SMM News, May 19: Metals market: As of the midday close, domestic base metals mostly fell. SHFE copper dropped 0.14%. SHFE aluminum rose 0.66%. SHFE lead edged up. SHFE zinc fell 0.28%. SHFE tin dropped 0.43%. SHFE nickel edged down. In addition, the most-traded casting aluminum futures rose 0.68%, and the most-traded alumina futures fell 0.69%. The most-traded lithium carbonate futures fell 3.74%. The most-traded silicon metal futures fell 0.3%. The most-traded polysilicon futures fell 0.92%. Ferrous metals all fell. Iron ore dropped 1.24%, rebar fell 0.93%, hot-rolled coil dropped 0.73%, and stainless steel fell 0.71%. Coking coal and coke: the most-traded coking coal contract fell 0.81%, and the most-traded coke contract fell 1.22%. Overseas base metals, as of 11:41, LME metals nearly all declined. LME copper fell 0.57%. LME aluminum edged up 0.04%. LME lead dropped 0.25%. LME zinc fell 0.1%. LME tin dropped 1.14%. LME nickel fell 0.27%. Precious metals, as of 11:41, COMEX gold fell 0.13%, and COMEX silver dropped 0.74%. Domestic precious metals: the most-traded SHFE gold futures rose 0.17%, and the most-traded SHFE silver futures rose 0.22%. In addition, as of the midday close, the most-traded platinum futures rose 0.22%, and the most-traded palladium futures fell 0.31%. As of the midday close, the most-traded Europe containerized freight index contract rose 1.84%, closing at 2,631.5 points. As of 11:41 on May 19, midday futures quotes for selected contracts: Spot and fundamentals Zinc: Today, #0 zinc mainstream transaction prices were concentrated at 24,495-24,675 yuan/mt, Shuangyan mainstream transactions at 24,605-24,775 yuan/mt, and #1 zinc mainstream transactions at 24,425-24,605 yuan/mt. In the morning session, the market quoted a premium of 30-40 yuan/mt against the SMM average price, with no quotes against the futures contract for now... Macro front China: [Preview: The State Council Information Office will hold a press conference to introduce preparations for the 4th China International Supply Chain Expo] The State Council Information Office will hold a press conference at 10:00 AM on May 22, 2026 (Friday). Li Xingqian and Liu Jiannan, Vice Chairs of the China Council for the Promotion of International Trade (CCPIT), will introduce preparations for the 4th China International Supply Chain Expo and answer questions from reporters. (Wallstreetcn) [Fujian: By 2030, the province's optoelectronic industry cluster revenue to exceed 300 billion yuan, accelerating R&D of high-speed optical modules] Recently, the "Fujian Province '15th Five-Year' Optoelectronic Industry Cluster High-Quality Development Action Plan (Draft for Public Comments)" was released for public consultation. It was mentioned that by 2030, the provincial optoelectronic industry cluster would achieve revenue exceeding 300 billion yuan, with the preliminary establishment of an optoelectronic industry cluster featuring a complete chain, a well-developed ecosystem, and international influence. In the optical communication field, targeting scenarios such as AI computing center interconnection and high-speed data center interconnection, the focus would be on developing high-performance optical coherent systems (OCS), linear-drive pluggable optical modules (LPO), near-packaged optics (NPO), co-packaged optics (CPO), Micro LED+CPO multi-channel low-power optical communication, and silicon photonics technology; accelerating R&D and industrialisation of key products and technologies including ≥200G EML, ≥800mW large power lasers, and ≥800G high-speed optical modules. Support would be given to advantageous enterprises to expand into specialty segments such as submarine optical cables and high-performance optical cables, continuously improving and enhancing the optoelectronic industry chain. US dollar: As of 11:41, the US dollar index rose 0.1% to 99.08. According to Fox Business, citing White House officials on Monday, Warsh will be sworn in as Fed Chairman at a ceremony at the White House on Friday, presided over by Trump. The US Senate approved Warsh as Fed Chairman last Wednesday, and the 56-year-old lawyer and financier will take the helm of the US central bank. The US Fed is currently facing intensifying inflationary pressures, which may make the interest rate cuts demanded by Trump difficult to implement. As Trump's nominee for Fed Chairman, Warsh's appointment is expected to bring a fresh start to the relationship between the Trump administration and the US Fed. Over the previous eight years, friction between the White House and the US Fed was constant, compounded by a global pandemic and the fight against high inflation. Warsh will take over leadership from Powell. (Jin10 Data) The sharp rise in US Treasury yields this month may be nearing its peak. Analysts at JPMorgan stated: "We no longer believe the risks are skewed toward higher yields." They said: "Money market pricing reflects a more hawkish policy outcome than our base case, and valuations have corrected." According to CME data, the market largely expects the US Fed to keep rates unchanged, but the probability of a rate hike is also increasing. Long-term bonds appear undervalued. JPMorgan stated: "We believe this bearish repricing presents