Metals generally declined, with SHFE tin and coking coal rising by over 1%, alumina falling by 2.9%, and the ferrous metals series showing mixed performance [SMM Daily Review]

SMM, June 5:

Metal Market:

As of the daytime close, domestic market base metals generally declined, with only SHFE lead and SHFE tin rising together. SHFE lead increased by 0.36%, and SHFE tin rose by 1.47%. The rest of the metals fell, with the main alumina contract dropping by 2.9%.

In addition, the main lithium carbonate contract fell by 0.43%, the main silicon metal contract declined by 0.56%, and the main polysilicon contract dropped by 0.27%. The main European container shipping contract fell by 0.11%.

The ferrous metals series showed mixed performance. Stainless steel rose by 0.2%, iron ore fell by 0.14%, rebar increased by 0.14%, and HRC declined by 0.19%. In the coking coal and coke sector, coking coal rose by 1.68%, and coke increased by 0.56%.

In the overseas market, as of 15:03, overseas market base metals generally declined, with only LME copper and LME nickel rising together. LME copper increased by 0.29%, and LME nickel rose by 0.1%. LME lead led the declines with a drop of 0.5%. The fluctuations in the declines of the remaining metals were relatively small.

In precious metals, as of 15:03, COMEX gold fell by 0.26%, and COMEX silver rose by 0.03%. Domestically, SHFE gold increased by 0.23%, and SHFE silver fell by 0.01%.

Market conditions as of 15:03 today

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Macro Front

Domestic Aspects:

[National Energy Administration: National power supply is generally expected to be secured during the peak summer period this year] Hao Ruifeng, Director of the Market Supervision Department of the National Energy Administration, stated at a State Council Information Office press conference that, based on the current situation, it is expected that the national power supply will be generally secured during the peak summer period this year, although there may be power supply tightness in some local areas during peak periods. Hao Ruifeng pointed out that the National Energy Administration will aim to ensure flexible regular supply, implement measures for localized short-term tightness, and achieve effective responses to extreme situations, pressing all parties to fulfill their responsibilities. Through measures such as strengthening energy and power monitoring and early warning, fully leveraging power supply potential during peak periods, accelerating the construction and commissioning of supportive power sources, optimizing cross-provincial power exchanges, and enhancing demand-side response, the National Energy Administration will strive to ensure the safe and stable supply of power during the peak summer period.

[Song Hongkun, Deputy Director of the National Energy Administration: As of the end of April, installed capacity of wind, PV, and nuclear power historically exceeded that of thermal power] Song Hongkun, Deputy Director of the National Energy Administration, stated at a State Council Information Office press conference today that as of the end of April this year, China's installed capacity of renewable energy power generation reached 2.017 billion kW, up 58% YoY. The installed capacity of wind, PV, and nuclear power reached 1.53 billion kW, historically exceeding that of thermal power.

[Ministry of Ecology and Environment: Coal consumption accounted for 53.2% of total energy consumption in 2024] The Ministry of Ecology and Environment officially released the "2024 Report on the State of China's Ecology and Environment."The proportion of coal consumption in total energy consumption was 53.2%, a decrease of 1.6 percentage points from 2023. The proportion of clean energy consumption, including natural gas, hydropower, nuclear power, wind power, and solar power, in total energy consumption was 28.6%, an increase of 2.2 percentage points from 2023. As of the end of 2024, the cumulative trading volume of quotas in the national carbon emissions trading market reached 630 million mt, with a cumulative turnover of 43.033 billion yuan.

[Caixin China General Services PMI rose to 51.1 in May] The Caixin China General Services Business Activity Index (Services PMI) for May, released today, recorded 51.1, up 0.4 percentage points from April, indicating an acceleration in the expansion of services sector operations.

►The central parity rate of the RMB exchange rate in the inter-bank foreign exchange market on June 5 was 7.1865 RMB per US dollar.

