SMM May 13 News: Metals market: As of the midday close, base metals in the domestic market generally rose. SHFE copper gained 1.63%. SHFE aluminum rose 0.3%. SHFE lead fell 0.15%. SHFE zinc gained 1.46%. SHFE tin rose 0.08%. SHFE nickel edged down. In addition, the most-traded casting aluminum futures rose 0.15%, the most-traded alumina futures fell 0.71%. The most-traded lithium carbonate futures fell 3.55%. The most-traded silicon metal futures fell 2.74%. The most-traded polysilicon futures fell 0.62%. Ferrous metals mostly fell. Iron ore was flat at 817.5 yuan/mt. Rebar fell 0.7%. Hot-rolled coil fell 0.57%. Stainless steel rose 0.16%. Coking coal and coke: the most-traded coking coal contract fell 2.51%, and the most-traded coke contract fell 1.28%. Overseas base metals, as of 11:41, LME metals rose across the board. LME copper gained 0.6%. LME aluminum rose 0.24%. LME zinc gained 0.4%. LME lead rose 0.3%. LME tin gained 1.29%. LME nickel rose 0.87%. Precious metals, as of 11:41, COMEX gold rose 0.48%, and COMEX silver gained 1.99%. Domestic precious metals: the most-traded SHFE gold contract fell 0.55%, and the most-traded SHFE silver contract rose 1.1%. In addition, as of the midday close, the most-traded platinum futures edged down, and the most-traded palladium futures fell 1.03%. As of the midday close, the most-traded Europe containerized freight index contract rose 3.17%, closing at 2,539.5 points. As of 11:41 on May 13, midday futures quotes for selected contracts: Spot and Fundamentals Copper: Looking ahead to tomorrow, copper prices continue to fluctuate at highs, downstream purchasing sentiment remains subdued, intraday buying and selling sentiment both pulled back, and spot discounts continued to widen. According to SMM, downstream orders continued to decline from the previous day... Macro Front [China-US Economic and Trade Consultations Begin in South Korea] At noon local time on May 13, the economic and trade teams of China and the US began China-US economic and trade consultations at Incheon International Airport in Seoul, South Korea. (Xinhua) Domestic: [PBOC Reverse Repo Operations Achieved Net Withdrawal of 25.5 Billion Yuan on the Day] The PBOC conducted 500 million yuan of 7-day reverse repo operations today. As 26 billion yuan of 7-day reverse repos matured today, a net withdrawal of 25.5 billion yuan was achieved on the day. US dollar: As of 11:41, the US dollar index rose 0.01%, at 98.31. The US CPI rose faster than expected in April, further intensifying concerns about the impact of inflation on the US economy. The Bureau of Labor Statistics reported on Tuesday that, after seasonal adjustment, the overall CPI rose 0.6% MoM and 3.8% YoY. The monthly increase was in line with expectations, but the YoY increase was 0.1 percentage point higher than market expectations. Core CPI, excluding food and energy, rose 0.4% and 2.8% respectively, indicating that although inflation remained well above the US Fed's 2% target, pressure mainly came from non-core areas, especially energy. Energy prices rose 3.8%, once again becoming one of the main drivers of rising inflation; food prices also rose 0.5%. For the full year, energy prices rose 17.9% and food prices rose 3.2%. Gasoline price index was up 28.4% YoY. Although energy, especially gasoline, was the main news focus, inflationary pressures also came from multiple other areas. Housing costs rose 0.6%, tariff-sensitive apparel prices rose 0.6%, airfares rose 2.8% with a YoY increase of 20.7%. Tariffs also appeared to have affected other areas, with household furnishings and related expenditures rising 0.7%. (Jin10 Data) According to the CME "Fed Watch": the probability of the US Fed maintaining rates unchanged through June was 97.1%, with a 2.9% probability of a cumulative 25 basis point interest rate cut. The probability of the US Fed maintaining rates unchanged through July was 96%, with a 3.9% probability of a cumulative 25 basis point interest rate cut. (Jin10 Data) A CITIC Securities research report stated that US April inflation continued to run hot, the spillover effects of the Middle East conflict persisted, and compensatory increases in rent inflation pushed up core readings. High inflation continued to erode the real purchasing power of US households, with low-income households facing stronger cost shocks, and real hourly wages YoY turned negative for the first time in three years. We believe the risk of a second wave of US inflation is relatively small, but high oil prices will constrain the room for inflation to pull back within the year. Under the base case scenario, the US Fed is still expected to cut interest rate by 25bps within the year. US Treasuries are currently more suited for trading opportunities. After the strong earnings season nears its conclusion, US equities should be watched for short-term risks of profit-taking. The US dollar index may remain in the doldrums below 100 rather than on a sustained downtrend. Other currencies: According to a latest estimate by the OECD, the Bank of Japan's benchmark interest rate is expected to reach 2% by the end of 2027. The report noted that, assuming inflation remains around 2%, the current interest rate is still close to the lower bound of the neutral rate range for the economy. The report also recommended that the Bank of Japan should continue to gradually raise interest rates to prevent the economy from overheating. The Bank of Japan previously estimated that Japan's nominal neutral interest rate was between 1.1% and 2.5%, but noted that there was significant uncertainty regarding the specific level. (Jin10 Data) On the macro front: Data to be released today include France's Q1 ILO unemployment rate, France's April CPI MoM final reading, eurozone Q1 GDP YoY revised reading, eurozone Q1 seasonally adjusted employment QoQ final reading, eurozone March industrial output MoM, US April PPI YoY, and US April PPI MoM. In addition, attention should be paid to: Chicago Fed President Goolsbee participating in a Q&A session hosted by a local chamber of commerce; 2028 FOMC voter and Boston Fed President Collins delivering a speech at the Boston Economic Club; Vice Premier He Lifeng leading a delegation to South Korea from May 12–13 for trade consultations with the US side; and US President Trump's state visit to China. Crude oil: As of 11:41, oil prices in both markets fell, with WTI down 1.03% and Brent down 1.06%. Iran presented its "entry ticket" for nuclear talks with the US, including unfreezing assets and recognizing sovereignty over the Strait of Hormuz. Trump stated: "When negotiating with Iran, I don't consider the financial situation of the American people. I don't consider anyone." Meanwhile, the US Secretary of Defense said the Iran ceasefire agreement remained in effect. (Jin10 Data) American Petroleum Institute (API) data showed that US crude oil inventory fell for the fourth consecutive week last week, while gasoline inventory increased. US API crude oil inventory for the week ending May 8 was -2.188 million barrels, versus expectations of -1.654 million barrels and a prior reading of -8.141 million barrels. US API gasoline inventory for the week ending May 8 was 502,000 barrels, versus expectations of -2.549 million barrels and a prior reading of -6.107 million barrels. The EIA Short-Term Energy Outlook report indicated that if the Strait of Hormuz were closed through the end of June, crude oil prices would be $20/barrel higher than the current forecast, which assumes reopening by the end of May. (Jin10 Data) Spot Market Overview: ► ► ► ► ► ► ► ► ►

