US dollar falls, overseas market metals rise across the board, with LME zinc up over 2%; precious metals and crude oil surge! [Holiday market review]

SMM, June 3:

※Financial Market Performance During the Holiday

Metal Market:

Domestic Metal Market:

The domestic metal market was closed during the Dragon Boat Festival holiday. A review of the market performance of domestic base metals on May 30 shows that most domestic metals fell: Domestic base metals generally declined, with SHFE nickel rising 1.14%, SHFE tin falling 2.87%, and SHFE copper, SHFE aluminum, SHFE lead, and SHFE zinc all falling less than 1%. The main alumina contract rose 0.27%. Most ferrous metals series declined on May 30: Iron ore fell 0.43%, rebar fell 0.34%, stainless steel rose 0.12%, and HRC fell 0.81%. In terms of coking coal and coke, coking coal fell 5.28%, and coke fell 2.13%.

Overseas Metal Market:

The London Metal Exchange (LME) mostly fell on May 30 and rose across the board on June 2. During the Dragon Boat Festival holiday, LME metals rose across the board, with LME zinc leading the gains with a 2.41% increase, LME copper rising 1.24%, LME aluminum rising 1%, LME tin and LME nickel both rising over 1%, and LME lead rising 0.87%.

Precious Metals:

During the Dragon Boat Festival holiday, COMEX precious metals all rose sharply. COMEX gold rose 2.82%, touching its highest level in over three weeks, as a weaker US dollar and economic uncertainty drove demand for safe-haven assets. COMEX silver rose 5.61%.

Hong Kong Stocks:

During the Dragon Boat Festival holiday, Hong Kong stocks weakened on June 2 as tariff issues once again drew market attention. As of the close on June 2, the Hang Seng Index fell 0.57%, the Hang Seng Tech Index fell 0.7%, and the Hang Seng China Enterprises Index fell 0.86%.

US Stocks:

During the Dragon Boat Festival holiday, the three major US stock indices closed mixed last Friday, with the Dow rising 0.12% and gaining 3.94% in May; the Nasdaq falling 0.32% but rising 9.56% in May; and the S&P 500 falling 0.01% but rising 6.15% in May. As of the close on June 2, the three major US stock indices all rose slightly, with the Dow Jones Industrial Average rising 0.08% to 42,305.48 points, the S&P 500 rising 0.41% to 5,935.94 points, and the Nasdaq rising 0.67% to 19,242.61 points.

Metal and Crude Oil Contract Quotes as of 8:20 on June 3

》SMM Metal Spot Prices on May 30

Macro Aspects

Domestic Aspects:

[National Bureau of Statistics (NBS): PMI for May was 49.5%, up 0.5 percentage points MoM, indicating improved manufacturing sentiment]On May 31, the China Federation of Logistics and Purchasing and the Service Industry Survey Center of the NBS announced China's PMI for May. Among them, the manufacturing PMI rebounded MoM, indicating an improvement in the manufacturing sector's prosperity level and a stabilization in economic operations. In May, China's manufacturing PMI stood at 49.5%, up 0.5 percentage points MoM. Looking at the sub-indices, the production index was 50.7%, up 0.9 percentage points MoM, rising above the critical point, suggesting an acceleration in manufacturing production activities. On the demand side, the new orders index in May was 49.8%, up 0.6 percentage points MoM. 》Click to view details

[This year's sales of consumer goods through trade-in policies have exceeded 1 trillion yuan]According to CCTV News reporters who learned from the Ministry of Commerce, as of now, this year's sales of consumer goods through trade-in policies have exceeded 1 trillion yuan. Since the beginning of this year, the trade-in policies for consumer goods have effectively driven a sustained rebound and improvement in consumption. Ministry of Commerce data shows that as of May 31, the five major categories of consumer goods under the trade-in policies have collectively driven sales of 1.1 trillion yuan, with approximately 175 million subsidies directly issued to consumers. Among them, there were 4.12 million applications for trade-in subsidies for automobiles; 49.863 million consumers purchased 77.618 million units of 12 major categories of home appliances; 53.529 million consumers purchased 56.629 million units of digital products such as mobile phones; 6.5 million e-bikes were traded in; and 57.626 million orders were placed for home renovation and kitchen and bathroom "upgrades". (CCTV News)

