Most metals declined, with SHFE tin falling over 3%, silicon metal dropping more than 2% to hit a new low, and European container shipping rates falling over 4% [SMM Daily Review]

SMM News on May 28:

Metal Market:

As of the daytime close, domestic market base metals generally fell, with only SHFE aluminum rising, up 0.17%. SHFE tin and SHFE nickel both fell by over 2%, with SHFE nickel down 2.1% and SHFE tin down 3.15%. SHFE zinc fell 0.89%, while the rest of the metals dropped slightly. The main alumina contract fell 0.73%.

In addition, the main lithium carbonate contract fell 0.59%, the main polysilicon contract rose 0.23%, and the main silicon metal contract fell 2.52%, hitting a record low since its listing at an intraday low of 7,240 yuan/mt. The main European container shipping contract fell 4.08%.

In the ferrous metals series, all prices fell, with stainless steel down 1.32%, rebar down 0.77%, and HRC down 0.55%. In the coking coal and coke sector, coking coal fell 2.2%, and coke fell 1.91%.

In the overseas market, as of 15:03, overseas market base metals all fell, with LME tin and LME nickel both declining. LME tin fell 1.96%, and LME nickel fell 1.32%. LME zinc fell 0.7%. The declines in the rest of the metals fluctuated slightly.

In the precious metals sector, as of 15:03, COMEX gold rose 0.14%, and COMEX silver rose 0.04%. Domestically, SHFE gold fell 0.59%, and SHFE silver fell 0.36%.

Market conditions as of 15:03 today

》Click to view SMM Market Dashboard

Macro Front

Domestic:

[China-EU Semiconductor Upstream and Downstream Enterprise Symposium: Firmly Opposing Unilateralism and Bullying, Striving to Maintain Global Semiconductor Supply Chain Security and Stability] The Ministry of Commerce website showed that the China-EU Semiconductor Upstream and Downstream Enterprise Symposium was held in Beijing on May 27. Relevant departments of the Ministry of Commerce, the China Semiconductor Industry Association, the European Union Chamber of Commerce in China, and representatives from over 40 Chinese and European semiconductor upstream and downstream enterprises attended the meeting. The meeting focused on deepening economic and trade cooperation in the China-EU semiconductor sector. The meeting emphasized that both China and the EU hold important positions in the global semiconductor supply chain, and strengthening cooperation is in the interests of both sides. Given the complex and severe international situation, with increasing unstable and uncertain factors, China will continue to expand high-level opening-up, providing enterprises with a fair, stable, transparent, and predictable policy environment. It supports Chinese and European semiconductor enterprises in fully leveraging their complementary advantages, deepening economic and trade cooperation in compliance with laws and regulations, firmly opposing unilateralism and bullying, and striving to maintain global semiconductor supply chain security and stability. Participants unanimously agreed that the security and stability of the global semiconductor production and supply chain are currently facing severe challenges. This symposium provided a good platform for Chinese and European semiconductor upstream and downstream enterprises to enhance understanding, boost trade confidence, and deepen exchanges and cooperation. Strengthening exchanges and cooperation in the semiconductor sector between China and the EU will help inject new impetus into the global economic recovery and growth. (Cailian Press)

[China's Ministry of Finance to Issue RMB68 Billion in Treasury Bonds in Hong Kong This Year] With the approval of the State Council, the Ministry of Finance will issue RMB68 billion in Treasury bonds in six tranches in the Hong Kong Special Administrative Region in 2025. Among them, the first two tranches, totaling RMB25 billion, were issued in February and April, respectively. The third tranche of RMB12.5 billion in Treasury bonds is scheduled to be issued through tender on June 4, with specific issuance arrangements to be announced on the Central Moneymarkets Unit (CMU) system of the Hong Kong Monetary Authority.

[Jiangsu: Boosting Consumption Upgrade, Expanding Service Consumption in Key Areas, and Accelerating the Development of New-Type Consumption] The Ninth Plenary Session of the 14th Jiangsu Provincial Committee of the Communist Party of China was held in Nanjing on May 27. The plenary session emphasized the need to strive for excellence in advancing deep-level reforms and high-level opening-up, accumulating greater impetus for forward development. It called for deepening the reform of market-oriented allocation of production factors and serving the construction of a unified national market. The session also urged for in-depth promotion of the construction of the "1+3" key functional areas and continuous optimization of the provincial productivity layout. It stressed the need to boost consumption upgrade with greater efforts, expand service consumption in key areas, explore new consumption scenarios, and accelerate the development of new-type consumption. The plenary session also highlighted the importance of strengthening the protection of the legitimate rights and interests of various business entities, promoting whole-chain optimization of approvals, fair supervision throughout the entire process, and whole-cycle optimization of services, to create a world-class business environment that is market-oriented, law-based, and internationalized. It called for in-depth implementation of the strategy to upgrade free trade zones, facilitate cross-border trade, and steadily expand institutional opening-up. The session also emphasized the need to continuously consolidate traditional markets, tap the potential of emerging markets, develop new forms and models of foreign trade, and actively expand international cooperation space.

