US Dollar Weekly Decline, Crude Oil Weekly Surge, Base Metals: Domestic Market Outperforms Overseas Market, Alumina and SHFE Tin Up over 1% [Overnight Market]

SMM, July 18:

Metals market:

Overnight, base metals in the domestic market nearly all rose. SHFE copper increased 0.15%, SHFE aluminum rose 0.22%, SHFE lead gained 0.69%, SHFE zinc fell 0.85%, and SHFE tin jumped 1.57%. SHFE nickel edged down 0.28%. In addition, the most-traded alumina futures rose 1.64%, and the most-traded foundry aluminum contract climbed 0.67%.

Overnight, ferrous metals mostly fell. Stainless steel dipped 0.3%, iron ore declined 0.46%, rebar dropped 0.35%, and HRC slipped 0.36%. For coking coal and coke: the most-traded coking coal contract rose 1.34%, and the most-traded coke contract increased 0.56%.

Overnight in the overseas market, LME base metals broadly fell. LME copper edged down 0.11%, LME aluminum dipped 0.33%, LME lead rose 0.96%, LME zinc fell 1.48%, LME tin edged up 0.73%, and LME nickel declined 0.38%.

Overnight, precious metals : COMEX gold rose 0.77%, with its weekly line falling as it dropped 2.2% for the week; COMEX silver inched up 0.06%, with its weekly line declining for a second straight week, down 6.56% for the week. Overnight, the most-traded SHFE gold contract rose 0.67%, with its weekly line falling for a second straight week, down 3.07% for the week; the most-traded SHFE silver contract gained 1.05%, declining for two consecutive weeks with a weekly loss of 7.85%.

Data from the World Gold Council showed gold prices weakened in June, erasing earlier gains, leaving H1 ending with a decline. Despite outflows in June, China's gold ETFs still recorded significant inflows in H1, pushing total assets under management (AUM) slightly higher to 243 billion yuan and total holdings up by 29 mt to 277 mt. In June, China's gold ETFs saw outflows of 15 billion yuan, the weakest monthly performance on record. (From Wall Street CN APP)

As of 8:45 am, July 18, overnight closing prices:

Macro front

Domestic:

[Ministry of Finance, Two Other Departments Adjust Consumption Tax Policy for Certain Batteries] On July 17, the Ministry of Finance announced that, starting September 1, 2026, a 2% consumption tax will be levied on mercury-free primary cells, nickel-metal hydride batteries, lithium primary cells, lithium-ion batteries, and all-vanadium flow batteries; from September 1, 2027, a 4% consumption tax rate will apply to these battery products. Starting April 1, 2027, a 2% consumption tax will be levied on solar cells; from April 1, 2028, the rate on solar cells will rise to 4%. From September 1, 2026 to December 31, 2028, consumption tax will be exempted for sodium-ion batteries, solid-state batteries, fuel cells, as well as for perovskite cells, tandem cells, and gallium arsenide cells among solar cells.

[MIIT: Automotive Producers Required to Firmly Resist Irrational Competition and Strengthen Product Testing, Verification, and Safety Assessment] On July 17, the Equipment Industry Department I of the Ministry of Industry and Information Technology (MIIT) convened a symposium for key automotive producers, deploying efforts to further regulate competition order in the automotive industry, enhance production conformity and quality safety levels of automotive products, and carry out key tasks such as safety risk and hazard investigations and inspections and supervision of automotive products. (from Wall Street CN app)

