Crude oil plunges over 7%, US dollar weakens, metals generally rise, LME zinc gains over 2%, LME aluminum hits 3-month high [overnight market]

SMM June 24 News:

Metal Market:

Overnight, domestic metals generally rose, with SHFE zinc leading the gains with a 1.2% increase. SHFE nickel was the sole decliner, falling 0.51%, while other metals saw minor fluctuations in their gains. The main alumina futures contract rose 0.38%, and the main casting aluminum futures contract increased by 0.15%.

The ferrous metals series generally rose, with stainless steel falling 0.8% and iron ore leading the gains with a 0.42% increase. In the coking coal and coke sector, coking coal rose 1.38%, and coke increased by 0.65%.

Overseas base metals generally rose, with LME copper up 0.63% overnight and LME aluminum rising 1.67%, hitting a nearly three-month high of $2,654.5/mt during the session, the highest since March 21. LME lead rose 0.75%, and LME zinc led the gains with a 2.11% increase, recording a four-day winning streak. LME tin and LME nickel both fell, with LME nickel declining 1.14%.

In precious metals, overnight COMEX gold fell 0.04%, while COMEX silver rose 0.15%. Domestically, SHFE gold rose 0.56%, and SHFE silver increased by 0.89%.

Overnight closing prices as of 8:18 a.m. on June 24

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Macro Front

Domestic Developments:

The National Energy Administration released national power industry statistics for January-May. As of the end of May, the country's cumulative installed power generation capacity reached 3.61 billion kW, up 18.8% YoY. Among them, the installed capacity of solar power generation was 1.08 billion kW, up 56.9% YoY, and the installed capacity of wind power was 570 million kW, up 23.1% YoY.

The Ministry of Industry and Information Technology and eight other departments issued the "Implementation Plan for High-Quality Development of the Gold Industry (2025-2027)". The Plan proposes that by 2027, the gold resource security capacity and innovation level of the industry chain will be significantly improved. In terms of resource security, gold resources will increase by 5%-10%, and gold and silver production will increase by more than 5%.

The National Federation of Industry and Commerce Automobile Dealers Chamber of Commerce issued an initiative calling on automobile producers to optimize rebate policies and shorten the rebate settlement period: 1) Establish clear and transparent rebate policies. 2) Shorten the rebate settlement period. 3) Eliminate excessive restrictions on rebate settlement and usage.

US Dollar:

The US dollar fell 0.39% overnight to close at 98.39, after earlier rising to 99.42, the highest since May 30. Earlier, US Fed Vice Chair for Supervision Michelle Bowman stated that the Fed should consider cutting interest rates as soon as possible. Fed's Bowman said that the timing of an interest rate cut may come soon, as she is increasingly concerned about risks in the job market and less worried that tariffs will lead to inflation. Federal funds rate futures are currently pricing in a 58 basis point interest rate cut this year, indicating that two 25 basis point cuts are considered certain, and the likelihood of a third cut is rising.

After Fed Governor Christopher Waller said on Friday that the US Fed should consider cutting interest rates at its next meeting on July 29-30, traders increased their bets on more rate cuts. Before Waller's remarks, traders had priced in a 46 basis point cut for the year.

Chicago Fed President Austan Goolsbee also said on Monday that so far, the impact of tariff hikes on the economy has been smaller than expected. The US dollar was boosted by the Fed's "hawkish pause" on Wednesday, when the central bank held rates steady and Chairman Jerome Powell said policymakers expected inflation to rise in the summer due to the Trump administration's tariffs. Powell is set to testify before the US Congress on Tuesday and Wednesday.

Other currencies:

Strategists at Bank of America said that if oil prices remain high, the USD/JPY pair could rebound, noting that Japan imports nearly all of its oil, with over 90% coming from the Middle East.

The yen fell 0.09% against the US dollar in late New York trading to 146.22 yen, after touching 148.02 yen during the session, its weakest since May 13.

The euro rose 0.39% against the US dollar to $1.1567.

The British pound rose 0.51% to $1.3517 against the US dollar, after earlier falling to $1.3367, its lowest since May 20.

Macro:

Today, data including the US Q1 current account, the US Conference Board's June consumer confidence index, Canada's May central bank core CPI monthly rate, Canada's May core CPI-common annual rate, Canada's May central bank core CPI annual rate-unadjusted, Australia's ANZ consumer confidence index for the week ending June 22, Germany's June IFO business climate index, and the UK's June CBI industrial orders difference will be released.

In addition, Fed Governor Adriana Kugler and FOMC permanent voter and New York Fed President John Williams will host the "Fed Listens" event. Fed Chairman Jerome Powell will testify before the House Financial Services Committee with his semi-annual monetary policy report. Bank of England Governor Andrew Bailey will attend a meeting of the House of Lords Economic Affairs Committee. NATO heads of state and government will hold a summit in The Hague from June 24 to 25, with Trump confirming his attendance.

Crude oil:

Oil prices in both markets plunged overnight, with US crude falling 8.95% and Brent crude dropping 7.62%, as geopolitical risks remained but oil and natural gas shipments through the Strait of Hormuz were not shut down. Given that the Middle East crisis has yet to affect supply, investors are still weighing the magnitude of the geopolitical risk premium. HSBC said on Monday that, considering the increased likelihood of the closure of the Strait of Hormuz, it expects Brent crude oil to surge above $80 per barrel. However, if the threat of disruption does not materialize, oil prices will pull back again. In a report released on June 22, Goldman Sachs stated that Brent crude oil prices are expected to average around $95 per barrel in Q4 2025. Their assumption is that oil flows through this critical waterway will be halved within a month and remain reduced by 10% for the next 11 months.

Preliminary survey results indicate that US crude oil inventories may have declined last week, while gasoline inventories are expected to remain flat and distillate inventories may have increased. Before the release of the weekly inventory report, the average forecast of five surveyed analyst firms was that US crude oil inventories decreased by approximately 200,000 barrels in the week ending June 20. The American Petroleum Institute (API) will release its weekly crude oil inventory report at 4:30 AM Beijing time on Wednesday, and the US Energy Information Administration (EIA) will release its weekly crude oil inventory report at 10:30 PM Beijing time on Wednesday. (Wenhua Comprehensive)