SMM May 18 News: Data Brief: As of Monday, May 18, SMM copper inventories in major regions across China decreased by 400 mt WoW to 242,900 mt, with total inventories up 103,700 mt compared to the same period last year (139,200 mt). Specifically, Shanghai saw continued inventory pullback—the only destocking region—due to the dual impact of tightening imported supply and declining domestic arrivals. Jiangsu saw overall stable domestic copper arrivals, but downstream procurement demand remained weak under the pressure of rising copper prices, resulting in a slight inventory buildup. Guangdong saw increased domestic arrivals, coupled with sluggish end-use consumption, leading to a concurrent inventory increase. Market outlook: Supply side, the pace of short-term import arrivals slowed down, while domestic arrivals saw some increase, gradually easing the overall tight supply situation. Demand side, as copper prices gradually pulled back, downstream enterprises' willingness to stockpile improved slightly, but overall market sentiment remained cautious, with most maintaining a wait-and-see purchase pace. Survey data showed that the copper cathode rod operating rate is expected to pull back to 60.84% this week, down 2.81 percentage points WoW. Considering overall supply-demand performance, the current market exhibits slightly looser supply while end-users maintain only just-in-time procurement, and social inventory is expected to show an inventory buildup trend in the short term.

[SMM Analysis: High Copper Prices Led to Slow Shipments and Sluggish Raw Material Consumption at Secondary Copper Rod Enterprises] According to SMM data, the operating rate of secondary copper rod was 6.84% this week, up 0.08 percentage points WoW and down 15.03 percentage points YoY. Meanwhile, the average price difference between copper cathode rod and secondary copper rod was 1,914 yuan/mt, widening by 549 yuan/mt WoW. In addition, the average discount of secondary copper rod in Jiangxi against copper futures was 1,518 yuan/mt, widening by 773 yuan/mt WoW. Based on SMM's secondary copper rod gross profit model, the average gross profit during the week was 857 yuan/mt, an increase of 477 yuan/mt......

[Recovering Transactions Underpinned the Magnesium Market as Weekly Inventory Continued to Decline] From May 8 to May 14, the weekly production of sampled magnesium plants nationwide was 23,576 mt, with a weekly operating rate of 77.4%, down 1.8% WoW.

Gold and silver market update — May 11, 2026 Key Takeaways The gold/silver ratio measures how many ounces of silver it takes to buy one ounce of gold — as of May 11, 2026, it stands at 54.94, down from 62.05 just one week earlier Silver surged 7.1% to $86.10/oz today while gold barely moved at $4,730 — the catalyst is a US-China 90-day tariff truce that directly reprices silver’s industrial demand outlook (prices per nFusion Solutions, ~3:49 PM ET) According to the Silver Institute, silver has run a supply deficit for six consecutive years, with roughly 762 million troy ounces drawn from above-ground stockpiles since 2021 — the structural case for silver was in place long before this week The gold/silver ratio measures how many ounces of silver it takes to buy one ounce of gold. When it falls, silver is outperforming. Right now it’s falling fast — from 62.05 a week ago to 54.94 today — after silver surged 7.1% to $86.10 on a US-China tariff truce. That kind of compression in under a week is rare. It tends to happen when a catalyst hits a metal that was already primed to move. Silver was primed: according to the Silver Institute, it has run a supply deficit for six consecutive years. What Is the Gold/Silver Ratio — and What Does 54.94 Actually Mean? The gold silver ratio doesn’t tell you whether to buy. It tells you relative value. A ratio of 55 means one ounce of gold currently buys 55 ounces of silver, while at 88 — where it stood in early 2024 — silver was cheap relative to gold. The lower the ratio, the more ground silver has reclaimed. In normal markets, the ratio has historically ranged from roughly 40 to 80. Extremes revert. It hit 125 in March 2020 — a pandemic-panic outlier — before compressing back to the mid-60s by August of that year. At 54.94 today, the ratio is near the low end of its historical range. That’s not a buy signal. It’s context: silver has already closed a lot of ground, which makes the next directional move meaningful. Why Is Silver Outperforming Gold Right Now? Two forces hit silver simultaneously this week. They reinforce each other. The first force is trade: the US and China announced a 90-day tariff truce over the weekend. US tariffs on Chinese goods dropped from 145% to 30%; Chinese tariffs on US goods fell from 125% to 10%. For gold, that news is roughly neutral. Silver, however, gets a direct demand signal. According to the Silver Institute, approximately 60% of silver’s annual consumption is industrial — solar panels, electric vehicle batteries, and semiconductors. Most of that supply chain runs through China. When the tariffs came down, traders immediately repriced silver’s demand outlook. The 7% single-session move is that repricing happening in real time. Underlying that trade catalyst is a second, structural force. According to the Silver Institute, silver has run a supply deficit for six consecutive years — the world consumes more than it mines. The 2026 deficit is projected at 46.3 million ounces, up 15% from 2025. Since 2021, roughly 762 million troy ounces have been drawn from above-ground stockpiles. The trade truce lit the match. Six years of deficits was the fuel. Has a Ratio This Low Ever Predicted a Bigger Silver Move? It has — though the setup matters as much as the level. The clearest recent parallel is 2020, when the pandemic pushed the ratio to 125 in March — an extreme by any historical measure. As the shock faded, silver rallied roughly 45% over the following months while the ratio compressed back to the mid-60s by August. The starting point this time is far less extreme. But the direction and velocity are similar. The fair pushback: a 90-day truce is not a trade deal. If US-China negotiations break down before the deadline, silver’s industrial demand thesis softens and the ratio can re-expand quickly. That’s a real risk. But six years of supply deficits, documented by the Silver Institute, don’t evaporate on a failed negotiation. The structural bid existed before this week. All the truce did was remove a ceiling — it didn’t create the floor. What Does the Ratio Tell Long-Term Precious Metals Holders? Not what to do today — what to understand about where we are. Silver’s dual nature is the point. It’s part monetary metal, part industrial feedstock. When real yields fall, gold tends to lead. As industrial activity picks up, silver tends to overshoot. Right now both conditions are present, which is why silver is moving faster. A ratio of 54.94 means silver has been closing the gap with gold since early 2024, when it sat at 88. Fiat currency systems erode purchasing power gradually, through inflation and monetary expansion. Gold and silver both resist that erosion — but they don’t always move in lockstep. The ratio is the scoreboard. Right now, silver is catching up. That’s not alarming. That’s the system working the way it’s supposed to. Prices as of May 11, 2026, approximately 3:49 PM ET. Source： https://goldsilver.com/industry-news/goldsilver-news/why-the-gold-silver-ratio-is-falling-and-what-it-means/

