Most metals fell, alumina rose for two consecutive days, silicon metal fell by over 2%, lithium carbonate and polysilicon fell by over 1% [SMM Midday Review]

SMM, May 19:

Metal Market:

As of the midday close, domestic base metals generally declined, with SHFE tin rising by 0.5%, SHFE zinc slightly falling, SHFE lead dropping by 0.5%, and both SHFE aluminum and SHFE nickel falling by 0.4%. SHFE copper rose by 0.19%.

In addition, alumina continued its upward trend from the previous trading day, rising by 1.55%. Lithium carbonate fell by 1.3%, silicon metal fell by 2.03%, and polysilicon fell by 1.08%.

The ferrous metals series mostly fell, with iron ore rising by 0.21% and stainless steel falling by 0.85%. Both rebar and HRC dropped slightly. In terms of coking coal and coke: coking coal fell by 0.76% and coke fell by 0.87%.

In the overseas metal market, as of 11:52 a.m., LME metals generally declined. LME copper, LME aluminum, LME zinc, and LME nickel all fell within 0.5%, while LME tin rose by 0.16% and LME lead rose by 0.61%.

In precious metals, as of 11:52 a.m., COMEX gold fell by 0.67% and COMEX silver fell by 0.56%. Domestically, SHFE gold rose by 0.52% and SHFE silver slightly increased.

As of the midday close, the most-traded contract for the European container shipping index fell by 0.95%, closing at 2306.0 points.

As of 11:52 a.m. on May 19, the midday futures market movements for some contracts were as follows:

》SMM Metal Spot Prices on May 19

Spot and Fundamentals

Copper: Today, spot #1 copper cathode in Guangdong was quoted at a premium of 150 yuan/mt to 230 yuan/mt against the front-month contract, with an average premium of 190 yuan/mt, down 80 yuan/mt from the previous trading day. SX-EW copper was quoted at a premium of 90 yuan/mt to 110 yuan/mt, with an average premium of 100 yuan/mt, down 70 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 78,180 yuan/mt, up 200 yuan/mt from the previous trading day, and the average price of SX-EW copper was 78,090 yuan/mt, up 210 yuan/mt from the previous trading day. Spot Market: Guangdong's inventory ended its three-day consecutive rise and began to decline again, mainly due to increased outflows from warehouses... 》Click for details

Macro Front

Domestic:

[Addressing cut-throat competition, policies to stabilize the economy to be implemented before the end of June! A comprehensive guide to the NDRC's press conference] The National Development and Reform Commission (NDRC) held its May press conference at 10 a.m. today. Li Chao, the NDRC's spokesperson, stated that on top of accelerating the implementation of existing policies, the NDRC, in collaboration with relevant departments, has expedited the introduction of several measures to stabilize employment, stabilize the economy, and promote high-quality development. Relevant departments are currently working diligently to implement these measures, with most policy initiatives planned to be in place before the end of June. Meanwhile, the NDRC will continue to strengthen policy pre-research and reserves on a regular and open-ended basis, continuously improving the policy toolbox for stabilizing employment and the economy to ensure timely implementation when needed. Li Chao stated that the National Development and Reform Commission (NDRC) aims to finalize and issue the list of all "implementation of major national strategies and the development of security capabilities in key areas" construction projects for this year by the end of June, ensuring high standards in organization and implementation. Li Chao noted that addressing cut-throat competition is a matter of great concern to all. Currently, China's economy is in a period of replacing old growth drivers with new ones, with new industries, business formats, and models continuously emerging. Traditional industries are accelerating their transformation and upgrading. During this process, some industries have encountered structural issues, breaching the boundaries and bottom lines of market competition, distorting market mechanisms, and disrupting the order of fair competition, necessitating immediate rectification.

[Ministry of Housing and Urban-Rural Development: Will Accelerate the Promotion of New-Type Urban Infrastructure Construction] Qin Haixiang, Deputy Minister of the Ministry of Housing and Urban-Rural Development, stated at a press conference that the Ministry will accelerate the promotion of new-type urban infrastructure construction in the next step. By utilizing information and digital technologies, it will enhance the intelligent level of infrastructure, expedite the improvement of long-term management systems for infrastructure construction, operation, and maintenance, explore new models for investment and financing in urban construction and operation, and continuously enhance the level of urban infrastructure construction, management, and services.

