SMM October 12 news:
In the metals market:
As of the midday close, base metals in the domestic market mostly rose. SHFE copper rose 1.16%, SHFE aluminum rose 0.9%. SHFE lead rose 0.97%. SHFE zinc rose 1.35%. SHFE tin rose 1.98%, while SHFE nickel fell 0.5%.
In addition, the most-traded foundry aluminum futures contract rose 0.67%, while the most-traded alumina contract fell 0.15%. The most-traded lithium carbonate contract fell 8.37%, hitting an intraday low of 107,700 yuan/mt. The most-traded silicon metal contract rose 0.81%. The most-traded polysilicon futures contract fell 2.03%.
Ferrous metals mostly rose. Iron ore rose 0.37%, rebar rose 0.49%. Hot-rolled coil rose 0.28%. Stainless steel fell 0.52%. In coking coal and coke: the most-traded coking coal contract rose 1.68%, and the most-traded coke contract rose 1.46%.
In overseas base metals, as of 11:39, LME metals mostly rose. LME copper rose 0.44%, LME aluminum fell 0.03%. LME lead rose 0.26%, LME zinc rose 0.46%. LME tin fell 0.2%. LME nickel rose 0.21%.
In precious metals, as of 11:39, COMEX gold rose 0.25%, and COMEX silver rose 0.41%. In domestic precious metals: SHFE gold rose 1.13%, and the most-traded SHFE silver contract rose 2.45%.
In addition, as of the midday close, the most-traded platinum futures contract rose 1.99%, and the most-traded palladium futures contract rose 0.4%.
As of the midday close, the most-traded European shipping route containerized freight index futures contract rose 1.13% to 2,780 points.
As of 11:39 on October 12, some futures midday quotes:
Spot and fundamentals
Zinc: Today, mainstream transaction prices for #0 zinc were concentrated at 26,240-26,350 yuan/mt, with no transactions for Shuangyan, and mainstream transactions for #1 zinc were at 26,170-26,280 yuan/mt. In early trading, the market quoted a premium of 70-80 yuan/mt against the SMM average price, with no quotes against the contract yet...
Macro front
Domestic:
[MIIT: Deepen the "AI + manufacturing" initiative and vigorously develop open-source base models and vertical model industry clusters] At the opening ceremony of the 26th China International Industry Fair, Wang Weiming, chief engineer of the MIIT, stated that first, it is necessary to build an engine for industrial innovation, strengthen basic research and breakthroughs in key core technologies, reinforce the principal role of enterprises in technological innovation, optimize the layout and construction of industrial innovation platforms, promote the cultivation of new tracks in national high-tech zones, and deepen the application of scientific and technological achievements. Second, it is necessary to promote the optimization and upgrading of the industrial system, maintain and develop a complete industrial system, coordinate the large-scale application of emerging industries, the forward-looking layout of future industries, and the renewal and upgrading of traditional industries, adapt measures to local conditions, cultivate and strengthen advanced manufacturing, deepen the "AI + manufacturing" initiative, vigorously develop open-source base models and vertical model industry clusters, and build world-class enterprises. Third, we will strengthen the foundation of intelligent software and hardware, increase guidance and support for enterprises' digital transformation, cultivate digital transformation service providers deeply rooted in the industry, and build intelligent factories and high-standard digital parks. Fourth, we will build a mutually beneficial and win-win industrial ecosystem. (Jin10 Data APP)
[China Automobile Dealers Association: The release of draft comments on automotive design and testing will help bring some flashy designs of NEVs back to the essence of being safety tools]Recently, the Ministry of Industry and Information Technology and three other departments jointly issued the "Notice on Further Strengthening the Management of Innovative Design and R&D Testing Verification of Automotive Products (Draft for Comments)." Zhang Hong, a member of the Expert Committee of the China Automobile Dealers Association, pointed out that the new regulations will help bring some flashy designs of NEVs back to the essence of being safety tools. What many consumers originally rejected was not electrification and intelligence, but the sacrifice of operational efficiency for the so-called sense of technology. After the return of physical buttons, the learning cost during test drives will be reduced, and the time for sales explanations will also be shortened. However, this only eliminates some real concerns, while what truly determines purchase conversion also includes driving range, energy replenishment, price, after-sales service, and overall reliability. Consumers have shifted from pursuing the sense of technology brought by screens to valuing safety, reliability, and ease of use. (CCTV News)
[PBOC's reverse repo operations achieved a net withdrawal of 250 billion yuan on the day]The PBOC conducted 50 billion yuan of 7-day reverse repo operations today. As 300 billion yuan of 14-day reverse repos matured today, a net withdrawal of 250 billion yuan was achieved on the day. (Jin10 Data APP)
US dollar:
As of 11:39, the US dollar index fell 0.07% to 102.17.
According to the CME "FedWatch": The probability that the US Fed will keep interest rates unchanged through October is 81.7%, and the probability of a cumulative 25-basis-point hike is 18.3%. The probability that the US Fed will keep interest rates unchanged through December is 15.8%, the probability of a cumulative 25-basis-point hike is 69.5%, and the probability of a cumulative 50-basis-point hike is 14.7%.
