SMM May 16 News: Metals market: Overnight, metals across both domestic and overseas markets fell collectively, with most declining over 1%. LME tin led the decline with a 4.03% drop, LME copper fell 3.15%, LME aluminum and SHFE tin dropped over 2% (LME aluminum down 2.36%, SHFE tin down 2.84%). LME lead, LME zinc, LME nickel, SHFE copper, and SHFE nickel all fell over 1% (LME lead down 1.39%, LME zinc down 1.35%, LME nickel down 1.9%, SHFE copper down 1.29%, SHFE nickel down 1.3%). SHFE lead and SHFE zinc fell less than 1% (SHFE lead down 0.6%, SHFE zinc down 0.44%). The alumina front-month contract fell 1.19%, and the casting aluminum front-month contract fell 0.99%. Overnight, ferrous metals generally declined. Stainless steel fell 0.94%, and iron ore fell 0.8%. Hot-rolled coil and rebar dropped over 0.6% (hot-rolled coil down 0.63%, rebar down 0.62%). Coking coal and coke: coking coal fell 0.49%, coke fell 1.32%. Overnight, 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 pressured by rising US Treasury yields and a strengthening US dollar index, while the escalating US-Iran conflict intensified inflation concerns, further reinforcing market expectations of interest rate hikes. As of 8:24 AM on May 16, 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 and stable 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, providing 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 that 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 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 will raise interest rates this year. US interest rate futures prices fell sharply on Friday, reflecting growing conviction among bond market investors that elevated inflation will force the US Fed to raise interest rates later this year or in early 2027. According to the CME FedWatch tool, the market now prices in approximately a 60% probability of a 25-basis-point rate hike by the January FOMC meeting, with a 50% probability of a rate hike in December. US April retail sales grew further, but part of the increase may have come 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, spending has not yet noticeably shifted away from other areas, thanks to larger tax refund amounts this year. IRS data showed that as of April 25, the average refund increased by $323 compared to the same period in 2025. However, this support is fading. Economists at PNC Financial Services Group stated, based on internal data analysis, that "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 is still months away, commodity outlook and monetary policy should continue to provide support for the Brazilian real. (Wallstreetcn) Data: Next week, China will release data including China's April total retail sales of consumer goods YoY, China's April industrial value added of enterprises above designated size YoY, China's 1-year Loan Prime Rate as of May 20, and China's April Swift RMB share in global payments. The US will release data including US initial jobless claims for the week ending May 16, US ADP employment weekly change for the week ending May 2, US April pending home sales index MoM, US April housing starts annualized, US April building permits, US May Philadelphia Fed Manufacturing Index, US continuing jobless claims for the week ending May 9, US May S&P Global Manufacturing PMI preliminary, US May S&P Global Services PMI preliminary, US May University of Michigan Consumer Sentiment Index final, US May NAHB Housing Market Index, US May 1-year inflation expectations final, and US April Conference Board Leading Index MoM. The UK will release data including UK March 3-month ILO unemployment rate, UK April unemployment rate, UK April claimant count, UK April CPI MoM, UK April Retail Price Index MoM, UK May Manufacturing PMI preliminary, UK May Services PMI preliminary, UK May CBI Industrial Orders balance, UK May GfK Consumer Confidence Index, UK April public sector net borrowing, and UK April seasonally adjusted retail sales MoM. Germany will release data including Germany April PPI MoM, Germany May Manufacturing PMI preliminary, Germany June GfK Consumer Confidence Index, Germany Q1 non-seasonally adjusted GDP annual rate final, and Germany May IFO Business Climate Index. The Eurozone will release data including Eurozone March seasonally adjusted trade balance, Eurozone April CPI annual rate final, Eurozone April CPI MoM final, Eurozone May Manufacturing PMI preliminary, Eurozone March seasonally adjusted current account, and Eurozone May Consumer Confidence Index preliminary. Canada will release data including Canada April CPI MoM and Canada March