The Trump administration was ambitious in its energy policies. US Treasury Secretary Bentsen once publicly introduced his "3-3-3 Plan," which aimed to increase the real GDP growth rate to 3%, reduce the annual budget deficit from 7% of GDP to 3%, and boost US domestic oil production by 3 million barrels per day (bpd). However, economists and energy experts have warned that Bentsen's goals have little basis in reality. Despite the Trump administration's policies favoring fossil fuels, US oil production is likely to remain flat or decline, as low oil prices make it unprofitable for oil companies. Commodity experts at Standard Chartered Bank predict that US crude oil supply may decline by 158,000 bpd in 2025 and by 183,000 bpd in 2026, ending the growth momentum of the past four years under the Biden administration. Previously, the Federal Reserve Bank of Dallas noted in a survey that the breakeven point for US shale oil producers is a WTI crude oil price of $65 per barrel. Over the past month, WTI prices have mostly remained below this breakeven point, partly due to the OPEC+ alliance's decision to increase production. What do the data reveal? Standard Chartered Bank analyzed four reasons for its pessimism about US oil production growth from four data dimensions. First, according to the revised monthly data from the US Energy Information Administration (EIA), US crude oil production reached a record high of 13.488 million bpd in March. However, the average daily increase over these three months was only 30,000 bpd, compared to a growth of 270,000 bpd in 2024. The EIA, which is usually seen as optimistic about production growth, also predicts that US crude oil production will increase slightly from 13.2 million bpd in 2024 to 14 million bpd in 2027, an increase that is only about a quarter of what Bentsen promised. Secondly, according to data from energy company Baker Hughes, the number of US oil rigs has decreased by 41 this year and by 50 on a YoY basis. Part of the decline is due to improvements in drilling technology and processes, but Standard Chartered warns that this downward trend has persisted for 30 months. In addition, the number of frac crews has also plummeted to 186, a significant decline from the 300 crews during the peak of the COVID-19 pandemic. Finally, the number of drilled but uncompleted (DUC) wells has also halved from the pandemic peak in June 2020, reaching a low of 4,494 in February this year before stabilizing. The number of frac crews can serve as a supplementary indicator for measuring US shale oil and gas production, while the DUC well count may be a leading indicator of any shifts in completion activity. A decline in the DUC well count suggests that drilling activity is weakening. From a data perspective, it is evident that US energy companies have significantly reduced their investments in drilling to preserve profits and remain accountable to shareholders. The immediate impact of this decision may be a stabilization or decline in US energy production, thereby exerting upward pressure on oil prices.

Francisco Blanch, head of global commodities research at Bank of America, said on Monday that OPEC+'s plan to increase oil production is part of a Saudi strategy that will lead to a long but mild price war aimed at regaining market share. On May 31, OPEC+ member countries agreed to increase oil supply by 411,000 barrels per day (bpd) in July, marking the third consecutive significant production increase by the alliance. These increases are reversing years of supply constraints aimed at maintaining higher oil prices. In response, Blanch said in an interview with the media that this is not a short and sharp price war; instead, it will be a long and mild one. He pointed out that this reflects Saudi Arabia's intention to seize market share from US shale oil producers, who are currently in relatively good shape but face higher production costs. Blanch also said that Saudi Arabia is also striving to regain market share from other OPEC+ member countries. "They (the Saudis) have been alone in this price support measure for more than three years, which has allowed competitors to increase their production. Now they are no longer doing so," Blanch said. Blanch noted that this strategic shift has begun to yield results. According to the latest US oil drilling data from Baker Hughes, the number of active oil and natural gas rigs in the US has fallen to its lowest point in about four years. Similarly, analysts including Martijn Rats from Morgan Stanley pointed out in a report on June 2 that OPEC+ is likely to continue increasing production over the next three months, a move that will push oil prices down. This means that by October this year, the 2.2 million bpd of voluntary production cuts decided by OPEC+ in 2023 will have fully rebounded, completely eliminating the cuts made at that time.