an opportunity to increase duration." (Jin10 Data) A CICC research report noted that multiple recent US inflation data points exceeded expectations, while the labor market trended toward stability. Bonds experienced a sell-off, and market concerns over inflation continued to intensify. Meanwhile, US-Iran peace negotiations showed no substantive progress, the Strait of Hormuz remained effectively closed, and upside risks to energy prices were difficult to dissipate. In our base case scenario, we expect US PCE inflation to remain above 3.5% for the full year, with core PCE inflation staying above 3%, both significantly higher than the US Fed's 2% policy target. Against this backdrop, the US Fed's policy stance is expected to shift toward a more cautious direction, making further interest rate cuts unlikely within the year (previously, the next rate cut was expected in Q4). After new Chair Warsh takes office, establishing policy credibility will be the top priority, and promptly conveying clear anti-inflation signals to the market is both a necessary duty and an essential move to stabilize expectations. For markets, this means a rising probability of marginal tightening in US dollar liquidity, and assets driven purely by liquidity are likely to remain under pressure. Other currencies: The Reserve Bank of Australia stated in its latest meeting minutes that raising interest rates for the third consecutive meeting would provide it with room to monitor how households and enterprises cope with the impact of the Middle East conflict that has caused fuel prices to surge. The minutes noted: "Although uncertainty remains, financial conditions are likely to tighten somewhat following this decision." According to the minutes, committee members discussed whether to raise rates or hold steady, with eight of the nine-member committee deciding there was a stronger case to raise rates to 4.35%. The minutes showed that the rate hike "would give the committee room to observe how the Middle East conflict develops and how households and enterprises respond." The committee acknowledged that policy actions cannot change the "short-term trajectory" of inflation. Money markets expect the RBA to raise rates at least once more this year, with more than a 50% probability of two additional hikes. After raising rates again two weeks ago, the RBA has fully reversed all of last year's easing measures. (Jin10 Data) Data: Data to be released today include the US ADP employment change for the week ending May 2, the US April pending home sales index MoM, the eurozone March seasonally adjusted trade balance, the UK March three-month ILO unemployment rate, the UK April unemployment rate, the UK April claimant count, and the Canada April CPI MoM. Crude oil: As of 11:41, oil prices in both markets declined, with WTI down 1.56% and Brent down 2.02%. The US extended the Russian seaborne oil sanctions waiver by another 30 days; at the request of Gulf allies, Trump canceled the military strike on Iran originally scheduled for the 19th, and international oil prices dropped sharply in response. (Jin10 Data) On May 18 local time, IEA Executive Director Fatih Birol, while attending the G7 finance ministers' meeting in Paris, France, stated that due to the Middle East conflict, commercial oil inventories are "declining sharply" and can sustain supply for "only a few more weeks."Birol said that the IEA's decision in March to coordinate the release of strategic petroleum reserves by member states could increase daily supply by approximately 2.5 million barrels, but these reserves are "not inexhaustible," and all parties should recognize the urgency of the situation. The latest monthly oil report released by the IEA on the 13th of this month showed that in March and April, global observable petroleum inventories, including offshore crude oil, decreased by 250 million barrels, equivalent to a daily average decrease of 4 million barrels. As the summer demand peak approaches, international oil prices may fluctuate further. (CCTV) In addition, according to Nikkei News, Japanese Prime Minister Takaichi Sanae and South Korean President Lee Jae-myung are expected to agree at a summit on Tuesday to establish a framework for cooperation in crude oil procurement, including the creation of a joint reserve mechanism. Takaichi Sanae will visit South Korea from Tuesday to Wednesday as part of ongoing "shuttle diplomacy" between the two countries. The situation in the Middle East is expected to be one of the key topics of the talks. The joint reserve plan will utilize the "Partnership on Energy and Resource Resilience" (POWERR), an energy framework for cooperation with Southeast Asia announced by Takaichi Sanae in April. POWERR Asia aims to support the development of energy supply systems, particularly in Asian countries with insufficient petroleum reserves. Financial support will be provided through institutions such as the Japan Bank for International Cooperation when enterprises procure crude oil from regions outside the Middle East. Japan and South Korea will not only cooperate on financial support but also jointly provide technical assistance to build petroleum reserve systems. (Jin10 Data) Spot market overview: ► ► ► ► ► ► ► ► ► ► ►