retail sales MoM. Japan April core CPI annual rate, France May Manufacturing PMI preliminary, and Australia 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 sales 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 overnight close, the US-Iran standoff over Strait of Hormuz passage showed no signs of a breakthrough, and both benchmarks rose. WTI rose 4.44%, and Brent rose 3.55%. On the week, WTI rose 10.73%, and Brent rose 8.08%. As the Iran conflict has 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 push many refineries to their 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 driving up crude oil refining margins. Analysts said this rapid growth trend is expected to push many refineries to their effective maximum capacity for at least the remainder of 2026. US Energy Information Administration data 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 such as ConocoPhillips, Santos, and Repsol, which hold leases within the reserve, and accelerate government review of projects such as 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 increase 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)

The year 2026 marks the opening year of the "15th Five-Year Plan" period. Against the backdrop of intensifying global macro volatility and the deepening advancement of high-quality development in China, the zinc industry is undergoing profound transformation: tightness on the ore side and the release of smelting capacity are creating structural tension, divergence between domestic and overseas inventories reflects the complex dynamics of supply-demand rebalancing, and technological innovation is becoming the key momentum for resolving contradictions and reshaping the landscape. Key areas under the "15th Five-Year Plan" such as new energy and new-type infrastructure are injecting new momentum into traditional zinc consumption, while green, low-carbon, and circular economy principles are accelerating the restructuring of industrial logic driven by technological innovation. With the joint support of upstream and downstream enterprises in the zinc industry, industry associations, and relevant parties, SMM is about to hold the 2026 SMM Zinc Industry Conference & the 8th Hot-Dip Galvanizing Industry Development and Technological Innovation Forum & the 14th Zinc Salt, Zinc Oxide and Zinc Secondary Resources Development Forum & the Zinc-Based Materials Development Forum on August 6-8 in Qingdao, Shandong. Themed "Converging Zinc Momentum · Building Zinc Industry · Embarking on a New Journey," the conference is driven by the dual engines of macro perspectives and fundamental analysis, closely aligned with the "15th Five-Year Plan" high-quality development mainline, focusing on four major dimensions: macro policies, supply-demand patterns, global trade, and technological innovation. It aims to drive cost reduction and efficiency improvement through technological breakthroughs, respond to market fluctuations through collaborative innovation, and jointly chart a new blueprint for high-quality and sustainable development of the zinc industry. Gansu Changba Nonferrous Metals Co., Ltd. will attend this grand event, discussing industry development trends with industry peers and jointly driving the zinc industry to new heights. Click the to register now, witness and participate in this significant and far-reaching industry event, and co-create a glorious new chapter! ◆ Company Overview ◆ Gansu Changba Nonferrous Metals Co., Ltd. is a subsidiary of Baiyin Nonferrous Group Co., Ltd., with Chengzhou Zinc Smelter and Changba Lead-Zinc Mine under its management. It is a large state-owned nonferrous metals enterprise integrating lead-zinc mining, mineral processing, smelting, and scientific research. Chengzhou Zinc Smelter currently has an annual electrolytic zinc production capacity of 100,000 mt. It is a modern smelter integrating zinc metal smelting, comprehensive utilization of resources, and R&D of new nonferrous metal smelting processes. The enterprise adheres to the development direction of "lean collaboration, digital integration, and green leadership," closely aligned with the goal of creating the ultimate quality benchmark. It has continuously made breakthroughs in improving zinc smelting quality. In 2026, the first batch of high-purity zinc ingots with a purity of 99.998% was successfully produced, injecting solid momentum into further enhancing the enterprise's core competitiveness, expanding the high-end zinc materials market, and driving high-quality development of the enterprise. The Chengzhou Zinc Smelter has