SMM May 20 News: Metals market: Overnight base metals on domestic and overseas markets showed mixed performance. LME nickel led the gains with a 1.21% increase, while LME aluminum, SHFE aluminum, and SHFE nickel all rose less than 1%. LME tin fell 2.06%, LME copper 1.2%, SHFE tin dropped 1.35%, and other metals declined less than 1%. The alumina front-month contract fell 0.11%, and the casting aluminum front-month contract rose 0.24%. Overnight ferrous metals collectively rose. Stainless steel gained 0.38%, iron ore rose 0.25%, rebar and hot-rolled coil both rose around 0.03%. For coking coal and coke, coking coal rose 0.04% and coke gained 0.11%. Overnight precious metals: COMEX gold fell 1.59%, and COMEX silver dropped 4.49%. In China, SHFE gold fell 1.11% to 989.5 yuan/gram, and SHFE silver dropped 3.44%. Overnight closing prices as of 6:47 AM on May 20: Macro Front On the evening of May 19, Russian President Putin arrived in Beijing by special aircraft. At the invitation of President Xi Jinping, Russian President Putin paid a state visit to China from May 19 to 20. (CCTV News) China: [National Energy Administration: Total Electricity Consumption in April 2026 Up 6.0% YoY] On May 19, the National Energy Administration released data on total electricity consumption for April. In April, total electricity consumption reached 820.5 billion kWh, up 6.0% YoY. By sector, the primary industry consumed 11.2 billion kWh, up 2.0% YoY. The secondary industry consumed 558.4 billion kWh, up 5.3% YoY; of which, industrial electricity consumption was 553.8 billion kWh, up 5.5% YoY, and high-tech equipment manufacturing consumed 105 billion kWh, up 10.1% YoY. The tertiary industry consumed 151.7 billion kWh, up 8.9% YoY; of which, EV charging and battery swapping services and internet data services consumed 13.7 billion and 8.2 billion kWh respectively, with growth rates of 61.9% and 42.8%. Urban and rural residential electricity consumption was 99.2 billion kWh, up 6.0% YoY. (National Energy Administration) (Jin10 Data APP) US dollar: As of overnight close, the US dollar index rose 0.32% to 99.31. Philadelphia Fed President Anna Paulson stated that the current interest rate level is appropriate given persistently elevated price pressures, and is exerting downward pressure on inflation. However, it is "healthy" for investors to begin considering scenarios where rate hikes may be needed. "Monetary policy is mildly restrictive, and that restrictiveness is helping to contain the impact of tariffs and price increases triggered by the Middle East conflict. Taking all of these... factors into account, I believe the current monetary policy stance is appropriate," Paulson said in remarks prepared for an Atlanta Fed conference. (Wallstreetcn) Philadelphia Fed President Anna Paulson (2026 FOMC voting member): She is inclined to keep rates steady and has set sustained progress on disinflation as a precondition for cutting interest rates. The labour market remains stable, but inflation is still too high. An interest rate cut will only become appropriate when sustained progress on reducing inflation is observed. The US Fed's future policy path largely depends on how long the war's disruption to oil and other commodity supplies persists. If the conflict is resolved quickly, inflation and inflation risks could dissipate relatively rapidly. (Wallstreetcn) A Huatai Securities research report stated that it is indeed difficult for the US Fed to cut interest rates again in H2 this year, and based on current trends, rate hikes may be necessary next year. Huatai Securities' latest base case assumption is that the US Fed will keep the policy rate unchanged this year, but guidance will be more hawkish than before. The neutral forecast for next year is two rate hikes, above current market expectations, primarily based on a relatively optimistic base case assumption for nominal growth. However, this forecast still faces considerable uncertainties including US economic fundamentals, geopolitical changes, and global growth. (Jin10 Data APP) According to CME FedWatch: The probability of the US Fed keeping rates unchanged through June is 99%, with a 1% probability of a cumulative 25 bps cut. The probability of the US Fed keeping rates unchanged through July is 84.4%, with a 0.8% probability of a cumulative 25 bps cut and a 14.8% probability of a cumulative 25 bps hike. (Jin10 Data APP) Data: Today will see the release of China's 1-year Loan Prime Rate as of May 20, UK April CPI MoM, UK April Retail Price Index MoM, Germany April PPI