As OPEC+ officially announced the continuation of its above-quota production increase in July, investors in the energy industry began to focus on the ultimate question: When will this round of production increases come to an end? What will be the subsequent impacts? As background, to maintain oil price stability, eight OPEC+ countries led by Saudi Arabia decided in 2023 to voluntarily cut production by 2.2 million barrels per day (bpd). After discussions, these countries began to lift restrictions at a rate of 137,000 bpd starting from April this year . As the "leading nations" within the organization grew increasingly dissatisfied with members such as Kazakhstan and Iraq for producing above their quotas, the oil production increase policy rapidly entered a "weaponized" state. Including the latest announced production increase in July, the eight OPEC+ countries will continue to lift production restrictions for the third consecutive month at a rate of 411,000 bpd . What will be the next move? Analysts including Martijn Rats from Morgan Stanley pointed out in a report on June 2 that OPEC+ is likely to continue increasing production over the next three months , a move that will push oil prices downward. This means that by October this year, the 2.2 million bpd production cuts will be fully reversed. Morgan Stanley analysts stated in the report: "The latest announcement shows that there is little sign of a slowdown in the pace of production increase quotas. The quota increase may create room for Saudi Arabia to increase production, with Kuwait and Algeria also benefiting to some extent." However, it will be difficult for the remaining members of the "Group of Eight" to achieve the same magnitude of production growth due to the quota increase. Morgan Stanley pointed out that OPEC+ only achieved about two-thirds of its planned production increase in May, so this gap will likely persist in June and July. Analysts also indicated that as refineries complete maintenance, crude oil demand will enter a seasonal peak (usually reaching its peak in May), coupled with healthy refining margins stimulating crude oil processing rates, all of which will provide short-term support for oil prices. However, as the impact of US tariff policies gradually emerges and non-OPEC supply accelerates, this support may fade by the end of the year . The report expects that the average price of Brent crude oil will be $57.5 per barrel in the last two quarters of this year, and will further decline to $55 per barrel in the first half of next year. Meanwhile, Goldman Sachs, which also believes that crude oil demand will slow down by the end of the year, expects in its Sunday report that the pace of OPEC+ production increases will only continue until August. The investment bank had previously expected OPEC+ to pause production increases after July. Daan Struyven and other Goldman Sachs analysts pointed out that the current fundamentals of spot crude oil are relatively tight, and factors such as global economic activity data exceeding expectations and seasonal summer demand support continued production increases. Therefore, by July 6, when the August production level is decided, the extent of the demand slowdown at that time may not be enough to halt the pace of production increases. Goldman Sachs now believes that in the face of production increases from non-OPEC+ oil-producing countries and the impact of the global economic slowdown in Q3 this year, OPEC+ will maintain existing capacity quotas unchanged from September , although "the risk of continued production increases still exists." Analysts maintain their forecast for an average Brent crude oil price of $60 per barrel for the remainder of this year, with a further decline to $56 in 2026. Why are oil prices still rising today? As of press time, following OPEC+'s official announcement of July production increase targets last Saturday, Brent crude oil futures jumped nearly 3% on Monday. (Source: TradingView) The core reason for the oil price increase is the drone strike launched by Ukraine against a Russian airbase . Additionally, the market had already priced in the production increase news last week, which also contributed to Monday's price increase. Stephen Innes, managing partner at SPI Asset Management, interpreted the situation, saying, "Crude oil trading seems to have suddenly realized the existence of geopolitical risks... Russia is being strategically provoked, and the market should prepare for strong retaliation." Innes also stated that OPEC+, which once had the core mission of defending oil prices, has now shifted to a production-first strategy—weaponizing crude oil to punish quota violators, squeezing US shale oil producers, and currying favor with Washington, all "like dancing on the edge of a fiscal cliff." He pointed out, "If Saudi Arabia is playing the long game, they are betting that the current oil price decline will be the cost of future market control."

