Today, SMM's pricing for the SGE Ag(T+D) at 10:00 was 18,071 yuan/kg, with premiums quoted at TD -30 to -10 yuan/kg, averaging -20 yuan/kg. Precious metals futures came under pressure again today. Geopolitical tensions in the Middle East remained volatile with slow progress in US-Iran negotiations, global crude oil inventories were critically low with elevated oil prices, and combined with rising rate hike expectations and continued rise in US Treasury yields, these factors weighed on precious metals valuations. Spot market side, mainstream quotations from national-standard silver ingot suppliers were quoted at premiums of -30 to -10 yuan/kg against TD. Most suppliers in Shanghai quoted premiums unchanged from yesterday. Suppliers reported that with silver prices continuing to decline recently, end-use demand rebounded slightly. Some delivery brand silver ingot suppliers raised quotations slightly and held back from selling in a wait-and-see stance, but transactions at higher premiums were difficult, and the transaction center still leaned toward the lower end of quotations. Non-delivery brands in Shenzhen maintained large discounts deviating from mainstream quotations. Investment demand also recovered slightly, with some jewelers reporting more purchases at the Shuibei market. Overall transactions in the silver spot market recovered slightly today.

Today, the most-traded BC copper contract 2606 opened at 92,280 yuan/mt, fluctuated upward to probe 92,850 yuan/mt in early trading, then moved sideways. During the day session, it opened lower with a gap to touch a low of 91,550 yuan/mt, after which the copper price center gradually shifted upward, ultimately closing at 92,400 yuan/mt, down 1.7%. Open interest stood at 9,388 lots, down 44 lots from the previous trading day, with trading volume at 7,146 lots, indicating bulls reducing positions. Macro perspective, US inflation data rebounded while Strait of Hormuz transit disruptions pushed up international oil prices, intensifying market concerns over rising inflation. Rate hike expectations within the year strengthened again, overall bearish for copper prices. Meanwhile, rising US Treasury yields drove the US dollar to continue strengthening, further suppressing upside room for copper prices. Fundamentals side, on the supply end, imported copper arrivals were relatively low, while domestic spot cargo sources saw some increase. Demand side, as copper prices pulled back, downstream enterprises' purchasing enthusiasm recovered, with marginal improvement in actual market transaction demand. Inventory side, as of Monday, May 18, SMM copper inventories in major regions across China decreased 400 mt WoW to 242,900 mt, with total inventory up 103,700 mt compared to the same period last year from 139,200 mt. SHFE copper 2606 contract closed at 104,330 yuan/mt. Based on the BC copper 2606 contract at 92,400 yuan/mt, its after-tax price was 104,412 yuan/mt. The price spread between SHFE copper 2606 contract and BC copper was -82, maintaining an inversion, and narrowed notably from the previous day.

May 18, 2026 In April, the Chinese gold market presented itself as a fascinating two-tiered society: while physical consumption at the grassroots level cooled noticeably, institutional investors and the government continued to pour billions into the precious metal undeterred. A market is emerging that is decoupling itself from short-term price fluctuations and is instead dominated by hard-nosed strategic purchases. Geopolitics keeps the price in a sideways stranglehold In terms of price, gold largely treaded water in April. The LBMA Gold Price PM recorded a marginal gain of 0.1%, while the Shanghai Gold Benchmark Price PM fell by 0.4%. Geopolitical ups and downs shaped the picture: An initial easing of tensions in the Middle East pushed bond yields lower and initially supported the precious metal. Shortly thereafter, new uncertainties surrounding the Strait of Hormuz drove up oil prices, dampened hopes for rapid U.S. interest rate cuts, and took the wind out of gold’s sails. Yet while the price stabilized, massive transactions were taking place behind the scenes. The driving forces: ETFs, the central bank, and imports Despite burgeoning competition from a resurgent Chinese stock market, financial investors and the central bank continued their accumulation unabated. The figures from the World Gold Council speak for themselves: ETFs on a record-breaking streak: For the eighth consecutive month, Chinese gold ETFs recorded inflows—specifically 3.5 billion renminbi (498 million USD). Holdings rose by 3 tons to a new month-end high of 301 tons. Assets under management thus climbed to 306 billion renminbi (45 billion USD). PBoC buys relentlessly: The People’s Bank of China (PBoC) increased its gold reserves by another 8 tons in April, bringing the total to 2,322 tons. It was the 18th consecutive monthly purchase and the largest since December 2024. Gold now accounts for 9% of total foreign exchange reserves (USD 3.8 trillion). Massive Q1 imports: Net imports underscore the massive appetite for the metal. In March, these rose to 143 tons (+49% month-over-month). The first quarter closed at 316 tons—a massive jump of 182% from the previous quarter and 333% year-over-year. Sluggish consumption and declining trading volumes On the flip side, there is a noticeable slowdown in physical wholesale trading, which coincides exactly with the start of the traditionally weaker seasonal phase in the second quarter. Gold withdrawals from the Shanghai Gold Exchange fell by 23% month-over-month in April to 103 tons. However, the 33% year-over-year decline is significantly mitigated by the fact that April 2025 marked the highest demand since 2018. The trend is nonetheless unmistakable: Chinese consumers are currently preferring to channel their capital into experiences and travel rather than traditional jewelry. While there was some light restocking ahead of the May 1 holidays, the major surge failed to materialize. Even physical bullion buyers have recently hesitated, lured by the renewed appeal of the domestic stock market. This caution was also evident in the futures market. Trading volume on the Shanghai Futures Exchange fell by 31% to 307 tons per day. However, the fact that this figure remains significantly above the five-year average of 265 tons per day demonstrates the market’s underlying strength. Outlook: The market remains divided This two-pronged picture is likely to persist in the coming months. Demand for jewelry and bullion is expected to remain weak during the seasonal lull, especially if the stock market remains strong as a competitor for capital. However, strategic and financial demand via ETFs and the central bank forms a massive foundation that cements China’s position as an indispensable anchor in the global gold sector. Source： https://goldinvest.de/en/china-s-gold-market-why-major-investors-and-the-central-bank-are-buying-up-massively-despite