always adhered to the pursuit of excellence and perfection. With the successful production of 99.998% high-purity zinc ingots as a major breakthrough, the smelter has continued to increase investment in scientific research, actively introduced advanced and applicable production technologies and equipment, focused on building a high-caliber professional and technical talent team, continuously optimized the production process for 99.997% high-purity zinc ingots, and steadily carried out technical research on even higher-purity zinc products. ◆ Honors Bestowed: Quality Certified by Authoritative Bodies ◆ The outstanding quality of the 99.998% high-purity zinc ingots has been widely recognized by authoritative institutions both within and outside the industry, with numerous prestigious awards attesting to their quality excellence: · Technology Innovation Awards: Leveraging core technological breakthroughs such as "Research and Application of Low-Impurity Electrolytic Zinc Standard Creation," the smelter won the "Second Prize of Nonferrous Metals Industry Science and Technology Award," the "First Prize of Gansu Province Science and Technology Progress Award," and the "Grand Prize of Science and Technology of CITIC Guoan Group Co., Ltd.," with its technical capabilities recognized at national, provincial, and municipal/county levels. The "R&D and Application of High-Grade Zinc Ingot Preparation Process Technology" won a Bronze Award at the 11th International Invention Exhibition "Belt and Road" and BRICS Skills Development and Technological Innovation Competition. "Full-Process Lean Management Control for Creating Excellent Zinc Ingot Quality" won the Second Prize of the 2025 Nonferrous Metals Enterprise Management Modernization Innovation Achievement Award. The smelter built Nanshi's first 5G+ digital workshop, deployed industrial robots and unmanned AGV systems, achieved full-process automation of ingot production, and improved production efficiency by 30%. · Product Quality Awards: The main product, zinc ingots (including the 99.997% grade), together with the by-product sulphuric acid, were awarded the highest honor in nonferrous metals product physical quality certification — the "Gold Cup Award," serving as an authoritative endorsement of their quality stability and superiority by the industry. In 2025, the smelter was recognized as a "Premium Brand" by the CNIA. · Market Access Certification: The main product, zinc ingots, was successfully registered on the Shanghai Stock Exchange, obtaining standardized market circulation qualifications. The brand value reached 2.482 billion yuan, ranking 31st nationwide among "Product Brands," laying a solid foundation for the market promotion of 99.997% high-purity zinc ingots. ◆ Diverse Applications: Empowering High-End Industrial Development ◆ Due to its extremely low impurity content and excellent chemical stability, the 99.998% high-purity zinc ingot demonstrates irreplaceable application value in multiple high-end fields: · High-End Electronics: As a core raw material for electronic component coatings, its low-impurity characteristics effectively enhance the conductivity and service life of electronic devices, and it is widely used in the production of precision electronic components such as integrated circuits and smartphone chips. · Aerospace: Used in anti-corrosion coatings for aerospace components and lightweight alloy material manufacturing, its stable physicochemical properties can adapt to extreme environments, ensuring the reliability of aerospace equipment. · Pharmaceutical and Chemical Industry: Serving as raw materials for pharmaceutical intermediates and high-end catalysts, its high-purity characteristics ensure product safety and efficacy, meeting the stringent standards of the pharmaceutical and chemical industry. · New Energy: In the production of new energy products such as zinc-based batteries and energy storage equipment, high-purity zinc ingots can enhance battery energy density and cycle life, facilitating the upgrading of the new energy industry. ◆ Outstanding Performance: Market Recognition Demonstrates Strength ◆ With a zinc ingot capacity of 100,000 mt, the 99.998% high-purity zinc ingots, leveraging core advantages of low lead, low iron, and low cadmium, received strong recognition from downstream clients upon market launch, delivering impressive market results: · Industry-Leading Zinc Ingot Quality: Zinc ingot purity reaches 99.998%, with lead content at 0.0009%, iron content stable at 0.0003%, and cadmium, tin, and aluminum consistently maintained at 