US dollar falls, metals show mixed performance; SHFE aluminum, SHFE gold, and New York gold rise over 1%; coking coal and coke, lithium carbonate lead declines [SMM Daily Review]

SMM June 12 News:

Metal Market:

As of the daytime close, domestic metals showed mixed performance. SHFE aluminum led the gains with a 1.12% increase, while SHFE lead and SHFE zinc both rose by 0.3%. The remaining metals declined, with SHFE nickel leading the losses with a 1.24% drop, SHFE copper falling by 0.72%, and SHFE tin decreasing by 0.02%. The main alumina contract rose by 0.1%, and the main casting aluminum contract increased by 0.54%.

In addition, the main lithium carbonate contract fell by 1.56%, the main polysilicon contract dropped by 1.39%, the main silicon metal contract decreased by 0.27%, and the main European container shipping contract fell by 1.74%.

In the ferrous metals series, all metals except stainless steel declined, with stainless steel rising by 0.48%. HRC fell by 0.87%, and rebar decreased by 0.7%. In the coking coal and coke sector, coking coal fell by 2.79%, and coke dropped by 1.77%.

In the overseas market, as of 15:02, only LME tin and LME nickel declined together, with LME tin falling by 0.06% and LME nickel decreasing by 0.24%. LME zinc led the gains with a 0.55% increase, while the remaining metals all rose by less than 0.5%.

In the precious metals sector, as of 15:02, COMEX gold rose by 1.48%. China and the US reached a framework agreement in principle on trade negotiations, easing international economic and trade relations. However, the tense geopolitical situation in the Middle East boosted safe-haven demand. The US May CPI was lower than expected, increasing market bets on a September interest rate cut by the US Fed. The US dollar index fell, and gold prices fluctuated upward. COMEX silver rose by 0.41%. Domestically, SHFE gold rose by 1.04%, and SHFE silver fell by 0.88%, recording three consecutive days of decline.

Market conditions as of 15:02 today

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Macro Front

Domestic Aspect:

[Li Chunlin, Deputy Director of the National Development and Reform Commission: Fully Supporting Shenzhen in Advancing Comprehensive Reform Pilot] Li Chunlin, Deputy Director of the National Development and Reform Commission, stated at a State Council Information Office press conference on June 12 that the Implementation Plan for the Comprehensive Reform Pilot in Shenzhen to Build a Pioneer Demonstration Area of Socialism with Chinese Characteristics (2020-2025) has been implemented for nearly five years. To further consolidate and expand the pilot results, and support Shenzhen in intensifying efforts to eliminate institutional and mechanism shortcomings in various aspects and accelerate the construction of a high-level socialist market economy system, the General Office of the CPC Central Committee and the General Office of the State Council recently issued the Opinions on Advancing Shenzhen's Comprehensive Reform Pilot, Deepening Reform and Innovation, and Expanding Opening-up. This is a major initiative to support Shenzhen in building a pioneer demonstration area of socialism with Chinese characteristics, an upgraded version of the Plan, and an important interpretation of China's unwavering commitment to deepening reform and opening-up. Next, we will earnestly implement the decisions and arrangements of the CPC Central Committee and the State Council, work together with relevant departments and Guangdong Province to fully support Shenzhen in advancing the comprehensive reform pilot, and ensure the implementation of the Opinions.

[Ministry of Industry and Information Technology: Supports Automakers' "60-Day Payment Term" Commitment to Promote Healthy Industry Development]Recently, 17 key automakers, including FAW, Dongfeng, GAC, and Seres, have successively issued statements committing to "payment terms not exceeding 60 days." Today (the 12th), a relevant official from the Ministry of Industry and Information Technology stated that the automakers' commitment is of great significance in promoting the healthy and sustainable development of the automotive industry. The official also noted that the automakers' proactive commitment to "payment terms not exceeding 60 days" reflects their positive response to national calls, fulfillment of social responsibilities, and corporate commitments, which is crucial for building a collaborative and win-win development ecosystem between "complete vehicles and parts." The relevant official from the Ministry of Industry and Information Technology also emphasized that currently, China's NEV industry is at a critical stage of high-quality development. It is hoped that enterprises will lead by example and strengthen industry self-discipline. It is also hoped that all sectors of society will care about and support the high-quality development of the NEV industry, jointly resist online chaos such as "internet trolls" and "black PR," and create a positive, civilized, and orderly development environment. (Cailian Press)

►The central parity rate of the RMB against the US dollar in the interbank foreign exchange market on June 12 was 7.1803 RMB per US dollar.

US dollar:

As of 15:02, the US dollar index fell by 0.29% to 98.34. On June 11, the US Bureau of Labor Statistics released the May Consumer Price Index (CPI) report, showing that the US May CPI rose 2.4% YoY and 0.1% MoM, while the core CPI rose 2.8% YoY and 0.1% MoM, both lower than market expectations. Following the data release, traders increased their bets on the US Fed starting interest rate cuts in September, with the likelihood of a September cut rising to 75%, and it is basically expected that there will be two rate cuts this year.

Macro:

Today, data such as the US initial jobless claims for the week ending June 7, continuing jobless claims for the week ending May 31, US May PPI YoY, US May core PPI YoY, Japan's Q2 BSI Large Manufacturing Confidence Index, UK April GDP MoM, UK April industrial production MoM, UK April industrial production YoY, UK April goods trade balance - seasonally adjusted, and UK April seasonally adjusted trade balance will be released.

In addition, at 12:00 on June 12, US President Trump raised tariffs on imported steel from 25% to 50%. He Lifeng visited the UK from June 8 to 13 and held the first meeting of the China-US Economic and Trade Consultation Mechanism.

Crude oil:

As of 15:02, oil prices in both markets fell simultaneously, with US crude oil down 0.65% and Brent crude oil down 0.72%, but still hovering near a more than two-month high, as the market worried that escalating geopolitical tensions would disrupt oil supplies.

According to CCTV News, due to escalating regional tensions, the US State Department has authorized non-essential personnel and their families to leave Bahrain and Kuwait. Family members of US military personnel in Bahrain are also allowed to temporarily depart. Additionally, multiple US and Iraqi sources have stated that the US is preparing to evacuate its embassy in Iraq due to heightened regional security risks. The framework agreement reached between China and the US on implementing the consensus from the phone call between the two heads of state and the Geneva talks has also boosted oil prices, as it may stimulate energy demand in the world's two largest economies.

The US Energy Information Administration (EIA) reported that US crude oil inventories fell by 3.6 million barrels last week to 432.4 million barrels. Analysts had previously expected a decline of 2 million barrels. Increased refining activity pushed up gasoline and distillate inventories. The EIA stated that US gasoline inventories rose by 1.5 million barrels to 229.8 million barrels, against market expectations of a 900,000-barrel increase. Distillate inventories, including diesel and heating oil, rose by 1.2 million barrels to 108.9 million barrels, compared to market expectations of an 800,000-barrel increase. (Comprehensive report from Wenhua)

SMM Daily Review

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