[Tight Zinc Ingot Supply Within the Week, Spot Premiums Rise]: Spot premiums in Ningbo continued to rise this week, up 55 yuan/mt WoW from the weekly average price. As of this Friday, spot prices against the 2606 contract were quoted at a premium of 50 yuan/mt, with a premium of 60 yuan/mt against Shanghai.

This week, operating rates across sub-sectors of China's aluminum processing industry continued their overall weak trend. The post-Labour Day holiday effect, combined with wild swings in aluminum prices, led to varying degrees of WoW pullback in operating rates across most sectors, with the overall rate recorded at 64.2%. Specifically, aluminum plate/sheet and strip operating rate fell to 72.6%, aluminum foil edged down to 74.7%, aluminum wire and cable recorded 66.6%, primary aluminum alloy rose slightly to 58%, leading secondary aluminum enterprises dropped to 57.0%, and aluminum extrusion operating rate also slipped slightly to 56.1%. Demand side, post-holiday aluminum prices fell by 480 yuan/mt in a single day, causing some traders to incur book losses, with cargo pick-up sentiment generally subdued. Underperforming real estate terminal completions continued to drag on construction extrusions and the air-conditioner foil segment within aluminum foil. PV frame enterprises also reduced their May production schedules, and passenger NEV growth falling short of expectations placed certain constraints on primary aluminum alloy. Overall, the consumption side was gradually showing traditional off-season characteristics. Cost side, high aluminum prices suppressed downstream enterprises' willingness to stockpile, compliant aluminum scrap sources remained tight with prices staying elevated, secondary aluminum industry profits continued to be under pressure, and some enterprises had already fallen into losses. However, aluminum wire and cable export orders continued to climb, with April expected to approach historical highs. Within aluminum extrusion industrial orders, heat sinks and industrial machinery accessories performed relatively well. Within aluminum foil, demand for food packaging foil, pharmaceutical foil, and battery foil remained stable. Automotive aluminum sheets & plates orders also benefited from the YoY and MoM double growth in April passenger NEVs, maintaining a recovery trend. Overall, in the short term, the aluminum processing industry's overall operating rate still faces downward pressure. The demand off-season and cost pressure form a dual suppression, and operating rates across sectors are expected to be under pressure in May. However, strengthening export orders and structural recovery in certain industrial demand segments will provide some bottom support for the industry. Primary aluminum alloy: This week, the primary aluminum alloy operating rate was 58%, showing a slight recovery WoW, but the rebound remained limited. Structurally, aluminum consumption at some enterprises increased, driving the overall operating rate slightly higher. However, most enterprises continued to primarily execute long-term contracts as normal, with overall operations running steadily. Current aluminum prices remained at elevated levels, suppressing downstream enterprises' willingness to stockpile, with most enterprises maintaining low inventory operations. Additionally, passenger NEV growth falling short of expectations also resulted in relatively slow demand growth. Overall, the primary aluminum alloy operating rate is expected to remain at the current level next week. Aluminum plate/sheet and strip: The operating rate of leading aluminum plate/sheet and strip enterprises edged down 0.4 percentage points WoW from pre-holiday levels to 72.6% this week. On the operational front, production lines at leading aluminum plate/sheet and strip enterprises ran normally during the Labour Day holiday with a steady production pace, but initial signs of operational pressure emerged in the industry. Post-holiday, aluminum prices pulled back, with a single-day drop of 480 yuan/mt. Some traders and dealers incurred book losses after purchasing, and sentiment for picking up goods was generally low. By product, domestic end-use demand for can stock packaging remained stable; auto sheets & plates orders benefited from the recovery of passenger NEVs in April with both YoY and MoM growth, still in a recovery trend; 1-series common plates and civilian general aluminum semis saw weak orders due to delayed cargo pick-up for engineering orders and shrinking civilian demand. In the short term, constrained by factors such as wild swings in aluminum prices and pressure on common plate orders, downward pressure on the operating rate of leading aluminum plate/sheet and strip enterprises is gradually increasing in May. Aluminum wire and