May's financial data were released, and the topic of "deposit migration" once again sparked market attention. Data recently released by the central bank shows that after a decline of 1.94 trillion yuan in April, household deposits continued to shrink by 110 billion yuan in May, with a total reduction of 2.05 trillion yuan over the two months. This marks a rare occurrence in nearly a decade of household deposits posting negative growth for two consecutive months. Over the same period, deposits at non-bank financial institutions increased by a combined 3.61 trillion yuan, with the "seesaw" effect persisting. Another phenomenon that has drawn significant attention is the continued deleveraging in the household sector: in May, household loans decreased by 141.2 billion yuan, with a YoY decline that widened by 195.2 billion yuan (compared to an increase of 54 billion yuan in the same period last year). Industry experts have repeatedly noted that the flow of household deposits to non-bank institutions merely changes the structure of bank deposits, and this trend precisely reflects the deepening of China's financial market. A more noteworthy positive signal is that as the growth rate of household deposits continues to pull back, the "scissors gap" between it and the growth of M2 (broad money) continues to narrow and has remained negative for five consecutive months, indicating a trend of marginal fund mobilization. Some institutional sources believe that the capital cycle from households to enterprises and non-bank institutions is restarting, building momentum for the improvement of the domestic economic cycle.

SMM June 11 news: Metal market: Overnight, base metals on the domestic market mostly fell. SHFE copper fell 0.79%. SHFE aluminum edged up 0.02%, while SHFE lead and SHFE tin fell slightly. SHFE zinc fell 1.98%. SHFE nickel fell 0.72%. In addition, the most-traded alumina futures rose 0.73%, and the most-traded foundry aluminum contract rose 0.63%. Overnight, ferrous metals all rose. Iron ore rose 0.07%, hot-rolled coil edged up, stainless steel rose 0.17%, and rebar rose 0.19%. Coking coal and coke: the most-traded coking coal futures contract rose 0.44%, and the most-traded coke futures contract rose 2.34%. Overnight, on the overseas market, LME base metals fell across the board. LME copper fell 0.81%. LME aluminum fell 1.09%, and LME lead fell 0.93%. LME zinc fell 2.19%. LME tin fell 0.34%. LME nickel fell 1.47%. Overnight, precious metals : Overnight, COMEX gold fell 4.49%, and COMEX silver fell 2.67%. Overnight, the most-traded SHFE gold contract fell 3.37%, and the most-traded SHFE silver contract fell 1.08%. Citibank expects that if the blockage of the Strait of Hormuz continues into this summer, global gold purchasing demand may shrink further, and gold prices may fall to $3,500 per ounce by September. Currently, Citibank has lowered its three-month gold price target from $4,300 per ounce to $4,000 per ounce. CITIC Securities pointed out that the US CPI for May was broadly in line with expectations, with high oil prices continuing to push up the overall inflation rate, while core inflation was mild. CITIC Securities believes the risk of a second round of US inflation is low, and the overall CPI YoY may have peaked for this cycle. It is expected to gradually decline slowly until September, then rebound slightly, before pulling back rapidly in March next year. The US Fed is expected to keep its target rate unchanged this year, and the interest rate hike expectations priced in the derivatives market have room to be revised downwards. The key focus of next week's Fed meeting will be the new Chair, Mr. Walsh's, remarks on the current inflation situation and interest rate levels. For US Treasuries, trading opportunities are more suitable than allocation opportunities now, and short-term bonds are better than long-term bonds. The US dollar index finds support, and gold prices may need to wait for accommodative expectations to restart before breaking out of their predicament. As of 7:19 AM on June 11, overnight closing prices: Macro front Domestic: [Zheng Zhajie: Fully implement the "AI+" initiative and deeply address "involution-style" competition] On June 10, Zheng Zhajie, Director of the National Development and Reform Commission (NDRC), chaired an expert symposium on the economic situation, exchanging views with Cai Fang, a member of the Chinese Academy of Social Sciences, Zhang Li, President of the CCID Research Institute, and chief economists from some domestic and international securities firms, including BOC International. The discussion focused on analyzing and assessing the current economic situation, continuously expanding domestic demand, promoting high-level sci-tech self-reliance and strength and autonomous control of the industry chain, and stabilizing employment, enterprises, the market, and expectations. The attending experts' views, opinions, and suggestions were heard. Zheng Zhajie stated that the NDRC would earnestly implement the decisions and plans of the Party Central Committee and the State Council by making best use of its macro policies and leveraging the integrated effects of existing and incremental policies; strengthening the planning and construction of water networks, new-type power grids, computing power networks, new-generation communication networks, urban underground pipeline networks, and logistics networks to promote a close integration of investment in objects and investment in people, and effectively implementing the consumer goods trade-in policy; accelerating the construction of a modern industrial system and fully implementing the "AI+" initiative; continuously strengthening reform and innovation to deeply advance the construction of a unified national market and deeply address "involution-style" competition; enhancing energy and resource security levels and implementing a comprehensive conservation strategy; effectively ensuring the basic wellbeing of the