US dollar declines, base metals generally fall, with alumina and LME nickel leading the declines. Iron ore rises 1.56% [overnight market]

SMM July 17 News:

Metal market:

Overnight, base metals in the domestic market mostly fell, with SHFE tin down 0.55%. SHFE copper edged lower. SHFE nickel dropped 0.9%. SHFE lead dipped slightly. SHFE aluminum rose 0.12%, while SHFE zinc gained 0.39%. Additionally, the most-traded alumina futures contract declined 1.69%, and the continuous casting aluminum contract increased 0.18%.

Overnight, most ferrous metals series rose, with iron ore up 1.56%, stainless steel down 0.08%, rebar rising 0.68%, and HRC climbing 1.01%. For coking coal and coke, coking coal was flat at 904.5 yuan/mt, and coke remained unchanged at 1,504 yuan/mt.

Overnight in the overseas market, LME base metals mostly declined, with LME copper down 0.09%, LME aluminum falling 0.19%, LME lead dropping 0.9%, LME zinc edging up 0.09%, LME tin decreasing 0.97%, and LME nickel sliding 1.03%.

Overnight precious metals: COMEX gold rose 0.52%; COMEX silver inched up 0.04%. SHFE gold gained 0.36%, while SHFE silver edged higher by 0.02%. Citigroup stated that silver prices would rise further in coming months and exceed $40 per ounce due to tight physical supply and growing investment demand. Meanwhile, the bank reiterated a more cautious view on gold prices. Analysts including Max Layton noted in a report that their three-month silver price forecast had been raised from $38 to $40, with the six-to-twelve-month projection lifted to $43. The gold outlook remained unchanged, with the bank suggesting prices may have peaked and maintaining its forecast for a drop below $3,000 next year.

As of 8:17 am July 17, overnight closing quotes

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Macro front

Domestically:

[Wang Huning Attends Symposium on Comprehensive Expansion of Domestic Demand Survey and Consultation]According to Xinhua News Agency, a symposium on the comprehensive expansion of domestic demand survey and consultation was held in Beijing on July 16, discussing key field trip findings by central committees of democratic parties, the All-China Federation of Industry and Commerce, and non-party personages. Wang Huning, member of the Standing Committee of the Political Bureau of the CPC Central Committee and chairman of the National Committee of the Chinese People's Political Consultative Conference, attended and delivered remarks. He noted that since the 18th CPC National Congress, the CPC Central Committee with Xi Jinping at its core has resolutely implemented the strategy of expanding domestic demand, accelerating the cultivation of a complete domestic demand system to provide strong support for high-quality economic development. He emphasized the need to thoroughly study Xi Jinping's important expositions on comprehensively expanding domestic demand, unify thinking with the CPC Central Committee's economic analysis and decisions on expanding domestic demand, leverage consumption as the foundation, play investment's key role, and prioritize supply system upgrades to contribute wisdom and strength for building a new development paradigm and promoting high-quality development. Wang Huning fully affirmed the continuous in-depth research and active advice from relevant central democratic parties, the All-China Federation of Industry and Commerce, and personages without party affiliation on comprehensively expanding domestic demand. He stated that comprehensively expanding domestic demand is essential for maintaining China's long-term sustained and healthy economic development, meeting the people's growing needs for a better life, and constitutes a strategic initiative. It is crucial to firmly maintain a political stance aligned with the central tasks of the Party and the state, focus on key issues in comprehensively expanding domestic demand, produce more refined and specific research outcomes, ensure effective application and transformation of results, and enhance the quality of key field trips and policy advocacy. It is equally vital to firmly adhere to the fundamental requirement of "four consolidations," solidly strengthen ideological and political guidance, and broadly unify consensus for the cause of the Party and the state. (Cailian Press)

[CPCA: Passenger vehicle retail sales reached 571,000 units nationwide from July 1-13, up 7% YoY compared to the same period last July] CPCA data shows that from July 1-13, nationwide passenger vehicle retail sales reached 571,000 units, up 7% YoY compared to the same period last July and down 5% MoM, with cumulative retail sales reaching 11.473 million units year-to-date, up 11% YoY. During the same period, nationwide passenger vehicle producer wholesale volume reached 555,000 units, up 34% YoY compared to the same period last July and down 7% MoM, with cumulative wholesale volume reaching 13.835 million units year-to-date, up 13% YoY.