Futures: Overnight, LME lead opened at $1,983.5/mt, with prices moving sideways within the $1,976-1,987/mt range, fluctuating repeatedly around the average price line of $1,981/mt. The tug-of-war between longs and shorts was intense, with no clear unidirectional trend. It finally closed at $1,981/mt, down $3/mt, a decline of 0.15%. Overnight, the most-traded SHFE lead 2026 contract opened higher with a gap at 16,505 yuan/mt. At the beginning of the session, SHFE lead prices briefly fluctuated downward, hitting a low of 16,435 yuan/mt, then fluctuated higher during the session, and pulled back slightly near the end, finally closing at 16,485 yuan/mt, recording a small bearish candlestick, up 10 yuan/mt, a gain of 0.06%. On the macro front: Trump stated that he canceled the military strike plan against Iran originally scheduled for tomorrow (May 19). Waller will be sworn in as Fed Chairman on Friday, with the ceremony presided over by Trump. The US Treasury Secretary announced another 30-day extension of the Russian seaborne oil sanctions waiver. UK Prime Minister Starmer emphasized he would not resign, saying he still plans to participate in the next UK general election. CSRC: Push forward the deepening reform of the Beijing Stock Exchange with greater efforts. NBS: From January to April, the national above-scale industrial value-added output was up 5.6% YoY. Spot fundamentals: Yesterday, SHFE lead remained in the doldrums, with the operating center shifting further down WoW. Suppliers showed low enthusiasm for shipments, with a few quoting at premiums. Secondary lead side, smelters shipped along with the market, but quotes remained relatively firm, with secondary refined lead quoted at parity with SMM #1 lead on an ex-factory basis, and a few quoted at premiums. Some downstream enterprises intended to buy the dip, but bargaining was frequent, and they preferred cargoes self-picked up from production site. Transactions in the Jiangsu, Zhejiang, Shanghai market were scarce. Inventory: On May 18, LME lead inventory decreased by 750 mt to 264,250 mt; SMM lead ingot social inventory across five regions pulled back MoM. Lead price forecast for today: Last week's decline in lead prices triggered panic selling by recyclers, and the pressure from raw material inventory shortages at secondary lead smelters was alleviated on a phased basis. This week, production cuts and shutdowns at smelters caused by tight raw material supply improved somewhat, but the overall industry operating rate remained at a low level. Combined with declining imported lead inflows, the supply side showed marginal contraction. The demand side continued its weak trend, and the supply-demand double-weakness pattern persisted. SHFE lead prices are expected to maintain a fluctuating trend in the short term.