people and making every effort to promote employment for key groups; at the same time, promptly researching and reserving a batch of targeted and highly operational policy tools, ready to be introduced and implemented as needed, to continuously consolidate the foundation for sustained and stable economic improvement. It is hoped that the experts would provide more suggestions to contribute their wisdom and strength to promoting high-quality development. [Ministry of Commerce and seven other units issue "Several Measures to Promote the Integrated Development of Railways and Tourism and Expand Service Consumption"] It is proposed to strengthen the coordination and alignment of railway and tourism planning. Planning guidance should be enhanced. Compiling railway-related plans should encompass the developmental needs of the tourism industry, site planning and layout must be effectively executed, and the accessibility and convenience of tourism resources should be elevated. The compilation of tourism-related plans should coordinate the layout and development of cultural tourism resources and railway resources, promoting the integrated and mutually reinforcing development of railways and tourism. [NRDC Price Cost and Certification Center Conducts Survey at SPIC] On June 3, Cheng Gang, Deputy Director of the Price Cost and Certification Center of the National Development and Reform Commission (NDRC), led a team to conduct a survey at State Power Investment Corporation Limited (SPIC). The two sides exchanged views on the operation of wind power and PV projects, as well as the development of the hydrogen-based energy industry. (NDRC Price Cost and Certification Center) US dollar: Overnight, the US dollar index rose 0.09%, closing at 100.04. Data released by the US Bureau of Labor Statistics on Wednesday showed that the Consumer Price Index (CPI) rose 4.2% YoY in May, the highest level since early 2023 and in line with market expectations. This marked the first time in three years that CPI inflation breached the 4% mark. The main factor driving the overall inflation higher was the rise in energy prices triggered by the Iran war. The 0.5% MoM rise matched expectations and was slightly lower than the previous 0.6%. "New Fed wire" Nick Timiraos' analysis pointed out that on a three-month annualized basis, the overall CPI increase in May was as high as 8.2% ; the overall CPI rose 0.47% MoM, with an annualized rate of approximately 5.8%, pushing the 12-month increase to 4.2%, a three-year high. Core CPI rose 2.9% YoY in May , matching expectations and edging up from the previous 2.8%; the MoM increase was 0.2%, lower than the market expectation of 0.3% and a significant slowdown from the previous 0.4%. Core inflation was mild, but US real wages have already seen their first YoY negative growth since April 2023, worsening the situation for consumers. Furthermore, multiple Wall Street institutions believe that while this CPI data reinforces the "higher for longer" logic, it is not enough to trigger an interest rate hike. Market bets on the Fed resuming rate hikes have risen, but mainstream institutions still tend to believe the Fed will stay on hold in the coming months. (Wall Street Insights) According to CME "FedWatch": The probability of the Fed keeping rates unchanged in June is 98.4%, with a 1.6% chance of a cumulative 25 basis point rate cut. The probability for the Fed to keep rates unchanged through July is 89.1%, with a 9.5% chance of a cumulative 25 basis point rate hike and a 1.5% chance of a cumulative 25 basis point rate cut. (Jin10 Data APP) Other currencies: The Bank of Japan (BOJ) stated on Wednesday that BOJ Governor Kazuo Ueda has been hospitalized and is expected to remain in hospital for about two weeks, therefore he will miss the monetary policy meeting on June 15-16 but is expected to attend the meeting on July 30-31. BOJ Deputy Governor Ryozo Himino will chair the June 15-16 monetary policy meeting, and Deputy Governor Shinichi Uchida will hold a press conference after the June meeting. (Jin10 Data APP) Data: Today's releases include the Eurozone ECB Deposit Facility Rate up to June 11, the Eurozone ECB Main Refinancing Rate up to June 11, the US Initial Jobless Claims for the week ending June 6, and the US May PPI YoY and MoM rates. Also, focus on: the Ministry of Commerce holds its second routine press conference of June; the ECB announces its interest rate decision; ECB President Christine Lagarde holds a monetary policy press conference. Crude oil: Overnight, both oil futures rose, with US crude up 4.14% and Brent crude up 3.88%. The Iran situation escalated abruptly, causing crude oil prices to surge. Additionally, a sharp decline in Cushing crude oil inventories and significant withdrawals from the Strategic Petroleum Reserve (SPR) once fueled an acceleration in the rise of oil prices. Trump subsequently stated on social media that over 100 million barrels of crude oil are currently transiting the Strait of Hormuz, which slightly capped the gains. (Wall Street Insights) The US Department of Energy (DOE) stated on Wednesday local time that the US is seeking to lend up to 40 million barrels from the Strategic Petroleum Reserve (SPR) to energy companies to help lower fuel prices. This plan is part of the previous agreement to release 172 million barrels from the SPR. To date, the US has lent approximately 133 million barrels of crude oil under this agreement. In March, after the US and Israel launched the war on Iran on February 28, the US reached an agreement with about 30 member countries of the International Energy Agency to jointly release approximately 400 million barrels of strategic reserves to help stabilize the international oil market. Currently, the US SPR inventory stands at 349.2 million barrels, the lowest level since August 2023. Enterprises borrowing crude oil must return an equivalent amount of crude oil plus pay a premium of up to 24% in extra crude oil. (Jin10 Data APP)