US dollar:

The US dollar index fell 0.34% overnight to 98.29. US June PPI data unexpectedly missed expectations, impacted by declining service prices, indicating businesses are absorbing at least part of the cost increases from raised import tariffs. US data showed producer prices remained unchanged MoM in June, following a 0.3% rise in May. CCTV News reported that on July 16 local time, US President Trump stated he currently has no plans to take action regarding Fed Chairman Powell and has not drafted dismissal letters. Earlier that day, a White House official indicated President Trump might soon dismiss Fed Chairman Powell. The New York Times further reported Trump has already drafted dismissal letters for Fed Chairman Powell. US Treasury Secretary Bessent stated on Tuesday that the formal process to identify Powell's successor as Fed Chairman has commenced, with Powell's term ending in May 2026.

In trade developments, Trump threatened last week to impose 30% tariffs on EU imports. Xinhua News Agency reported that European Commission Executive Vice President Šefčovič, responsible for trade and economic security, stated on July 14 that should US-EU trade negotiations fail, the EU is prepared to impose additional retaliatory tariffs on $11.473 million worth of US imports. On the 15th local time, US President Trump stated that tariff letters would soon be sent to some countries with relatively small economies, and that tariffs for these countries were expected to be set at "slightly above 10%".

In addition to tariffs and inflation, the market is also concerned about the fiscal and debt prospects of the US, as well as the pressure exerted by the Trump administration on Powell to maintain interest rates unchanged. Trump said on Tuesday that consumer prices were low, and that the US Fed should now cut interest rates. (Wenhua Comprehensive)

Data:

Today, data such as Australia's seasonally adjusted unemployment rate for June, the change in employment population for June in Australia, the UK's unemployment rate for May - according to ILO standards, the UK's average wage annual rate including bonuses for the three months ending in May, the eurozone's harmonized CPI annual rate for June - unadjusted final value, the eurozone's core harmonized CPI annual rate for June - unadjusted final value, the US's import price index monthly rate for June, 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 Philadelphia Fed manufacturing index for July, the US's retail sales monthly rate for June, the US's core retail sales monthly rate for June, the US's retail sales annual rate for June, and the US's retail sales control group monthly rate for June - seasonally adjusted, which is linked to GDP, will be released.

In addition, attention should be paid to the US Fed's release of the Beige Book on economic conditions; a speech by FOMC permanent voting member and New York Fed President Williams on the US economy and monetary policy; the US Fed's release of the Beige Book on economic conditions; a speech by FOMC permanent voting member and New York Fed President Williams on the US economy and monetary policy; South Africa hosting the G20 Finance Ministers and Central Bank Governors Meeting until July 18; and South Africa hosting the G20 Finance Ministers and Central Bank Governors Meeting until July 18.

Crude oil:

Overnight, futures for both crude oils fluctuated rangebound, with US crude oil rising by 0.18% and Brent crude oil remaining flat at $68.71 per barrel. Oil prices were under pressure due to an increase in US fuel inventories and concerns about the broader economic impact of US tariffs, which overshadowed some signs of increased demand.

The US Energy Information Administration (EIA) stated on Wednesday that US crude oil inventories fell last week due to increased exports, while gasoline and distillate inventories rose, raising some concerns about fuel demand. The EIA said that gasoline inventories increased by 3.4 million barrels to 232.9 million barrels last week, compared to analysts' expectations of a decrease of 1 million barrels. Distillate inventories, including diesel and heating oil, increased by 4.2 million barrels to 107 million barrels, far exceeding analysts' expectations of an increase of 200,000 barrels. The EIA said that US crude oil inventories decreased by 3.9 million barrels to 422.16 million barrels in the week ending July 11, while previous surveys showed analysts' expectations of a decrease of 552,000 barrels.

In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) stated that despite trade conflicts, the global economy may perform better than expected in the second half of the year (H2). Refineries will maintain high crude oil intake to meet the increase in summer travel, which will help support the demand outlook. Following a downward revision in April, OPEC kept its forecast for global oil demand growth in 2025 and 2026 unchanged in its monthly report released on Tuesday, citing a strong economic outlook. According to OPEC's monthly report, the daily crude oil production of OPEC member countries in June was 41.559 million barrels, an increase of 349,000 barrels from May, but still below the alliance's planned monthly increase of 411,000 barrels. (Wenhua Comprehensive)