Crude Oil Strengthened, Base Metals Fell Broadly with SHFE Copper, Aluminum, Tin, and Nickel Leading Declines, Precious Metals Weakened Across the Board with SHFE Silver Down Nearly 5% [SMM Midday Review]

SMM May 28:

Metals market:

As of the midday close, domestic base metals fell across the board. SHFE copper dropped 1%, SHFE aluminum fell 1.08%, SHFE lead declined 0.99%, SHFE zinc lost 0.54%, SHFE tin slid 1.05%, and SHFE nickel fell 1.07%.

In addition, the most-traded foundry aluminum futures fell 0.82%, while the most-traded alumina contract rose 0.14%. The most-traded lithium carbonate contract gained 0.27%. The most-traded silicon metal contract dropped 0.64%. The most-traded polysilicon futures fell 0.9%.

Ferrous metals mostly rose. Iron ore edged up, rebar and hot-rolled coil each gained less than 0.5%, and stainless steel fell 0.5%. Coking coal and coke: the most-traded coking coal contract rose 2.09%, and the most-traded coke contract gained 2.44%.

Overseas base metals, as of 11:39, LME metals fell nearly across the board. LME copper dropped 0.2%. LME aluminum and LME lead both fell 0.15%. LME zinc was flat at $3,507.5/mt. LME tin declined 0.55%. LME nickel lost 0.45%.

Precious metals, as of 11:39, COMEX gold fell 1.47% and COMEX silver dropped 2.6%. Domestic precious metals: the most-traded SHFE gold contract fell 2.75%, and the most-traded SHFE silver contract dropped 4.97%.

In addition, as of the midday close, the most-traded platinum futures fell 3.78%, and the most-traded palladium futures declined 3.75%.

As of the midday close, the most-traded Europe containerized freight index contract rose 1.22% to 2,995.5 points.

As of 11:39 on May 28, midday futures quotes for selected contracts:

Spot Prices and Fundamentals

Copper:Today in Guangdong, #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 120 yuan/mt, down 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 50 yuan/mt, down 10 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 20 yuan/mt, down 10 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 103,695 yuan/mt, down 1,395 yuan/mt from the previous trading day, and the average price of SX-EW copper was 103,590 yuan/mt, down 1,395 yuan/mt from the previous trading day. Spot market: Guangdong inventory increased again, mainly driven by rising arrivals and weakening consumption...

Macro Front

China:

[CSRC Vice Chairman Liu Haoling: Foreign investors' willingness to allocate to China's quality assets continues to rise]On May 28, the 2026 Global Investor Conference hosted by the Shenzhen Stock Exchange was held in Shenzhen. CSRC Vice Chairman Liu Haoling stated in his address that China's capital market reforms integrating investment and financing had progressed steadily and continued to deliver results, overall market valuations were within a reasonable range, and foreign investors' willingness to allocate to China's quality assets continued to rise. In his address, Liu Haolin stated that China is a major contributor to and stabilizing anchor for global economic growth, and a fertile ground for foreign enterprises to invest and do business. Since the beginning of this year, foreign capital has been flowing steadily into China's stock market through various channels. As of now, various overseas investors hold over 4 trillion yuan in A-share tradable market capitalization, making them important participants in China's capital market. (Wallstreetcn)

PBOC conducted 101.3 billion yuan of 7-day reverse repo operations in the open market, with the operation rate at 1.40%, unchanged from the previous day. Today, 100 billion yuan of reverse repos matured.

US dollar:

As of 11:39, the US dollar index rose 0.25% to 99.48. Persistently high energy prices intensified market concerns about a resurgence in inflation. Chicago Fed President Goolsbee on Thursday further reinforced his warning: rising market expectations for AI's potential to boost productivity could push up inflation and force the US Fed and other central banks to raise interest rates. Goolsbee said: "The more hype there is about future productivity, the higher rates may need to go to prevent the economy from overheating. More importantly, facing supply shocks in the short term—whether from oil prices, supply chain disruptions, or other factors—makes the problem even worse." The above remarks further expanded on the views Goolsbee first publicly raised earlier this month. He questioned the notion that AI could suppress inflation and thereby create room for central banks to cut interest rates—a view championed by many officials in the Trump administration as well as new US Fed Chair Warsh. In the 1990s, as computers became more widely adopted, US productivity rose unexpectedly, driving rapid economic growth without triggering inflation. However, Goolsbee argued that if productivity gains are anticipated by the market, the situation would be different. Markets could trigger a spending boom in advance, pushing up prices before actual productivity gains materialize.

US Fed Vice Chair Jefferson said he expected inflation to cool later this year as the effects of tariffs and rising energy costs fade, but he warned that inflation risks remain tilted to the upside. In remarks prepared for delivery at a Bank of Japan-hosted conference in Tokyo on Thursday morning, Jefferson said he is watching for signs that rising energy costs from the Iran war are weighing on consumer spending. He also warned that he continued to see signs of weakness in the labour market. Jefferson reiterated his view that the central bank's current policy stance was well positioned to respond to any developments. Jefferson stated, "I am not prejudging the next meeting and look forward to engaging with my colleagues on the best policy to achieve our dual mandate goals." (Jin10 Data)

Other currencies:

The Bank of Korea's six-month dot plot showed that out of 21 dots, 7 were at 2.75%, 10 at 3%, 2 at 3.25%, and 2 at 2.5%. (From Wallstreetcn APP)

Data:

Data to be released today include the Eurozone May industrial confidence index, Eurozone May economic sentiment index, Canada Q1 current account, US initial jobless claims for the week ending May 23, US April core PCE price index YoY, US April personal spending MoM, US Q1 real GDP annualized QoQ revised, US April core PCE price index MoM, and US April durable goods orders MoM.

In addition, attention should be paid to: the ECB publishing the minutes of its April monetary policy meeting; permanent FOMC voter and New York Fed President Williams delivering a keynote speech at a conference co-organized by the Central Bank of Iceland; 2028 FOMC voter and St. Louis Fed President Musalem delivering a speech.

Crude oil:

As of 11:39, oil prices in both markets rose, with WTI up 3.1% and Brent up 3.07%. US-Iran tensions escalated again, driving crude oil higher. US President Trump expressed "dissatisfaction" with negotiations with Iran, and the White House subsequently denied reports from Iranian media about progress in peace talks, quickly dampening the market's earlier optimism about a ceasefire agreement. The US-Iran conflict entered its fourth month, with ceasefire prospects remaining uncertain. According to Xinhua News Agency, US President Trump said at a cabinet meeting at the White House on the 27th that the US and Iran had not yet reached a deal and the US was "dissatisfied" with this, fully rejecting the potential mechanism for joint US-Iran management of the Strait of Hormuz by Iran and Oman. (Wallstreetcn)

The American Petroleum Institute (API) released data showing that US crude oil and gasoline inventories both declined last week. US API crude oil inventory for the week ending May 22 was -2.819 million barrels, versus expectations of -4.367 million barrels and a prior value of -9.11 million barrels. US API gasoline inventory for the week ending May 22 was -3.199 million barrels, versus expectations of -2.896 million barrels and a prior value of -5.795 million barrels. (Jin10 Data APP)

Spot market overview:

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