This week, the ferrous metals series opened lower and closed higher, with coking coal rising by over 12% and coke by over 7%. On the macro front, at the beginning of the week, the Caixin Manufacturing PMI was recorded at 48.3, falling below the critical point for the first time since October 2024. The futures market opened lower. Mid-week, there was a series of news about coking coal, including a tariff hike on Mongolian coal, followed by production cuts in the Sanxi region and the implementation of the Mineral Resources Law. These developments brought about a rebound in coking coal and coke, which had been experiencing a smooth decline and were undervalued earlier. At the same time, they also drove up other ferrous metals series products. However, the fundamentals of coking coal remained weak, and the medium and long-term outlook remained bearish...

China's Caixin Manufacturing PMI for May came in at 48.3, falling below the threshold for the first time since October 2024. The forecast was 50.7, and the previous reading was 50.4.

[Caixin manufacturing PMI was 48.3 in May] The Caixin China General Manufacturing Purchasing Managers' Index (PMI) released on June 3 was recorded at 48.3 in May, a decrease of 2.1 percentage points from April, marking the first time it fell below the threshold since October 2024.

China's Caixin Manufacturing PMI for May came in at 48.3, against an expected 50.7 and a prior reading of 50.4.

SMM, June 3: ※Financial Market Performance During the Holiday Metal Market: Domestic Metal Market: The domestic metal market was closed during the Dragon Boat Festival holiday. A review of the market performance of domestic base metals on May 30 shows that most domestic metals fell: Domestic base metals generally declined, with SHFE nickel rising 1.14%, SHFE tin falling 2.87%, and SHFE copper, SHFE aluminum, SHFE lead, and SHFE zinc all falling less than 1%. The main alumina contract rose 0.27%. Most ferrous metals series declined on May 30: Iron ore fell 0.43%, rebar fell 0.34%, stainless steel rose 0.12%, and HRC fell 0.81%. In terms of coking coal and coke, coking coal fell 5.28%, and coke fell 2.13%. Overseas Metal Market: The London Metal Exchange (LME) mostly fell on May 30 and rose across the board on June 2. During the Dragon Boat Festival holiday, LME metals rose across the board, with LME zinc leading the gains with a 2.41% increase, LME copper rising 1.24%, LME aluminum rising 1%, LME tin and LME nickel both rising over 1%, and LME lead rising 0.87%. Precious Metals: During the Dragon Boat Festival holiday, COMEX precious metals all rose sharply. COMEX gold rose 2.82%, touching its highest level in over three weeks, as a weaker US dollar and economic uncertainty drove demand for safe-haven assets. COMEX silver rose 5.61%. Hong Kong Stocks: During the Dragon Boat Festival holiday, Hong Kong stocks weakened on June 2 as tariff issues once again drew market attention. As of the close on June 2, the Hang Seng Index fell 0.57%, the Hang Seng Tech Index fell 0.7%, and the Hang Seng China Enterprises Index fell 0.86%. US Stocks: During the Dragon Boat Festival holiday, the three major US stock indices closed mixed last Friday, with the Dow rising 0.12% and gaining 3.94% in May; the Nasdaq falling 0.32% but rising 9.56% in May; and the S&P 500 falling 0.01% but rising 6.15% in May. As of the close on June 2, the three major US stock indices all rose slightly, with the Dow Jones Industrial Average rising 0.08% to 42,305.48 points, the S&P 500 rising 0.41% to 5,935.94 points, and the Nasdaq rising 0.67% to 19,242.61 points. Metal and Crude Oil Contract Quotes as of 8:20 on June 3 》SMM Metal Spot Prices on May 30 Macro Aspects Domestic Aspects: [National Bureau of Statistics (NBS): PMI for May was 49.5%, up 0.5 percentage points MoM, indicating improved manufacturing sentiment] On May 31, the China Federation of Logistics and Purchasing and the Service Industry Survey Center of the NBS announced China's PMI for May. Among them, the manufacturing PMI rebounded MoM, indicating an improvement in the manufacturing sector's prosperity level and a stabilization in economic operations. In May, China's manufacturing PMI stood at 49.5%, up 0.5 percentage points MoM. Looking at the sub-indices, the production index was 50.7%, up 0.9 percentage points MoM, rising above the critical point, suggesting an acceleration in manufacturing production activities. On the demand side, the new orders index in May was 49.8%, up 0.6 percentage points MoM. 