SMM May 16 News: Metal Market: As of the midday close, domestic base metals fell across the board. SHFE zinc dropped 0.97%, SHFE aluminum fell 0.54%. SHFE lead declined 0.62%, SHFE copper edged down slightly, and SHFE tin fell 0.2%. SHFE nickel dropped 0.24%. In addition, alumina fell 2.94%, lithium carbonate dropped 2.88%, silicon metal fell 2.77%, and polysilicon dropped 3.45%. The ferrous metals series all fell, with iron ore dropping 0.95% and stainless steel declining 0.27%. Rebar and HRC both fell 0.77%. In the coking coal and coke sector: coking coal fell 3.05%, and coke dropped 1.73%. In the overseas metal market, as of 11:42 a.m., LME metals showed mixed performance. LME copper and LME tin edged up slightly, while LME aluminum edged down slightly. LME tin edged up slightly, LME lead fell 0.6%, LME zinc dropped 0.28%, and LME nickel rose 0.29%. In the precious metals sector, as of 11:42 a.m., COMEX gold fell 0.36%, and COMEX silver dropped 0.32%. Domestically, SHFE gold rose 0.75%, and SHFE silver increased 0.72%. As of the midday close, the most-traded contract for the European Containerized Freight Index fell 5.65%, closing at 1,697.9 points. As of 11:42 a.m. on May 16, the midday futures market movements for some contracts were as follows: 》SMM Metal Spot Prices on May 16 Spot and Fundamentals Iron Ore: This week, the imported iron ore market surged significantly before pulling back slightly. On Monday, the "Joint Statement of the China-U.S. Geneva Economic and Trade Talks" was released, with both sides agreeing to significantly reduce bilateral tariff levels, each retaining a 10% tariff. Since February, market sentiment regarding tariff wars had improved significantly, stimulating a sharp rise in iron ore futures. Subsequently, an accident occurred at a Peruvian iron ore company's port facility, requiring 4-5 months of repairs, raising market concerns about future supply reductions and pushing iron ore prices to highs again. However, ... 》Click for details Macro Front Domestic: [Announcement] The State Council Information Office will hold a press conference with Chinese and foreign journalists titled "Strivers on the New Journey" at 3:00 p.m. on Tuesday, May 20, 2025. Representatives from the civil affairs system will meet and exchange views with Chinese and foreign journalists on the theme of "Fulfilling the Mission of Civil Affairs and Enhancing People's Well-being." The People's Bank of China conducted 106.5 billion yuan in 7-day reverse repo operations today, with an operating interest rate of 1.40%, unchanged from the previous rate. As 77 billion yuan in 7-day reverse repos matured today, a net injection of 29.5 billion yuan was achieved. [Export-Import Bank of China: Medium and Long-Term Manufacturing Loans Exceeded 180 Billion Yuan from January to April] Data released by the Export-Import Bank of China today showed that from January to April, the bank disbursed over 180 billion yuan in medium and long-term manufacturing loans. As of the end of April, the outstanding balance of medium and long-term manufacturing loans was 1.8 trillion yuan, with a focus on supporting the export of manufacturing products such as ships and construction machinery. The bank also actively met the full-cycle financial needs of technology-based enterprises, fully supporting the construction of a modern industrial system. [Cui Dongshu from CPCA: China's power battery installations reached 54.1 GWh in April, up 52.8% YoY] Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), released an analysis of the lithium battery market for new energy vehicles (NEVs) in April. In April, China's power battery installations reached 54.1 GWh, down 4.3% MoM and up 52.8% YoY. Among them, ternary battery installations were 9.3 GWh, accounting for 17.2% of total installations, down 7.0% MoM and 6.3% YoY. LFP battery installations were 44.8 GWh, accounting for 82.8% of total installations, down 3.8% MoM and up 75.9% YoY. From January to April, China's cumulative power battery installations reached 184.3 GWh, up 52.8% YoY. Among them, cumulative ternary battery installations were 34.3 GWh, accounting for 18.6% of total installations, down 15.9% YoY. Cumulative LFP battery installations were 150.0 GWh, accounting for 81.4% of total installations, up 88.0% YoY. (Cailian Press) ► On May 16, the central parity rate of the RMB exchange rate in the inter-bank foreign exchange market was 7.1938 RMB per US dollar. US dollar: As of 11:42, the US dollar index extended its decline from the previous trading day, falling by 0.16% to 100.65. Data released by the US Department of Labor showed that the US Producer Price Index (PPI) for April rose 2.4% YoY, lower than expected and the previous reading, marking the third consecutive month of slowing growth and the lowest since September last year. The PPI fell 0.5% MoM in April, the largest decline in five years. The continued cooling of the US PPI largely reflects a decline in corporate profit margins, indicating that US companies are absorbing some of the impact of tariff increases and have not yet passed them on to consumers. In addition, US retail sales growth slowed sharply in April as the boost from households