The US Fed's latest Survey of Consumer Finances shows that debt pressure on US households is intensifying, with more borrowers falling behind on loan payments or needing to use a larger share of their income to repay debt. The survey shows that the median debt payment-to-income ratio for US households rose to 15.4%, up 2 percentage points from 2022. The US Fed noted that this may be related to the rise in mortgage and consumer loan interest rates over the same period. Meanwhile, the share of households with a heavy debt repayment burden rose from 6.5% in 2022 to 8.6% in 2025, the highest level since the survey began in 2013. For these households, debt payments account for 40% or more of their income. More notably, from 2022 to 2025, the share of households reporting loan delinquencies jumped sharply from about 12% to nearly 20%. These figures indicate that as borrowing costs rise, US households not only need to devote more income to debt repayment, but loan delinquencies have also increased markedly, reflecting deteriorating financial conditions for some households. (Jin10 Data APP)
In other currencies:
Challenger Chief Economist Jonathan Kearns said the odds of an RBA rate hike in November remain a coin toss. Thursday's employment data and the Q3 inflation data due on October 30 will provide a clearer basis for the discussion. However, he noted that risks to monetary policy remain clearly tilted toward tightening, and the RBA cannot tolerate another rise in inflation. If Q3 trimmed mean inflation comes in at 0.9%, up from 0.8% in the previous two consecutive quarters, that would push the central bank to hike rates. Kearns, a former senior manager at the RBA, said that if the central bank fails to act, its commitment to achieving the inflation target will be called into question. (Jin10 Data APP)
The Indian rupee rose in offshore market trading after the Reserve Bank of India took one of its strongest steps to support the exchange rate since the 2013 taper tantrum. In early Asian trading on Monday, the one-month dollar-rupee non-deliverable forward (NDF) fell as much as 2.7% to 94.17 before paring losses to 0.7%. On Saturday, the RBI unveiled a series of measures to stabilize the rupee, including opening a special window for state-owned oil companies to meet their dollar demand and introducing reserve requirements for some foreign exchange derivatives transactions. The move came after the rupee approached a record low near 97 per dollar, prompting the RBI to act. The RBI already hiked rates last Wednesday and signaled the possibility of further monetary tightening. Societe Generale's Hong Kong-based emerging Asia strategist Galvin Chia said: "The need for a series of measures this year has become very clear, indicating that the RBI has been behind the curve in defending the currency." The market expects the rupee to continue strengthening when trading resumes on Monday, with analysts believing the RBI will defend the key level of 97 rupees per dollar. (Jin10 Data APP)
On the data front:
China's September M2 money supply year-over-year figure (TBD) will be released today. Additionally, attention should be paid to the following: The International Monetary Fund (IMF) and World Bank Annual Meetings are being held in Bangkok through the 18th.
Crude oil:
As of 11:39, oil prices fell in both markets, with WTI down 1.97% and Brent down 1.66%. Oil prices pulled back after being boosted by news of a Russia-Ukraine "energy ceasefire." The market will continue to monitor the impact of geopolitical developments on crude oil supply.
Ukrainian President Volodymyr Zelenskyy said on October 11 local time: Strikes on energy infrastructure could stop today, but Putin does not want to do so. If Russia stops attacking Ukraine's energy infrastructure, Ukraine is prepared to stop striking Russian oil refineries. Any de-escalation measures must be mutual and backed by real guarantees. (Jin10 Data APP)
Additionally, Japan's Minister of Economy, Trade and Industry Yoji Muto called for stronger cooperation between oil-producing and oil-consuming countries, and for enhanced oil reserves and infrastructure development in Asia to bolster the region's resilience against supply disruptions. At the International Energy Forum (IEF) ministerial meeting, Muto said that as tensions in the Middle East intensify, the importance of energy security has become increasingly prominent. This initiative reflects Japan's efforts to reduce Asia's vulnerability to oil supply disruptions, particularly the impact of instability in the Middle East. Muto also mentioned that the Asia Zero Emission Community (AZEC) plans to deepen cooperation with oil-producing countries and strengthen coordination in emergency situations. Japan hopes to serve as a bridge between Middle Eastern oil producers and Asian countries, strengthening cooperation between the two sides and contributing to the stability of global energy supply. (Jin10 Data APP)
Goldman Sachs said in a report released on Sunday that the bank maintains its base-case expectation that Middle East supply will continue to adjust, ultimately driving crude oil prices lower, but the potential for renewed escalation in the conflict still poses significant upside risk. Goldman Sachs raised its December Brent price forecast to $90 per barrel, while maintaining its expectation for an average Brent price of $80 per barrel in 2027, and expects WTI crude oil to average $81 per barrel in December this year and $73 per barrel in 2027. Goldman Sachs said that if average daily production in the Gulf region in 2027 is 5 million barrels lower than the February 2026 level, rather than 300,000 barrels lower under the base-case scenario, Brent crude could average around $125 per barrel in 2027. Conversely, if average daily production in the Gulf region in 2027 is 1 million barrels higher than the February 2026 level, Brent crude prices could fall to the low $60s per barrel in 2027. (Jin10 Data APP)
Spot market overview:
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