》Click to view details [This year's sales of consumer goods through trade-in policies have exceeded 1 trillion yuan] According to CCTV News reporters who learned from the Ministry of Commerce, as of now, this year's sales of consumer goods through trade-in policies have exceeded 1 trillion yuan. Since the beginning of this year, the trade-in policies for consumer goods have effectively driven a sustained rebound and improvement in consumption. Ministry of Commerce data shows that as of May 31, the five major categories of consumer goods under the trade-in policies have collectively driven sales of 1.1 trillion yuan, with approximately 175 million subsidies directly issued to consumers. Among them, there were 4.12 million applications for trade-in subsidies for automobiles; 49.863 million consumers purchased 77.618 million units of 12 major categories of home appliances; 53.529 million consumers purchased 56.629 million units of digital products such as mobile phones; 6.5 million e-bikes were traded in; and 57.626 million orders were placed for home renovation and kitchen and bathroom "upgrades". (CCTV News) [Various regions take multiple measures to strictly prevent the illegal outflow of strategic minerals] Multiple regions across the country have taken various measures and strengthened controls to strictly prevent the illegal outflow of strategic minerals. Among them, the "Overall Deployment for Strengthening the Full-Chain Management and Control of Strategic Mineral Exports" by the National Office for Coordination of Export Control Work was issued and implemented after approval in accordance with procedures. Guizhou will strictly adhere to the division of responsibilities outlined in the "Overall Deployment" to carry out relevant work. The relevant competent authorities in Hunan Province have stated that they will earnestly fulfill their local regulatory responsibilities, systematically investigate and establish ledgers for strategic mineral export enterprises in Hunan, guide enterprises in strengthening the construction of compliance systems, enhance enterprises' awareness and capabilities of compliance, and ensure the effective implementation of control measures. Guangxi, on the other hand, will continue to effectively supervise and manage the exploration and mining of national strategic minerals, increase efforts to investigate and punish illegal mining activities such as mining without licenses, mining beyond boundaries, and mining under the guise of exploration, and resolutely prevent the illegal outflow of strategically important minerals through illegal mining. Among them, Wuzhou City in Guangxi and Yunfu City in Guangdong have established a cross-regional cooperation mechanism to combat and rectify illegal activities related to mineral resources. In addition, relevant departments in Jiangxi and Yunnan have also stated that they will unwaveringly implement all tasks in accordance with their respective responsibilities. [MIIT: Intensify Efforts to Rectify "Cut-throat Competition" in the Automotive Industry] In response to the "Initiative on Maintaining Fair Competition Order and Promoting Healthy Industry Development" issued by the China Automobile Manufacturers Association (CAAM) on May 31, relevant officials from the Ministry of Industry and Information Technology (MIIT) stated that they would intensify efforts to rectify "cut-throat competition" in the automotive industry and resolutely maintain a fair and orderly market environment. [Opposing "Cut-throat Competition" CAAM Issues Important Initiative] CAAM issued the "Initiative on Maintaining Fair Competition Order and Promoting Healthy Industry Development." In recent years, China's new energy vehicle (NEV) industry has developed rapidly, with the proportion of new NEV sales exceeding 40%. Currently, the overall operation of the industry is showing a steady and improving trend, with market vitality continuing to be released. However, we have also observed that for some time, the industry's profitability has declined. "Cut-throat competition," primarily manifested as disorderly "price wars," is a significant factor contributing to the decline in industry benefits. Continuous investment is needed in product after-sales service guarantees and enterprise innovation and development, while "price wars" seriously affect the normal operations of enterprises, impact the security of the industry chain and supply chain, and drive the industry into a vicious cycle. US Dollar Aspect: During the Dragon Boat Festival holiday, the US dollar index fell by 0.75%, closing at 98.69 as of June 2. New US tariff threats have sparked market concerns about economic uncertainty, putting pressure on the US dollar. According to CCTV News, on May 30 local time, US President Trump stated at a rally in Pennsylvania that he would raise tariffs on imported steel from 25% to 50%. Subsequently, Trump posted on social media platforms that the decision would take effect from June 4. The latest data released by the US shows: The