rushing to buy cars before tariff implementation faded, while US consumers cut spending in other areas amid uncertainty about the economic outlook. US Fed Governor Barr said the economy was on a solid footing, but trade disputes were casting a shadow over the outlook. Macro: Today, data to be released include China's total electricity consumption for April (monthly), the preliminary monthly rate of US building permits for April, the preliminary annualized total of US building permits for April, the monthly rate of the US import price index for April, the annual rate of the US import price index for April, the annualized total of US housing starts for April, the preliminary May University of Michigan consumer sentiment index for the US, the Eurozone's seasonally adjusted trade balance for March, the preliminary QoQ seasonally adjusted real GDP growth rate for Japan in Q1, the preliminary QoQ seasonally adjusted nominal GDP growth rate for Japan in Q1, the preliminary QoQ seasonally adjusted annualized real GDP growth rate for Japan in Q1, New Zealand's inflation expectations for the next two years in Q2, and New Zealand's inflation expectations for the next year in Q2. Crude Oil: As of 11:42, crude oil futures dropped slightly, with both WTI and Brent crude falling by 0.03%. Oil prices fluctuated rangebound, supported by optimistic sentiment about the global trade situation, but pressure was exerted by the return of Iranian supply to the market. The International Energy Agency (IEA) stated that despite lower forecasts for US shale oil production, the growth rate of global oil supply this year will be faster than previously expected, as Saudi Arabia and other OPEC member countries cancel production cuts. In its monthly report, the IEA said it expects global oil supply to increase by 1.6 million barrels per day this year, an increase of 380,000 barrels per day from previous forecasts. (Webstock Inc.) Spot Market Overview: ► Spot premiums/discounts surged after contract rollover, with overall market activity rebounding. [SMM North China Spot Copper] ► [SMM Analysis] Supported by fundamentals and sentiment, iron ore prices are expected to continue rising next week. Updates on other metal spot market reviews will be available later. Please refresh to view.

On Thursday local time, the International Energy Agency (IEA) slightly raised its forecast for global oil demand growth this year, as the impact of US tariff policies on the global economy was not as severe as previously anticipated, and low oil prices also boosted demand. The IEA currently expects global oil demand to grow by 740,000 barrels per day (bpd) in 2025, with total demand averaging 104 million bpd, up from a previous forecast of 726,000 bpd growth. A report released by OPEC the day before showed that it expects global oil demand to increase by 1.3 million bpd in 2025. OPEC began gradually increasing production in April, and combined with Trump's tariff hikes, this led to a significant pullback in global oil prices. During European trading hours on Thursday, WTI crude oil futures prices plunged 3.6% to $60.58 per barrel, while Brent crude fell 3.7% to $63.66 per barrel. This was due to market optimism about the prospects of a potential nuclear deal between the US and Iran, as well as a recent increase in US crude oil inventories. Earlier this week, the world's two largest economies, China and the US, announced a trade agreement and agreed to mutually reduce tariffs, easing fears of an economic recession and driving oil prices to rebound from recent lows. However, lingering uncertainties surrounding future trade negotiations have limited further upside room. In its monthly report, the IEA reiterated its forecast of a significant global oil supply surplus next year, expecting global oil supply to increase by 1.6 million bpd in 2025 and 970,000 bpd in 2026. In its previous report last month, the agency had forecast global oil supply growth of 120 bpd and 960,000 bpd for this year and next, respectively. The IEA believes that supply growth from non-OPEC+ countries will be robust, with daily production expected to increase by 1.3 million bpd this year, though it is expected to rise by only 820,000 bpd next year, as US shale oil production will be impacted by low oil prices. "The decline in oil prices has prompted some shale oil producers to cut spending and activity levels, with more production cuts expected in the coming quarters," the IEA said. OPEC+ is expected to increase daily production by 310,000 bpd in 2025 and a further 150,000 bpd in 2026. The alliance has agreed to increase oil supply by 411,000 bpd in June, accelerating the pace of supply recovery for the second consecutive month, raising concerns about potential oversupply in the coming months. However, the IEA pointed out that only Saudi Arabia has the capacity to significantly increase production. Meanwhile, tighter US sanctions on Venezuela and Iran may reduce the scale of the supply surplus. IEA data shows that in April, despite increased sanctions pressure, Iran's production remained strong, while Venezuela's production was hit the hardest, with daily output falling by 130,000 bpd from the previous month.