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)

HRC prices fluctuated downward this week, with weekly average prices edging down slightly and overall trading weakening. In terms of supply, more rolling line maintenance occurred this week, and overall HRC production edged down. Demand side, downstream sectors resumed work and restocked this week, traders showed greater purchasing enthusiasm, while stronger macro sentiment and raw material costs resonated, driving apparent demand to warm up. Inventory side, SMM's nationwide 86-warehouse (large sample) HRC social inventory was 4.7134 million mt this week, down 155,100 mt WoW, down 3.19% WoW. By region, inventory in the Northeast, North China, and east China markets declined notably, Central China market inventory decreased slightly, and South China market saw inventory buildup. Cost side, average ore prices edged down slightly, the third round of coke price increases was implemented, and HRC cost support strengthened slightly. Looking ahead, HRC supply-demand imbalance eased, cost support remained, and some fear-of-heights sentiment was released this week, so HRC prices may still strengthen next week. In summary, the most-traded HRC contract is expected to trade in the 3400-3490 range next week.

Early this week, the market continued to trade around geopolitical tensions, inflation expectations, and the rise in global long-end yields. US April non-farm payrolls added 115,000 jobs with the unemployment rate holding at 4.3%, indicating continued employment resilience. Subsequently, US April CPI rose to 3.8% YoY and PPI to 6.0% YoY, with retail sales growing consecutively, further reinforcing market expectations of "reflation" and the US Fed maintaining a tight policy stance. Meanwhile, Japan's April corporate goods prices rose 4.9% YoY, and the 10-year JGB yield climbed to a nearly 29-year high, with Japan's long-end rate center shifting upward. Overall, the macro theme this week remained the resonance between US inflation and economic resilience, with rising JGB and US Treasury yields suppressing risk appetite, while recurring Middle East tensions and supply concerns provided support for copper prices, which rallied before pulling back. Fundamentals side, supply disruptions remained a key support for copper prices' rise this week. On one hand, recurring Middle East tensions disrupted shipping through the Strait of Hormuz, with oil prices fluctuating at highs and continuously pushing up smelting and logistics costs. On the other hand, the Peruvian government approved on May 11 state-owned oil company Petroperu to seek a $2 billion state-backed loan to maintain operations, indirectly confirming that the local energy system remained under strain, and market concerns over ore supply disruptions had not subsided. China's spot cargo side was affected by the approaching delivery month, with suppliers showing increased willingness to ship to delivery warehouses, and overall spot circulation remained tight. However, high copper prices continued to suppress downstream purchase willingness, with the market still dominated by rigid restocking demand. Inventory rebounded slightly after destocking, and fundamentals exhibited a supply-demand dual-weakness structure. Looking ahead to next week, the macro logic is unlikely to change significantly in the near term. If US inflation stays high and global long-end yields continue to rise, the US dollar and interest rate side will still cap copper prices to some extent. However, given that Middle East tensions and Strait of Hormuz disruptions have not truly been resolved, coupled with ongoing risks on the ore and energy fronts, downside support for copper prices also remains strong. A short-term pullback is expected but with limited magnitude. LME copper is expected to fluctuate within $13,400-13,850/mt, and SHFE copper within 104,000-107,000 yuan/mt. Spot cargo side, supported by delivery logic and tight circulation, premiums are expected to remain firm, but downstream willingness to chase higher prices is limited under elevated prices, and overall trading activity may remain cautious. Spot prices against the SHFE copper front-month contract are expected to range from a discount of 80 yuan/mt to a premium of 100 yuan/mt.