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, copper prices continue to fluctuate at highs, and downstream purchasing sentiment remains subdued. Both buying and selling sentiment pulled back during the day, with spot discounts continuing to widen. According to SMM, downstream orders continued to decline from the previous day, with procurement driven mainly by rigid demand and limited willingness to chase higher prices. In terms of market structure, the inter-month Contango price spread between futures contracts remained in the range of 90-20 yuan/mt. As the 05 contract delivery date approaches, suppliers are increasingly willing to ship to delivery warehouse, and the delivery logic is expected to provide bottom support for spot discounts, limiting further significant downside. Overall, Shanghai spot copper prices against the SHFE copper 2605 contract are expected to remain at a discount tomorrow, with a generally weak tone but limited downside room.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, Peru's energy crisis has raised market concerns over copper ore supply. Copper prices surged significantly during the night session, and end-users' acceptance of the current high copper prices and spot discounts has declined. According to SMM, downstream orders dropped sharply during the day, with purchasing sentiment subdued and dominated by rigid demand. In terms of market performance, suppliers continuously lowered their offers, and spot cargo has shifted from premiums to discounts, with the discount margin widening. However, Friday marks the last trading day of the SHFE copper 2605 contract. As delivery approaches, spot discounts are widening under the Contango price spread structure, and suppliers' willingness to ship to delivery warehouses is increasing. The delivery logic is expected to provide bottom support for spot discounts, limiting further downside room.

[SMM Daily Review: Repeated Disruptions from Middle East Situation, Silver Spot Discounts with Sluggish Trading] SMM reported on May 11 that on the macro front, silver fluctuated at highs due to the deteriorating outlook for Middle East negotiations. The spot market remained weak, with spot discounts dominating transactions, and overall trading was sluggish.

SMM Morning Meeting Summary: Last Friday evening, LME copper opened at $13,522.5/mt, fluctuated downward to $13,484.5/mt in early trading, then experienced wild swings reaching a high of $13,583/mt, before fluctuating downward to finally close at $13,535.5/mt, up 1.59%, with trading volume at 29,500 lots and open interest at 271,000 lots, down 1,154 lots from the previous trading day, indicating bears cutting positions. Last Friday evening, the most-traded SHFE copper 2606 contract opened at 104,500 yuan/mt, rose to 104,580 yuan/mt in early trading, then fluctuated downward to 103,690 yuan/mt, moved sideways near the end of the session to finally close at 104,200 yuan/mt, up 0.53%, with trading volume at 50,000 lots and open interest at 208,000 lots, down 1,584 lots from the previous trading day, indicating bears cutting positions.

[SMM Shanghai Spot Copper] Outlook for next week: Shanghai spot copper premiums continued under pressure during the day. Suppliers consecutively lowered their offers throughout the day, with the premium center shifting notably downward, reflecting limited downstream acceptance of high copper prices and premiums, with purchasing driven mainly by rigid demand. In addition, the Shanghai-Guangdong price spread stayed high, with theoretical arbitrage opportunities persisting, which may attract east China cargo to be diverted to south China, diverting available cargo from the Shanghai market and providing some support for local spot discounts. Notably, next Friday is the delivery day for the May contract, and delivery logic is gradually emerging, which may provide bottom support for spot premiums. Overall, Shanghai spot copper premiums are expected to remain under pressure, but downside room is expected to be supported by delivery expectations.