[SMM Zinc Morning Comment] Overnight, LME zinc opened at $2,654.5/mt. Early in the session, LME zinc prices continuously declined below the daily average line, then rapidly rose to a high of $2,662.5/mt during European trading hours. Subsequently, LME zinc prices quickly pulled back, fluctuating considerably along the daily average line during the night session. Towards the end of the session, LME zinc prices slightly declined, closing at $2,636.5/mt, down $23.5/mt or 0.88%. Trading volume decreased to 90,506 lots, while open interest fell by 394 lots to 211,000 lots...

[SMM Morning Meeting Summary: Mixed Data Performance, LME Zinc Records a Bearish Candlestick] Overnight, LME zinc opened at $2,654.5/mt, and continuously declined below the daily average line in the early session...

Last week, the ferrous metals series fluctuated rangebound, with iron ore continuing to outperform other ferrous metals, while coke prices remained in the doldrums. On the macro front, China's National Bureau of Statistics released macroeconomic data for January-April, revealing that real estate data remained sluggish, with significant YoY declines in steel-related investment and new construction starts. Overseas, the US composite PMI and manufacturing PMI both rebounded, prompting manufacturing enterprises to stockpile inventory in May amid concerns about future supply deficits. In the spot market, futures fluctuations were narrow this week, with market sentiment remaining lukewarm. Meanwhile, the construction materials market was affected by high temperatures and rainy weather, leading to weakened demand. In the short term, according to SMM survey tracking, some blast furnaces have new annual maintenance plans, resulting in a downward trend in pig iron production, though absolute levels remain high, with limited loosening of cost support. For steel, the high-temperature and rainy season is approaching, and construction materials demand is set to slow down. However, manufacturing demand remains resilient, and with profit support, the decline in exports is limited. The inflection point for the five major steel products' inventory has yet to appear. Overall, the fundamental aspects of steel can temporarily maintain a good state, with no immediate risk of a decline in exports. Coupled with moderate cost support, steel prices are expected to fluctuate weakly in the short term based on current levels, with previous support levels unlikely to be effectively breached.

[Rebar Weekly Review] Looking ahead, there are no significant positive macroeconomic news for the time being. With supply and demand in a phase of tight balance, market sentiment remains relatively cautious. It is expected that spot prices will fluctuate rangebound next week, but the possibility of prices stopping falling and beginning to rebound due to staged stockpiling of end-use demand before the holiday cannot be ruled out. It is expected that the RB2510 contract will trade within the range of 3000-3180 next week.

[SMM Stainless Steel Daily Review: Fading Favourable Macro Front Leads to Weakening Trend in Stainless Steel Futures and Spot Prices, Which Fluctuate Downward] SMM reported on May 19 that today, the SS futures contract exhibited a doldrums trend, ultimately closing with a doji K-line. Recently, as the stimulus from the favourable macro front gradually faded, market dynamics returned to being dominated by supply and demand fundamentals. The spot price continued its slight downward trend, a stark contrast to the previous period. Last week, driven by favourable macro news, the SS futures market took the lead in rising, with the spot market quickly following suit. Downstream demand was concentratedly released in the early stages of the price increase. However, entering this week, the demand side significantly weakened. Today, market transactions were particularly sluggish. To boost sales, some traders opted for slight price concessions, further pushing spot prices lower. In the futures market, the most-traded contract 2507 was in the doldrums. At 10:30 a.m., SS2507 was quoted at 12,975 yuan/mt, down 20 yuan/mt from the previous trading day. In the Wuxi region, the premiums and discounts for 304/2B spot cargo ranged from 345 to 545 yuan/mt. In the spot market, the cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 8,100 yuan/mt. The average price of cold-rolled mill edge 304/2B coils was 13,275 yuan/mt in Wuxi and 13,225 yuan/mt in Foshan. The cold-rolled 316L/2B coil was priced at 23,875 yuan/mt in Wuxi and the same in Foshan. The hot-rolled 316L/NO.1 coil was quoted at 23,100 yuan/mt in both regions. The cold-rolled 430/2B coil was priced at 7,500 yuan/mt in both Wuxi and Foshan. Factors that frequently disrupted the market in the early stages...