MoM, Eurozone April CPI YoY final, and Eurozone April CPI MoM final. In addition, SpaceX's Starship V3 will attempt its maiden flight, 2026 FOMC voting member and Philadelphia Fed President Paulson will deliver a speech, and Fed Governor Barr will also speak. Crude oil: As of overnight close, both benchmarks declined, with WTI down 0.34% and Brent down 1.05%. Earlier, US Vice President Vance said significant progress had been made in US-Iran negotiations, somewhat easing market concerns about crude oil supply. Notably, the NYMEX WTI crude oil June futures contract, affected by contract rollover, completed its last pit trading at 2:30 AM on May 20 and last electronic trading at 5:00 AM. Please pay attention to exchange expiration and rollover announcements to manage risk. Additionally, some trading platforms typically expire WTI contracts one day earlier than the official NYMEX schedule, so please take note. Citigroup maintained its consistent view that the current crude oil market clearly underestimates the duration of geopolitical risks and potential tail risks. Brent crude prices are expected to surge to $120/barrel in the near term. Under a bullish scenario (with multiple pathways that could trigger it), Brent crude could reach as high as $150/barrel. Citi's forecast for 2026 global crude oil demand growth is -600,000 bpd (-0.6 mb/d), with YoY declines in Q2, Q3, and Q4 estimated at -2.4 million bpd, -800,000 bpd, and -300,000 bpd respectively. (Wallstreetcn) American Petroleum Institute (API) data showed that last week, US API crude oil inventory was -9.11 million barrels, compared with -2.188 million barrels the previous week. Last week, API Cushing crude oil inventory was -1.428 million barrels (previous: -1.755 million barrels). Last week, API gasoline inventory was -5.795 million barrels (previous: +502,000 barrels), and distillate inventory was -1.047 million barrels (previous: -319,000 barrels). (Wallstreetcn) Bloomberg reported, citing a senior NATO official, that NATO is discussing the possibility of assisting commercial vessels through the blocked Strait of Hormuz if it remains closed by early July. According to a diplomat from a NATO member state, the proposal has received support from several NATO members but has not yet achieved the unanimous consent required for approval. A coalition led by France and the UK is developing a plan to secure navigation through the Strait of Hormuz as soon as frontline hostilities ease. (Wallstreetcn)

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,477/mt, dipped to a low of $13,436/mt in early trading, then the price center gradually shifted upward to reach $13,625/mt, and finally moved sideways at high levels to close at $13,590/mt, up 0.34%, with trading volume at 24,000 lots and open interest at 283,000 lots, an increase of 2,099 lots from the previous trading day, indicating bulls adding positions. Overnight, the most-traded SHFE copper 2606 contract opened at 104,480 yuan/mt, touched a high of 104,840 yuan/mt in early trading, then the price center shifted slightly lower to a low of 104,440 yuan/mt, and finally moved sideways to close at 104,590 yuan/mt, up 0.28%, with trading volume at 30,000 lots and open interest at 154,000 lots, a decrease of 3,110 lots from the previous trading day, indicating bears reducing positions.

[SMM Zinc Morning Comment: Bullish and Bearish Factors Coexist in Fundamentals, SHFE Zinc Maintains Fluctuating Trend] Overnight, the most-traded SHFE zinc 2607 contract opened at 24,800 yuan/mt. At the beginning of the session, SHFE zinc touched a high of 24,800 yuan/mt. After the opening, SHFE zinc quickly pulled back to near the daily average line, hitting a low of 24,605 yuan/mt. SHFE zinc then moved sideways around the daily average line, eventually closing lower at 24,690 yuan/mt.

[SMM Zinc Morning Comment: Zinc Concentrate TCs Continued to Decline, SHFE Zinc Maintained Fluctuating Trend] Last Friday, the most-traded SHFE zinc 2606 contract opened at 24,650 yuan/mt. After the opening, SHFE zinc fluctuated around the moving average. During the session, SHFE zinc touched a high of 24,770 yuan/mt, and near the close, SHFE zinc dipped to a low of 24,600 yuan/mt..

[SMM Zinc Morning Meeting Minutes: US Dollar Index Continued to Strengthen, LME Zinc Retreated from Highs]: Last Friday, LME zinc opened at $3,589.5/mt, touched a high of $3,590/mt in early trading, then fluctuated downward, hitting an intraday low of $3,510/mt, before hovering at lows around the daily average line, ultimately closing lower at $3,538.5/mt...

