US dollar continues to weaken, metals generally rise, with LME zinc, LME aluminum, LME lead, and SHFE tin leading the gains; SHFE gold and NYMEX silver rise over 2% [overnight market]

SMM, May 21:

Metal Market:

Overnight, domestic base metals futures closed higher across the board. SHFE tin rose by 1.16%, SHFE copper by 0.36%, SHFE lead by 0.57%, SHFE aluminum by 0.62%, and SHFE zinc by 0.76%, while SHFE nickel fell by 0.31%. Additionally, the most-traded alumina futures contract dropped by 1.18%.

Overnight, the ferrous metals series showed mixed performance. Iron ore rose by 0.21%, stainless steel edged up slightly, rebar fell by 0.07%, and HRC closed flat at 3,206 yuan/mt. In the coking coal and coke sector, coking coal fell by 0.06%, while coke rose by 0.28%.

Overnight, overseas base metals futures closed mostly higher. LME copper rose by 0.33%, LME aluminum by 1.27%, LME lead by 1.27%, LME zinc by 1.79%, LME tin by 0.19%, while LME nickel fell by 0.21%.

Overnight, precious metals futures closed higher. COMEX gold rose by 1.83%, COMEX silver by 2.32%. SHFE gold rose by 2.11%, and SHFE silver by 1.68%.

As of 8:10 a.m. on May 21, overnight closing prices

》Click to view SMM Futures Data Dashboard

Macro Front

Domestic:

[Xi Jinping: Strengthen Confidence to Promote High-Quality Development and Efficient Governance, Strive to Write a New Chapter in Advancing Chinese-Style Modernization in Central China] Xi Jinping, General Secretary of the CPC Central Committee, President of the People's Republic of China, and Chairman of the Central Military Commission, recently emphasized during a field trip to Henan that in the new era and on the new journey, Henan should earnestly implement the strategic plans of the CPC Central Committee on accelerating the rise of the central region, ecological protection and high-quality development of the Yellow River basin, adhere to the general principle of pursuing progress while ensuring stability, comprehensively deepen reform and opening up, focus on building a modern industrial system and a strong agricultural province, improve people's livelihoods, strengthen social governance, enhance ecological and environmental protection, and promote cultural prosperity, striving to write a new chapter in advancing Chinese-style modernization in central China with high-quality development and efficient governance. (Xinhua News Agency)

[Financial Support for the Real Economy! PBOC Governor Pan Gongsheng Presides Over High-Profile Symposium] To implement the decisions and arrangements of the CPC Central Committee and the State Council, promote the effective implementation of a package of monetary and financial policies, and support sustained economic recovery and improvement, Pan Gongsheng, Governor of the People's Bank of China (PBOC), presided over and delivered a speech at a symposium on financial support for the real economy on May 19. Zhou Liang, Deputy Governor of the National Financial Regulatory Administration, attended and delivered a speech. Xuan Changneng and Zou Lan, Deputy Governors of the PBOC, also attended the meeting. The meeting emphasized the need to implement a moderately accommodative monetary policy to meet the effective financing needs of the real economy and maintain reasonable growth in the total amount of finance. We will intensify support for key areas such as scientific and technological innovation, boosting consumption, private and micro enterprises, and stabilizing foreign trade. We will make full use of existing and incremental policies, enhance the quality and efficiency of financial support for the real economy, and support economic restructuring, transformation and upgrading, and the replacement of old growth drivers with new ones. We will strengthen the implementation and transmission of monetary policies, safeguard fair market competition, and promote the organic unity of financial services for the real economy and the sustainable development of banks themselves. We will advance the international use of the RMB in an orderly manner and improve the convenience of trade, investment, and financing. We will coordinate development and security and resolutely safeguard national financial security. 》Click for details

[China's National Energy Administration: Total electricity consumption in society increased by 4.7% YoY in April] The National Energy Administration released data on total electricity consumption in society for April. In April, total electricity consumption in society reached 772.1 billion kWh, up 4.7% YoY. In terms of electricity consumption by sector, the primary sector consumed 11 billion kWh, up 13.8% YoY; the secondary sector consumed 528.5 billion kWh, up 3.0% YoY; the tertiary sector consumed 139 billion kWh, up 9.0% YoY; and urban and rural residents consumed 93.6 billion kWh, up 7.0% YoY. From January to April, cumulative electricity consumption in society reached 3,156.6 billion kWh, up 3.1% YoY, with power generation by industrial enterprises above designated size totaling 2,984 billion kWh. 》Click for details

