Crude oil surged over 9%, metals showed mixed performance, LME tin and SHFE gold and silver fell over 2%, and LME lead, zinc, and SHFE tin fell over 1% [Overnight market]

SMM, July 14:

Metals Market:

Overnight, base metals on overseas and domestic markets showed mixed performance. LME tin led the decline with a drop of 2.47%, while LME lead, LME zinc, and SHFE tin all fell over 1%—LME lead (-1.32%), LME zinc (-1.23%), and SHFE tin (-1.27%)—with the rest of the metals seeing relatively small changes. Alumina main contract edged up 0.15%, while cast aluminum main contract edged down 0.22%.

Overnight, ferrous metals generally fell, with only iron ore and stainless steel rising—stainless steel gained 1.85% and iron ore rose 0.47%. Hot-rolled coil and rebar both edged down. For coking coal and coke, coking coal fell 0.04% and coke dropped 1.04%.

In precious metals overnight, COMEX gold fell 2.55%, briefly dipping below the $4,000/oz psychological level again during the session, while COMEX silver dropped 3.63%. In China, SHFE gold fell 2.12% and SHFE silver declined 2.84%, mainly as escalating Middle East tensions fueled rate-hike expectations.

As of 6:44 a.m. July 14, overnight closing prices:

Macro Front

China:

[State Council: Target total retail sales of consumer goods to reach around 60 trillion yuan by 2030] The State Council approved the “Expanding Consumption” 15th Five-Year Plan, aiming for the consumer market to keep expanding in scale by 2030, with the household consumption rate rising notably and total consumption of goods and services growing rapidly; total retail sales of consumer goods are to reach around 60 trillion yuan, providing a stronger boost to economic growth. The consumption structure will be further optimized, with the share of per capita service consumption expenditure in per capita consumption expenditure steadily increasing, development-oriented and improvement-oriented consumption continuing to grow, digital consumption scale constantly expanding, and urban-rural, regional, and group consumption gaps gradually narrowing. Consumption capacity will keep improving, high-quality full employment will make new progress, household income will grow in step with the economy, the social security system will be more optimized and sustainable, and consumers will have stronger spending power, more stable expectations, and greater confidence.

[State Council: Launch access and on-road pilot programs for intelligent connected vehicles] The State Council approved the “Expanding Consumption” 15th Five-Year Plan, which notes that high-quality development of digital consumption will be promoted, “AI + consumption” will be deepened, and a digital consumption upgrade campaign will be implemented. The plan calls for expanding digital product consumption, increasing effective supply of new-generation intelligent end-use products such as AI phones and computers, smart wearables, intelligent robots, and desktop 3D printing equipment, accelerating R&D and interconnection of smart security and video care systems, and launching access and on-road pilot programs for intelligent connected vehicles. Digital service consumption will be upgraded by leveraging AI, virtual reality, and other technologies to empower lifestyle services, scenic spots, and neighborhoods, promoting integrated applications of AI with education, healthcare, culture, tourism, sports, and other sectors, and expanding agent application scenarios. Digital content consumption will be innovated by launching more high-quality digital cultural and museum products, strengthening the supply of ultra-high-definition radio, TV, and online audio-visual content, and developing new film formats such as virtual reality movies and LED digital cinemas.

US Dollar:

The US dollar index gained 0.35% overnight to 101.31, as Fed Governor Waller sent hawkish signals, while the market awaited the US CPI data and remarks by Warsh later today. Fed Governor Waller said on Monday that if future data show inflation remains well above the 2% target, the Fed may need to raise rates “in the near term.” He described current monetary policy as being at a “crossroads,” adding that the direction will be determined by new information such as the CPI report due Tuesday, and that if data take an unfavorable turn, the Fed is at a stage where it must not be “complacent.” Waller stated: “At current policy levels, inflation could still gradually return to the 2% target. But I am equally concerned about the alternative scenario that data in the coming weeks will show inflation staying elevated or even rising further, which would require tighter policy in the near term.” He specifically noted he worries that recent inflation reports suggest price pressures appear to be broadening across the economy, extending beyond the effects of last year’s tariff hikes or recent energy cost increases, possibly reflecting broader, systemic inflation that would demand tighter monetary policy. Waller said, “If core inflation comes in hot again this week, the FOMC will have to consider tightening in the near term. We need to see sustained declines in inflation data over several months to believe that inflation is moving in the right direction.” (Jin10 Data App)

Market pricing showed that expectations for at least one rate hike by September had been almost fully priced in, and two hikes by end-March next year had been fully priced. Earlier, Trump announced on social media that the US had reinstated a blockade on Iran and planned to impose a 20% fee on any cargo passing through the Strait of Hormuz. (Jin10 Data App)

According to CME FedWatch: the probability of the Fed keeping rates unchanged in July was 58.3%, while the probability of a cumulative 25bp hike stood at 41.7%. For September, the probability of rates staying on hold was 24.9%, a cumulative 25bp hike 51.2%, and a cumulative 50bp hike 23.9%. (Jin10 Data App)

Macro Side:

Today, data releases will include China’s June trade balance, June import/export y/y growth rates, the US June unadjusted CPI y/y, June seasonally adjusted CPI m/m, June seasonally adjusted core CPI m/m, June unadjusted core CPI y/y, June NFIB Small Business Optimism Index, and the weekly change in ADP employment for the week ended June 27.

Crude Oil:

At the overnight close, both benchmarks surged sharply—WTI crude jumped 9.23% and Brent crude soared 9.62%, as the US-Iran geopolitical conflict escalated after Trump announced a blockade of the Strait of Hormuz, triggering supply disruption fears. According to CCTV News, Trump said on his social media platform on Monday that the US will impose a 20% fee on all cargo shipped through the Strait of Hormuz, with related procedures and deployment to begin immediately. During the US stock market afternoon session, US Central Command confirmed that US forces will restart the maritime blockade on Iran starting at 4:00 p.m. Eastern Time on Tuesday (4:00 a.m. Beijing time on Wednesday), and international crude gains briefly widened to nearly 10%.

Goldman Sachs’s base case forecasts Brent to move sideways in a $75–85 range, based on the logic that Iran effectively controls transit while the US tacitly accepts this reality, with traffic gradually resuming. A move above $100 would require direct strikes on regional energy infrastructure—such as an offshore platform hit over the weekend—or a simultaneous disruption of both the Strait of Hormuz and Bab el-Mandeb. Chris Hussey of Goldman Sachs added a long-term perspective, projecting that by 2028 over half of the crude oil originally shipped through the Strait of Hormuz will find alternative pipeline routes, noting that history shows a single-country pipeline in the Middle East can be built in as little as two and a half years, with seven pipelines already under construction. (Wallstreetcn)

Russia’s June crude output fell to the lowest level in at least two and a half years, as Ukraine attacked Russian oil infrastructure on an almost daily basis. According to the OPEC monthly report, Russian producers pumped 8.928 million barrels per day (bpd) of crude in June. These figures underscore the enormous pressure on Russia’s oil sector: refiners were forced to cut runs because of Ukrainian drone strikes, leaving Russia to export large volumes of crude. OPEC data based on secondary sources showed that Russia’s June output was 834,000 bpd below its OPEC+ target and 61,000 bpd below the slightly revised May figure. (From the Wallstreetcn App)