Iran’s threat to drive oil prices up to $200 a barrel may sound like hyperbole, but as the energy crisis persisted, that outcome already looked more likely than US President Trump’s prediction that oil prices would soon pull back to pre-war levels… The conflict involving Israel and the US against Iran entered its third week — and escalated into one spanning the entire Middle East — yet the global oil benchmark’s response so far was surprisingly “mediocre.” Brent crude oil was currently trading near $100 a barrel, up about 65 from the start of the year. Although that level would have been unimaginable just a few weeks ago, it still remained below last Monday’s brief peak of nearly $120. Given that since the conflict began, the effective closure of the Strait of Hormuz had trapped about one-fifth of global oil supply — roughly 20 million barrels a day — crude oil prices should, in theory, have been much higher. That seemed to suggest investors still retained a degree of trust in Trump , betting that the crisis would be resolved quickly and that the Strait of Hormuz would soon reopen — whether it was called the “Trump put,” the “TACO trade,” or “buy Trump,” many oil traders appeared to be wagering that the president would ultimately be able to limit the market damage. “When this is over, oil prices will come down very, very quickly,” Trump said on Monday this week. Yet that optimism looked increasingly difficult to reconcile with realities on the ground — whether on a battlefield where the conflict was intensifying, or in the physical oil market, where supply bottlenecks were steadily spreading. Signals Being Overlooked In fact, the physical crude oil market was sending an increasing number of stress signals, even though the international benchmark “paper oil” market had so far largely ignored them. Although trade had stalled under the impact of the Iran conflict, Middle Eastern crude benchmarks still surged to record highs, making them the most expensive crude in the world. The spike in these benchmark indicators, which are used to price millions of barrels of Middle Eastern crude sold to Asia, was raising costs for Asian refiners and forcing them to seek alternatives or make further production cuts in the coming months. S&P Global Platts said Dubai spot crude assessments for May-loading cargoes hit a record $157.66 a barrel on Tuesday, surpassing the previous all-time high of $147.5 set by Brent crude oil futures in 2008. That left Dubai crude’s premium to swaps at $60.82 a barrel, compared with an average premium of just 90¢ in February. Meanwhile, Oman crude oil futures hit a record high of $152.58 per barrel on Tuesday, with its premium to the Dubai swap set at $55.74 per barrel, versus an average premium of just 75¢ in February. Oman crude oil is exported from a terminal outside the Strait of Hormuz. This surge reflected massive uncertainty over actually available supply in the Middle East after Iran repeatedly attacked Oman's oil terminal and the UAE's major oil export terminal of Fujairah outside the Strait of Hormuz. Are Brent and WTI Failing to Reflect the "True Severity" of the Oil Market? As JPMorgan's head of commodities, Natasha Kaneva, pointed out in her latest research note on Tuesday , there was a clear mismatch between international benchmark crude pricing and the Middle Eastern geography of the supply disruptions. The core issue was that Brent and WTI are benchmark indicators at opposite ends of the Atlantic basin, while the current shock is concentrated in the Middle East. As a result, these benchmark crude prices were particularly influenced by relatively loose regional fundamentals—commercial oil inventory in both the US and Europe were ample in early 2026, and supply across the Atlantic basin was also relatively abundant in the short term. In addition, expectations for a release from the US Strategic Petroleum Reserve (SPR)—as well as a partial release that will soon materialize—further eased prompt tightness in Brent- and WTI-linked markets. By contrast, Middle Eastern crude benchmarks such as Dubai and Oman more accurately reflected the current dislocation in the physical market. Dubai and Oman spot prices were both trading above $150 per barrel, underscoring the severity of crude oil shortages originating in the Gulf region. These Middle Eastern oil prices were directly affected by export disruptions and therefore more effectively reflected marginal supply deficits than Atlantic-linked crude prices. Crucially, trade geography intensified this dynamic. Most of the crude transported via the Strait of Hormuz goes to Asia—before the outbreak of the Middle East conflict, about 11.2 million barrels of crude and 1.4 million barrels of refined products flowed through the strait to Asia each day. As a result, the direct physical shortage—and the surge in oil prices—was concentrated in Asian markets most dependent on Gulf crude. In fact, early signs of demand destruction had already emerged in Asia as product