[Ministry of Housing and Urban-Rural Development: Advance Urban Renewal with High Quality and Intensify the Implementation of the Renovation of Old Urban Residential Communities] On July 17, the Party Leadership Group of the Ministry of Housing and Urban-Rural Development held an expanded study session of the theoretical study center group. The meeting stressed that carrying out urban work in the new era and on the new journey is a glorious mission with arduous tasks. It called for advancing urban renewal with high quality, promoting urban governance with high efficiency, and building “four-good” construction of good houses, good residential communities, good neighborhoods, and good urban districts to high standards. It emphasized intensifying efforts to implement livelihood-related projects such as the renovation of old urban residential communities, the construction of complete communities, the improvement of property service quality, the environmental remediation of back alleys and lanes, the development of pocket parks, and the opening and sharing of green spaces. It called for making great efforts to solve the most pressing difficulties and problems faced by the people, such as the installation of elevators, parking, and charging, striving to make people’s urban life more convenient, comfortable, and beautiful, and seizing the momentum to open up a new landscape in the modernization and construction of people-oriented cities. (China Construction News)

[The “Several Measures to Further Promote the Development of ‘AI+Manufacturing’ in Shanghai” Issued] The Shanghai Municipal Commission of Economy and Informatization has issued the “Several Measures to Further Promote the Development of ‘AI+Manufacturing’ in Shanghai.” It mentions promoting breakthroughs in key and core technologies. Support will be provided for breakthroughs in technologies such as knowledge graph integration and text-to-3D parts design, focusing on frontier fields including industrial vertical large models, AI programming large models, physical AI, industrial agents, industrial software, and the industrial Internet, with a maximum support of 20 million yuan. For the R&D of comprehensive security solutions for industrial large models and agents, a maximum support of 10 million yuan will be provided. The measures aim to reduce the cost of using intelligent elements. Industrial intelligent computing cloud platforms are encouraged to provide manufacturing enterprises with low-code agent development platforms and free trials of industrial agents, distribute platform token trial coupons, and introduce computing power benefit packages for enterprises. Support will be given for renting non-affiliated intelligent computing resources to carry out the R&D and application of industrial large models and industrial agents, with a maximum subsidy of 40 million yuan. Supports using third-party large models or private deployment of third-party large models to advance industrial vertical applications, with a maximum subsidy of 5 million yuan. Supports purchasing high-quality corpora for the R&D and application of industrial vertical large models and industrial agents, with a maximum subsidy of 5 million yuan. (Jin10 Data APP)

On the dollar:

The US dollar index edged up 0.03% overnight to 100.76. On the weekly chart: The US dollar index fell for the week, down 0.2%.

According to the latest survey, US consumer sentiment surged to a five-month high in early July, boosted by falling gasoline prices. The survey results released on Friday showed that the University of Michigan's preliminary consumer sentiment index for July rose to 54.4 from 49.5 in June, compared with market expectations of 51. Gasoline prices fell steadily from June through early July, effectively easing household budget pressures. However, renewed tensions in the Middle East have since begun to push oil prices higher and cloud the inflation outlook further. The survey covered the period from June 23 to July 13, but the report noted that over 70% of responses were completed before the US airstrikes against Iran in early July. The improvement in consumer sentiment was broad-based across age, income groups, and political affiliations. (from Wallstreetcn APP)

US housing starts surged in June after a sharp drop the previous month, driven by a rebound in apartment construction. Official data released Friday showed that housing starts increased 19% to an annualized rate of 1.43 million units, the highest since March and exceeding economists' expectations. Starts for multifamily housing jumped over 76% to an annualized rate of 532,000 units, following a plunge of nearly 40% in the prior month. Meanwhile, single-family starts slipped 0.2%, declining again after builders experienced a sluggish spring. The rebound in multifamily construction underscores the volatility of monthly data, especially in the apartment sector. However, high home prices and elevated mortgage rates have been weighing on demand for single-family homes, factors that may be supporting apartment demand. At the same time, single-family builders have generally faced high inventory and weak demand. This has forced many builders to attract buyers through sales incentives.