The core logic of the South American steel market is that end-user demand drives everything. Consumption demand is the starting point, filled jointly by local production and imports; imports act as a regulating valve rather than a driving force.

SMM News, April 30: According to SMM statistics, the total primary aluminum output overseas in April 2026 fell 10.2% year-on-year, while the average daily overseas output dropped 10.0% month-on-month, mainly as the impact of production cuts at Middle Eastern aluminum smelters became more evident. During the period, despite accelerated production resumptions at overseas primary aluminum smelters amid high prices, the overall incremental volume was far lower than the scale of production cuts in the Middle East, leading to a notable year-on-year and month-on-month decline in overseas primary aluminum output in April. Per Alcoa’s Q1 earnings report, the company announced on April 8, 2026 that the restart of its San Ciprián aluminum smelter in Spain had been safely completed. According to Vedanta’s production report, its primary aluminum output in the 2026 fiscal year (Q2 2025 to Q1 2026) hit a record high of 2.456 million tons, up 1% year-on-year, mainly driven by improved operational efficiency. As per an official announcement from Century Aluminum, idle capacity at its Mt. Holly aluminum smelter in South Carolina has commenced restarting, with the first batch of primary aluminum production underway. It is expected that the resumed capacity will reach full operational status by the end of June, involving a total capacity of approximately 50,000 tons. In addition, the second production line at its primary aluminum smelter in Iceland has resumed production several months ahead of schedule. Staff are energizing the first batch of electrolytic cells for the second line and will accelerate the restart of remaining cells, targeting a near-full production level by the end of July. Looking ahead to May 2026, production resumptions at smelters in the US and Iceland, together with the ramp-up of new capacity in Indonesia, are expected to push average daily output higher month-on-month, though year-on-year output is projected to remain in sharp negative growth. Overall, given the unresolved situation in the Middle East, overseas primary aluminum output is expected to stay in sustained year-on-year negative growth in the short term. Market participants shall continue to monitor subsequent announcements from relevant aluminum smelters in the Middle East as well as global aluminum inventory trends.

