US dollar continues to fall, most metals rise, alumina gains over 3%, precious metals rebound strongly [SMM Daily Review]

SMM, May 21:

Metal Market:

As of the daytime close, domestic market base metals generally rose, with only SHFE nickel declining, by 0.05%. SHFE tin led the gains with a 1.11% increase, while SHFE zinc rose by 0.71%. The gains of other metals were all within 0.7%. The main alumina contract rose by 3.11%, recording three consecutive days of gains.

In addition, the main lithium carbonate contract rose by 0.59%, the main polysilicon contract rose by 0.93%, and the main silicon metal contract fell by 1.75%. The main European container shipping contract fell by 7.18%.

The ferrous metals series showed mixed performance, with iron ore rising by 0.76% and HRC rising by 0.16%. In the coking coal and coke sector, coking coal fell by 0.36% and coke fell by 0.14%.

In the overseas market, as of 15:01, only LME tin and LME nickel declined together, with LME tin falling by 0.16% and LME nickel falling by 0.15%. LME zinc rose by 0.87%, LME aluminum rose by 0.83%, and LME copper rose by 0.7%.

In the precious metals sector, as of 15:01, COMEX gold rose by 1.04%, returning to the round number of $3,300 per ounce, and COMEX silver rose by 0.5%. Domestically, SHFE gold rose by 2.98% and SHFE silver rose by 2.04%.

Market conditions as of 15:01 today

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Macro Front

Domestic Developments:

[Head of China's National Energy Administration Meets with Director of Singapore's Energy Market Authority] According to the National Energy Administration, on May 19, Wang Hongzhi, Director of the National Energy Administration, met in Beijing with Poon Kok Keong, Director of Singapore's Energy Market Authority, who was visiting China. The two sides had an in-depth exchange of views on advancing cooperation in new energy between China and Singapore. Wang Hongzhi stated that energy is an important area of pragmatic cooperation between China and Singapore. The two countries maintain close communication on bilateral and multilateral platforms, with enterprises from both sides investing in each other and engaging in extensive cooperation in power, oil and gas, energy storage, and renewable energy. There is significant potential for future cooperation, with broad prospects. The National Energy Administration of China is willing to work with Singapore to build on past achievements, further leverage the role of existing cooperation mechanisms, strengthen dialogue and communication, and jointly advance cooperation in new energy to a new level. (Financial News)

[China and Ten ASEAN Countries Fully Complete Negotiations on China-ASEAN Free Trade Area Version 3.0] Version 3.0 includes nine new chapters on the digital economy, green economy, supply chain connectivity, standards, technical regulations, and conformity assessment procedures, customs procedures and trade facilitation, sanitary and phytosanitary measures, competition and consumer protection, micro, small, and medium-sized enterprises, and economic and technical cooperation. This will facilitate both sides in promoting broader and deeper regional economic integration under the new circumstances.

[The central bank injected a net 65 billion yuan into the open market]The central bank conducted 157 billion yuan of 7-day reverse repo operations today, with an operating interest rate of 1.40%, unchanged from the previous rate. As 92 billion yuan of 7-day reverse repos matured today, a net injection of 65 billion yuan was achieved.

►On May 21, the central parity rate of the RMB against the US dollar in the interbank foreign exchange market was 7.1937 yuan per US dollar.

US dollar:

As of 15:01, the US dollar index fell by 0.41% to 99.6, recording three consecutive days of decline. Atlanta Fed President Raphael Bostic said on Tuesday that US companies may have exhausted their strategies for coping with higher import tariffs and can no longer delay adjusting prices or employment conditions, suggesting that the economy may be on the brink of a new round of price increases. He currently expects the US Fed to implement only one 25-basis-point interest rate cut this year, followed by a few months before the effects of the Trump administration's policies become clearer. St. Louis Fed President Albert M. "Al" Musalem said on Tuesday that even with the recent easing of US-China trade tensions, the labour market still appears likely to weaken, and prices will rise. However, if the easing of trade tensions continues, the US Fed's current monetary policy stance may "remain appropriate."

The tax cut bill promoted by US President Donald Trump has reached an impasse. Currently, the market's focus is on a key vote planned by the US House of Representatives for this weekend. Republican leaders in the House have stated that they will continue to push forward with the tax bill despite the uncertain outlook. (Wenhua Comprehensive)

Macro:

Today, data such as the UK's April CPI year-on-year rate, the UK's April core CPI year-on-year rate, and the UK's April retail price index year-on-year rate will be released. In addition, it is worth noting that 2025 FOMC voting member and St. Louis Fed President Albert M. "Al" Musalem will deliver a speech on the economic outlook and monetary policy; 2027 FOMC voting member Bostic will chair a meeting, and 2026 FOMC voting member Harker and 2027 FOMC voting member Daly will deliver keynote speeches.

Crude oil:

As of 15:01, oil prices in both markets rose simultaneously, with US crude oil up 1.29% and Brent crude oil up 1.19%. This is due to market concerns about potential disruptions to supply in major oil-producing regions in the Middle East. ING's commodity analysts stated that Iranian crude oil supply still faces risks. Iran is currently the third-largest crude oil producer in OPEC.

At the same time, there are signs that crude oil supply is improving. Data released by the API showed that US commercial crude oil inventories increased last week, while gasoline and distillate inventories declined. The data showed that US commercial crude oil inventories increased by 2.5 million barrels in the week ending May 16. Currently, market participants are awaiting the official weekly report on crude oil inventories from the EIA, to be released later on Wednesday.

According to a survey, the average forecast of nine surveyed institutions is that US crude oil inventories are expected to decline by approximately 1.3 million barrels for the week ending May 16. An industry insider stated on Tuesday that Kazakhstan's oil production increased by 2% in May, defying pressure from the OPEC organization to cut production. Technical analysts have said that US crude oil futures are expected to retest the resistance level of $64.20 per barrel. (Wenhua Comprehensive)

SMM Daily Review

►The price center of primary aluminum shifts upward, while the upward momentum in the secondary aluminum market is insufficient. [ADC12 Price Daily Review]

►[SMM Nickel Sulphate Daily Review] On May 21, nickel salt prices rose slightly.

►Upstream producers remain firm in their pricing stance, with high-grade NPI prices stabilizing. [NPI Daily Review]

►The EMM market remains stable, with spot prices holding steady. [SMM EMM Daily Review]

►Mainstream steel tender pricing falls short of expectations, with spot prices dropping slightly. [SMM SiMn Daily Review]

►Silver prices rebound, while both supply and demand in the spot market decline. [SMM Daily Review]