Simona Mocuta, chief economist at State Street Global Advisors, said that the dollar has been supported this year by safe-haven inflows and market pricing of Fed rate hikes, but these factors are already reflected in the exchange rate, so the dollar is set to resume its multi-year depreciation trend. Her baseline forecast is that the US Fed will keep interest rates unchanged throughout the year, but Mokuta said the risk of a rate hike remains. Even if a hike occurs, it has already been priced into the dollar and would therefore not have much additional impact; whereas if a rate hike fails to materialize, it would weaken the dollar. As concerns over the US fiscal outlook persist, the dollar will return to its long-term depreciation trend. (from Wallstreetcn APP)

On the macro front:

Next week will see the release of China’s one-year Loan Prime Rate (LPR) for July 20, Germany June PPI MoM, Canada June CPI MoM, US June Conference Board Leading Index MoM, Switzerland June trade balance, UK May three-month ILO unemployment rate, UK June public sector net borrowing, UK June unemployment rate, UK June claimant count change, Germany July ZEW Economic Sentiment Index, Eurozone July ZEW Economic Sentiment Index, US ADP employment change for the week ending July 4, UK June CPI MoM, UK June RPI MoM, China’s June SWIFT share of the Chinese yuan in global payments, Australia June seasonally adjusted unemployment rate, UK July CBI industrial orders balance, Eurozone ECB deposit facility rate decision on July 23, Eurozone ECB main refinancing rate decision on July 23, Canada May retail sales MoM, US initial jobless claims for the week ending July 18, Eurozone July consumer confidence preliminary, UK July GfK consumer confidence, Japan June core CPI YoY, Germany August GfK consumer confidence, UK June seasonally adjusted retail sales MoM, France July manufacturing PMI flash, Germany July manufacturing PMI flash, Eurozone July manufacturing PMI flash, UK July manufacturing PMI flash, UK July services PMI flash, US July S&P Global manufacturing PMI flash, US July S&P Global services PMI flash, and US June new home sales annualized, among other data.

Also next week, attention will be on: the ECB interest rate decision; ECB President Lagarde’s monetary policy press conference.

Crude oil:

Overnight, both crude oil futures surged, with WTI up 4.46% and Brent up 4.78%. Weekly: WTI futures gained for a second straight week, up 14.51% for the week; Brent futures gained for two consecutive weeks, up 16.12%. On Friday, the Middle East situation deteriorated further, and the escalation of geopolitical conflicts drove a sharp rally in crude oil.

Data released by Kpler, an international market service provider, on the 17th showed that vessel traffic through the Strait of Hormuz continued to weaken on the 16th, with confirmed transits falling to 8 vessels, the lowest in nearly three weeks. (From Wallstreetcn APP)

International Energy Agency (IEA) Executive Director Fatih Birol warned on the 16th that if oil shipments through the Strait of Hormuz cannot be restored in a few weeks, global energy security will raise a red flag. According to UK sources, Birol told an event hosted by the Council on Foreign Relations that oil supply security remains a key issue at present, and the world should be concerned if the situation in the Strait of Hormuz does not improve in the coming weeks. He said that the response measures taken by some countries “cannot last forever”; even if the US significantly increases oil production, it would be far from enough to offset the supply gap caused by disruptions in the Strait of Hormuz. (CCTV News)

Energy services company Baker Hughes said US energy firms added rigs for a fifth straight week this week, the first such streak since early June, pushing the total count to the highest level since April 2025. As an early indicator of future production, the total rig count rose by 7 to 588 in the week ended July 17, according to Baker Hughes. The company said this week’s increase lifted the total rig count by 44, or 8%, compared to the same period last year. Baker Hughes reported that oil rigs increased by 7 this week to 452, the highest since May 2025; the number of natural gas rigs held steady at 126, and miscellaneous rigs were unchanged at 10. (From Wallstreetcn APP)

It is worth noting that:The NYMEX August crude oil futures will be affected by contract rollover. The final floor trading will conclude at 2:30 a.m. on July 22, followed by the final electronic trading at 5:00 a.m. Pay attention to exchange announcements regarding expiration and contract rollover to manage risks. In addition, some trading platforms’ US oil contracts typically expire one day earlier than the official NYMEX schedule; please take note.