In March 2026, the global steel market experienced a fierce geopolitical "sudden chill." According to the latest data from WSA, global crude steel production in March fell by 4.2% year-on-year to 159.9 million tons. The US-Iran conflict that erupted on Feb 28, and the subsequent blockade of the Strait of Hormuz, have completely disrupted the spring recovery rhythm of the global steel supply chain, with the shadow of energy crises and logistical interruptions rapidly spreading worldwide.

Q1 has ended. From an order perspective, January orders weakened seasonally, February coincided with the Chinese New Year holiday when most galvanized sheet producers in China were on holiday, and although galvanized sheet enterprises gradually resumed operations in March, overall utilization rates were lower than last year on a YoY basis.

This week (April 3, 2026 - April 9, 2026), the average operating rate of primary lead smelters across the three provinces was 61.48%, down 0.57 percentage points WoW. This week, a small-scale smelter in Henan that had previously shut down for maintenance resumed production, and the operating rate in Henan edged up. In Hunan, after smelters maintained stable operations, some plants marginally increased output. In Yunnan, smelter maintenance and resumption coexisted, and the operating rate in Yunnan registered negative growth this week. Smelters in other regions maintained stable production for the time being. A smelter in east China mentioned expectations of possible maintenance in May, but the specific plan has not yet been confirmed. SMM will continue to monitor the situation.

Futures: Last Friday, LME lead opened at $1,945/mt and fluctuated upward during the Asian session. Entering the European session, it continued to rise and touched a high of $1,955/mt before weakening and dipping to $1,937/mt. Before the close, it recovered part of the losses and finally closed at $1,946/mt, up $2.5/mt, a gain of 0.13%. Overnight, the most-traded SHFE lead contract opened at 16,780 yuan/mt. It rose early to a high of 16,815 yuan/mt, then moved lower and weakened. After touching 16,730 yuan/mt at the low, it rebounded to hover and consolidate near the intraday moving average, and finally closed at 16,765 yuan/mt, up 0 yuan/mt from the previous day’s settlement price, with a % change of 0%. On the macro front: US nonfarm payrolls in February unexpectedly fell by 92,000, marking the first single-month negative growth since 2020. After the data release, traders increased their bets on US Fed interest rate cuts in 2026. Analysts believed that a weakening labour market, coupled with escalating tensions in the Middle East pushing up oil prices, intensified market concerns over stagflation risks. Zheng Shanjie, Director of the National Development and Reform Commission (NDRC), said at an economy-themed press conference that this year’s GDP increment was expected to exceed 6 trillion yuan, equivalent to the annual total of a developed economy, which would provide strong support for stabilising employment, improving people’s livelihoods, and preventing risks. On investment, 109 major projects under the 15th Five-Year Plan will be advanced this year, focusing on building the “six networks” such as water networks, power grids, and computing power networks, as well as facilities for the low-altitude economy and artificial intelligence. The related investment scale this year was expected to exceed 7 trillion yuan. Spot fundamentals: In the Shanghai market, Chihong lead was quoted at discounts of 100-0 yuan/mt against the SHFE lead 2604 contract. SHFE lead remained in the doldrums, and suppliers mostly made shipments at discounts, especially for cargoes self-picked up from production site from primary lead smelters, which were quoted at relatively larger discounts. Mainstream producing areas were quoted at discounts of 50 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price, ex-works. Secondary lead smelters held prices firm for shipments, with secondary refined lead quoted at discounts of 50 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price, ex-works, leaving no price spread versus primary lead. In addition, with some imported lead entering the domestic market, downstream enterprises had more procurement options, and transactions in the spot order market remained sluggish. Inventory: As of March 6, LME lead inventory stood at 285,900 mt, unchanged from the previous day; last Thursday, SMM five-region social inventory of lead ingots edged up again and remained at a five-month high. Lead price forecast for today: In March, both supply and demand for domestic lead ingots increased. With imported lead supplementing supply and downstream pre-holiday inventories being digested slowly, lead prices lacked upward momentum. The secondary lead segment was currently in a loss-making state, reducing smelters’ willingness to resume production. Some enterprises delayed their production resumptions to mid-to-late March, briefly providing supportive conditions for lead price performance. This week was also the week before delivery for the SHFE lead 2603 contract. In the spot market in Henan and Hunan, deals for premiums over the SMM #1 lead average price were slightly difficult to conclude. Suppliers and smelters were expected to continue transferring inventory and shipping to delivery warehouses, and expectations of a continued build in visible inventory were still set to keep lead prices under pressure.