US core PCE price index in April rose 2.5% YoY, the lowest since March 2021, in line with market expectations of 2.5% and down from the previous value of 2.6%. The US core PCE price index in April rose 0.1% MoM, in line with the estimated increase of 0.1% and up from the previous value of 0%. The final S&P Global US Manufacturing PMI for May was 52, below the expected 52.3 and unchanged from the previous value of 52.3. The market is also closely monitoring the speeches of Fed Chairman Powell and other policymakers this week, seeking clues about the path of US interest rates. Other Currency Aspects: The European Central Bank's (ECB) 25 basis point interest rate cut has been fully priced in by the market and widely anticipated. The final manufacturing Purchasing Managers' Index (PMI) for the Eurozone was in line with expectations at 49.4, slightly below expectations in Germany at 48.3, and slightly above expectations in France at 49.8. This week, the focus of eurozone data will be on the preliminary Consumer Price Index (CPI) released on Tuesday, with overall and core inflation rates expected to fall to 2.0% and 2.4%, respectively. Thursday's European Central Bank (ECB) meeting is crucial as policymakers will release new forecasts and provide some insights into interest rate expectations. The market has fully priced in a 25-basis-point interest rate cut and expects at least another 25-basis-point cut by December. The risk lies in that a neutral or hawkish interest rate cut may signal the end of the current easing cycle. (Huitong Finance) Macro Aspects: This week will also see the release of data including Malaysia's manufacturing PMI for May, Australia's current account for Q1, China's Caixin manufacturing PMI for May, Switzerland's annual CPI rate for May, the eurozone's preliminary unadjusted annual harmonized CPI for May, the eurozone's unemployment rate for April, the revised monthly rate of US durable goods orders for April, the monthly rate of US factory orders for April, US JOLTs job openings for April, Australia's AIG manufacturing performance index for May, Australia's seasonally adjusted quarterly GDP growth rate for Q1, Australia's annual GDP growth rate for Q1, Russia's SPGI services PMI for May, the final UK SPGI services PMI for May, the change in US ADP employment for May, Canada's total reserve assets for May, Brazil's seasonally adjusted SPGI services PMI for May, the Bank of Canada's overnight lending rate on June 5, the US ISM non-manufacturing PMI for May, a Q&A session involving 2025 FOMC voter and Chicago Fed President Austan Goolsbee, 2027 FOMC voter and Atlanta Fed President Raphael Bostic, and Fed Governor Lisa Cook attending the "Fed Listens" event, the Bank of Canada's interest rate decision, the global annual ANZ commodity price index for May, Australia's goods and services trade balance for April, Australia's monthly export growth rate for April, Australia's monthly import growth rate for April, China's Caixin services PMI for May, Switzerland's unadjusted unemployment rate for May, the global leading indicator for turning points in the industrial production cycle for May (irregular), the number of job cuts announced by US Challenger companies for May, the ECB's main refinancing rate for June, the ECB's deposit facility rate for June, the ECB's marginal lending facility rate for June, the US trade balance for April, the number of initial jobless claims in the US for the week ending May 31, the number of continuing jobless claims in the US for the week ending May 31, Canada's trade balance for April, Canada's seasonally adjusted IVEY PMI for May, the global supply chain pressure index for May, Germany's seasonally adjusted monthly industrial output growth rate for April, France's trade balance for April, the final seasonally adjusted quarterly GDP growth rate for the eurozone in Q1, the monthly retail sales growth rate for the eurozone in April, the monthly leading indicator growth rate for Canada in May, the seasonally adjusted change in US non-farm payrolls for May, the annual growth rate of US average hourly earnings for May, the change in US non-farm payrolls in the private sector for May, the US labor force participation rate for May, the seasonally adjusted change in US manufacturing employment for May, the US unemployment rate for May, the change in Canadian employment for May, the Canadian unemployment rate for May, and China's foreign exchange reserves for May. Notably: South Korea held its presidential election on June 3, with the stock market closed for the day. The Zhengzhou Commodity Exchange designated 8:55-9:00 on June 3 as the call auction period for all futures and options contracts, with night session trading to resume that evening. Goolsbee, the 2025 FOMC