0.0002%, placing it at a leading level in the ISP zinc smelting industry. · Extensive Market Coverage: Products were rapidly sold to core markets such as Shanghai and Xuzhou, covering multiple sectors including high-end electronics and precision manufacturing, breaking the supply bottleneck of high-end high-purity zinc ingots. · Leading Client Satisfaction: With stable purity, extremely low impurity content, and reliable supply capability, a stable client base and strong market reputation have been established. Client satisfaction in 2025 reached 100%. ◆ Future Outlook: Continuously Leading High-Quality Development ◆ Chengzhou Zinc Smelter consistently adheres to the pursuit of excellence and perfection. Taking the successful production of 99.998% high-purity zinc ingots as a significant breakthrough, it continues to increase R&D investment, actively introduces advanced and applicable production technologies and equipment, focuses on building a high-caliber professional technical talent team, and continuously optimizes the production process for 99.997% high-purity zinc ingots while steadily advancing technical breakthroughs for even higher-purity zinc products. Meanwhile, it deepens industry-academia-research collaborative innovation, expands application scenarios of high-purity zinc in high-end manufacturing, new materials, and other fields, and promotes coordinated improvement and synergistic development across the upstream and downstream of the industry chain. The enterprise is anchored on the goal of building an industry-leading lean benchmark enterprise, continuously strengthening whole-process quality management, deepening green and low-carbon production, accelerating intelligent transformation and upgrading, and driving enterprise quality improvement, efficiency enhancement, and transformation with solid achievements, contributing tangible "Chengye Strength" to the high-quality development of the zinc smelting industry. ◆ Contact Information ◆ Long press to scan the code and register now 2026 SMM Zinc Industry Conference

SMM Morning Meeting Minutes: Overnight, LME copper opened at $14,043/mt, touched a high of $14,077/mt in early trading, then the copper price center gradually shifted lower to probe $13,917.5/mt, followed by wild swings before finally closing at $13,986/mt, down 0.7%, with trading volume at 22,000 lots and open interest at 277,000 lots, an increase of 2,465 lots from the previous trading day, indicating bears reducing positions. Overnight, the most-traded SHFE copper 2606 contract opened at 107,250 yuan/mt, immediately touched a high of 107,320 yuan/mt in early trading, then the copper price center quickly shifted lower to probe 106,690 yuan/mt, followed by a rise amid wild swings before finally closing at 107,024 yuan/mt, down 0.35%, with trading volume at 39,000 lots and open interest at 184,000 lots, a decrease of 4,131 lots from the previous trading day, indicating bulls reducing positions.

[Macro Tailwinds and Inventory Pressure Coexist, Limiting Upside Room for Aluminum Prices] Current macro tailwinds are being released in a concentrated manner, the global rigid supply gap for aluminum has been confirmed, and China’s aluminum ingot inventory has entered initial destocking. Multiple positive factors are providing support for aluminum prices. However, inventory at high levels in China remains the core factor suppressing a sharp price surge. In addition, spot market trading has been relatively weak, and expectations for US Fed interest rate hikes this year have been heating up, further limiting upside room for aluminum prices. Going forward, attention should be paid to whether China’s aluminum ingot inventory can maintain sustained destocking, thereby easing the pressure that inventory at high levels exerts on aluminum prices.

[SMM Tin Morning Brief: The Most-Traded SHFE Tin Contract Fluctuated and Pulled Back, Spot Market Trading Remained Sluggish]