[Price Review] This week, silver prices saw an extreme “roller-coaster” ride. On March 2, driven by the sudden loss of control in the Middle East situation and the escalation of the US-Israel-Iran conflict, international silver prices once opened higher with a gap to around $97/oz, then quickly reversed lower, entering an in the doldrums trend for the week. After the fermentation of the geopolitical risk premium ended, macro factors such as cooling expectations for US Fed interest rate cuts and a stronger US dollar weighed on precious metals prices. In terms of the gold/silver ratio, gold and crude oil lead the gains among commodities; silver’s weekly gain lagged gold’s. The short-term trend in precious metals prices remained unclear, speculative interest declined, and as of March 4, the LBMA gold/silver ratio rebounded to 60x. [Key Data] Bearish: US February ISM Manufacturing PMI (actual): 52.4, above expectations and below the previous reading US February ADP employment (actual): 63,000, above expectations and the previous reading US EIA crude oil inventory for the week ended February 27 (actual): 3.475 million barrels, above expectations and the previous reading Data and macro releases to watch next week include: On March 6 (Friday), the US is set to release February seasonally adjusted nonfarm payrolls and the unemployment rate. The market expects job gains to slow down sharply to 60,000; Bloomberg Economics even forecasts negative growth due to the cold wave. The unemployment rate is expected to hold steady at 4.3. Fed Chairman Powell, along with multiple governors and voting members, will speak next week. Attention should be paid to their latest remarks on inflation, the labor market, and the impact of tariff policies. US-Iran situation: Iran’s Islamic Revolutionary Guard Corps has announced a ban on any vessels passing through the Strait of Hormuz, effectively blocking a route that carries about 20% of global oil shipments. Next week, attention should be paid to whether shipping resumes; Iran has launched missile strikes on 27 US military bases in the Middle East, and the conflict has entered its sixth day. Next week, attention should be paid to whether the conflict spills over to neighboring countries such as Saudi Arabia and the UAE. [Price Forecast] Next week, silver prices are still expected to be heavily influenced by macro factors. There are no signs of easing in the conflict in the near term. If military frictions continue to escalate into a prolonged conflict, safe-haven demand may rise again, lifting precious metals into a new round of gains; however, if the conflict eases or the US dollar continues to strengthen, precious metals may come under pressure and pull back. In terms of fund flows, the forced deleveraging effect from CME’s previous seven consecutive margin hikes to 18% continues to constrain high-leverage trading, and speculative funds in silver are unlikely to drive wild swings in prices for now. In the domestic spot market, as the spot-futures price spread narrows and tightness in circulating spot cargo supply has eased somewhat, downstream buyers have bargained aggressively. Spot premiums for silver are expected to gradually pull back to normal levels going forward.

[SMM Aluminum Express] Entering March 2026, the operating capacity of newly commissioned aluminum projects in Indonesia and Angola is expected to continue climbing. However, there is a risk of production cuts or halts at the Mozambique aluminum plant. Affected by this, the daily average aluminum production may turn to negative growth. Despite this, high aluminum prices continue to stimulate faster global aluminum supply. The resumption of production at the Iceland aluminum plant is expected earlier than originally planned; the operating rates at other aluminum plants have also slightly increased. Overall, aluminum supply is expected to maintain a growth trend, but global aluminum inventory trends still require ongoing monitoring.