US dollar:

As of 15:03, the US dollar index rose by 0.12% to 98.91. On June 4 local time, the latest Beige Book, a national economic conditions survey report released by the US Fed, showed that economic activity in the US had declined slightly since the last report. Businesses and consumers faced increased policy uncertainty and mounting price pressures, with the overall economic outlook remaining pessimistic. US ADP employment increased by 37,000 in May, against an expected increase of 110,000 and a prior increase of 62,000. Following the release of the US May ADP employment data, US President Trump stated that Powell must now cut interest rates. Data released by ISM showed that the US May ISM Services PMI Index was reported at 49.9, significantly below the expected 52, marking the first contraction in nearly a year. The new orders index fell sharply by 5.9 points, the largest decline since June 2024, to 46.4. The prices paid index jumped to 68.7, the highest since November 2022.

Currently, the market is focusing on the non-farm payrolls report to be released this Friday, seeking clearer guidance.

Macro:

Today, data such as the year-on-year rate of the ANZ commodity price index for May globally, Australia's goods and services trade balance for April, Australia's monthly export rate for April, Australia's monthly import rate for April, China's Caixin Services PMI for May, Switzerland's unadjusted unemployment rate for May, Switzerland's seasonally adjusted unemployment rate for May, the leading indicator for turning points in the global industrial production cycle for May, the number of job cuts announced by US companies in May (Challenger report), the European Central Bank's (ECB) main refinancing rate for June in the Eurozone, the ECB's deposit facility rate for June in the Eurozone, the ECB's marginal lending facility rate for June in the Eurozone, 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, Canada's unadjusted IVEY PMI for May, and the global supply chain pressure index for May will be released. In addition, it is worth noting that the US Fed released the Beige Book on economic conditions; the European Central Bank (ECB) announced its interest rate decision; and ECB President Christine Lagarde held a press conference on monetary policy.

Crude oil:

As of 15:03, oil prices in the two markets showed mixed performance, with US crude oil down 0.06% and Brent crude oil up 0.05%. Earlier industry reports indicated an increase in US gasoline and diesel inventories last week. Additionally, Saudi Arabia lowered its official selling prices (OSPs) for Asian crude oil buyers in July, while uncertainties surrounding the global economy also weighed on oil prices.

The US Energy Information Administration (EIA) released its inventory report on Wednesday, showing a decline in US crude oil inventories last week as refineries ramped up production with the start of the summer driving season, while fuel inventories rose due to weak demand. The EIA reported that US gasoline inventories increased by 5.2 million barrels to 228.3 million barrels in the week ending May 30, compared to market expectations of a 600,000-barrel increase. US commercial crude oil inventories fell by 4.3 million barrels to 436.06 million barrels in the same week, against market expectations of a 1 million-barrel decrease. Distillate inventories, including heating oil and diesel, rose by 4.2 million barrels to 107.6 million barrels in the week, compared to market expectations of a 1 million-barrel increase.

Saudi Arabia, the world's largest oil exporter, lowered its prices for Asian crude oil buyers to a two-month low, which the market views as an attempt by Saudi Arabia to regain market share. Saudi Aramco reduced the OSP for its flagship Arab Light crude oil sold to Asia in July to a premium of $1.20 per barrel over the Oman/Dubai average. The OSP premium was $1.40 per barrel in June and $1.20 per barrel in May. A previously released survey indicated that the price cut for Arab Light crude oil in July would be in the range of 40-50¢. Analysts from ANZ Bank said in a report, "Although the price cut by Saudi Arabia was smaller than expected, it indicates that demand remains weak despite entering the peak demand period." (Wenhua Comprehensive)

SMM Daily Review

►Aluminum prices fluctuate rangebound, aluminum scrap prices remain unchanged [Daily Review of Aluminum Scrap]

►June 5: SHFE aluminum holds up well, with no sign of inventory buildup yet; processing fees struggle to maintain [Daily Review of Spot Aluminum Billet]

►[SMM MHP Daily Review] June 5: Indonesian MHP prices decline

►[SMM Nickel Sulphate Daily Review] June 5: Nickel salt prices decline

►Rare earth miners withhold sales and refuse to budge on prices, leading to a slight price increase [SMM Rare Earth Daily Review]

►Tungsten market fluctuates at highs, with APT and tungsten powder prices rising again [SMM Tungsten Daily Review]

►Silver prices continue to consolidate, with sluggish market trading remaining unchanged [SMM Daily Review]