Most metals fell, with LME zinc and LME lead leading the decline, while silver rose nearly 5% and oil prices rose for two consecutive weeks [overnight market]

SMM July 12 News:

Metal Markets:

Overnight domestic market base metals closed universally lower, with SHFE tin down 0.01%, SHFE copper down 0.27%, SHFE nickel down 0.5%, SHFE lead down 0.2%, SHFE aluminum down 0.34%, and SHFE zinc down 0.83%. Additionally, alumina main futures fell 0.85%, while primary aluminum continuous contracts declined 0.2%.

Overnight ferrous metals series mostly declined: iron ore fell 0.07%, stainless steel dropped 0.71%, rebar fell 0.1%, and HRC declined 0.15%. For coking coal and coke: coking coal rose 1.32%, while coke increased 1.96%.

Overnight overseas market metals saw LME base metals nearly universally decline: LME copper fell 0.39%, LME aluminum dropped 0.21%, LME lead declined 1.32%, LME zinc fell 1.4%, LME tin rose 0.02%, and LME nickel decreased 0.36%.Z6/>Precious metals: COMEX gold rose 1.34%, extending its weekly gain to 0.82% for two consecutive weeks. COMEX silver surged 4.74%, hitting a fresh high since September 2011 at $39.225/oz during the session, with weekly gains reaching 5.37% for two consecutive weeks. SHFE gold rose 0.68% overnight but posted a 0.25% weekly loss, while SHFE silver climbed 2.38%, reaching a record high of 9,237 yuan/kg intra-day and extending its weekly rally to 1.38% for three consecutive weeks.

As of 8:50 on July 12, overnight closing prices

》Click to view SMM Futures Data Dashboard

Macro Front

Domestic Updates:

[MIIT: Implementing "AI+Manufacturing" Initiative to Support Enterprise Deployment of General/Industry-Specific Large Models and Intelligent Agents in Key Scenarios] The Ministry of Industry and Information Technology (MIIT) released the 2025 Work Priorities for Information and Industrial Integration, encompassing 17 measures across five areas. Key initiatives include elevating intelligence levels through compiling AI application guidelines for manufacturing enterprises and strengthening AI-industry integration. The "AI+Manufacturing" initiative will support enterprise deployment of general/industry-specific large models and intelligent agents in critical scenarios. Ongoing efforts involve smart manufacturing projects, continued smart factory cultivation, and drafting interim management measures for smart factory grading. This will drive accelerated application and iterative upgrades of smart manufacturing equipment, industrial software, and system integration innovations.

[Two Departments: 2025 Green Power Consumption Ratios Set for Steel, Cement, Polysilicon Industries and New Data Centers at National Hub Nodes] The General Office of the National Development and Reform Commission (NDRC) and the Comprehensive Department of the National Energy Administration issued a notice on 2025 renewable energy consumption responsibility weights and related matters. To implement the Energy Law of the People's Republic of China's green energy promotion mechanism and comply with documents including the 2024-2025 Energy Conservation and Carbon Reduction Action Plan (Guo Fa [2024] No.12), Guidelines on Vigorously Implementing Renewable Energy Substitution (Fa Gai Neng Yuan [2024] No.1537), National Carbon Emissions Trading Market Expansion Plan for Cement, Steel, and Aluminum Smelting Sectors (Huan Qi Hou [2025] No.23), and Data Center Green Development Special Action Plan (Fa Gai Huan Zi [2024] No.970), the 2025 green power consumption ratios will be expanded from the electrolytic aluminum sector to include steel, cement, polysilicon industries, and new data centers at national hub nodes. 》Click for details

[Long-term capital for long-term investments: New regulations introduced, insurers to fully implement "current year + 3-year + 5-year" performance assessments to ensure long-term capital investment in A-shares]A systemic breakthrough for "long-term capital for long-term investments" has emerged. The Ministry of Finance recently issued the *Notice on Guiding Long-term Stable Investments of Insurance Funds and Strengthening Long-term Performance Assessments for State-owned Commercial Insurance Companies* (hereinafter referred to as the "Notice"), aiming to improve insurance companies' performance evaluation systems at the institutional level, enhance the stability and sustainability of long-term insurance fund investments, and support the healthy development of capital markets. The Notice's core focus lies in optimizing performance assessments for state-owned insurers, adjusting the evaluation methods for return on equity (ROE) and capital preservation & appreciation rates to a "current year indicator + 3-year cycle indicator + 5-year cycle indicator" structure, with weights set at 30%, 50%, and 20% respectively.Implementation will formally commence with the 2025 performance evaluation cycle.》Click for details