This week, the ferrous metals series saw a narrow pullback after a rebound from low levels. Among them, iron ore outperformed other ferrous metals, while coke showed weaker performance. On the macro front, the China-U.S. economic and trade talks in Geneva on May 12 indicated a 90-day suspension of the 34% reciprocal tariffs imposed on April 2, 2025, with a 10% portion remaining in place during the suspension period. This temporary tariff relief provides greater possibilities and more ample room for China to rush exports in the short term. However, from a medium and long-term perspective, the easing of the tariff environment is not yet a permanent solution, as the current 30% tariff remains higher than those imposed on other countries. In the spot market, influenced by improved market sentiment, both the spot prices and trading volumes of hot-rolled coil and rebar saw improvements...

[SMM Steel Morning Meeting Summary] From a fundamental perspective, on the supply side, according to the SMM survey, due to poor profits at EAF steel mills and weakening demand, some electric furnace plants in south China adjusted their operating hours downward. Some electric furnace plants in central and south-west China also conducted temporary maintenance due to raw material procurement issues. This week, the national electric furnace operating rate dropped to 36.52%, down 1.82% WoW. On the demand side, the market enthusiasm for construction materials demand in May waned, and continuous rainfall during the flooding season in south China disrupted construction schedules. Overall, the supply-demand imbalance in the fundamentals is not yet prominent. It will take some time for positive news such as RRR cuts, reductions in housing provident fund loan interest rates, and the advancement of Sino-US peace talks at the macro level to be implemented. The market sentiment is one of wait-and-see, and merchants are operating more cautiously. It is expected that construction material prices may fluctuate in the short term, and subsequent attention should be paid to any changes in the macro direction.

[Operating Rate of Steel Mills Using Externally Purchased Billets (SMM Survey)] According to the SMM survey, as of April 29, the operating rate of steel mills using externally purchased billets, which mainly produce construction steel, was 34.64%, up 12.5 percentage points from the operating rate at the end of March, and up 9.14 percentage points YoY.

[SHFE Zinc Daily Candlestick Center Moves Up, Expected to Maintain Fluctuating Trend in the Short Term]: The most-traded SHFE zinc 2504 contract opened at 24,025 yuan/mt. At the beginning of the session, bulls increased their positions, pushing SHFE zinc upward to a high of 24,180 yuan/mt. Subsequently, as bulls took profits and exited, SHFE zinc fell below the daily average line to a low of 23,990 yuan/mt. It then slightly recovered its losses and ultimately closed higher at 24,050 yuan/mt, up 180 yuan/mt or 0.75%. Trading volume increased to 131,000 lots, while open interest decreased by 3,649 lots to 72,769 lots...

According to SMM's imported ore cost-profit table, the profit of imported ore decreased slightly. SMM shipping data shows that the global iron ore shipment totaled 26.93 million mt, up 8.7% MoM. Among them, shipments from Australia were 13.34 million mt (up 1.5% MoM), and shipments from Brazil were 6.72 million mt (up 33.4% MoM). SMM data also indicates that China's total iron ore port arrivals reached 24.61 million mt, up 5.8% MoM. Both shipments and port arrivals increased simultaneously, leading to a recovery in iron ore supply, which weakened support for ore prices. Additionally, market rumors suggest that GDP growth may slow down in 2025, slightly dampening market sentiment. In the short term, the fundamentals of iron ore remain stable. With the Two Sessions approaching, market expectations persist, significantly impacting ore prices. Attention should be paid to macroeconomic news and end-use demand. It is expected that the profit of imported ore will remain stable with a weak trend in the short term.