US dollar falls, metals show mixed performance; New York gold, polysilicon rise over 1%, alumina falls over 2% [SMM Daily Review]

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SMM News on May 22:

Metal Market:

As of the daytime close, domestic market base metals generally declined, with only SHFE lead rising, up 0.48%. SHFE nickel fell 0.7%, SHFE tin dropped 0.48%, and the rest of the metals saw slight declines, with alumina falling 2.01%.

In addition, the main lithium carbonate contract fell 1.65%, the main polysilicon contract rose 1.09%, the main silicon metal contract increased 0.25%, and the main European container shipping contract surged 2.73%.

The ferrous metals series generally declined, with iron ore falling 1.24%, HRC dropping 0.75%, and rebar decreasing 0.42%. In the coking coal and coke sector, coking coal fell 4.01%, and coke dropped 1.81%.

In the overseas market, as of 15:03, overseas market base metals generally rose, with only LME copper falling 0.04%. LME lead increased 0.76%, LME tin rose 0.52%, and LME aluminum gained 0.22%, with the rest of the metals seeing slight fluctuations in their increases.

In precious metals, as of 15:03, COMEX gold rose 1.04%, and COMEX silver increased 0.35%. Domestically, SHFE gold rose 0.1%, and SHFE silver fell 0.37%. According to Jordan Roy-Byrne, author of CMT, MFTA, and the book "Gold and Silver: The Greatest Bull Market Has Begun," gold is in the early stages of a strong, long-term bull market, with its price potentially rising to $4,500, while silver prices may also exceed $100.

Market conditions as of 15:03 today

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Macro Front

Domestic Aspects:

[Ministry of Commerce: Online Sales of Digital Products Increased by 8.4% from January to April, with Smart Robots and Smart Home Systems Rising by 87.6% and 16%]The head of the E-commerce Department of the Ministry of Commerce introduced the development of China's e-commerce from January to April 2025. Digital consumption growth accelerated, with online sales of digital products increasing by 8.4% according to e-commerce big data monitoring, among which smart robots and smart home systems rose by 87.6% and 16%, respectively. Products under the trade-in policy grew rapidly, with online sales of 15 categories of home appliances and digital products increasing by 11.5%, among which three expanded categories of digital products, including mobile phones, rose by 18.5%. Service consumption led the growth, driven by factors such as policy efforts, supply optimization, and holiday economy, with key monitored online service consumption increasing by 12.1%, among which online entertainment and online tourism rose by 31.9% and 25.4%, respectively.

[The People's Bank of China Net Injected 36 Billion Yuan in the Open Market]The People's Bank of China conducted 142.5 billion yuan of 7-day reverse repo operations today, with an operating interest rate of 1.40%, unchanged from the previous rate. As 106.5 billion yuan of 7-day reverse repo operations matured today, a net injection of 36 billion yuan was achieved.

►The central parity rate of the RMB against the US dollar in the inter-bank foreign exchange market on May 23 was 7.1919 yuan per US dollar.

US dollar:

As of 15:03, the US dollar index fell by 0.3%. The number of initial jobless claims in the US for the week ending May 17 was 227,000, compared to market expectations of 230,000 and 229,000 the previous week. The number of initial jobless claims in the US fell by 2,000 last week to a four-week low, indicating that the job market remains healthy despite uncertainties brought about by trade policies. However, the number of continuing claims rose, making it increasingly difficult for the unemployed to find new jobs. The US manufacturing PMI rose to a three-month high of 52.3 in May. The flash services PMI stood at 52.3, hitting a two-month high. The index for new orders from enterprises rose to 52.4 from 51.7 in April, mainly driven by the manufacturing sector. The index measuring the prices paid by enterprises for inputs rose to 63.4 from 58.5 in April, reaching its highest level since November 2022.

Federal Reserve Governor Waller stated that the Fed would not purchase bonds in primary auctions, as hard data indicated that the economy was performing quite well and had not yet shown clear signs of tariff impacts. Waller still believed that tariffs would lead to one-time price increases, and said that if tariffs were lowered, the Fed was expected to cut interest rates in the second half of 2025. (Wenhua Comprehensive)

Macro:

Today, data such as the revised quarter-on-quarter seasonally adjusted GDP growth rate for Germany in Q1, the revised year-on-year non-seasonally adjusted GDP growth rate for Germany in Q1, the month-on-month seasonally adjusted retail sales growth rate for the UK in April, the month-on-month seasonally adjusted core retail sales growth rate for the UK in April, the revised month-on-month building permits growth rate for the US in April, the revised annualized total building permits for the US in April, the month-on-month retail sales growth rate for Canada in March, the month-on-month core retail sales growth rate for Canada in March, and the annualized total of seasonally adjusted new home sales for the US in April will be released. In addition, it is worth noting that FOMC permanent voter and New York Fed President Williams will deliver a keynote speech at a seminar on monetary policy implementation; FOMC voters for 2025, St. Louis Fed President Musalem and Kansas City Fed President Schmid, will participate in a fireside chat in Northwest Arkansas hosted by the St. Louis Fed to discuss the economy and monetary policy.

Crude oil:

As of 15:03, oil prices in both markets fell simultaneously, with US crude oil down by 0.82% and Brent crude oil down by 0.79%. OPEC's production policy moves remain the core variable driving oil price trends. At this stage, OPEC member countries are discussing whether to agree to another round of oversized production increases at the June 1 meeting, which could be the third consecutive month that the organization adds extra oil production to the market. Delegates stated that a 411,000 barrel-per-day (bpd) increase in daily production in July was one of the options under discussion, but no final agreement had been reached. Meanwhile, Saudi Arabia indicated that an oil price of $60 per barrel was sustainable. If production is further increased, it could signal a clearer intention by OPEC to compete for market share.

At a recent meeting, Saudi Arabia, as the leader of OPEC+, warned non-compliant member countries such as Kazakhstan and Iraq that if they did not adhere to their quotas, Saudi Arabia might further increase production. Despite Kazakhstan's commitment to make some compensatory measures, the country has not taken substantive steps to restrict international oil companies operating within its borders, and its exports remain near record highs. If major oil-producing countries like Saudi Arabia push for a larger-scale production increase plan, it could trigger a new round of downward pressure on the crude oil market. (Wenhua Comprehensive)

SMM Daily Review

►Concerns about the continuous decline in LME copper prices prompt import traders to slightly increase shipments [SMM Secondary Copper Daily Review]

►Aluminum prices rebound slightly, and the secondary aluminum market operates steadily [ADC12 Price Daily Review]

►[SMM Nickel Sulphate Daily Review] On May 23, nickel salt prices remained stable

►[SMM MHP Daily Review] On May 23, Indonesian MHP prices slightly declined

►Silver prices consolidate, with downstream cautious and trading remaining light [SMM Daily Review]