[SMM Silver Weekly Review] Silver consumption has gradually picked up since June, with photovoltaic orders increasing and transactions mostly concentrated in the range of parity to a premium of RMB 10/kg. Last week's silver price drop to near-term lows attracted bargain buying from some downstream enterprises, strengthening holders' willingness to offer, and spot premiums have shown a slight firming trend this week. Overall, silver consumption in the PV sector has declined year-on-year, while non-PV industrial demand such as semiconductors and AI servers has yet to see notable growth, leaving the domestic silver market facing surplus pressure. A premium of RMB 10/kg is now considered relatively stable, with limited likelihood of returning to the high premium levels seen in Q1 this year. On the price front, silver fell continuously last week due to stronger-than-expected US non-farm data and geopolitical tensions. This week, news of a potential US-Iran memorandum of understanding has boosted sentiment, and precious metals are expected to see a modest rebound. Looking ahead to the second half of the year, further upside for precious metals remains possible amid evolving macroeconomic policies and geopolitical dynamics.

The global stainless steel market navigated a series of sharp sentiment. The opening weeks saw Indonesia's mill closures and price hikes push the cost narrative to its highest point of the year, before a combination of easing geopolitical tensions triggered the first price reduction since December 2025. The month's defining characteristic was similar to April's. What differentiated May was the sharply higher amplitude of both the policy signals and the emotional swings that accompanied them.

[SMM Morning Meeting Minutes: SHFE tin swung wildly throughout the week at 394,000-411,000 yuan/mt; amid a supply-demand stalemate, it is expected to continue consolidating at highs.]

1. Thailand & South Korea Markets: Prices climb steadily, bolstered by upbeat expectations for long-term contract premiums CIF quotations and transaction prices of aluminum ingots in Thailand and South Korea moved higher overall this week. The backwardation of LME spot aluminum against the three-month contract narrowed notably. Market optimism over higher Q3 QMJP long-term contract prices continued to build. Sellers lifted spot quotes amid rising costs, pushing transaction prices up accordingly during the week. End-product manufacturers in Southeast Asia and South Korea have extensively adopted Chinese exported aluminum products as raw material substitutes, curbing import demand for primary aluminum ingots. Most downstream players only conduct sporadic restocking based on immediate needs, with little willingness for large-scale inventory buildup. The market has therefore seen a trend of strong prices amid sluggish trading activity . 2. Japan Market: Tight spot supply drives sharp premium hikes; buyers become more price-tolerant Japan’s MJP spot premiums kept climbing this week, mainly driven by acute domestic spot shortages. The Middle East, Japan’s major source of imported aluminum ingots, has delivered lower shipments year-on-year due to geopolitical tensions, shipping disruptions and constrained delivery schedules. No other producing regions can make up the supply gap on a meaningful scale, keeping domestic tradable spot inventories at persistently low levels. Faced with tight supply, Japanese end-users have softened their price stance and grown more receptive to spot cargoes with steep premiums. Meanwhile, bullish expectations for Q3 long-term contract premiums have spilled over to the spot market. The combined factors have pushed Japan’s spot premiums to sharply elevated levels.

This week, macro sentiment was shaped by two key narratives: accelerating US-Iran peace talks and higher-than-expected inflation. Peace talks notably heated up—Trump said a peace deal could be signed in Europe as soon as this weekend, and Iran allowed 10 tankers through the Strait of Hormuz as a goodwill gesture. Brent crude fell to a near two-month low of around $89/bbl as geopolitical risk premiums quickly faded. Mid-week, however, May CPI rose to 4.2% YoY, the first breach above 4% in three years (driven by energy, with core at 2.9%). The market’s expectation for the US Fed shifted from rate cuts to a possible hike within the year, and tightening fears weighed on industrial metals demand; copper prices briefly hit a three-week low. By the week’s end, optimism around US-Iran relations eased growth concerns, and copper prices rebounded, with COMEX recovering to around $6.35/lb. Overall, easing geopolitical tensions and sticky inflation offset each other. Ahead of the June 17 FOMC meeting (the first chaired by new Chair Warsh, who is expected to hold rates steady), the market leans toward a wait-and-see stance. Copper prices pulled back from highs on macro headwinds, with increased volatility. Fundamentals side, China’s spot market notably strengthened. On inventory, SMM social inventory fell to recent lows, and suppliers showed a strong willingness to hold prices firm. Spot premiums quickly flipped from discounts; South China premiums surged around 230 yuan/mt in total this week, with the approaching delivery-related backwardation structure supporting SHFE copper premiums. Demand side, dip-buying activity picked up when copper prices fell and trading recovered, but as prices rebounded, downstream buying interest was suppressed and the market cooled—overall, demand remained need-based. The SHFE/LME price ratio recovered slightly, with buyers showing greater purchase willingness. The overall picture is one of low-inventory support, strengthening spot premiums, and a demand pattern that switches with price moves, lending support to copper’s downside. Looking ahead to next week, macro focus will center on the June 17 FOMC meeting (attention on Warsh’s comments on the inflation overshoot and the dot plot), whether the US-Iran deal materializes and progress on Strait of Hormuz navigation resumption, while the June 30 US copper cathode tariff ruling adds further uncertainty. If peace talks deliver and geopolitical risk continues to recede, risk appetite could recover but crude oil and inflation expectations would likely pull back in tandem; if sticky inflation pushes the Fed hawkish, risk assets would face pressure. As for fundamentals, low inventories and strengthening spot premiums offer downside support, while high copper prices deter chasing. LME copper is expected to trade at $13,300–$13,800/mt, and SHFE copper is expected to trade at 102,800-105,500, moving sideways in a high range with a slightly softer center. Spot premiums are expected to persist; attention will focus on the sustainability of suppliers holding prices firm post-delivery and downstream restocking intensity.

Spot circulation was limited this week, with MHP and high-grade nickel matte payables fluctuating at highs.