[National Development and Reform Commission: Further improve institutional mechanisms for promoting the development of the private economy, and conduct a review of local regulations, rules, normative documents, and other policy documents] The General Office of the National Development and Reform Commission issued a notice on learning about, publicizing, and implementing the Law of the People's Republic of China on Promoting the Private Economy. Taking the implementation of the Law on Promoting the Private Economy as an opportunity, we will further improve our work standards, strengthen work measures, and ensure the promotion and growth of the private economy within the framework of the rule of law. First, we will establish and improve working mechanisms. We will implement relevant legal provisions, establish and improve coordination mechanisms for promoting the development of the private economy, and comprehensively promote the implementation of work. Second, we will accelerate the improvement of supporting systems. In line with legal provisions, we will do a good job in "establishing, amending, abolishing, and interpreting" (laws and regulations). On the one hand, we will further improve institutional mechanisms for promoting the development of the private economy in light of our own actual conditions. On the other hand, we will conduct a review of local regulations, rules, normative documents, and other policy documents, and promptly amend or abolish those that are inconsistent with legal provisions. Third, we will fully implement legal provisions. We will enhance our awareness of the rule of law, fulfill our statutory duties, and carry out our work in strict accordance with statutory authorities and procedures. We will ensure that all forms of ownership can use production factors equally under the law, participate in market competition fairly, and enjoy equal legal protection. We will actively coordinate and resolve major issues in the development of the private economy, safeguard the legitimate rights and interests of private enterprises and entrepreneurs in accordance with the law, and ensure that all institutional provisions of the Law on Promoting the Private Economy are effectively implemented.

Regarding the US dollar:

The US dollar fell again on Tuesday, dragged down by the US Fed's cautious stance on the economy. Overnight, the US dollar index continued its decline from the previous trading day, dropping 0.35% to 100.01. The US dollar was sold off on Monday after rating agency Moody's downgraded the US sovereign rating from "Aaa" to "Aa1" last Friday. US Fed officials doubled down on their concerns about the impact of the US government's trade policies on the economy on Tuesday. St. Louis Fed President Alberto Musalem said that although recent US-China trade tensions have eased, the labour market appears likely to weaken and prices may rise. Cleveland Fed President Beth Hammack told Axios that current trade developments could lead to stagflation, although other US government policies might offset this effect.

Regarding other currencies:

The yen is expected to remain strong as the Bank of Japan's policy stance remains biased towards further rate hikes, while other G10 central banks are cutting interest rates, noted Derek Halpenny of MUFG Bank in a report. Even if the Bank of Japan eventually stops raising rates, it is unlikely to return to monetary easing, which will continue to support the yen. (Huitong Finance)

On the macro front:

Today, the UK's April CPI year-on-year rate, core CPI year-on-year rate, and retail price index year-on-year rate will be released. Additionally, it is worth noting that 2025 FOMC voter and St. Louis Fed President Alberto Musalem will speak on the economic outlook and monetary policy; 2027 FOMC voter Bostic will chair a meeting, and 2026 FOMC voter Hammack and 2027 FOMC voter Daly will deliver keynote speeches.

Regarding crude oil:

Both oil futures rose slightly, with US crude up 0.18% and Brent crude up 0.09%. Oil prices fluctuated rangebound due to uncertainties in US-Iran negotiations and Russia-Ukraine peace talks. An agreement to end the Russia-Ukraine conflict could allow Russia to export more oil globally.
　　
An industry insider said on Tuesday that Kazakhstan's May oil production increased by 2%, a rise that defied OPEC's pressure on the country to cut production. Kazakhstan has repeatedly violated its OPEC production quota, citing the difficulty of telling Western oil giants like Chevron and ExxonMobil to cut their plans. On Tuesday, Qatari Energy Minister Saad al-Kaabi said at an economic forum in Doha that if crude oil prices fall below $60 per barrel, investment will decrease and electricity demand will not be met. Saudi Arabia's Minister of Economy Faisal Alibrahim stated at the Qatar Economic Forum that the Saudi economy is always prepared for various oil price scenarios. He said, "Our budget is no longer driven by oil, but by our priorities."

The American Petroleum Institute (API) released data on Tuesday indicating that US crude oil inventories increased last week, while gasoline and distillate inventories declined. According to the API report, US crude oil inventories rose by 2.499 million barrels in the week ending May 16. Gasoline inventories fell by 3.238 million barrels, and distillate inventories dropped by 1.401 million barrels. Previous surveys had shown that analysts expected US crude oil inventories to decrease by approximately 1.3 million barrels, gasoline inventories by around 500,000 barrels, and distillate inventories by about 1.4 million barrels last week. Additionally, the US Energy Information Administration (EIA) will release its weekly crude oil inventory report at 22:30 on Wednesday.

Furthermore, due to the impact of contract rollover, the last in-house trading for June NYMEX New York crude oil futures will be completed at 2:30 on May 21, and the last electronic trading will be completed at 5:00 AM. Please pay attention to the contract rollover announcements from trading venues to manage risks. Moreover, the expiration time for US crude oil contracts on some trading platforms is usually one day earlier than the official NYMEX schedule. Please take extra caution. (Webstock Inc.)