[SMM Zinc Morning Meeting Minutes: LME Zinc Decline Pauses, Expected to Maintain Fluctuating Trend in the Short Term]: Overnight, LME zinc opened at $3,531/mt, briefly pulled back at the beginning of the session to a low of $3,495.5/mt, then rebounded from lows, touching a high of $3,554/mt during the session, before fluctuating downward toward the daily average line...

[SMM Aluminum Express News] Chinalco International has signed a supplementary EPC contract with PT Borneo Alumina Indonesia for a 1 million tons per year metallurgical-grade alumina project in Indonesia. The project is split into two sub-projects: 1. The alumina plant was completed on February 11, 2026. 2. The tailings system will run from March 1 to June 30, 2027. Successful implementation is expected to positively impact the company’s performance, though it faces various risks that will be actively managed.

[SMM Morning Meeting Summary: The Market Bet on a US Fed Rate Hike, and LME Zinc Came Under Pressure] Overnight, LME zinc opened at $3,132.5/mt. In early trading, LME zinc briefly rose to a high of $3,136/mt before bears increased their positions, sending LME zinc fluctuating downward all the way. It touched a low of $3,125/mt in the night session, after which its center rebounded, and it finally closed down at $3,073.5/mt, down $59/mt, or 1.88. Trading volume increased to 18,995 lots, and open interest rose by 607 lots to 209,000 lots.

Futures: Overnight, LME lead opened at $1,911/mt. During the 9:00–12:00 session, LME lead fluctuated rangebound within $1,906–1,915/mt, overall holding up well and touching a high of $1,915.5/mt. After 12:00, LME lead shifted into a unilateral downtrend, plunging to a low of $1,872.5/mt. In the night session, LME lead bottomed out and rebounded, fluctuating and repairing to the $1,895–1,898/mt range near the close, and finally closed at $1,897/mt, down $16/mt, or 0.84%. Overnight, the most-traded SHFE lead 2605 contract opened at a low of 16,300 yuan/mt. In early trading, SHFE lead fluctuated upward and touched a high of 16,480 yuan/mt, after which SHFE lead dropped back slightly and fluctuated rangebound within 16,395–16,460 yuan/mt. It finally closed at 16,435 yuan/mt, posting a small bullish candlestick, up 20 yuan/mt, or 0.12%. On the macro front: 1. The market began betting that the US Fed will raise interest rates. 2. Trump: He was completely unaware of Israel's attack on Iran's South Pars natural gas field. 3. US Treasury Secretary Bessent: Sanctions on Iran's seaborne oil may be lifted in the coming days, and Iranian oil will be used to push for lower prices. 4. Iran: Retaliatory actions over attacks on Iran's energy infrastructure have not yet ended. 5. Joint statement by six countries: They are prepared to take measures to safeguard security in the Strait of Hormuz. 6. The US defense secretary confirmed that he has requested White House approval for a $200 billion appropriation application. 7. Ministry of Finance: In January-February 2026, securities transaction stamp tax reached 4.99 billion yuan, up 1.1 times YoY. 8. The central bank: It will firmly maintain the stable operation of financial markets including equities, bonds, and foreign exchange. 9. Chinese airlines collectively raised fuel surcharges, with the maximum doubling. Spot fundamentals: SHFE lead reversed and pulled back. Suppliers were only moderately willing to make shipments, with few spot order quotations. Meanwhile, quotations for cargoes self-picked up from primary lead smelters remained stable, with mainstream producing areas quoted at premiums of 0–80 yuan/mt ex-works against the SMM #1 lead average price. Secondary lead smelters shipped in line with the market, but spot order quotations were limited. Some smelters held prices firm on shipments, with secondary refined lead quoted around parity with the SMM #1 lead average price ex-works. In addition, downstream enterprises mainly made just-in-time procurement. As it was approaching late month, some enterprises gradually picked up goods under current-month long-term contracts, and spot market transactions were mediocre. Inventory: As of March 19, LME lead inventory decreased by 125 mt, or 0.04%, to 284,250 mt; SMM social inventory of lead ingot across five regions decreased slightly. Today's Lead Price Forecast: Yesterday, SHFE lead pulled back. Primary lead suppliers were only moderately willing to make shipments, and smelter quotations remained stable. Secondary lead smelters, constrained by costs and profits, held prices firm on shipments, and overall transactions were poor. Downstream battery plants maintained full production, mainly purchasing for just-in-time needs and long-term contracts, while spot order transactions were mediocre. SMM expects lead prices to remain in the doldrums with fluctuations in the short term.

Tensions in the Middle East have escalated again recently, as the conflict between Israel and Iran continues to intensify, drawing renewed global attention to energy transportation security in the Gulf region.Given the high level of uncertainty surrounding the development of the situation, market risks are clearly skewed to the upside. This article provides a brief analysis of how the current conflict may affect the copper market going forward.