prices surged and spot crude became prohibitively expensive. JPMorgan noted that timing effects further reinforced this divergence. A typical voyage from Gulf Cooperation Council (GCC) countries to Asia takes about 10 to 15 days, while cargoes bound for Europe via the Suez Canal require nearly 25 to 30 days, or 35 to 45 days if rerouted around the Cape of Good Hope. Therefore, the impact of disrupted Gulf flows would hit Asian markets sooner and more severely, while Atlantic Basin benchmarks such as Brent and WTI would enjoy a longer buffer because of surplus inventory and slower supply adjustments. The US, with crude oil production exceeding 13 million barrels per day, would be affected the least. JPMorgan believed that, in this context, the apparent price stability shown by Brent and WTI should not be taken as evidence of adequate global supply. It reflected a temporary buffer created by regional surplus inventory, benchmark composition, and policy intervention. In fact, for refiners, especially those in Asia, the current crude oil shortage had already become a serious problem. About 60% of the region’s crude oil imports depended on the Middle East, and the difficulty of finding alternative, timely supplies was rapidly becoming acute. The pressure had already forced many countries into painful adjustments. Refiners across Asia had begun cutting run rates to conserve dwindling inventory. Some countries had banned exports of refined products, a defensive move that could further tighten the global market. As the crude oil shortage worsened, refined product prices surged. Asian jet fuel prices were approaching $200 a barrel, near the record high of about $220 reached earlier this month. The Crisis Could Spread Further Ultimately, this crisis was expected to extend beyond Asia. Data from analytics firm Kpler showed that Europe accounted for about three-quarters of Middle Eastern jet fuel exports shipped through the Strait of Hormuz last year—about 379,000 barrels per day—but since the conflict began, no such cargoes had passed through the strait. Unsurprisingly, jet fuel barge prices in the Amsterdam-Rotterdam-Antwerp refining hub had surged to a record $190 a barrel, exceeding the previous peak set after the Russia-Ukraine conflict in February 2022. The comparison with the Russia-Ukraine crisis may be even more compelling. Before the outbreak of the Russia-Ukraine conflict in 2022, Russia supplied about 30% of Europe’s crude oil imports and one-third of its refined product imports. As traders feared Europe would lose supplies from one of the world’s largest oil producers, Brent crude rose to $130 a barrel after the Russia-Ukraine conflict—even though that worst-case scenario never fully materialized in the end. By contrast, according to Morgan Stanley, the physical disruption caused by the Iran conflict had already exceeded that level of concern by more than threefold. Even if the Strait of Hormuz were to reopen immediately, it would not bring immediate relief. According to the International Energy Agency, about 10 million barrels per day of production in the Middle East has been shut in since the conflict began. Restoring these flows will take weeks, if not months. To be sure, the oil market entered the Iran conflict in a relatively loose state, and the International Energy Agency had projected that global supply would exceed demand by about 3.7 million barrels per day. But that surplus has now been erased by the current turmoil. Last week, the International Energy Agency announced plans to release a record 400 million barrels from member countries' strategic petroleum reserves, which will help cushion the initial shock. But drawing down inventories cannot substitute for deliveries of new oil. In other words, the supply shock to the oil market is real and may persist. Once the Strait of Hormuz finally reopens, oil prices could initially plunge in a relief rebound, but given the harsh realities of the physical market, traders may need to think twice before betting that the return to normalcy promised by Trump is about to arrive…

[Hyundai Motor Abandons Repurchase of Russian Plant] South Korean automaker Hyundai Motor announced on February 2 that, due to the ongoing Russia-Ukraine conflict, the company did not exercise its previous repurchase option for its car manufacturing plant in Russia. According to industry sources, Hyundai Motor continued negotiations with the Russian side until the repurchase option deadline on January 31, but ultimately decided not to repurchase the plant's production facilities. It is reported that, as talks between the US and Russia to end the Ukraine conflict have stalled, the persistent geopolitical uncertainty was considered by Hyundai Motor as the primary concern behind this decision.

On Tuesday this week, the latest survey of fund managers released by Bank of America once again revealed a fact that most people already knew: nearly everyone on Wall Street is currently shorting the US dollar.