[PBOC, Financial Regulatory Authority, and ACFIC officials: Closely monitoring issues in automotive distribution sector]The All-China Federation of Industry and Commerce (ACFIC) Automotive Dealers Chamber recently convened a symposium on "high-quality development of the automotive distribution sector," attended by representatives from 45 automotive dealerships and local chambers of commerce, alongside officials from the People's Bank of China (PBOC) Credit Markets Department, China Banking and Insurance Regulatory Commission (CBIRC) Property Insurance Department, and CBIRC Inclusive Finance Department. Participants heard enterprise feedback and suggestions. Relevant PBOC and CBIRC officials stated that financial authorities are closely tracking issues in the automotive distribution sector and will analyze root causes of enterprise concerns in alignment with national consumption promotion and vehicle trade-in policies, while developing better-targeted policy measures. The chamber will compile meeting minutes incorporating attendees' feedback and survey findings for submission to relevant state authorities. (Cailian Press)

US dollar update:

The US dollar index rose 0.3% overnight to close at 97.87. Weekly performance: The index posted a weekly gain of 0.92%. US President Trump announced new tariffs on Canada and other trading partners, reigniting trade tensions. CCTV News reported that on local date 10th, Trump declared a 35% tariff on Canadian imports effective August 1. Canada's Prime Minister responded by vowing to defend national interests and strengthen global trade cooperation against US tariff threats. Trump has recently sent letters to leaders of over 20 nations regarding planned tariff implementations starting August 1. In an interview broadcast on NBC News on the 10th, he also said that other trading partners who had not yet received tariff letters might face comprehensive tariffs ranging from 15% to 20%. Trump also announced this week a 50% tariff on imported copper and a 50% tariff on Brazilian goods. US Fed Governor Waller reiterated on Thursday the possibility of an interest rate cut this month, with investors expecting the US Fed to cut interest rates by 50 basis points before the end of the year. RBC Capital Markets strategists have postponed their estimate for the US Fed to resume interest rate cuts from September to December, citing that policymakers need more time to assess inflation and labour market conditions.

In other currencies:

Bank of America's interest rate strategists pointed out in a report that the Bank of England might slow down the pace of quantitative tightening from October, reducing the annual reduction in government bond holdings from the current £100 billion to £60 billion. Bank of America stated that the slowdown in quantitative tightening might be due to the fact that the operation is actually tightening the monetary policy environment, imposing additional pressure on the economy. Therefore, adjusting the pace helps to mitigate its impact on financial conditions and economic growth. (Huitong Finance)

Macro:

This week will see the release of data including China's June trade balance, China's year-on-year import and export rates, China's year-on-year urban fixed asset investment rate for the year to date as of June, China's year-on-year industrial added value rate for enterprises above designated size for the year to date as of June, China's year-on-year total retail sales of consumer goods rate for June, China's Q2 GDP year-on-year rate for the single quarter, China's Q2 GDP year-on-year rate for the year to date, the Eurozone's July ZEW economic sentiment index, Germany's July ZEW economic sentiment index, the Eurozone's June total reserve assets, the US's June CPI year-on-year rate (unadjusted), the US's June core CPI year-on-year rate (unadjusted), the US's July New York Fed manufacturing index, Canada's June unadjusted CPI year-on-year rate, Canada's June core CPI - common year-on-year rate, Canada's May manufacturing sales month-on-month rate, the UK's June CPI year-on-year rate, the UK's June retail price index year-on-year rate, China's June total electricity consumption year-on-year rate (monthly), the Eurozone's May seasonally adjusted trade balance, the US's June PPI year-on-year rate, the US's June core PPI year-on-year rate, the US's June industrial production month-on-month rate, the US's June capacity utilization rate, the US's June manufacturing production month-on-month rate, Japan's June merchandise trade balance (unadjusted), Japan's June seasonally adjusted merchandise trade balance, Australia's June seasonally adjusted unemployment rate, Australia's June employment population change, the UK's May unemployment rate (according to ILO standards), the UK's May three-month average wage year-on-year rate including bonuses, the Eurozone's June harmonized CPI year-on-year rate (unadjusted final value), the Eurozone's June core harmonized CPI year-on-year rate (unadjusted final value), the US's June import price index month-on-month rate, the US's initial jobless claims for the week ending July 12, the US's continuing jobless claims for the week ending July 5, the US's July Philadelphia Fed manufacturing index, the US's June retail sales month-on-month rate, the US's June retail sales control group month-on-month rate associated with GDP (seasonally adjusted), Japan's June nationwide CPI year-on-year rate, Japan's June nationwide core CPI year-on-year rate, the US's June preliminary month-on-month rate of building permits, the US's July preliminary University of Michigan consumer sentiment index, and other data.