►The central parity rate of the RMB against the US dollar in the interbank foreign exchange market on May 28 was 7.1894 RMB per US dollar.

US dollar:

As of 15:03, the US dollar index rose by 0.13% to 99.74. Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, called on Tuesday for maintaining interest rates unchanged until the impact of tariff hikes on inflation becomes clearer, and warned against ignoring the effects of such supply-side price shocks. He also noted that within the US Fed, there are differing views on how interest rates should change in response to the inflation risks posed by Trump's tariff policies. John Williams, President of the Federal Reserve Bank of New York, said on Wednesday that when inflation begins to deviate from its target, central banks must take "relatively strong countermeasures."

According to survey data released by the Conference Board, a US research institution, on the 27th, influenced by factors such as the latest developments in the trade situation, the US consumer confidence index in May rebounded to 98 from 85.7 in April, higher than market expectations, ending a five-month consecutive decline. The month-on-month rate of US durable goods orders in April recorded a -6.3% decline, marking the largest drop since June 2024.

Macro Aspects:

Today, data including the European Central Bank's 1-year CPI expectation for the eurozone in April, the European Central Bank's 3-year CPI expectation for the eurozone in April, Germany's seasonally adjusted unemployment rate for May, the change in Germany's seasonally adjusted number of unemployed individuals for May, Australia's annual CPI rate (seasonally adjusted) for April as reported by the statistics bureau, New Zealand's official cash rate decision for May 28, France's final annual GDP growth rate for Q1, and Switzerland's Credit Suisse/CFA Economic Expectation Index for May will be released.

Additionally, FOMC permanent voter and New York Fed President John Williams will participate in a panel discussion at the Bank of Japan Institute for Monetary and Economic Studies conference. The Reserve Bank of New Zealand will announce its interest rate decision and monetary policy statement, and Reserve Bank of New Zealand Governor Adrian Orr will hold a monetary policy press conference.

Crude Oil Aspects:

As of 15:03, oil prices in both markets rose simultaneously, with US crude oil up 0.11% and Brent crude oil up 0.08%. OPEC+ has advanced its video conference to decide on the July oil production levels of eight major member countries by one day to May 31. OPEC+ will also hold a series of virtual plenary sessions on May 28, potentially assessing production quotas across the entire organization. As the meeting approaches, the market is focused on whether OPEC+ will further increase production in July. Institutions generally expect that, following two consecutive production increases of 411,000 barrels per day in May and June, the organization will announce a third round of large-scale production increase in July, followed by a return to the regular monthly production increase of 135,000 barrels per day, maintaining this pace until the end of 2025 and pausing production increases in early 2026. An eight-country group led by Saudi Arabia and Russia held preliminary talks last week on a significant daily production increase of approximately 411,000 barrels for the third consecutive month, with the final plan to be determined in a conference call. Saudi Arabia had previously stated that the production increase was a disciplinary measure against member countries that refused to comply, noting that Kazakhstan overproduced crude oil by approximately 400,000 barrels per day in April, and that condoning such behavior would threaten the existence of the OPEC+ agreement framework. When asked about July's production plans on Tuesday, the UAE Energy Minister stated that OPEC+ is doing its utmost to balance the oil market and needs to focus on growing demand.

Regarding the market outlook, Hongyuan Futures analysis suggests that the downside risk for oil prices has not been fully released, primarily because it is believed that for the Trump administration, making certain concessions to bring Iranian crude oil back to the market, thereby lowering oil prices and inflation, would be beneficial for the US Fed to cut interest rates. If US-Iran negotiations break down, oil prices will rebound in the short term, but expectations for an OPEC production increase will limit the rebound's height. If negotiations proceed smoothly, oil prices will face further downside risks. (Wenhua Comprehensive)

SMM Daily Review

►Domestic silver prices continue to consolidate under pressure, with overall market trading remaining sluggish as month-end approaches [SMM Daily Review]