SMM May 15 News: Metals market: Overnight, domestic base metals fell nearly across the board. SHFE copper fell 0.35%. SHFE aluminum fell 0.7%, SHFE lead fell 0.54%. SHFE zinc rose 0.2%. SHFE tin fell 1.33%. SHFE nickel fell 1.06%. In addition, the most-traded alumina futures fell 0.32%, and the most-traded casting aluminum futures fell 0.7%. Overnight, ferrous metals mostly fell. Iron ore fell 0.12%, rebar rose 0.34%. Stainless steel fell 0.8%, hot-rolled coil rose 0.2%. Coking coal and coke: coking coal fell 0.72%, coke edged down slightly. Overnight overseas metals showed mixed performance. LME copper fell 0.7%. LME aluminum rose 0.21%, LME lead rose 0.4%. LME zinc rose 0.99%, hitting an intraday high of $3,633.5/mt, the highest since June 2022. LME tin fell 2.89%. LME nickel fell 1.17%. Overnight precious metals : COMEX gold fell 1.09%, COMEX silver fell 6%. Overnight, the most-traded SHFE gold futures fell 0.32%, and the most-traded SHFE silver futures fell 3.52%. As of 7:15 AM on May 15, overnight closing prices: Macro front China: [PBOC: Aggregate social financing in the first four months totaled 15.45 trillion yuan; new loans reached 8.59 trillion yuan; April M2 grew 8.6% YoY] PBOC data showed that, according to preliminary statistics, the cumulative increase in aggregate social financing in the first four months of 2026 was 15.45 trillion yuan, down 893 billion yuan YoY. Of this, RMB loans to the real economy increased by 8.5 trillion yuan (down 1.29 trillion yuan YoY); foreign currency loans to the real economy increased by 103.6 billion yuan in RMB equivalent (up 213.4 billion yuan YoY); entrusted loans decreased by 94.1 billion yuan (down an additional 99.4 billion yuan YoY); trust loans increased by 300 million yuan (down 45.1 billion yuan YoY); undiscounted bankers' acceptances increased by 51.3 billion yuan (down 199.2 billion yuan YoY); net corporate bond financing was 1.5 trillion yuan (up 739.3 billion yuan YoY); net government bond financing was 4.45 trillion yuan (down 399 billion yuan YoY); domestic equity financing by non-financial enterprises was 200.8 billion yuan (up 65.5 billion yuan YoY). In the first four months, RMB loans increased by 8.59 trillion yuan. At end-April, the outstanding balance of domestic and foreign currency loans was 284.29 trillion yuan, up 5.5% YoY. Month-end outstanding RMB loans stood at 280.5 trillion yuan, up 5.6% YoY. In the first four months, RMB loans increased by 8.59 trillion yuan. By sector, household loans decreased by 490.2 billion yuan, of which short-term loans decreased by 610.2 billion yuan and medium and long-term loans increased by 119.9 billion yuan; loans to enterprises and public institutions increased by 8.99 trillion yuan, of which short-term loans increased by 3.67 trillion yuan, medium and long-term loans increased by 5.01 trillion yuan, and bill financing increased by 142.9 billion yuan; loans to non-bank financial institutions decreased by 193.5 billion yuan. At end-April, the outstanding balance of foreign currency loans was $55.15 billion, up 3.4% YoY. In the first four months, foreign currency loans increased by $6.5 billion. PBOC data showed that at end-April, broad money (M2) balance was 353.04 trillion yuan, up 8.6% YoY. Narrow money (M1) balance was 114.58 trillion yuan, up 5% YoY. Currency in circulation (M0) balance was 14.75 trillion yuan, up 12.2% YoY. Net cash injection in the first four months was 653 billion yuan. [PBOC: To conduct 300 billion yuan outright reverse repo operation on May 15 with a 6-month tenor] To maintain ample liquidity in the banking system, on May 15, 2026, the People's Bank of China will conduct a 300 billion yuan outright reverse repo operation through fixed-quantity, interest rate tender, and multiple-price winning method, with a tenor of 6 months (184 days), maturing on November 15, 2026 (postponed in case of holidays). US dollar: Overnight, the US dollar index rose 0.41% to 98.88. According to Wallstreetcn, US April retail sales posted the strongest gain in 8 months, confirming consumer resilience, but inflationary pressures continued to build. Combined with rising long-term Treasury yields, market expectations for a US Fed interest rate cut have largely faded. US Fed Governor Barr stated that easing liquidity rules to shrink the central bank's balance sheet is a bad idea that could undermine the safety of the financial system. "There has been a lot of discussion recently about shrinking the size of the Fed's balance sheet to reduce our 'footprint' in the financial system," Barr said in prepared remarks for a conference hosted by the NYU Money Marketeers. "I believe shrinking the balance sheet is the wrong objective, and many of the proposals put forward to achieve it would weaken bank resilience, impede the normal functioning of money markets, and ultimately threaten financial stability," Barr said. "Some proposals would actually increase the Fed's 'footprint' in financial markets." Barr noted that allowing banks to reduce their liquidity holdings as a means of shrinking Fed assets could increase the risk that these institutions would need to turn to Fed liquidity facilities when in distress. He said, "The size of the Fed's balance sheet is not the right measure