voter and Chicago Fed Chairman, participated in a Q&A session. Fed Chairman Powell delivered opening remarks at an event. South Korea tentatively scheduled its presidential election for June 3. The Reserve Bank of Australia released the minutes of its June monetary policy meeting. Bank of Japan Governor Kazuo Ueda delivered a speech. South Korea held its general election. The Fed released the Beige Book on economic conditions. The European Central Bank (ECB) announced its interest rate decision. ECB President Christine Lagarde held a monetary policy press conference. Fed Governor Adriana Kugler delivered a speech at the Economic Club of New York. Harker, the 2026 FOMC voter and Philadelphia Fed Chairman, delivered a speech on the economic outlook. ECB President Christine Lagarde delivered a speech. In terms of crude oil: During the Dragon Boat Festival holiday, both WTI and Brent crude oil futures rose. WTI crude oil increased by 3.7%, while Brent crude oil rose by 4.01%. Despite the OPEC+ group's adherence to its plan to increase production, wildfires raging in oil-producing provinces in Canada threatened supplies, and new US tariff threats put pressure on the US dollar, both of which supported oil prices. As of Monday, wildfires in Alberta, a major oil-producing province in Canada, had affected approximately 7% of the country's total crude oil production. At least two thermal oil sands operators south of the industrial hub of Fort McMurray evacuated workers and halted production over the weekend. OPEC member countries agreed on Saturday to increase oil production by 411,000 barrels per day (bpd) in July, marking the third consecutive month of the same increase. The alliance aims to regain market share and penalize overproducing countries. Goldman Sachs analysts expect OPEC to implement a final 410,000 bpd increase in August. In a report, the bank stated, "Relatively tight spot oil market fundamentals, strong global manufacturing data, and seasonal support for oil demand during the summer suggest that the expected slowdown in demand is unlikely to be severe enough to prevent production increases when the August production level is decided on July 6." (Wenhua Comprehensive)

Next week coincides with the Dragon Boat Festival, and the SHFE will be closed for one day on June 2. The key macroeconomic data includes China's Caixin Manufacturing PMI for May, the US's ISM Manufacturing PMI for May, and the US's ADP employment figures for May. Additionally, the US Fed will release its Beige Book on economic conditions. For LME lead, following a sharp increase of 50,000 mt in LME lead inventory last week, the inventory of lead ingots reversed its trend and declined this week. However, the total inventory remains at a high level not seen in years, dragging down lead prices. Meanwhile, the LME lead cash-3M contango widened, reaching -$23.35/mt as of May 29. Against the backdrop of high inventory, coupled with geopolitical tensions and market concerns about an economic downturn, LME lead is expected to remain in the doldrums next week, trading within the range of $1,925-1,990/mt. Domestically, for SHFE lead, weak consumption is currently the biggest bearish factor. In particular, downstream enterprises plan to take holidays ranging from 1 to 5 days during the Dragon Boat Festival, leading to a temporary lack of consumption and potentially increasing the risk of inventory buildup for lead ingots after the holiday. On the raw material side, however, the supply of scrap is tight, making it difficult to reduce scrap battery prices. This has widened the losses for secondary lead producers, prompting some smelters to suspend shipments. As a result, the prices of secondary refined lead and primary lead have inverted. Attention will be paid to whether the cost support for secondary lead remains effective. The most-traded SHFE lead contract is expected to trade within the range of 16,450-16,900 yuan/mt next week. Spot price forecast: 16,350-16,650 yuan/mt. During the Dragon Boat Festival next week, many lead-acid battery enterprises have plans to take holidays. Upon returning from the holiday, downstream enterprises' demand for lead ingots is expected to be limited. If lead prices fall further, it may stimulate downstream enterprises to purchase and transfer inventory. For primary lead, production at smelters remains stable, and the availability of spot cargo is ample, with spot prices expected to continue trading at a discount. For secondary lead, the issue of losses is prominent, dampening the enthusiasm of secondary lead enterprises for production and shipments. If scrap battery prices remain high, secondary lead is expected to be sold at a premium, with transactions being more difficult to secure than for primary lead.