cable: The operating rate of China's aluminum wire and cable industry registered 66.6% this week, edging down 1 percentage point WoW from pre-holiday levels. Although top-tier enterprises still held some power grid orders, they proactively reduced production loads due to the holiday factor and order losses, resulting in a decline in capacity utilization rate. Currently, domestic power grid end-use demand still dominates consumption, but the concentrated cargo pick-up cycle has passed, providing limited support to the overall industry operating rate. In contrast, export orders for aluminum stranded wire climbed, and Q2 exports are expected to increase significantly this year. April exports are expected to approach or break historical highs, and May exports are expected to increase by 10,000-20,000 mt MoM. Export orders will provide support to industry operations. Aluminum extrusion: The operating rate of China's aluminum extrusion industry was 56.1% this week, down 0.4 percentage points WoW, showing a generally stable but weakening trend. By segment, for architectural extrusion, dragged by domestic real estate terminal completion progress falling short of expectations, engineering orders continued their weak trend this week, and demand growth in the home decoration doors and windows segment was limited, failing to provide effective support, slightly dragging down the overall operating performance of architectural extrusion. For industrial extrusion, downstream tier-one PV module enterprises' May production schedule plans contracted, and PV frame enterprises saw a decline in operating rates. Some Hebei frame enterprises chose to shut down for 5 days during the Labour Day holiday to offset order pullback and ease cost pressure, maintaining a relatively full production schedule after the holiday; some Anhui frame enterprises reported that orders on hand remained generally stable with no significant reduction, resulting in relatively limited drag on operations. Additionally, large Guangdong aluminum extrusion enterprises reported that recent orders for heat sinks, industrial machinery accessories, and other industrial extrusion products performed well, providing support to regional industrial extrusion operations. In the short term, the weakness in architectural extrusion and the structural recovery in industrial extrusion offset each other, and the aluminum extrusion operating rate is expected to show a stable and improving trend. Aluminum foil: This week, the operating rate of leading aluminum foil enterprises fell 0.3 percentage points WoW from pre-holiday levels to 74.7%. Order side, demand for food packaging foil, pharmaceutical foil, and battery foil remained stable, supporting the baseline operating rate. Air-conditioner foil was under pressure, with May orders on hand declining MoM, as demand was dragged down by factors including a sluggish real estate market, tapering of national subsidies, high inventories outside China, and capacity relocation. Both domestic sales and export schedules declined, and weak end-use demand is expected to pull down the overall aluminum foil operating rate. In the short term, demand for packaging foil and battery foil can still support the aluminum foil operating rate at a relatively high level, but the deep weakness in air-conditioner foil will set the stage for an overall pullback in the aluminum foil industry's operating rate in May. Secondary aluminum: This week, the operating rate of leading secondary aluminum enterprises in China fell 0.7 percentage points WoW to 57.0%. During the holiday, sampled major plants maintained normal production, but affected by some downstream enterprises being on holiday and declining orders, enterprises compressed their production pace, and operating levels pulled back slightly. Currently, both demand and raw materials exerted dual pressure on production: on one hand, May gradually entered the traditional consumption off-season, downstream procurement became more cautious, market transaction activity continued to decline, and manufacturers' order performance was poor; on the other hand, finished alloy ingot prices fell more than raw material prices, compliant aluminum scrap sources remained tight with prices fluctuating at highs, industry profits continued to narrow, and some enterprises even fell into losses, with operating rates passively under pressure. After the holiday effect fades next week, the operating rate is expected to recover slightly, but the demand off-season and cost pressure are unlikely to improve significantly in the short term, and the industry's overall operating rate still faces downward expectations. [Data source statement: Data other than public information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.]