SMM, May 16: Metal Market: Overnight, metals in both domestic and overseas markets showed mixed performance. LME zinc and LME aluminum both fell by over 1%, with LME zinc down 1.41% and LME aluminum down 1.17%. The percentage changes of other metals were all within 1%. The main alumina futures contract rose by 0.17%. The ferrous metals series collectively declined, with iron ore down 0.75%, HRC and rebar both falling by over 0.2% (rebar down 0.29%, HRC down 0.21%). In the coking coal and coke sector, coking coal fell by 2.48% and coke by 1.22%. In precious metals, overnight COMEX gold rose by 1.74% and COMEX silver by 1.07%. Domestically, SHFE gold rose by 1.22% and SHFE silver by 1.02%. As of the overnight market close at 6:45 a.m. on May 16 》Click to view SMM Futures Data Dashboard Macro Front Domestic Developments: On May 15, the State Council convened a meeting to advance the work of strengthening the domestic economic cycle. Li Qiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, emphasized at the meeting that the strategic foothold of development should be placed on strengthening the domestic economic cycle, leveraging its inherent stability and long-term growth potential to hedge against uncertainties in the international cycle, thereby promoting steady and sustained economic growth in China and striving to achieve high-quality development. Li Qiang pointed out that a domestic demand-led and internally circulated economy is a unique advantage of a large economy. Efforts should be made to place strengthening the domestic economic cycle in a more prominent position in accelerating the construction of a new development paradigm. The General Office of the CPC Central Committee and the General Office of the State Council issued the "Opinions on Continuously Promoting Urban Renewal Actions." The opinions propose advancing the renovation of old urban residential communities, steadily promoting the renovation of dilapidated housing, accelerating the demolition and renovation of Category D dilapidated housing, strengthening the renovation of urban infrastructure, and advancing the construction of new-type urban infrastructure. The central government's fiscal support should be provided for the implementation of urban renewal actions, and various financial institutions are encouraged to actively participate in urban renewal on the premise of compliance with laws and regulations, risk controllability, and commercial sustainability. US Dollar: After the US released a series of economic data overnight, the US dollar index fell by 0.26%. This data included an indicator measuring consumer health, which showed that retail sales growth slowed in April as the uncertain economic outlook affected consumer confidence. Data released on Thursday showed that US producer prices (PPI) unexpectedly fell in April, and retail sales growth also slowed. A report earlier in the week showed that consumer price increases in April were lower than expected. The US Department of Commerce stated that retail sales rose slightly by 0.1% last month, with the March increase revised up to 1.7%, while economists had expected no change. The previously reported retail sales growth for March was 1.5%. The increase in retail sales in March was partly due to the advance purchase of goods such as automobiles ahead of the US tariff hikes. Recent remarks by Fed officials suggest that the US Fed needs more data to determine the impact of tariff announcements on prices and the economy before adjusting its policies. In his comments on Thursday, Fed Chairman Powell did not focus on monetary policy or the economic outlook, but he stated that, given the inflation experience of the past few years, Fed officials believe they need to reconsider the key factors surrounding employment and inflation in their monetary policy approach. Fed Governor Barr said that the economy is on a solid footing, with inflation moving toward the 2% target, but trade policy has introduced uncertainty into the outlook. The market expects the US Fed to cut interest rates only by September. (Wenhua Comprehensive) Other Currencies: The US dollar fell 0.73% against the Japanese yen to 145.68 yen; the British pound rose 0.23% to $1.329, as the UK economy grew more strongly than expected in early 2025. Macro: Today, data to be released include China's annual and monthly electricity consumption for April, the initial monthly rate of US building permits for April, the initial annualized total of US building permits for April, the monthly rate of the US import price index for April, the annual rate of the US import price index for April, the annualized total of US housing starts for April, the initial value of the University of Michigan's consumer sentiment index for the US in May, the eurozone's seasonally adjusted trade balance for March, the initial quarterly rates of Japan's seasonally adjusted real and nominal GDP for Q1, the initial value of Japan's seasonally adjusted annualized quarterly rate of real GDP for Q1, New Zealand's inflation expectations for the next two years in Q2, New Zealand's inflation expectations for the next year in Q2, and more. Crude Oil: As of the overnight close, oil prices in both markets fell together, with US crude dropping 2.31% and Brent crude falling 2.22%, both recording two consecutive days of decline. This