After facing opposition from Hungary and Slovakia, the European Commission is preparing to proceed with its plan to "fully halt imports of Russian natural gas by the end of 2027" on Tuesday, and will take legal measures to ensure the smooth implementation of the plan. The European Commission had previously formulated an energy roadmap, hoping to end dependence on Russian natural gas through legal means. This is a response to the international situation following the Russia-Ukraine conflict, as well as an effort to enhance its own energy security and promote energy transition. According to CCTV reports, on Monday local time, Hungarian Foreign Minister Péter Szijjártó stated that Hungary and Slovakia jointly vetoed a proposal at the EU Council of Energy Ministers meeting held that day, which called for the European Commission to make progress on the "plan to terminate imports of Russian energy" by June. Szijjártó pointed out that the veto aimed to demonstrate to the EU that the government cannot allow Hungary to bear energy security risks. He added that the EU's plan to require member states to eliminate their dependence on Russian energy would cause a significant surge in domestic natural gas prices in Hungary if implemented. It is reported that the European Commission next plans to stipulate through legal means that the import of Russian pipeline natural gas and liquefied natural gas will be banned from January 1, 2026, although the expiration dates of certain contracts will be later. The European Commission's proposal also mentions that short-term Russian natural gas contracts signed before June 17, 2025, will have a one-year transition period ending on June 17, 2026. Longer-term natural gas import contracts will also be banned, with a deadline of January 1, 2028, which is also the date when the EU will completely cease using Russian natural gas. Dan Jørgensen, the EU's Energy Commissioner, stated on Monday that the EU's ban measures will have sufficient legal force to allow companies to invoke the "force majeure" clause to legally terminate their natural gas contracts with Russia without facing legal risks. Jørgensen claimed: "Since this is an energy ban, companies will not face legal issues as a result. This is force majeure, just like sanctions." Bypassing the Veto Power Slovakia and Hungary have consistently sought to maintain close political and economic ties with Russia, and are still importing Russian natural gas through pipelines. They have stated that switching to alternative energy sources would increase energy costs and economic burdens. They have vowed to block sanctions on Russian energy, which typically require the unanimous consent of all EU member states. EU officials have stated that in order to bypass this issue, the European Commission plans to adopt a new legal procedure that does not require the unanimous consent of all countries, but rather the support of a "qualified majority" of member states and the European Parliament to pass. Although most EU member states have expressed support for the natural gas ban, officials claim that some natural gas importing countries have expressed concerns about the risk of economic penalties or arbitration faced by companies due to breach of contract. "We fully support this plan in principle, with the aim of ensuring that we find the right solution and provide the maximum level of security for companies," French Industry Minister Marc Ferracci said on Monday.

On Friday (June 13) local time, the International Energy Agency (IEA) stated that it was prepared to release emergency oil reserves if the crude oil market faced shortages following Israel's attack on Iran. This statement drew criticism from its "rival," the Organization of the Petroleum Exporting Countries (OPEC), which claimed that such remarks would only create panic sentiment in the market. The IEA primarily represents some oil-consuming countries, while OPEC represents major oil-producing countries. In recent years, the two have continued to have disagreements on issues such as global oil demand trends and the pace of energy transition. Fatih Birol, the Executive Director of the IEA, stated that the current market supply was sufficient, but the agency was ready to take action if necessary. He added that the IEA's oil security system had 1.2 billion barrels of strategic and emergency oil reserves. In response, Haitham Al Ghais, the Secretary General of OPEC, criticized the IEA for repeatedly emphasizing the need to release emergency oil reserves, an unnecessary move that created false alarms and sparked panic sentiment in the market. Al Ghais emphasized that there had been no changes in either crude oil supply or market dynamics, so "there was no need to take unnecessary measures." It is worth mentioning that after the outbreak of the Russia-Ukraine conflict in 2022, the US and