by 6.1% YoY and 0.22% MoM. By industry, the value-added of the mining industry increased by 5.7% YoY, manufacturing by 6.6%, and the production and supply of electricity, heat, gas, and water by 2.1%. The value-added of the equipment manufacturing industry increased by 9.8% YoY, and that of the high-tech manufacturing industry increased by 10.0%, which were 3.7 and 3.9 percentage points faster, respectively, than the overall value-added of industrial enterprises above designated size. By economic type, the value-added of state-controlled enterprises increased by 2.9% YoY; joint-stock enterprises increased by 6.6%, foreign-invested enterprises and those invested by Hong Kong, Macao, and Taiwan increased by 3.9%; and private enterprises increased by 6.7%. By product, the production of 3D printing equipment, industrial robots, and NEV products increased by 60.7%, 51.5%, and 38.9% YoY, respectively. From January to April, the seasonally adjusted industrial added value of enterprises above designated size nationwide increased by 6.4% YoY. In April, the total retail sales of consumer goods reached 3,717.4 billion yuan, up 5.1% YoY... 》Click to view details

[The CSRC will soon introduce policy measures to deepen the reform of the Science and Technology Innovation Board (STAR Market) and the ChiNext Market. Currently, the valuation level of A-shares remains relatively low.] The Shenzhen Stock Exchange (SZSE) hosted the 2025 Global Investors Conference in Shenzhen for two consecutive days from May 19 to 20. The conference, themed "New Quality Productive Forces: New Investment Opportunities in China - Shenzhen's Open and Innovative Market," showcased the investment value of Chinese assets and the A-share market through keynote speeches, panel discussions, company roadshows, and other formats. Li Ming, Vice Chairman of the China Securities Regulatory Commission (CSRC), stated at the conference that the current valuation level of A-shares remains relatively low, with the CSI 300 price-to-earnings ratio at 12.6, significantly lower than major indices in overseas markets, further highlighting its allocation value. Li Ming said that in the near future, the CSRC will also introduce policy measures to deepen the reform of the STAR Market and the ChiNext Market, providing more suitable and inclusive institutional support for the innovative growth of enterprises. 》Click to view details

►The central parity rate of the RMB exchange rate in the inter-bank foreign exchange market on May 19 was 7.1916 yuan per US dollar.

US dollar:

As of 15:04, the US dollar index fell by 0.34% to 100.62. Earlier, US Fed's Bostic stated that he expects the US economy to slow down this year but not fall into a recession, reiterating that an interest rate cut is expected once in 2025. He said that the economic growth rate this year may be around 0.5% or 1%, with uncertainties and concerns surrounding the outlook putting pressure on consumers. He added that fluctuations in trade policies also make enterprises more reluctant to make significant decisions. Currently, market expectations suggest that the US Fed will begin cutting interest rates in October this year.

Macro:

Today, data such as China's total electricity consumption in April (monthly), the final unadjusted year-on-year rate of the harmonized CPI in the Eurozone in April, and the final unadjusted year-on-year rate of the core harmonized CPI in the Eurozone in April will be released. Attention should also be paid to: NVIDIA CEO Jensen Huang's speech at Computex Taipei, where he will share the latest progress and breakthroughs in "AI and accelerated computing technology"; a speech by US Fed Vice Chair Jefferson; and a speech by FOMC permanent voter and New York Fed President Williams.

Crude oil:

As of 15:04, oil prices in both markets fell simultaneously, with US crude oil down by 0.81% and Brent crude oil down by 0.76%. In terms of supply, OPEC+ may further ease crude oil production restrictions in July, with the market expecting the production increase to remain within the range of 100,000-400,000 barrels per day. OPEC+ had previously decided to accelerate production increases in May, with a single-month increase of 410,000 barrels per day, equivalent to three months of production growth. In June, the single-month increase of 410,000 barrels per day will continue. The sustained release of supply has raised concerns in the market about a potential supply surplus in the oil market. The main intention behind OPEC+'s unexpected production increase is to penalize member countries such as Kazakhstan and Iraq, which previously failed to strictly adhere to quota regulations. These countries have still not taken the required compensatory production cuts. By raising the overall production level, OPEC+ may exert downward pressure on international oil prices. In this scenario, even if some member countries attempt to overproduce, their actual profits will significantly shrink due to the pullback in oil prices, ultimately making overproduction unprofitable.

Demand side, last week, OPEC and IEA successively released their May crude oil market reports, providing the latest assessments of global crude oil demand prospects. While OPEC lowered its global economic growth forecast, it made no significant adjustments to demand. IEA, on the other hand, slightly raised its demand expectations for this year and next year in its monthly report due to positive signals from Sino-US trade negotiations, increasing this year's oil demand growth forecast by 20,000 barrels per day to 740,000 barrels per day. However, IEA expects the demand growth rate for the remainder of this year to slow down from 990,000 barrels per day in the first quarter to 650,000 barrels per day. IEA further warned that global supply in 2025 is expected to significantly exceed demand growth, with inventories increasing by approximately 720,000 barrels per day, reducing the room for further rebound in oil prices.

SMM Daily Review

►[SMM MHP Daily Review] May 19, Indonesian MHP prices slightly declined

►[SMM Nickel Sulphate Daily Review] May 19, Nickel salt demand weakened

►Silver prices consolidated, downstream cautious procurement, market transactions slightly weak [SMM Daily Review]