was due to market expectations that Iran would release more oil into the global market. SEB analyst Ole Hvalbye said, "Any immediate lifting of sanctions due to a nuclear deal could bring 800,000 barrels per day of Iranian crude oil supply to the global market, which is undoubtedly negative for oil prices." John Kilduff, a partner at Again Capital in New York, said, "We are in a state of flux. Either President Trump will bring Iran to zero or integrate them into the international community. Therefore, the threat to supply is two-way. Either some Iranian oil will continue to flow into the market, or we will reap the full benefits of Iranian oil restrictions. This is what is affecting oil prices." Meanwhile, the International Energy Agency (IEA) has revised its forecast for oil demand growth in 2025 upwards to 740,000 barrels per day (bpd), 20,000 bpd higher than its previous projection, citing upward revisions to economic growth forecasts and lower oil prices that will support consumption. However, economic headwinds, coupled with record-high EV sales, are expected to reduce global oil demand growth for the remainder of 2025 from nearly 1 million bpd in Q1 to 650,000 bpd. "Signs of a slowdown in global oil demand growth may have already emerged." The agency has revised its forecast for global oil supply growth in 2025 upwards to 1.6 million bpd, an increase of 380,000 bpd from the projection in last month's report, as more optimistic production prospects in Saudi Arabia offset the expected slowdown in US shale oil production amid low oil prices. It has also revised its forecast for global oil supply growth in 2026 upwards from 960,000 bpd to 970,000 bpd. The IEA stated that a significant increase in supply, far exceeding demand growth, will lead to an average increase in oil inventories of 720,000 bpd this year. (Comprehensive report from Wenhua)

SMM, May 14: Metal Market: Overnight, metals in both domestic and overseas markets generally rose. LME copper, LME zinc, and SHFE zinc all increased by over 1%, with LME copper up 1.09%, LME zinc up 1.51%, and SHFE zinc up 1.57%. The gains of other metals were all within 1%. The main alumina futures contract rose by 1.69%. The ferrous metals series generally rose, with iron ore up 0.83% and stainless steel up 0.73%. In the coking coal and coke sector, coking coal rose by 0.34% and coke by 0.75%. The gains of other metals were all within 1%. In precious metals, overnight COMEX gold rose by 0.82% and COMEX silver by 1.43%, recording a four-day winning streak. Domestically, SHFE gold rose by 0.36% and SHFE silver by 0.4%. Overnight closing prices as of 6:48 a.m. on May 14 》Click to view SMM Futures Data Dashboard Macro Front Domestic: The Customs Tariff Commission of the State Council issued an announcement on adjusting tariff hike measures on imported goods originating from the US. Upon approval by the State Council, starting from 12:01 a.m. on May 14, 2025, the Customs Tariff Commission of the State Council adjusted the tariff hike measures on imported goods originating from the US, reducing the tariff hike rate specified in Announcement No. 4 of 2025 from 34% to 10%, suspending the implementation of the 24% tariff hike rate for 90 days, and halting the implementation of the tariff hike measures specified in Announcement No. 5 and No. 6 of 2025. US Dollar: Overnight, the US dollar index fell by 0.8%, giving back most of its gains from the previous trading day, mainly due to inflation data falling below market expectations. The US Department of Labor stated that CPI rose by 0.2% last month, lower than the 0.3% expected by economists, and the consumer price index fell by 0.1% in March. Despite this, inflation may rebound in the coming months due to higher costs of imported goods resulting from US tariffs. The easing of trade tensions has led market participants to lower their estimates of the likelihood of a recession and also reduced expectations for the timing and magnitude of interest rate cuts by the US Fed this year. Financial markets expect the US Fed to resume interest rate cuts in September. (Wenhua Comprehensive) Other Currencies: The US dollar fell by 0.57% against the Japanese yen to 147.6 yen, after a significant gain of over 2% the previous day. The US dollar fell by 0.54% against the Swiss franc to 0.841, after climbing 1.6% on Monday. The British pound rose by 0.95% against the US dollar to 1.3297 US dollars, on track for its largest single-day gain since April 28. Macro: Today, data such as the US May IPSOS Primary Consumer Sentiment Index (PCSI) and the final annual German April CPI will be released. Additionally, US Fed Governor Waller will deliver a speech titled "Central Bank Research," and US Fed Vice Chair Jefferson will speak on the economic outlook. US Secretary of State Rubio will participate in the informal meeting of NATO foreign ministers from May 14 to 16 to discuss NATO's security priorities, including increasing defense investments and ending the Russia-Ukraine war. Crude Oil: Overnight, oil prices in both markets rose together, with US crude oil up 2.71% and Brent crude oil up 2.52%, both recording four consecutive days of gains, primarily driven by easing trade tensions and better-than-expected inflation reports. The two benchmark contracts rose by about 4% or more in the previous