SMM May 18 Update: Metals market: Last Friday's overnight session saw a broad sell-off across both domestic and overseas metals markets, with most declining over 1%. LME tin led the decline at 4.03%, LME copper fell 3.15%, LME aluminum and SHFE tin dropped over 2% (LME aluminum -2.36%, SHFE tin -2.84%). LME lead, LME zinc, LME nickel, SHFE copper, and SHFE nickel all fell over 1% (LME lead -1.39%, LME zinc -1.35%, LME nickel -1.9%, SHFE copper -1.29%, SHFE nickel -1.3%). SHFE lead and SHFE zinc fell less than 1% (SHFE lead -0.6%, SHFE zinc -0.44%). The alumina front-month contract fell 1.19%, and the foundry aluminum front-month contract fell 0.99%. Last Friday's overnight session saw broad declines in ferrous metals. Stainless steel fell 0.94%, and iron ore fell 0.8%. Hot-rolled coil and rebar dropped over 0.6% (hot-rolled coil -0.63%, rebar -0.62%). For coking coal and coke, coking coal fell 0.49% and coke fell 1.32%. Last Friday's overnight session for precious metals: COMEX gold fell 3.02% overnight, down 3.96% on the week; COMEX silver plunged 10.59%, down 5.65% on the week. In China, SHFE gold fell 1.13%, down 3.37% on the week; SHFE silver fell 6.79%, down 3.26% on the week. This was mainly driven by rising US Treasury yields and the strengthening of the US dollar with no resolution in sight, while the US-Iran conflict intensified inflation concerns, further reinforcing market expectations of interest rate hikes. As of 8:24 AM on May 16, last Friday's overnight closing prices: Macro Front Wang Yi briefed the media on the China-US summit and the consensus reached. Wang Yi stated that the two heads of state interacted for nearly 9 hours and agreed that building a "China-US Constructive Strategic Stability Relationship" was the most important political consensus. At the invitation of President Trump, President Xi Jinping will pay a state visit to the US this autumn. The economic and trade teams of both countries reached overall balanced and positive outcomes, including continuing to implement all consensus from previous negotiations, agreeing to establish a Trade Council and an Investment Council, addressing each other's concerns on agricultural product market access, and promoting the expansion of two-way trade under a reciprocal tariff reduction framework. China: The Ministry of Foreign Affairs provided consolidated responses on China-US economic and trade issues including semiconductors, rare earths, Boeing, and oil purchases. On May 15, Ministry of Foreign Affairs spokesperson Guo Jiakun hosted a regular press conference and provided consolidated responses on China-US economic and trade issues. Regarding rare earth supply, China is committed to maintaining the stability of global supply chains. Regarding purchases of US oil and Boeing aircraft, China expressed willingness to jointly safeguard energy security and supply chain stability, emphasizing the mutually beneficial nature of China-US economic and trade relations. Qiushi Journal published an important article by General Secretary Xi Jinping titled "Making the Real Economy Stronger, Better, and Bigger." The article pointed out that manufacturing is the foundation of the real economy, and high-quality development of manufacturing should be given a more prominent position, with unwavering commitment to building a manufacturing powerhouse. It called for implementing industrial foundation re-engineering projects and major technical equipment breakthrough projects, supporting the development of specialized, refined, distinctive, and innovative enterprises, and promoting high-end, intelligent, and green development of manufacturing. It also called for promoting the integrated cluster development of strategic emerging industries and building a batch of new growth engines in areas such as next-generation information technology, artificial intelligence, biotechnology, new energy, new materials, high-end equipment, and green environmental protection. US dollar: As of last Friday's overnight close, the US dollar index rose 0.41% to 99.28, up 1.45% on the week. Rising energy prices and prolonged shipping disruptions intensified inflationary pressures, pushing up market expectations that the US Fed would raise interest rates this year. US interest rate futures prices fell sharply on Friday, reflecting growing conviction among bond market investors that elevated inflation would force the US Fed to raise interest rates later this year or in early 2027. According to the CME FedWatch tool, the market priced in approximately a 60% probability of a 25-basis-point rate hike by the Federal Open Market Committee (FOMC) meeting next January, with a 50% probability of a rate hike in December. US April retail sales grew further, but part of the increase may have stemmed from rising inflation, as the Iran conflict pushed up energy and other commodity prices. Data released Thursday showed April retail sales rose 0.5%, in line with market expectations, while the March increase was revised down to 1.6%. The Iran conflict is driving up inflation; US Energy Information Administration data showed gasoline prices rose 12.3% in April. Despite surging oil prices, consumer spending had not yet noticeably shifted away from other areas due to larger tax refund amounts this year. IRS data showed that as of April 25, the average refund amount increased by $323 compared to the same period in 2025. However, this support is fading. Economists at PNC Financial Services Group stated that based on internal data analysis, "consumers are spending their tax refunds faster than last year, especially among lower-income households," adding that "the amount of refund money being used to pay off credit card and other debts is also declining." (Jin10 Data APP) The Fed Board of Governors said in a statement on Friday that it had appointed Jerome Powell as chair pro tempore until his successor Kevin Warsh is officially sworn in. The US Fed stated: "This interim step of appointing the current chair as chair pro tempore is consistent with the practice followed during previous chair transitions." In response, Fed Governors Bowman and Milan stated that they did not support the interim appointment. On May 15, Powell's