its allies coordinated with the IEA to release emergency oil reserves, a move that was also strongly opposed by OPEC at the time. Reviewing the current incident, according to CCTV News, Israel launched a "pre-emptive strike" on nuclear facilities and military targets inside Iran in the early hours of Friday (June 13). Influenced by this news, international oil prices surged significantly, with the main Brent crude oil futures contract rising by 7% to $78.53 per barrel at one point, the highest level since January this year. Shortly before the news was released, the Islamic Republic News Agency of Iran reported that Iranian President Masoud Pezeshkian condemned Israel's attack on Iran that day and stated that Iran would take a legitimate and forceful response. These statements led market participants to worry that the situation might escalate further, potentially affecting energy infrastructure in Iran and its neighboring countries, and even leading to the blockade of the Strait of Hormuz. Earlier in the day, JPMorgan Chase wrote in a report that if a larger-scale conflict broke out in the Middle East, leading to the blockade of the Strait of Hormuz, the crude oil market could face severe supply disruptions. JPMorgan Chase believed that under extreme geopolitical circumstances, international oil prices could nearly double, rising to levels between $120 and $130. "Oil prices have surged significantly... and future movements will largely depend on whether Iran repeats the 2019 playbook of attacking tankers, pipelines, and critical energy infrastructure," Helima Croft, an analyst at RBC Capital Markets, wrote in a report. In September 2019, Yemen's Houthi rebels launched a drone attack on Saudi Aramco's oil processing facilities in Abqaiq, disrupting 5.7 million barrels per day of Saudi Arabia's capacity and causing severe market volatility. There are concerns that a similar "Abqaiq incident" could recur.

SMM News on June 14: Metal Market: As of the overnight close, base metals in both domestic and overseas markets generally declined, with only LME tin, SHFE aluminum, and SHFE tin rising. LME tin rose 0.42%, SHFE aluminum rose 0.2%, and SHFE tin rose 0.51%. The rest of the metals fell, with LME copper down 0.56%, LME aluminum down 0.58%, and LME zinc down 0.61%. The declines in other metals were relatively minor. The main alumina contract fell 0.73%, while the main aluminum casting contract rose 0.31%. The ferrous metals series generally rose, with rebar up 0.64% and HRC up 0.81%. In the coking coal and coke sector, coking coal rose 1.81% and coke rose 0.52%. In precious metals, as of the overnight close, COMEX gold rose 1.48%, recording a three-day winning streak and hitting a new high since April 22, with a weekly gain of 3.17%. COMEX silver rose 0.21%, with a weekly gain of 0.64%. Domestically, SHFE gold rose 0.64%, with a weekly gain of 1.72%, and SHFE silver rose 0.24%, with a weekly gain of 0.42%. As of 9:13 a.m. on June 14, Friday's overnight market close 》Click to view SMM Futures Data Dashboard Macro Front Domestic Aspects: [PBOC: Social financing increased by 18.63 trillion yuan, new loans increased by 10.68 trillion yuan from January to May, M2 grew 7.9% YoY in May] According to preliminary statistics from the People's Bank of China (PBOC), China's social financing scale increased by 18.63 trillion yuan from January to May, compared to 16.3429 trillion yuan from January to April. New RMB loans increased by 10.68 trillion yuan from January to May, compared to 10.0597 trillion yuan from January to April. At the end of May, the balance of broad money (M2) was 325.78 trillion yuan, up 7.9% YoY. The balance of narrow money (M1) was 108.91 trillion yuan, up 2.3% YoY. The balance of currency in circulation (M0) was 13.13 trillion yuan, up 12.1% YoY. Net cash injection in the first five months was 306.4 billion yuan. 》Click to view details The PBOC announced that to maintain ample liquidity in the banking system, on June 16, 2025, the People's Bank of China will conduct 400 billion yuan of outright reverse repo operations through fixed-quantity, interest-rate tenders with multiple-price awards, with a term of six months (182 days). US Dollar Aspects: The overnight US dollar index rose 0.27% to 98.12, with a weekly decline of 1.11%. Investors largely ignored data showing that US consumer confidence rebounded in June for the first time in six months. Data released by the University of Michigan's consumer survey on Friday showed that the consumer sentiment index jumped to 60.5 this month, higher than market expectations. Next week, the US Fed's FOMC will announce its interest rate decision and Summary of Economic Projections. Other currencies: In afternoon trading, the US dollar rose 0.3% against the Japanese yen to 143.88 yen and 0.1% against the Swiss franc to 0.8110 francs. The US dollar fell