The global stainless steel market navigated a series of sharp sentiment. The opening weeks saw Indonesia's mill closures and price hikes push the cost narrative to its highest point of the year, before a combination of easing geopolitical tensions triggered the first price reduction since December 2025. The month's defining characteristic was similar to April's. What differentiated May was the sharply higher amplitude of both the policy signals and the emotional swings that accompanied them.

[SMM Morning Meeting Minutes: SHFE tin swung wildly throughout the week at 394,000-411,000 yuan/mt; amid a supply-demand stalemate, it is expected to continue consolidating at highs.]

[Geopolitical Risks Dominate Market, SHFE and LME Both Move Lower] At the start of the week, the situation in the Middle East remained volatile, and LME zinc fluctuated; subsequently, the US dollar index declined, and LME zinc rose; however, as market expectations for the US Fed to maintain higher interest rates for longer intensified and the US struck Iran, the center of LME zinc shifted lower; then, Trump announced the resumption of “heavy strikes” against Iran, the US-Iran ceasefire agreement was disrupted, and LME zinc quickly moved lower...

[SMM Magnesium Weekly Review: Intensified Supply-Demand Tug-of-War, Magnesium Ingot Market Remains in Stalemate and Consolidation This Week] This week, the overall market for dolomite and magnesium products remained stable, with the market showing a supply-strong, demand-weak pattern. Dolomite quarries in Wutai, Shanxi, were shut down due to environmental protection measures, leading to localized tight supply of high-grade dolomite. However, national inventory remained ample, and downstream users purchased as needed, keeping prices stable. Magnesium ingot supply in major production areas was abundant, while downstream buyers only made just-in-time procurement, resulting in a stagnant market. Export orders were sluggish, with a strong wait-and-see sentiment. Magnesium powder followed the raw material trend, and the industry was in the demand off-season, with mediocre domestic and foreign trade transactions. Magnesium alloy production was steady, but enterprise orders diverged. Some producers saw rising inventory, an increase in low-priced supply, and a widening price spread. The supply-demand tug-of-war across the industry chain intensified, and short-term price fluctuations for various product categories remained limited, with the market expected to continue running steadily.

[Geopolitical News Disruptions Continue, SHFE and LME Maintain Fluctuating Trend] At the beginning of the week, mixed news on Middle East peace talks rekindled short-term risk-averse sentiment in the market. Sporadic conflicts persisted, the tariff outlook remained unclear, and LME zinc continued to rise......

[SMM Magnesium Weekly Review: Limited Support from Raw Materials, Magnesium Products Overall in the Doldrums This Week] This week, prices of various products across the industry chain followed magnesium ingots in a weak consolidation trend. Dolomite supplies were replenished adequately across regions; although raw materials tightened in some areas, overall inventory remained ample, and ex-factory prices stayed stable. Magnesium ingot prices in major producing areas first declined then stabilized during the week, with weekly quotes lowered by 250 yuan/mt. Low-priced factories held back from selling, supporting prices to stop falling, while downstream buyers restocked on an as-needed basis. FOB quotes at Tianjin port saw limited fluctuations, and a wait-and-see approach outside China led to sluggish transactions. Magnesium powder stabilized after declining alongside raw materials, with both domestic and external demand in the off-season, limited to just-in-time procurement. Magnesium alloy prices weakened, dragged down by raw materials. Demand divergence was evident, with moderate automotive orders but weak two-wheeler demand. The market faced oversupply, and enterprises lowered processing fees to boost shipments.