[Various regions take multiple measures to strictly prevent the illegal outflow of strategic minerals]Multiple regions across the country have taken various measures and strengthened controls to strictly prevent the illegal outflow of strategic minerals. Among them, the "Overall Deployment for Strengthening the Full-Chain Management and Control of Strategic Mineral Exports" by the National Office for Coordination of Export Control Work was issued and implemented after approval in accordance with procedures. Guizhou will strictly adhere to the division of responsibilities outlined in the "Overall Deployment" to carry out relevant work. The relevant competent authorities in Hunan Province have stated that they will earnestly fulfill their local regulatory responsibilities, systematically investigate and establish ledgers for strategic mineral export enterprises in Hunan, guide enterprises in strengthening the construction of compliance systems, enhance enterprises' awareness and capabilities of compliance, and ensure the effective implementation of control measures. Guangxi, on the other hand, will continue to effectively supervise and manage the exploration and mining of national strategic minerals, increase efforts to investigate and punish illegal mining activities such as mining without licenses, mining beyond boundaries, and mining under the guise of exploration, and resolutely prevent the illegal outflow of strategically important minerals through illegal mining. Among them, Wuzhou City in Guangxi and Yunfu City in Guangdong have established a cross-regional cooperation mechanism to combat and rectify illegal activities related to mineral resources. In addition, relevant departments in Jiangxi and Yunnan have also stated that they will unwaveringly implement all tasks in accordance with their respective responsibilities.

[MIIT: Intensify Efforts to Rectify "Cut-throat Competition" in the Automotive Industry]In response to the "Initiative on Maintaining Fair Competition Order and Promoting Healthy Industry Development" issued by the China Automobile Manufacturers Association (CAAM) on May 31, relevant officials from the Ministry of Industry and Information Technology (MIIT) stated that they would intensify efforts to rectify "cut-throat competition" in the automotive industry and resolutely maintain a fair and orderly market environment.

[Opposing "Cut-throat Competition" CAAM Issues Important Initiative]CAAM issued the "Initiative on Maintaining Fair Competition Order and Promoting Healthy Industry Development." In recent years, China's new energy vehicle (NEV) industry has developed rapidly, with the proportion of new NEV sales exceeding 40%. Currently, the overall operation of the industry is showing a steady and improving trend, with market vitality continuing to be released. However, we have also observed that for some time, the industry's profitability has declined. "Cut-throat competition," primarily manifested as disorderly "price wars," is a significant factor contributing to the decline in industry benefits. Continuous investment is needed in product after-sales service guarantees and enterprise innovation and development, while "price wars" seriously affect the normal operations of enterprises, impact the security of the industry chain and supply chain, and drive the industry into a vicious cycle.

US Dollar Aspect:

During the Dragon Boat Festival holiday, the US dollar index fell by 0.75%, closing at 98.69 as of June 2. New US tariff threats have sparked market concerns about economic uncertainty, putting pressure on the US dollar. According to CCTV News, on May 30 local time, US President Trump stated at a rally in Pennsylvania that he would raise tariffs on imported steel from 25% to 50%. Subsequently, Trump posted on social media platforms that the decision would take effect from June 4. The latest data released by the US shows: The US core PCE price index in April rose 2.5% YoY, the lowest since March 2021, in line with market expectations of 2.5% and down from the previous value of 2.6%. The US core PCE price index in April rose 0.1% MoM, in line with the estimated increase of 0.1% and up from the previous value of 0%. The final S&P Global US Manufacturing PMI for May was 52, below the expected 52.3 and unchanged from the previous value of 52.3. The market is also closely monitoring the speeches of Fed Chairman Powell and other policymakers this week, seeking clues about the path of US interest rates.

Other Currency Aspects:

The European Central Bank's (ECB) 25 basis point interest rate cut has been fully priced in by the market and widely anticipated. The final manufacturing Purchasing Managers' Index (PMI) for the Eurozone was in line with expectations at 49.4, slightly below expectations in Germany at 48.3, and slightly above expectations in France at 49.8. This week, the focus of eurozone data will be on the preliminary Consumer Price Index (CPI) released on Tuesday, with overall and core inflation rates expected to fall to 2.0% and 2.4%, respectively. Thursday's European Central Bank (ECB) meeting is crucial as policymakers will release new forecasts and provide some insights into interest rate expectations. The market has fully priced in a 25-basis-point interest rate cut and expects at least another 25-basis-point cut by December. The risk lies in that a neutral or hawkish interest rate cut may signal the end of the current easing cycle. (Huitong Finance)

Macro Aspects:

This week will also see the release of data including Malaysia's manufacturing PMI for May, Australia's current account for Q1, China's Caixin manufacturing PMI for May, Switzerland's annual CPI rate for May, the eurozone's preliminary unadjusted annual harmonized CPI for May, the eurozone's unemployment rate for April, the revised monthly rate of US durable goods orders for April, the monthly rate of US factory orders for April, US JOLTs job openings for April, Australia's AIG manufacturing performance index for May, Australia's seasonally adjusted quarterly GDP growth rate for Q1, Australia's annual GDP growth rate for Q1, Russia's SPGI services PMI for May, the final UK SPGI services PMI for May, the change in US ADP employment for May, Canada's total reserve assets for May, Brazil's seasonally adjusted SPGI services PMI for May, the Bank of Canada's overnight lending rate on June 5, the US ISM non-manufacturing PMI for May, a Q&A session involving 2025 FOMC voter and Chicago Fed President Austan Goolsbee, 2027 FOMC voter and Atlanta Fed President Raphael Bostic, and Fed Governor Lisa Cook attending the "Fed Listens" event, the Bank of Canada's interest rate decision, the global annual ANZ commodity price index for May, Australia's goods and services trade balance for April, Australia's monthly export growth rate for April, Australia's monthly import growth rate for April, China's Caixin services PMI for May, Switzerland's unadjusted unemployment rate for May, the global leading indicator for turning points in the industrial production cycle for May (irregular), the number of job cuts announced by US Challenger companies for May, the ECB's main refinancing rate for June, the ECB's deposit facility rate for June, the ECB's marginal lending facility rate for June, the US trade balance for April, the number of initial jobless claims in the US for the week ending May 31, the number of continuing jobless claims in the US for the week ending May 31, Canada's trade balance for April, Canada's seasonally adjusted IVEY PMI for May, the global supply chain pressure index for May, Germany's seasonally adjusted monthly industrial output growth rate for April, France's trade balance for April, the final seasonally adjusted quarterly GDP growth rate for the eurozone in Q1, the monthly retail sales growth rate for the eurozone in April, the monthly leading indicator growth rate for Canada in May, the seasonally adjusted change in US non-farm payrolls for May, the annual growth rate of US average hourly earnings for May, the change in US non-farm payrolls in the private sector for May, the US labor force participation rate for May, the seasonally adjusted change in US manufacturing employment for May, the US unemployment rate for May, the change in Canadian employment for May, the Canadian unemployment rate for May, and China's foreign exchange reserves for May.

Notably: South Korea held its presidential election on June 3, with the stock market closed for the day. The Zhengzhou Commodity Exchange designated 8:55-9:00 on June 3 as the call auction period for all futures and options contracts, with night session trading to resume that evening. Goolsbee, the 2025 FOMC voter and Chicago Fed Chairman, participated in a Q&A session. Fed Chairman Powell delivered opening remarks at an event. South Korea tentatively scheduled its presidential election for June 3. The Reserve Bank of Australia released the minutes of its June monetary policy meeting. Bank of Japan Governor Kazuo Ueda delivered a speech. South Korea held its general election. The Fed released the Beige Book on economic conditions. The European Central Bank (ECB) announced its interest rate decision. ECB President Christine Lagarde held a monetary policy press conference. Fed Governor Adriana Kugler delivered a speech at the Economic Club of New York. Harker, the 2026 FOMC voter and Philadelphia Fed Chairman, delivered a speech on the economic outlook. ECB President Christine Lagarde delivered a speech.

In terms of crude oil: During the Dragon Boat Festival holiday, both WTI and Brent crude oil futures rose. WTI crude oil increased by 3.7%, while Brent crude oil rose by 4.01%. Despite the OPEC+ group's adherence to its plan to increase production, wildfires raging in oil-producing provinces in Canada threatened supplies, and new US tariff threats put pressure on the US dollar, both of which supported oil prices.

As of Monday, wildfires in Alberta, a major oil-producing province in Canada, had affected approximately 7% of the country's total crude oil production. At least two thermal oil sands operators south of the industrial hub of Fort McMurray evacuated workers and halted production over the weekend. OPEC member countries agreed on Saturday to increase oil production by 411,000 barrels per day (bpd) in July, marking the third consecutive month of the same increase. The alliance aims to regain market share and penalize overproducing countries. Goldman Sachs analysts expect OPEC to implement a final 410,000 bpd increase in August. In a report, the bank stated, "Relatively tight spot oil market fundamentals, strong global manufacturing data, and seasonal support for oil demand during the summer suggest that the expected slowdown in demand is unlikely to be severe enough to prevent production increases when the August production level is decided on July 6." (Wenhua Comprehensive)