term as Fed Chairman expired. (Wallstreetcn) Analysts at BofA Global Research: If strong global economic growth prevents the US Fed from cutting interest rates, emerging markets could perform well. However, under scenarios of asymmetric growth (favoring the US) or a global stagflation shock, emerging markets would be more vulnerable. On the currency front, even though the election trigger point is still months away, commodity outlook and monetary policy should continue to provide support for the Brazilian real. (Wallstreetcn) Data: This week, China will release data including April total retail sales of consumer goods YoY, April industrial value added of enterprises above designated size YoY, the one-year Loan Prime Rate as of May 20, and April Swift RMB share in global payments. The US will release data including initial jobless claims for the week ending May 16, weekly ADP employment change for the week ending May 2, April pending home sales index MoM, April annualized housing starts, April building permits, May Philadelphia Fed Manufacturing Index, continuing jobless claims for the week ending May 9, May S&P Global Manufacturing PMI preliminary, May S&P Global Services PMI preliminary, May University of Michigan Consumer Sentiment Index final, May NAHB Housing Market Index, May one-year inflation expectations final, and April Conference Board Leading Index MoM. The UK will release data including March three-month ILO unemployment rate, April unemployment rate, April claimant count, April CPI MoM, April Retail Price Index MoM, May Manufacturing PMI preliminary, May Services PMI preliminary, May CBI Industrial Orders balance, May GfK Consumer Confidence Index, April public sector net borrowing, and April seasonally adjusted retail sales MoM. Germany will release data including April PPI MoM, May Manufacturing PMI preliminary, June GfK Consumer Confidence Index, Q1 final non-seasonally adjusted GDP YoY, and May IFO Business Climate Index. The eurozone will release data including March seasonally adjusted trade balance, April CPI YoY final, April CPI MoM final, May Manufacturing PMI preliminary, March seasonally adjusted current account, and May Consumer Confidence Index preliminary. Canada will release data including April CPI MoM and March retail sales MoM. Japan's April core CPI YoY, France's May Manufacturing PMI preliminary, and Australia's April seasonally adjusted unemployment rate will also be released. In addition, in China, the National Bureau of Statistics (NBS) will release the monthly report on residential property prices in 70 large and medium-sized cities, the State Council Information Office will hold a press conference on the national economic performance, and a new round of domestic refined oil price adjustment window will open. At 2:00 AM on May 21, the US Fed will release the minutes of its monetary policy meeting. The Reserve Bank of Australia will release the minutes of its May monetary policy meeting. ECB Chief Economist Lane and Fed Governor Waller will speak at an ECB research conference. 2026 FOMC voter and Philadelphia Fed President Paulsen will deliver a speech. Crude oil: As of last Friday's overnight close, the US-Iran standoff over Strait of Hormuz passage remained unresolved, and both benchmarks rose. WTI gained 4.44% and Brent gained 3.55%. On the week, WTI rose 10.73% and Brent rose 8.08%. As the Iran conflict cut off energy supplies from the Persian Gulf, US refiners are ramping up fuel production to fill supply gaps in gasoline, diesel, and jet fuel. Analysts said this rapid growth trend is expected to keep many refineries operating at effective maximum capacity for at least the remainder of 2026. Reduced spare crude oil supply in Europe and other regions, combined with the difficulty of restoring post-conflict infrastructure in the Middle East in the short term, is pushing up crude oil refining margins. Analysts said this rapid growth trend is expected to keep many refineries operating at effective maximum capacity for at least the remainder of 2026. Data from the US Energy Information Administration showed that the so-called "capacity utilization rate" has climbed for three consecutive weeks and is now approaching 92%. In recent weeks, gasoline production hit a nine-month high, while jet fuel production reached its highest level since the summer of 2024. (Jin10 Data APP) US Energy Secretary Wright said at an event in Sabine Pass, Texas on Friday that the US will replenish every barrel of crude oil released from the Strategic Petroleum Reserve (SPR). He said: "We are releasing oil now, and for every barrel released, we will put back at least 1.2 barrels into the reserve. Ultimately, we will make the reserve larger than when we started." (Jin10 Data APP) According to US media reports, the Trump administration plans to streamline the permitting process for oil projects within the National Petroleum Reserve-Alaska to boost crude oil production in the US Arctic region. The Interior Department's move aims to establish a new permitting framework for the construction and operation of oil production facilities and related infrastructure. Under the plan, eligible projects could receive analysis and authorization more quickly, potentially within just 30 days. This initiative could benefit companies holding leases in the reserve, such as ConocoPhillips, Santos, and Repsol, and accelerate government review of projects like ConocoPhillips' Willow project, which had drawn strong opposition from climate activists. During the Iran conflict, with approximately 20% of global supply trapped in the Persian Gulf, the Trump administration has stepped up calls for US oil companies to increase production. (Jin10 Data APP) US import and export prices surged in April, posting the largest increases in over four years, driven by oil market pressures related to the Iran conflict, further signaling rising inflation in the world's largest economy. Data released Thursday by the Bureau of Labor Statistics showed the import price index rose 1.9% MoM, the largest increase since March 2022, with petroleum costs surging 19%. Export prices rose 3.3% MoM, also the largest increase in over four years. (Wallstreetcn)