Metals Rose Broadly, LME Copper and LME Aluminum Up Over 2%, LME Nickel and SHFE Copper Up Over 1%, Crude Oil Up Over 3% Posting Three Consecutive Gains [Overnight Market]

SMM April 23 News:

Metals market:

As of the overnight close, base metals on both domestic and overseas markets generally rose, with SHFE lead being the only decliner, down 0.03%. LME tin closed flat at $50,595/mt. LME copper and LME aluminum rose over 2%, with LME copper up 2.4% and LME aluminum up 2.58%. LME nickel rose 1.74%, and SHFE copper rose 1.4%. Other metals gained less than 1%, with the alumina front-month contract up 0.81% and the casting aluminum front-month contract up 0.64%.

Overnight, ferrous metals generally rose, with iron ore being the only decliner, down 0.25%. Hot-rolled coil rose 0.62%. Coking coal and coke side, coking coal rose 0.67% and coke rose 1.01%.

Overnight, precious metals side, COMEX gold rose 0.82% and COMEX silver rose 1.56%. In China, SHFE gold fell 0.19% and SHFE silver rose 0.65%.

Overnight closing prices as of 6:43 AM on April 23:

Macro Front

China:

[Energy Conservation and Carbon Reduction: Major Policy Document Issued by the General Office of the CPC Central Committee and the State Council]On April 22, the General Office of the CPC Central Committee and the General Office of the State Council released the "Opinions on Achieving Higher-Level and Higher-Quality Energy Conservation and Carbon Reduction." Energy conservation and carbon reduction serve as a key lever for advancing carbon peaking and carbon neutrality and accelerating the green transformation of development models, and as an important pillar for safeguarding national energy security and promoting industrial quality upgrading. The Opinions require consistently adhering to the principle of conservation priority, integrating energy conservation and carbon reduction throughout the entire process and all aspects of economic and social development, achieving higher-level and higher-quality energy conservation and carbon reduction, firmly curbing unreasonable growth in total energy consumption, continuously improving energy and resource output efficiency, and effectively reducing carbon emissions at the source, so as to provide strong support for achieving carbon peaking and carbon neutrality and accelerating the comprehensive green transformation of economic and social development. The Opinions set out specific arrangements in areas including coordinating energy conservation, carbon reduction, and green transformation; vigorously advancing energy conservation and carbon reduction in key sectors; further strengthening supervision and management of energy conservation and carbon reduction; and reinforcing support and safeguards for energy conservation and carbon reduction work.

US dollar:

As of the overnight close, the US dollar index rose 0.23% to 98.61. According to a Reuters poll of economists, the US Fed will have to wait at least six months before cutting interest rates this year, as the energy shock triggered by the conflict has once again intensified already elevated inflation. In the April 17-21 survey, 56 out of 103 economists forecast that the US Fed's benchmark interest rate would remain in the 3.50%-3.75% range through the end of September, whereas in the late March survey, nearly 70% of economists expected at least one interest rate cut by then. In an early March survey, most economists expected an interest rate cut by the end of June. In the latest survey, 71 economists still expected at least one interest rate cut this year, with the median estimate pointing to only one cut, in line with the dot plot projections released by the US Fed last month. Currently, nearly one-third of economists expect rates to remain unchanged this year, nearly double the proportion in the previous survey. (Jin10 Data APP)

Reuters poll: 56 out of 103 economists believed the US Fed would keep the federal funds rate in the 3.50%-3.75% range through September (in the late March survey, 56 out of 82 economists forecast at least one interest rate cut by September). (Jin10 Data APP)

A report from Oxford Economics noted that Kevin Warsh favors major reforms to the US Fed and its communication strategy — but any reforms he wishes to implement would be constrained by the need to build consensus among US Fed officials. The report stated: "The Fed Chairman cannot unilaterally make such reforms." The report also mentioned that potential changes to the US Fed's communication strategy could include reducing the number of annual FOMC meetings and not holding press conferences after every committee meeting. The report further noted that Warsh opposes the use of forward guidance as a policy tool and opposes the publication of economic projections. (Jin10 Data APP)

On the macro front:

Data to be released today include US initial jobless claims for the week ending April 18, US April S&P Global Manufacturing PMI preliminary reading, US April S&P Global Services PMI preliminary reading, UK March public sector net borrowing, UK April Manufacturing PMI preliminary reading, UK April Services PMI preliminary reading, UK April CBI Industrial Orders balance, France April Manufacturing PMI preliminary reading, Eurozone April Manufacturing PMI preliminary reading, and Germany April Manufacturing PMI preliminary reading.

In addition, the Ministry of Commerce will hold its 4th regular press conference in April. ECB President Lagarde will deliver a speech, and the second round of ambassador-level talks between Israel and Lebanon will be held at the US State Department.

Crude oil:

As of the overnight close, oil prices on both markets rose together, with WTI up 3.57% and Brent up 3.12%. Crude oil futures rose for a third consecutive trading day, as expectations for the reopening of the Strait of Hormuz were dashed once again. Ritterbusch & Associates stated in a report that Trump's extension of the ceasefire agreement removed the immediate possibility of escalation, but negotiations could be delayed, and the US blockade would likely remain in place indefinitely. Exports via alternative routes and the release of strategic petroleum reserves partially offset the impact of the strait closure on oil prices, while "price-related demand destruction is becoming a hotter topic." (Jin10 Data APP)

The US Energy Information Administration (EIA) said on Wednesday that US crude oil inventory increased last week, while gasoline and refined product inventories declined, and total US exports reached record levels due to supply disruptions caused by the Iran conflict. The EIA said crude oil inventory increased by 1.9 million barrels to 465.7 million barrels in the week ending April 17, compared with expectations of a 1.2 million barrel decrease. The EIA said crude oil inventory at the Cushing, Oklahoma delivery hub increased by 806,000 barrels. Despite the unexpected inventory build, oil prices still rose. (Jin10 Data APP)

Sources: The Caspian Pipeline Consortium (CPC) blend crude oil export plan for May was set at 1.8 million barrels per day, up from the April plan of 1.65 million barrels per day. Kazakhstan plans to reroute some crude oil originally scheduled for delivery to Germany via the Druzhba pipeline in May to CPC exports. (Reuters) (Jin10 Data APP)