US economic data released during the holiday period was relatively concentrated. Among them, GDP and manufacturing data showed weakness, casting a shadow over the economic growth outlook. Both COMEX copper and LME copper prices fell in tandem. However, the subsequently released US non-farm payrolls data and unemployment rate showed positive results, alleviating market concerns about an economic recession. Additionally, there were signs of easing global trade frictions, and external market sentiment improved slightly. Copper prices in the overseas market rebounded overall, with LME copper prices almost fully recovering, while COMEX copper remained relatively weak, with its overall center still slightly shifting downward. Mixed US Economic Data Persists, Market Uncertainty Remains On the eve of the holiday, China's official and Caixin manufacturing PMIs for April were released, both showing a decline MoM, indicating a pullback in the manufacturing sector's prosperity level. US economic data released during the holiday period was mixed. Specifically, the initial estimate for the US Q1 real GDP annualized growth rate was a decline of 0.3%, compared to a survey forecast of 0.3% growth. The US April ISM manufacturing PMI was 48.7, the lowest since November 2024, but higher than the market's prior expectation of 48. US April non-farm payrolls data showed an increase of 177,000 jobs, exceeding expectations, with the unemployment rate remaining unchanged at 4.2%, indicating no signs of weakness in the US job market. Additionally, the US Fed's closely watched core PCE price index for March showed a slight MoM decline, suggesting no urgency for the Fed to cut interest rates. Overall, US manufacturing data showed weakness, indicating certain pressures on economic growth. However, positive job and inflation data alleviated market concerns to some extent. Although there are still signs of easing global trade frictions that previously troubled investors, uncertainties regarding US tariff policies persist. Additionally, US manufacturing data is under pressure. Despite the relatively positive performance of subsequently released US non-farm data, the US dollar index still experienced a weak rebound, with its center not significantly shifting upward. Chile's Copper Production in March Surged by Over 20%, COMEX Copper Inventories Accumulated On April 30, data released by the Chilean government showed that Chile's copper production in March increased by 9.1% YoY. Additionally, the National Bureau of Statistics (NBS) reported that Chile's copper production in March was 477,049 mt, a significant increase of 20% MoM and higher than the same period since 2022. Chile's copper production in February was temporarily constrained by global power outages, but production recovered significantly in March. Before the holiday, due to relatively strong domestic demand and a narrowing price difference between primary metal and scrap, the substitutability of copper cathode consumption increased. As a result, China's social inventory of copper cathode continued to decline, significantly lower than the level of the same period last year. Amid the continuous decline in domestic inventories, overseas copper inventories showed divergent performances. LME copper inventories fluctuated downward, currently falling below 200,000 mt to around 197,000 mt. In contrast, COMEX copper inventories continued to accumulate. Earlier, due to concerns about US tariffs on imported copper, global copper shifted towards the US, with inventories becoming more visible recently. The following is a review of LME copper market trends during the holiday period: On May 2, London copper futures rose, achieving a slight weekly increase as market concerns about trade tensions eased somewhat. On May 1, London copper futures rose, rebounding from a sharp decline the previous day. On April 30, London copper futures fell by over 3%, recording the largest monthly decline since June 2022, dragged down by lingering trade uncertainties.