of its influence in financial markets," and in a system where the Fed creates reserves "at no cost," the real focus should be on the effectiveness of the Fed's monetary policy implementation. (Jin10 Data) According to Reuters, Milan formally submitted his resignation to the US Fed on Thursday local time, setting his departure date on or shortly before the day Waller is sworn in. Waller is expected to be sworn in as Fed Chairman within the coming days. In his resignation letter, Milan continued to warn that interest rates may be too high. He wrote that broader economic trends such as slowing population growth and deregulation would reduce inflation on their own, giving the Fed room to ease policy. He also argued that technical challenges in measuring inflation may cause inflation statistics to overstate actual levels. (Jin10 Data) According to CME "FedWatch": the probability of the US Fed holding rates unchanged through June is 96.8%, with a 3.2% probability of a cumulative 25 bps cut. The probability of holding rates unchanged through July is 93.8%, with a 3.1% probability of a cumulative 25 bps cut and a 3.1% probability of a cumulative 25 bps hike. Data: Today will see the release of the US May NY Fed Manufacturing Index, US April industrial production MoM, and China April total electricity consumption YoY, among other data. Also watch: 2026 FOMC voter and Cleveland Fed President Hammack delivers opening remarks at an online discussion on central bank independence; FOMC permanent voter and NY Fed President Williams participates in a discussion; US Fed Governor Barr speaks on the balance sheet; the National Energy Administration releases total electricity consumption data around the 15th of each month; Powell's term as Fed Chairman ends; US President Trump makes a state visit to China. Crude oil: Overnight, both oil futures rose, with WTI up 0.99% and Brent up 0.91%. Market concerns over supply disruptions amid the US-Iran conflict persisted, supporting oil prices. US Treasury Secretary Bessent stated that Iran's oil storage is full and Tehran will need to halt oil production. Following the US blockade on Iranian oil exports, the key question in this conflict is: how long can Iran store the oil it cannot export before running out of space. Some analysts believe Iran still has a few weeks of storage capacity, and Tehran has begun slowly cutting production to cope with the standoff. Bessent said in an interview on CNBC's "Squawk Box" that over the past three days, Iran has been unable to load tankers at its main oil export terminal, Kharg Island, as the US blockade prevented tankers from entering or leaving the Persian Gulf. In the first month of the US blockade, the US military forced 70 vessels allegedly heading to or from Iranian ports to change course. (Jin10 Data) According to Bloomberg ship-tracking data, four VLCCs loaded with crude oil have transited the Strait of Hormuz since May 10, with combined daily flows approaching 2 million barrels. However, this improvement was relatively limited. Freight analyst Georgios Sakellariou stated: according to Bloomberg ship-tracking data, four VLCCs loaded with crude oil have transited the Strait of Hormuz since May 10, with combined daily flows approaching 2 million barrels. However, this improvement was relatively limited. Goldman Sachs analyst Tallulah Adams noted that the oil market has entered a narrower trading range, with realized volatility over the past 5 days falling to the lowest level since the conflict began, and the market is largely in wait-and-see mode. Weak physical market signals suggest supply remains adequate for the May trading cycle, but Goldman Sachs also cautioned that the coming weeks will be critical as the summer peak demand season is about to arrive. (Wallstreetcn) Additionally, two industry sources told Reuters that a Gazprom natural gas processing plant in Russia's southern Astrakhan region suspended motor fuel production after a fire on May 13. The fire was caused by a drone strike. They said the plant suspended operations, including a stabilized condensate processing unit with an annual capacity of 3 million mt that produces gasoline and diesel. According to sources, restoring motor fuel production could take weeks to months. The second source said hydrogen sulfide treatment and sulfur recovery equipment were also damaged in the drone strike. Industry sources said the Astrakhan plant processed 1.8 million mt of stabilized natural gas condensate in 2024, producing 800,000 mt of gasoline, 600,000 mt of diesel, and 300,000 mt of fuel oil. (Jin10 Data)