against the Swiss franc for the second consecutive week. The euro fell 0.4% against the US dollar to $1.1539. Data releases: Next week, China will release data including the operation scale of the medium-term lending facility (MLF) on June 16, the winning bid rate of the MLF on June 16, the year-to-date annual rate of urban fixed asset investment in May, the year-to-date annual rate of industrial added value above designated size in May, the monthly annual rate of industrial added value above designated size in May, the annual rate of total retail sales of consumer goods in May, the year-to-date annual rate of total retail sales of consumer goods in May, the monthly rate of total retail sales of consumer goods in May, the monthly annual rate of total electricity consumption in May, the monthly total electricity consumption in May (irregularly from the 15th to the 20th), the one-year loan prime rate (LPR) in June, the five-year loan prime rate (LPR) in June, etc. The US will release data including the upper and lower limits of the target federal funds rate in June, the New York Fed manufacturing index in June, the New York Fed manufacturing index for the next six months' expectations in June, the monthly import price index in May, the annual rate of the import price index in May, the monthly rate of retail sales in May, the monthly rate of core retail sales in May, the annual rate of retail sales in May, the monthly rate of the retail sales control group associated with GDP in May (seasonally adjusted), the monthly rate of industrial output in May, the capacity utilisation rate in May, the monthly rate of manufacturing output in May, the manufacturing capacity utilisation rate in May, the annual rate of industrial output in May (seasonally adjusted), the initial annualized total of building permits in May, the initial jobless claims for the week ending June 14, the Philadelphia Fed manufacturing index in June, etc. The eurozone will release data including the total reserve assets in May, the ZEW economic sentiment index in June, the final unadjusted annual rate of core harmonized CPI in May, and the initial consumer confidence index in June. Japan will release data including the Bank of Japan's policy benchmark interest rate on June 17 (%)(irregularly on June 17), the unadjusted merchandise trade balance in May, the seasonally adjusted merchandise trade balance in May, the unadjusted merchandise exports in May, and the annual rate of the nationwide core CPI in May. The UK will release data including the annual rate of core CPI in May, the annual rate of the retail price index in May, the Bank of England's benchmark interest rate in June, the Gfk consumer confidence index in June, and the seasonally adjusted monthly rate of core retail sales in May. Australia will release data including the ANZ consumer confidence index for the week ending June 15, the seasonally adjusted unemployment rate in May, and the change in employed population in May. Data such as the quarterly rate of GDP in Q1 for New Zealand (production method, seasonally adjusted), the annual rate of GDP in Q1 for New Zealand (production method, seasonally adjusted), the monthly rate of core retail sales in April for Canada, the ZEW economic sentiment index in June for Germany, and the Bank of Switzerland's policy interest rate in June will also be released. Additionally, the National Bureau of Statistics (NBS) will release the monthly report on residential sales prices in 70 large and medium-sized cities, and the State Council Information Office will hold a press conference on the national economic performance. On June 17, China has 182 billion yuan of 1-year medium-term lending facility (MLF) maturing. The Federal Open Market Committee (FOMC) of the US Fed will announce the interest rate decision and the Summary of Economic Projections, and Fed Chairman Powell will hold a press conference on monetary policy. US President Trump will visit Canada from June 15 to 17 to attend the G7 Leaders' Summit. The Swiss National Bank will announce its interest rate decision, and the Bank of England will also announce its interest rate decision. Kazuo Ueda, Governor of the Bank of Japan, will hold a press conference on monetary policy, and the Bank of Japan will announce its interest rate decision. The Bank of Canada will release the minutes of its monetary policy meeting, and Kazuo Ueda, Governor of the Bank of Japan, will deliver a speech. Crude oil market: Oil prices in both markets surged overnight, with US crude oil rising 7.55%, hitting a high of $77.62 per barrel during the session, a new high since January 20, and Brent crude oil rising 8.39%, reaching a high of $78.5 per barrel during the session, a new high since January 23. The escalation of regional tensions has sparked investor concerns about potential widespread disruptions to oil exports in the Middle East. Both benchmark crude oils recorded their largest intraday fluctuations since the energy price surge triggered by the Russia-Ukraine conflict in 2022. The Iraqi National News Agency stated that Iraq has sufficient strategic reserves of key materials to prepare for the escalation of the situation in the region. The National Iranian Oil Refining and Distribution Company said that oil refining and storage facilities were undamaged and continued to operate. Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), currently has a daily production of about 3.3 million barrels, with oil and fuel exports exceeding 2 million barrels per day. According to analysts and OPEC observers, the spare capacity of OPEC and its allies (including Russia) to produce more oil to offset any disruptions is roughly equivalent to Iran's production. Analysts and OPEC observers said that the rapid surge in oil prices is partly due to the fact that the spare capacity of OPEC and its allies to increase production to offset supply disruptions is roughly equivalent to Iran's production. In other market news, US energy services company Baker Hughes stated in its closely watched report that the number of oil and natural gas rigs operated by US energy companies fell for the seventh consecutive week this week to the lowest level since November 2021. Data showed that as of the week ending June 13, the total number of US oil and natural gas rigs, a leading indicator of future production, decreased by 4 to 555, down 35 or 6% from the same period last year. (Wenhua Comprehensive)

According to the European Central Bank (ECB), driven by record-breaking purchases and soaring gold prices, gold has surpassed the euro to become the second-largest reserve asset held by global central banks. A report released by the ECB on Wednesday showed that gold accounted for 20% of global official reserves in 2024, surpassing the euro's 16% and trailing only the US dollar's 46%. "Central banks worldwide continued to accumulate gold at a record pace," the ECB stated in the report. It is understood that global central banks purchased over 1,000 mt of gold for the third consecutive year in 2024, accounting for one-fifth of the world's annual production and doubling the average annual purchases of the 2010s. Global central banks' gold reserves are approaching the historical highs seen during the post-World War II Bretton Woods system era. Prior to 1971, global exchange rates were pegged to the US dollar, which in turn was convertible into gold at a fixed rate. According to the latest data from the ECB, global central banks' gold reserves peaked at 38,000 mt in the mid-1960s and have now climbed back to 36,000 mt in 2024. "Global central banks currently hold almost the same amount of gold as they did in 1965," the report stated. According to data from the World Gold Council, major gold buyers last year included China, India, Turkey, and Poland. Gold prices rose by 30% last year, one of the reasons for the surge in gold's share of global foreign exchange reserves. So far this year, gold prices have risen by a further 27%, hitting a record high of $3,500 per ounce. "This volume of reserves, combined with high prices, has made gold the world's second-largest reserve asset by market value in 2024, trailing only the US dollar," the ECB said. Although gold does not generate interest and has high storage costs, it is regarded by global investors as the ultimate safe-haven asset, highly liquid, free from counterparty risk, and less susceptible to sanctions. In recent years, due to concerns over geopolitical instability and US debt levels, global central banks have begun to reduce their reliance on the US dollar. The trend of de-dollarization has accelerated further since the outbreak of the Russia-Ukraine conflict, catalyzed by the US-led Western countries cutting off Russia's access to global financial markets. Following the full-scale escalation of the Russia-Ukraine conflict in 2022, the West froze approximately $280 billion of the Russian central bank's overseas assets. The ECB pointed out that central banks' gold purchases appear to be seen as a hedge against sanctions, such as the freezing of financial assets. In the past, gold typically became cheaper when the real yield on other assets rose, but this long-standing correlation has been broken since early 2022. Investors now view gold more as a tool to hedge against political risks rather than merely as a tool to combat inflation.

In early June, silver prices surged sharply amid multiple bullish factors, breaking out of the previous rangebound fluctuation pattern. On June 5, London spot silver soared 4.5% in a single day, breaching the $36/oz mark and reaching its highest level since February 2012. The cumulative weekly gain exceeded 9% (compared to just 0.6% for gold over the same period).