[Liao Yuanyuan from the National Financial Regulatory Administration: Will Study and Introduce Specialized Loan Management Measures for Urban Renewal Projects] Caijing reported on May 20 that Liao Yuanyuan, Director of the Statistics and Risk Monitoring Department of the National Financial Regulatory Administration, stated at a press conference held by the State Council Information Office that the Administration will guide financial institutions to deeply understand the inherent logic of urban renewal initiatives, accurately grasp new characteristics and requirements, and actively provide a diverse range of tailored financial products and services for urban renewal initiatives in accordance with the principles of legal compliance, risk controllability, and commercial sustainability, to meet the financial needs of different entities, projects, stages, and links. Liao Yuanyuan indicated that the Administration will guide financial institutions to closely study and formulate supporting institutional processes, business systems, and performance evaluation systems in line with the specific requirements of urban renewal initiatives. It will fully leverage the unique advantages of different types of financial institutions, allocate financial resources effectively, and ensure seamless integration with fiscal funds and social capital. The Administration will study and introduce specialized loan management measures for urban renewal projects, clarifying loan conditions and standards to meet the financial needs of urban renewal initiatives and enhance the timeliness and effectiveness of financial services.

First Drop This Year! China's 1-Year and 5-Year LPR Both Cut by 10 Basis Points in May

[PBOC Injects Net 177 Billion Yuan into Open Market] The People's Bank of China (PBOC) conducted 357 billion yuan in 7-day reverse repo operations today, with an operating interest rate of 1.40%, unchanged from the previous rate. With 180 billion yuan of 7-day reverse repo operations maturing today, a net injection of 177 billion yuan was achieved.

►On May 19, the central parity rate of the RMB exchange rate in the inter-bank foreign exchange market was set at 7.1916 yuan per US dollar.

US dollar:

As of 11:52, the US dollar index fell by 0.01% to 100.35. Several US Fed officials delivered speeches, expressing caution about the impact of the US government's credit rating downgrade and market instability. Currently, they are still grappling with a highly uncertain economic environment. Heavyweight officials, including US Fed Vice Chair Jefferson and New York Fed President Williams, hinted that due to the unclear economic outlook in the US, interest rate policymakers may not be ready to cut interest rates before September. Williams, the "third-in-command" at the US Fed, stated on Monday, "We won't figure out what's happening in June or July. This will be a process of collecting data, gaining a clearer understanding of the situation, and observing how events unfold." Atlanta Fed President Bostic also expressed similar views on Monday, hinting at a reluctance to adjust interest rates for some time. Bostic reiterated that, given the uncertainties triggered by tariffs, he believes the central bank will cut interest rates once this year. On the 16th, international credit rating agency Moody's announced that it had downgraded the US sovereign credit rating by one notch from Aaa to Aa1. Moody's pointed out that this downgrade reflects the continuous rise in the US government's debt-to-interest payment ratio over the past decade, which is now significantly higher than that of other sovereign nations of the same rating. Several US Fed officials are scheduled to deliver speeches later today, potentially offering further insights into the economic and central bank policy paths. The market currently expects the US Fed's first interest rate cut this year to begin in October.

Other currencies:

The reset of the EU-UK trade agreement on Monday reshapes a crucial aspect of European economic, strategic, and defense relations, which should bring economic benefits to both sides. Lars Klingbeil, Germany's new finance minister, is seeking to cut expenses before a surge in large-scale spending, which includes the establishment of a 500 billion euro infrastructure fund and the exemption of defense spending from debt rules. (Huitong Finance)

Macro:

Today's data includes China's April year-on-year growth rate of total electricity consumption, Australia's May cash rate, Canada's April unadjusted year-on-year CPI growth rate, Canada's April central bank core CPI month-on-month growth rate, and the preliminary value of the Eurozone's May consumer confidence index. In addition, it is worth noting that the Reserve Bank of Australia (RBA) will announce its interest rate decision; RBA Governor Bullock will hold a monetary policy press conference; and the G7 finance ministers and central bank governors' meeting will be held until May 22.

Crude Oil Update:

As of 11:52, crude oil futures rose slightly, with US oil up 0.06% and Brent oil up 0.02%. The prospect of more oil supply entering the global market has weakened, causing oil prices to fluctuate rangebound. Moody's downgraded the US sovereign rating, dampening the economic outlook of the world's largest energy consumer, the US, and hindering further increases in oil prices.

Alex Hodes, an analyst at StoneX, stated that if the US and Iran reach an agreement, it could pave the way for the US to ease sanctions and allow Iran to increase its oil exports by 300,000 to 400,000 barrels per day.

In the short term, tariffs, US-Iran negotiations, economic uncertainties, and the Russia-Ukraine war could all impact oil prices. (Webstock Inc.)

Spot Market Overview:

►Warrants flow out, and end-users' willingness to restock is moderate. Suppliers have to lower prices to sell. [SMM South China Spot Copper]

►[SMM Analysis] Tin ore imports remained low in April, and supply pressure persists in the domestic smelting sector.

►[SMM Nickel Midday Review] Nickel prices dropped slightly on May 20. Atlanta Fed President Bostic reiterated his preference for only one interest rate cut this year.

Midday reviews of other metal spot prices will be updated later. Please refresh to view.