US dollar falls for two consecutive days, most metals fall; alumina rises over 1%, silicon metal, European container shipping fall over 2% [SMM Daily Review]

SMM May 20 Report:

Metal Market:

As of the daytime close, among domestic market base metals, only SHFE tin saw an increase, rising by 0.29%. SHFE nickel led the declines with a drop of 0.83%, while the declines in other metals fluctuated slightly. The main alumina contract rose by 1.42%.

In addition, the main lithium carbonate contract fell by 0.88%, the main polysilicon contract dropped by 0.99%, and the main silicon metal contract declined by 2.53%. The main European container shipping contract fell by 2.8%.

In the ferrous metals series, only iron ore saw an increase, rising by 0.28%. Stainless steel fell by 1%, and rebar declined by 0.59%. In the coking coal and coke sector, coking coal fell by 1.47%, and coke dropped by 1.71%.

In the overseas market, as of 15:07, only LME lead and LME tin rose together, with LME lead up by 0.43% and LME tin up by 0.12%. LME copper fell by 0.5%, and LME aluminum dropped by 0.53%. The declines in other metals fluctuated slightly.

In the precious metals sector, as of 15:07, COMEX gold fell by 0.67%, and COMEX silver also declined by 0.67%. Domestically, SHFE gold rose by 0.48%, and SHFE silver fell by 0.21%.

Market conditions as of 15:07 today

》Click to view SMM market dashboard

Macro Front

Domestic Aspect:

[Addressing cut-throat competition, policies to stabilize the economy will be implemented before the end of June! A comprehensive guide to the NDRC press conference] The National Development and Reform Commission (NDRC) held its May press conference at 10 a.m. today. Li Chao, the NDRC 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 toolkit for stabilizing employment and the economy to ensure timely implementation when needed. Li Chao mentioned that the NDRC aims to finalize and issue the entire list of "implementation of major national strategies and the development of security capabilities in key areas" construction projects for this year by the end of June, and to implement them to a high standard. Li Chao stated 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 forms, and models continuously emerging. Traditional industries are accelerating their transformation and upgrading, during which some sectors have encountered structural issues, breaching the boundaries and bottom lines of market competition, distorting market mechanisms, and disrupting fair competition order, necessitating rectification. 》Click for details

[Five departments jointly voice their stance on the continuous promotion of urban renewal initiatives] ① Ministry of Housing and Urban-Rural Development: China is currently entering a crucial period for urban renewal; ② NDRC: The 2025 special central budget investment plan for urban renewal will be issued before the end of June; ③ Ministry of Finance: Encouraging policy banks to provide support for eligible urban renewal projects; ④ Ministry of Natural Resources: Actively supporting localities in formulating special urban renewal plans; ⑤ National Financial Regulatory Administration: Will study and introduce specialized loan management regulations for urban renewal projects. 》Click to view details

》First cut this year! China's 1-year and 5-year LPR both lowered by 10 basis points in May

►On May 20, the central parity rate of the RMB exchange rate in the inter-bank foreign exchange market was set at 7.1931 RMB per US dollar.

US dollar updates:

As of 15:07, the US dollar index fell by 0.17%, closing at 100.19. On May 19 (US Eastern Time), Raphael Bostic, President of the Federal Reserve Bank of Atlanta, expressed his expectations for future price increases in an interview, believing that inflation is moving in a concerning direction. Therefore, he favors only one interest rate cut this year. Federal Reserve Vice Chair Philip Jefferson also stated that, given the current level of uncertainty, it is appropriate to wait and observe how policies unfold. William Dudley, the third-ranking official at the Federal Reserve and President of the Federal Reserve Bank of New York, warned that tariff policies could drive up both inflation and unemployment, and that the outlook may not become clearer until after June or July. The market currently expects the Federal Reserve's first interest rate cut this year to begin in October.

Macro updates:

Today's data includes China's annual growth rate of total electricity consumption in April (monthly), Australia's cash rate in May, Canada's unadjusted annual CPI growth rate in April, Canada's central bank's core monthly CPI growth rate in April, and the preliminary consumer confidence index for the Eurozone in May. Additionally, notable events include the Reserve Bank of Australia's announcement of its interest rate decision, a press conference on monetary policy by RBA Governor Michele Bullock, and the G7 Finance Ministers and Central Bank Governors Meeting, which will run until May 22.

Crude oil updates:

As of 15:07, oil prices in both markets showed mixed performance, with US crude oil rising by 0.03% and Brent crude oil falling by 0.02%. Analysts stated that Saudi Arabia is expected to burn more crude oil for power generation this summer, as it increases crude oil production after OPEC+ relaxes supply controls and as fuel oil becomes more expensive. By burning more crude oil, Saudi Arabia may alleviate some concerns about global supply surpluses, following OPEC's agreement (which includes allies such as the Organization of the Petroleum Exporting Countries and Russia) to increase production by nearly 1 million barrels per day in April, May, and June.

Despite analysts lowering their oil price forecasts for this year after OPEC+'s decision to accelerate production increases sparked concerns about increased supply, refiners' profits from producing high-sulfur fuel oil from Dubai crude oil reached a record high of $4.45 per barrel. OPEC data shows that Saudi Arabia's oil production quota for June is 9.367 million barrels per day, up from 9.034 million barrels per day in April. (Comprehensive report from Wenhua)

SMM Daily Review

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►Silver prices are in the doldrums, with downstream consumption weakening and transactions being negotiated [SMM Daily Review]