Market Movement - Silver Prices Surge to New Highs In early June, driven by multiple positive factors, silver prices rose sharply, breaking out of the previous rangebound fluctuation pattern. On June 5, London spot silver surged 4.5% in a single day, breaking through the $36/oz mark and reaching its highest level since February 2012, with a cumulative weekly gain exceeding 9% (compared to gold's 0.6% gain over the same period). Domestically, the most-traded SHFE silver contract reached a record high of 8,804 yuan/kg, while A-share silver concept stocks (such as Hunan Silver and Baiyin Nonferrous Group Co., Ltd.) all hit their daily limits. Currently, the gold-silver ratio stands at 85-90 (i.e., 1 oz of gold ≈ 90 oz of silver), significantly higher than the 40-50 average over the past 50 years. Some market traders believe that silver is severely undervalued relative to gold. Based on the historical pattern of the gold-silver ratio reverting to its mean after a crisis, the current silver price rally is poised to ignite. 1. Concentrated Macro Catalysts In terms of macro news, the steel and aluminum tariff issue and the Eurozone's interest rate cut jointly contributed to the significant rise in silver prices. On one hand, on June 3, Trump signed an executive order raising tariffs on imported steel from 25% to 50%, effective from June 4. The market feared that critical metals like silver could be the next target. Previously, on May 30, Trump had already expressed related expectations at a rally in Pennsylvania and posted about it on social media. On June 2, London spot silver prices broke through the oscillation range for the first time, reaching $34.774/oz. Due to the Dragon Boat Festival holiday in China, domestic spot silver TD prices opened higher with a gap at 8,500 yuan/mt after the holiday (on June 3). On the other hand, the European Central Bank (ECB) announced its interest rate decision on the evening of June 5, cutting the three key interest rates by 25 basis points. This marked the eighth interest rate cut since June 2024. The current deposit facility rate was lowered from 4% to 2%. The Eurozone economy faces downside risks, and the ECB may increase monetary easing efforts in H2. These factors bolstered bullish confidence in the silver market, leading to a second high open and upward trend in silver prices. Additionally, factors such as the contraction in the US service sector, slowing employment, the Russia-Ukraine conflict, and tensions in the Middle East have indirectly boosted the safe-haven demand for precious metals, though not enough to solely trigger a significant rally in silver prices. 2. Technical Momentum and Capital Enthusiasm Follow Technically, after breaking through the key technical resistance level of $34.8/oz, silver triggered program trading to rush to buy amid continuous price rise, with capital enthusiasm following suit. The next target level is projected to be $38-40/oz. As of June 9, silver ETF open interest increased from 13,900 mt on May 16 to 14,700 mt, a gain of nearly 6%, indicating strong market enthusiasm for silver. Hedge funds reduced their long positions in gold and shifted them to silver, further driving a significant rally in spot silver prices. 3. Industrial demand supports the destocking trend of silver bars Looking ahead, the supply-demand gap in the global silver market is expected to continue widening in 2025. Despite a slowdown in the growth of industrial demand, the supply of refined silver is constrained by mineral raw materials and recycling technology, and the total global inventory of silver bars will remain dominated by destocking. Previous tariff concerns led to a significant transfer of spot silver bars to the New York market, and currently, both London and domestic spot silver inventories are at their lowest levels in nearly three years. Trend Outlook In June, market sentiment is leaning towards the bullish side, and favourable macro front factors are expected to continue supporting silver prices to rise, with silver prices likely to remain in a state of upward fluctuation in the short term. Against the backdrop of easing crises and the gradual realization of interest rate cut expectations, the performance of the silver market is expected to outperform that of gold, and the gold-silver ratio may also experience a correction and recovery. However, following the rise in silver prices, downstream enterprises are generally adopting a wait-and-see attitude, only making small purchases on dips and actively negotiating prices, with spot premiums pulling back from highs. Meanwhile, it is necessary to remain vigilant against potential impacts such as an unexpectedly delayed interest rate cut by the US Fed, a contraction in profits and a decline in production in the PV end-use product sector. 》View SMM Precious Metals Spot Quotes

This week, the SHFE/LME zinc price ratio pulled back to around 8.4, closing the import window for zinc ingots. From an overseas perspective, the "steel tariffs" imposed by the Trump administration once again escalated global trade tensions. Coupled with the intensification of the Russia-Ukraine conflict, geopolitical risks rose rapidly, and market risk-averse sentiment continued to strengthen, driving up the price of LME zinc.