SMM June 2 News: Metals market: Overnight, metals generally rose across both domestic and overseas markets, with SHFE lead being the only decliner, down about 0.09%. LME tin and SHFE tin both rose over 2%, with LME tin up 2.63% and SHFE tin up 2.46%. LME copper, LME aluminum, LME zinc, LME nickel, SHFE copper, and SHFE nickel all rose over 1% (LME copper +1.97%, LME aluminum +1.59%, LME zinc +1.09%, LME nickel +1.42%, SHFE copper +1.12%, SHFE nickel +1.26%). The remaining metals gained less than 1%, with the alumina front-month contract down 0.69% and the foundry aluminum front-month contract up 0.41%. Overnight, ferrous metals collectively rose, with stainless steel leading the gains at +1.52%, and iron ore up 0.51%. Hot-rolled coil and rebar saw minor fluctuations. In coking coal and coke, coking coal rose 2.19% and coke rose 0.84%. Precious metals: Overnight, COMEX gold fell 1.7% and COMEX silver dropped 0.96%. In China, SHFE gold fell 1.28% and SHFE silver declined 0.73%. As of 6:43 AM on June 2, overnight closing prices: Macro front China: [NDRC, National Energy Administration and other departments issued the Notice on Printing and Distributing the Guidelines for Accounting of Non-Fossil Energy Power Consumption (Trial)] On June 1, the NDRC, National Energy Administration and other departments issued the Notice on Printing and Distributing the Guidelines for Accounting of Non-Fossil Energy Power Consumption (Trial). It mentioned that the development and reform commissions, energy bureaus, ecological environment departments, statistics bureaus, and data management departments of all provinces, autonomous regions, municipalities directly under the central government, and the Xinjiang Production and Construction Corps, as well as State Grid Corporation of China, China Southern Power Grid Co., Ltd., Inner Mongolia Power (Group) Co., Ltd., relevant power generation enterprises, Beijing and Guangzhou Power Exchange Centers, China Renewable Energy Engineering Institute, and China Electricity Council: To implement the major decisions and plans of the CPC Central Committee and the State Council on carbon peaking and carbon neutrality, and to promote the improvement of the carbon emission statistical accounting system, we have formulated the Guidelines for Accounting of Non-Fossil Energy Power Consumption (Trial), which are hereby issued to you. Please carry out relevant work accordingly. These guidelines shall be implemented on a trial basis from the date of issuance and shall be used for accounting of non-fossil energy power consumption for 2026 and subsequent years. If there are any issues or suggestions during the trial period, please provide timely feedback to the NDRC and the National Energy Administration. Shanghai Mayor Gong Zheng chaired a standing meeting of the municipal government on June 1. The meeting approved in principle the Shanghai Plan for Accelerating New-Type Industrialisation and Building a Modern Industrial System under the 15th Five-Year Plan, and noted the need to develop and strengthen a number of emerging pillar industries and make forward-looking arrangements for future industries. The meeting emphasized the need to adhere to innovation-driven development and forge competitive advantages in industry, accelerate breakthroughs in new technologies, R&D and application of new products, and cultivation and opening of new scenarios, support the efficient transformation and industrialisation of scientific and technological achievements, and turn more "flowers of technology" into "fruits of industry." The CPC Chengdu Municipal Committee and the Chengdu Municipal People's Government issued the Opinions on Accelerating the Building of a National Advanced Manufacturing Base. The opinions proposed forward-looking deployment of future industries, accelerating the layout of new tracks including nuclear fusion energy, brain-computer interfaces, quantum technology, intelligent sensing, embodied AI, sixth-generation mobile communications, biomanufacturing, cell and gene therapy, flying cars, and frontier new materials. US dollar: As of the overnight close, the US dollar index rose 0.26% to 99.19. Data from the Institute for Supply Management (ISM) showed that, driven by growth in new orders and production, the US May ISM Manufacturing Index rose to 54, hitting a four-year high. US manufacturing has sent expansion signals for five consecutive months, indicating that manufacturing is regaining vitality amid a surge in artificial intelligence (AI) investment, more favourable tax policy, and reduced trade policy uncertainty. Persistent cost pressure may mean US consumers will face higher prices, as the US Fed's preferred inflation gauge rose 3.8% YoY in April. (Wallstreetcn) According to CME "FedWatch": The probability of the US Fed keeping rates unchanged through June was 98.4%, with a 1.6% probability of a cumulative 25-basis-point interest rate cut. The probability of the US Fed keeping rates unchanged through July was 90.2%, with an 8.4% probability of a cumulative 25-basis-point rate hike and a 1.4% probability of a cumulative 25-basis-point interest rate cut. (Jin10 