Geopolitical conflict in the Middle East led to a blockade of the Strait of Hormuz, cutting off the global sulphur supply chain (China’s import dependence exceeds 50%, with the Middle East accounting for 56%). Sulphur prices surged to 4,395 yuan/mt, directly pushing up phosphate fertiliser costs. Rigid demand from spring ploughing provided support, but China’s policies to ensure supply and stabilise prices curbed phosphate fertiliser gains。

SMM March 2nd Report: On February 28, 2026, the US and Israel launched a large-scale military strike on Iran, which promptly announced the closure of the Strait of Hormuz. The geopolitical situation in the Middle East escalated sharply and fell into sustained turmoil. As a critical "chokepoint" for global energy transportation, the Strait of Hormuz handles about 30% of global seaborne oil trade. Its blockade directly led to a severe physical disruption in the global energy supply chain, causing international oil prices to surge dramatically, with shipping costs and insurance fees skyrocketing, significantly increasing uncertainty in the energy market. As a key raw material for prebaked anodes used in aluminum production, petcoke is expected to enter a state of supply tightens, cost surges, and quality disturbances under the influence of the geopolitical situation. This change will directly impact the stability of China's petcoke import system, while also substantially raising domestic prebaked anode production costs, creating a chain reaction in the downstream aluminum industry. In terms of the overall distribution of import sources, in 2025, regions and countries with high petcoke import dependency in China showed a tiered characteristic. The first tier, centered around the US and Russia, saw the US accounting for 31%, making it the largest source of petcoke imports for China; Russia followed closely with 17%, together contributing nearly half of the total imports. The second tier was the Middle East, collectively accounting for 15%, serving as an important supplementary segment for China's petcoke imports. Other import sources were more dispersed, with Canada and Brazil each at 5%, and Argentina, Colombia, and Taiwan, China, each at 4%. This diversification of smaller sources enriched China's petcoke import supply system, but the influence of individual entities remained relatively limited. Notably, as a key supplementary sector for China's petcoke imports, the highly concentrated internal supply structure of the Middle East became the core reason for the impact of the deteriorating geopolitical situation on China's import market. In detail, the supply landscape of the Middle East exhibited a "dominance by one, supplemented by a few" feature: Saudi Arabia, with a 64% share, held an absolute dominant position, being the core exporter of petcoke from the Middle East to China; Oman ranked second with 22%; Kuwait accounted for 12%, with other regions providing only minor supplements. In terms of imported product specifications, petcoke from the Middle East mainly consisted of medium- to high-sulfur varieties, with different source countries focusing on specific types: petcoke from Saudi Arabia primarily included high-sulfur sponge coke and high-sulfur shot coke, from Oman mainly shot coke, and from Kuwait mainly medium-sulfur sponge coke. These types of petcoke are primarily used for blending in the production of prebaked anodes, serving as a crucial raw material supplement for the domestic prebaked anode industry. The blockade of the Strait of Hormuz has a multi-dimensional impact on the petroleum coke market: On one hand, the blockade leads to a complete halt in the export of Middle Eastern petroleum coke, significantly reducing the international circulation of petroleum coke. The arrival cycle for petroleum coke imported by China from the Middle East is notably extended, directly exacerbating the tightness of domestic import supply. On the other hand, some refineries in the region are affected by military conflicts, limiting their production activities and further contracting the overall supply of petroleum coke, creating a dual squeeze on the supply side. Meanwhile, the surge in international oil prices drives up the production costs of petroleum coke from refinery delayed coking units, providing a solid bottom support for petroleum coke prices. Coupled with the sharp rise in international shipping freight and war risk insurance premiums, these factors collectively push petroleum coke prices into a more likely to rise than fall trajectory. In summary, this geopolitical conflict in the Middle East is a significant external shock to the 2026 petroleum coke-prebaked anode-aluminum industry chain. The triple pressures of supply tightening, cost surges, and quality disruptions will continue to be passed down: Petroleum coke prices will keep rising, pushing up the production costs of prebaked anodes, which in turn will elevate the production costs of aluminum. If the blockade of the Strait of Hormuz persists, the entire industry chain will gradually enter a phase characterized by high costs, low inventory, and strong fluctuations. Ensuring supply chain security and controlling enterprise costs will become the core challenges facing the industry.

[SMM Analysis: Key Anchor in Great Power Rivalry: The U.S. "Project Vault" and the Changing Resource Landscape in Latin America] Amid the current accelerated reshaping of the global resource competition landscape, China's copper concentrate import pattern is undergoing a profound structural transformation. The latest trade data from 2025 clearly outlines this trend: China is significantly enhancing its capacity to acquire copper concentrate resources from neighboring countries.