Macro side, the US March ISM Manufacturing Index was 49, below the expected 49.5 and the previous 50.3. This marked the first contraction this year, with the price index surging to a new high since June 2022. Factory orders and employment performance were sluggish, highlighting the impact of the new US government's tariff policy on the economy. Details of the US reciprocal tariffs are expected to be finalized, with the White House announcing that the tariffs will take effect immediately after the April 2 announcement. Several countries have indicated they will take countermeasures. Domestically, China's March Caixin Manufacturing PMI was 51.2, higher than the previous 50.8, reaching a new high since December 2024, indicating continued accelerated expansion in manufacturing production and business activities. Inventory side, LME copper increased by 1,900 mt to 213,275 mt; Comex copper increased by 1,223.8 mt to 88,473.19 mt; SHFE copper warrants decreased by 1,457 mt to 136,003 mt; BC copper warrants remained at 15,017 mt. The continuous increase in COMEX copper inventories may indicate that previous arbitrage positions are gradually being transferred to delivery warehouses. Domestic copper downstream faces restocking, and with the inverted price spread between domestic and overseas markets, the actual momentum for active short selling is insufficient. Before the US reciprocal tariffs are finalized, market uncertainty is high, with overseas copper prices driving domestic prices downward. After the tariffs are finalized, uncertainty diminishes, and attention will be on whether copper resumes its slow upward trend. (Source: Everbright Futures)

China's Caixin Manufacturing PMI rebounded, while the US "reciprocal tariffs" remain uncertain. Overnight, US stocks dipped and then recovered, with copper prices fluctuating. Yesterday, LME copper edged up 0.03% to $9,692/mt, and the most-traded SHFE copper contract closed at 79,820 yuan/mt. On the industry front, LME inventory increased by 1,900 mt to 213,275 mt, as the rise in European inventory offset the decline in Asian inventory. The ratio of cancelled warrants dropped to 47.6%, with the Cash/3M spread at a discount of $51.4/mt. Domestically, spot premiums in Shanghai were lowered to 10 yuan/mt, with market activity improving at the beginning of the month and downstream pickup volume showing MoM improvement. Inventory in Guangdong continued to rise, with spot premiums flat at 10 yuan/mt, as downstream restocking increased and trading warmed up. On the import and export front, domestic spot copper imports incurred a loss of around 500 yuan/mt, while Yangshan copper premiums remained flat MoM. In the scrap copper sector, the price difference between primary metal and scrap widened to 1,450 yuan/mt, slightly enhancing the substitution advantage of scrap copper. On the news front, indigenous communities in Peru's Cusco region blocked access to Glencore's Antapaccay copper mine to protest its expansion plan. In 2024, the Antapaccay mine produced 146,000 mt of copper. On the price front, the US may impose tariffs on copper in the coming weeks. Although the uncertainty over the tariff magnitude continues to pose volatility risks, the halt in the global refined copper shift to the US has eased expectations of a copper shortage. However, concerns over demand due to the potential tariffs and the US's upcoming "reciprocal tariffs" have intensified. On the raw material side, copper concentrate TCs have yet to bottom out, and supply disruptions in the mining sector have prolonged the tightness in copper ore supply. Attention is focused on changes in TCs and their impact on market sentiment. Overall, the improvement in domestic demand following the pullback in copper prices is evident, and coupled with supply-side disruptions, price support has strengthened. However, demand concerns stemming from US tariff policies will limit the rebound potential of prices. Today, the most-traded SHFE copper contract is expected to trade within the range of 79,200-80,500 yuan/mt, while LME copper 3M is projected to move between $9,600-9,800/mt.

[Domestic Conference Releases Positive Signals, Zinc Prices Continue to Rise This Week] At the beginning of the week, influenced by the US January personal spending monthly rate being lower than the previous value and expected value last Friday, and the US February Chicago PMI exceeding expectations, LME zinc maintained a fluctuating trend. Meanwhile, the higher-than-expected US February S&P Global Manufacturing PMI data and the lower-than-expected US February ISM Manufacturing PMI on Monday caused LME zinc to continue maintaining a fluctuating trend...