Data APP) Ozan Tarman, Vice Chairman of Global Macro at Deutsche Bank, said the US Fed's next move will not be a rate hike. Tarman said the newly appointed Fed Chairman Kevin Warsh will try to "convince his colleagues to stay put." "Everyone is excitedly talking about how he might completely change his stance and even convince Trump that a significant rate hike is possible this year — that seems a bit excessive to me." "The best approach is to wait and see, and let the political dynamics in the US, the Strait of Hormuz, and even the UK play out on their own," Tarman said. Tarman noted that a European Central Bank rate hike in June appears to be a foregone conclusion, but whether Lagarde will raise rates in September will depend on the progress of Middle East peace negotiations. (Bloomberg) Torsten Slok, Chief Economist at Apollo Global Management Inc., said that AI infrastructure construction will push up inflation in the early stages, which will prevent new Fed Chairman Kevin Warsh from cutting interest rates as quickly as he had previously hinted. "We may have to wait a while longer, because in the early stages, the AI boom will certainly push up inflation," he said. From the perspective of semiconductor prices, energy prices, and labour costs, the risk of price pressure is "very clear." (Bloomberg TV) Macro: Today, the US April JOLTs job openings, Switzerland April trade balance, UK April central bank mortgage approvals, Eurozone May CPI annual rate preliminary reading, and Eurozone May CPI monthly rate preliminary reading will be released. In addition, 2026 FOMC voter and Minneapolis Fed President Kashkari will deliver a speech, 2026 FOMC voter and Cleveland Fed President Hammack will speak on monetary policy, and Bank of England Governor Bailey will attend a House of Lords hearing. Crude oil: As of the overnight close, oil prices on both markets rose, with WTI up 5.85% and Brent up 4.53%, driven by the breakdown of US-Iran negotiations and blockade risks. Earlier, Iranian media reported that Iran would suspend communication with the US through intermediaries and planned to completely block the Strait of Hormuz, sending crude oil prices sharply higher. This morning, US President Trump said he expected to reach an agreement with Iran "within the next week," extending the current ceasefire arrangement and reopening the Strait of Hormuz. Trump said the negotiations were progressing well and expressed optimism about reaching a deal. (CCTV) (Wallstreetcn APP) According to US sources, the Trump administration continued to release large volumes from the US Strategic Petroleum Reserve to ease the energy supply crisis triggered by the US-Iran conflict and the closure of the Strait of Hormuz. Data released by the US Department of Energy (DOE) showed that the Strategic Petroleum Reserve decreased by 8 million barrels of crude oil last week, following declines of 9.1 million barrels and a record 9.9 million barrels in the two preceding weeks. As of now, the Strategic Petroleum Reserve inventory has fallen to 357.1 million barrels, the lowest level since January 2024. (Wallstreetcn) Three sources said OPEC+ producers will most likely agree at their meeting on Sunday to further increase crude oil production quotas in July. However, the Iran war has so far caused some countries to fall short of their previous production increase targets. A further increase in production quotas would indicate that the organisation is gradually resuming normal operations, despite disruptions caused by the blockade of the Strait of Hormuz and the unexpected withdrawal of the UAE in May. According to sources, OPEC+ is expected to increase production by approximately 188,000 barrels per day in July, the same as the increase agreed for June, which had been reduced from 206,000 barrels per day after taking into account the UAE's withdrawal. (Jin10 Data APP)

In May, European APT prices held firm above $3,000/mtu amid tight supply, while scrap tungsten dropped sharply. China's tungsten prices rebounded late in the month as sentiment improved, though downstream demand remained soft. A cautious bottoming trend emerged.

[Frequent Market Disruptions Drive SHFE and LME Prices Higher] At the beginning of the week, the tug-of-war between longs and shorts intensified. On the macro front, the Middle East situation remained unresolved and market uncertainty persisted, but the US dollar index retreated from highs. Combined with persistently low zinc ingot inventory outside China, LME zinc maintained a fluctuating trend......

[SMM Magnesium Weekly Review: Cost Support vs. Weak Demand — Magnesium Prices Rose First Then Fell] Magnesium prices rose first then fell this week. At the beginning of the week, prices surged driven by rising coal costs, but later pulled back due to downstream resistance to high prices and sluggish transactions. Dolomite prices remained stable, while magnesium powder and magnesium alloys fluctuated in line with magnesium ingot prices. Export inquiries recovered but actual transactions remained low. In the short term, the market is expected to continue in the doldrums with range-bound fluctuations.