Additionally, this week, we should also pay attention to the following events: the State Council Information Office will hold a press conference to introduce the import and export situation in the first half of 2025; the State Council Information Office will hold a press conference on the financial statistics data for the first half of 2025; the National Energy Administration will release data on the electricity consumption of the whole society around the 15th of each month; US President Trump plans to make a "major announcement" on Russia; the National Bureau of Statistics (NBS) will release the monthly report on residential sales prices in 70 large and medium-sized cities; the State Council Information Office will hold a press conference on the national economic operation; Collins, the 2025 FOMC voter and President of the Federal Reserve Bank of Boston, will deliver a speech; Bowman, a Governor of the US Fed, will deliver a welcome address at a conference hosted by the US Fed; Bailey, Governor of the Bank of England, and Reeves, Chancellor of the Exchequer, will deliver speeches at a dinner at the Mansion House in London; Barr, a Governor of the US Fed, will deliver a speech at a conference hosted by the US Fed; Collins, the 2025 FOMC voter and President of the Federal Reserve Bank of Boston, will deliver a speech again; Bailey, Governor of the Bank of England, will deliver a speech; Logan, the 2026 FOMC voter and President of the Federal Reserve Bank of Dallas, will deliver a speech on the US economy; Hamrick, the 2026 FOMC voter and President of the Federal Reserve Bank of Cleveland, will deliver a speech; the US Fed will release the Beige Book on economic conditions; Williams, the permanent FOMC voter and President of the Federal Reserve Bank of New York, will deliver a speech on the US economy and monetary policy; South Africa will host the G20 Finance Ministers and Central Bank Governors Meeting until July 18.

Crude oil:

Both WTI and Brent crude oil futures rose overnight, with WTI up 3.27% and Brent up 2.9%. On a weekly basis, WTI crude oil futures rose for two consecutive weeks, up 2.61% this week; Brent crude oil futures rose for two consecutive weeks, up 3.41% this week. The International Energy Agency (IEA) said the market was tighter than it appeared, while the market was also concerned about US tariffs and possible further sanctions on Russia. The IEA said the global oil market could be tighter than it seemed, helped by peak summer refinery capacity to meet travel and power generation demand.

Russian Deputy Prime Minister Alexander Novak said Russia would compensate for the part of its oil production that exceeded OPEC's production quota in August-September this year, further supporting the short-term price outlook.

US energy services company Baker Hughes said in its closely watched report that US energy companies reduced the number of active oil and natural gas drilling rigs for the 11th consecutive week this week. The last time this happened was in July 2020, when the COVID-19 pandemic led to a decline in fuel demand. Data showed that as of the week ending July 11, the total number of US oil and natural gas rigs, a leading indicator of future production, decreased by 2 to 537, the lowest level since October 2021. The report showed that as of the week ending July 11, the number of active oil drilling rigs in the US fell by one to 424, the lowest level since September 2021, while the number of natural gas drilling rigs remained steady at 108.

The Saudi Arabian Ministry of Energy stated that the country had been fully adhering to its voluntary OPEC production targets, noting that Saudi Arabia's supply of crude oil to the market in June was 9.352 million barrels per day, in line with the agreed quota. The ministry added, "Although production briefly exceeded the quota, these additional volumes were not sold in the domestic or international markets but were redistributed as a contingency measure." (Wenhua Comprehensive)