Dollar Weakens, Metals Fall Broadly, SHFE Tin Down Over 2%, SHFE Nickel Down Over 1%, Crude Oil Down Over 2% [Overnight Market]

SMM June 5 News:

Metals market:

Overnight, base metals fell broadly across both domestic and overseas markets, with only LME copper and SHFE copper rising together. LME copper rose 0.86%, and SHFE copper rose 0.64%. LME tin and SHFE tin both fell over 2%, with LME tin down 2.24% and SHFE tin down 2.1%. SHFE nickel fell 1.25%, while the remaining metals declined less than 1%. The alumina front-month contract fell 1.36%, and the casting aluminum front-month contract fell 0.04%.

Overnight, ferrous metals generally fell. Stainless steel and iron ore both dropped over 1%, with stainless steel down 1.01% and iron ore down 1.23%. Hot-rolled coil and rebar each fell around 0.4%. Coking coal and coke both rose, with coking coal up 1.23% and coke up 0.88%.

Precious metals: Overnight, COMEX gold rose 0.79% and COMEX silver rose 0.58%. In China, SHFE gold rose 0.43% and SHFE silver rose 0.73%.

As of 6:42 AM on June 5, overnight closing prices:

Macro Front

China:

[PBOC: Conducted 500 billion yuan outright reverse repo operation]The PBOC announced that to maintain ample liquidity in the banking system, on June 5, 2026, the People's Bank of China would conduct a 500 billion yuan outright reverse repo operation through fixed-quantity, interest rate tender, and multiple-price winning method, with a term of 3 months (92 days) and a maturity date of September 5, 2026 (to be extended in case of holidays).

US dollar:

As of the overnight close, the US dollar index fell 0.09% to 99.44. US Fed's Daly stated that monetary policy is currently in a good position, but the economic outlook is too uncertain to provide clarity on the direction of interest rates. Daly said it is not appropriate to offer forward guidance at this time, as it is impossible to predict how the economy will develop. The most concerning issue at present is inflation, with the focus on rising energy and food prices, and bringing inflation back to the target level is the Fed's top priority. Daly also noted that although there is no clear evidence in current economic data that artificial intelligence has boosted productivity, she remains optimistic about the technology and believes 2027 will be the litmus test; meanwhile, she has not identified financial stability concerns related to AI investment. (Jin10 Data APP)

Data from the New York Fed showed that global supply chains remained under pressure in May due to the Middle East conflict, indicating that inflationary pressures will remain severe for the foreseeable future. The latest Global Supply Chain Pressure Index pulled back slightly to 1.77 from April's unrevised reading of 1.82. The index remained near levels seen in the second half of 2022. (Wallstreetcn)

According to CME FedWatch: The probability of the US Fed holding rates unchanged through June was 96.4%, with a 3.6% probability of a cumulative 25 basis point interest rate cut. The probability of the Fed holding rates unchanged through July was 88.5%, with an 8.2% probability of a cumulative 25 basis point rate hike and a 3.2% probability of a cumulative 25 basis point interest rate cut. (Jin10 Data APP)

Macro front:

Data to be released today include the US May unemployment rate, US May seasonally adjusted non-farm payrolls, US May average hourly earnings year-on-year, US May average hourly earnings month-on-month, UK May Halifax seasonally adjusted house price index month-on-month, France April industrial output month-on-month, France April trade balance, Eurozone Q1 GDP year-on-year revised, and Eurozone Q1 seasonally adjusted employment quarter-on-quarter final.

In addition, 2028 FOMC voter and Kansas City Fed President Schmid will participate in a fireside chat, and 2027 FOMC voter and San Francisco Fed President Daly will deliver a speech.

Crude oil:

As of the overnight close, oil prices in both markets fell, with WTI crude down 3.24% and Brent crude down 2.5%. The market pinned hopes on the possibility of an end to the US-Iran conflict; however, US crude oil inventory declines exceeded expectations and market supply remained constrained, providing a foundation for oil prices to move higher.

Iran's crude oil and condensate exports fell to at least a six-year low in May, with daily average exports well below 300,000 barrels per day, mainly due to the US naval blockade imposed since April 13. At that time, Iran nearly completely blocked the Strait of Hormuz, disrupting exports from Saudi Arabia, Kuwait, Iraq, and the UAE, and the oil market faced a supply deficit. Vortexa data showed Iran's May exports were approximately 209,000 bpd, down from 1.34 million bpd in April and nearly 1.9 million bpd in March, the lowest level since the end of 2019. Another agency, Kpler, estimated May exports at approximately 260,000 bpd, also a six-year low. (Wallstreetcn)

According to data released by the US Energy Information Administration (EIA) on Wednesday, for the week ending May 29, total US crude oil and petroleum product inventories fell by 10.6 million barrels from the previous week to 1.57 billion barrels, the lowest level since 2004. Commercial crude oil inventories (excluding the Strategic Petroleum Reserve) fell by 8 million barrels in a single week to 433.7 million barrels, marking the sixth consecutive weekly decline, far exceeding analysts' prior expectations of a 3.3 million barrel draw. (Wallstreetcn)

Fitch stated that the Strait of Hormuz closure has lasted 14 weeks, and it assumes the strait will not begin to reopen until July. Fitch raised its 2026 Brent crude oil average price assumption from $70/barrel in March to $87/barrel. (Jin10 Data APP)