trading session after China and the US reached a consensus to significantly reduce import tariffs within at least 90 days, which also boosted Wall Street stocks and the US dollar. "We didn't participate in the rally like other markets did yesterday, so we're catching up today," said John Kilduff, a partner at Again Capital LLC. "This morning's data also gives the US Fed room to possibly start taking some action." Goldman Sachs stated in a report that due to the recent easing of trade tensions, the bank sees upside risks to its price forecasts for Brent crude oil and US crude oil in 2025 and 2026. The bank believes that Brent crude oil and US crude oil prices are expected to average $60/barrel and $56/barrel, respectively, for the remainder of 2025, with upside risks of $3-4 per barrel, and $56/barrel and $52/barrel, respectively, for 2026. However, Goldman Sachs noted that the reduced risk of a recession also lowers the likelihood of a significant drop in oil prices, although robust supply growth outside of US shale oil could still push prices sharply lower. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) plan to increase oil exports in May and June, which may limit the upside potential for oil prices. (Wenhua Comprehensive)

On Saturday local time, OPEC+ member countries agreed to increase oil supply by 411,000 barrels per day (bpd) in June. This marks the second consecutive month that the alliance has accelerated the pace of supply restoration, following a significant and unexpected production increase in May, aiming to penalize member countries that have violated quotas and overproduced. Following an online meeting lasting over an hour, OPEC+ issued a statement saying that eight oil-producing countries would increase production by 411,000 bpd in June, and that the gradual production increase might be suspended or reversed, depending on changes in market conditions. The statement showed that Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman reaffirmed their commitment to maintaining market stability on the basis of the current healthy oil market and increasing production. Although the statement mentioned the "current healthy market foundation," OPEC+ representatives attributed the strategic shift to Saudi Arabia's anger and frustration over excessive production by member countries such as Kazakhstan and Iraq, choosing to punish and restrain these countries by suppressing oil prices. OPEC+ had originally planned to gradually and steadily lift production cuts over 18 months starting from April, with a monthly production increase of about 137,000 bpd. However, the latest decision means that the group of eight countries, including Saudi Arabia and Russia, will recover nearly half of the production cuts (2.2 million bpd) in just three months. Prior to this, several core OPEC+ oil-producing countries had announced that they would implement unexpected oil production increases in May, expanding the production increase to 411,000 bpd, three times the original plan. Against the backdrop of the global trade war, this decision led to international oil prices falling below $60 per barrel, recording the largest monthly decline in nearly three and a half years. Market analysts believe that this move may signal a potential price war brewing. According to OPEC+ representatives, Saudi Arabia has reached its limit with the long-term overproduction by countries such as Kazakhstan and Iraq. Jorge Leon, an analyst at Rystad Energy who previously worked at the OPEC Secretariat, said, "OPEC+ has just dropped a bombshell on the crude oil market. Saudi Arabia's move is both to punish unruly members and to cater to Trump's wish to see lower oil prices." Giovanni Staunovo, an analyst at UBS, said that due to trade tensions and concerns about economic growth, as well as the more critical significant production increase by OPEC+, oil prices would fall next Monday. Meanwhile, Saudi Arabia is seeking to strengthen its relationship with US President Trump, who is set to visit the Middle East this month and may offer Saudi Arabia a package of weapons and a nuclear agreement, after previously calling on OPEC to reduce fuel costs. It has been reported that Saudi officials have informed allies and industry experts that Saudi Arabia is unwilling to further cut supply to support the oil market and can cope with prolonged low oil prices. Currently, Brent crude oil prices have fallen to around $61 per barrel, approaching a four-year low, amid fears of a global economic recession triggered by Trump's trade war. The plunge in oil prices threatens oil companies, including US shale oil producers. These companies have warned that they will be unable to respond to Trump's call to achieve a new era of US energy dominance characterized by "drill, baby, drill." Meanwhile, the oil price collapse has also brought pain to OPEC+ member countries, including Saudi Arabia itself. Saudi Arabia has already been forced to cut investments in core projects of Crown Prince Mohammed bin Salman's economic transformation plan, such as the Neom future city. According to data from the International Monetary Fund (IMF), Saudi Arabia needs oil prices above $90 to balance its budget, higher than other OPEC members such as the UAE.

SMM April 17 News: Metal Market: At the close of the day, domestic base metals showed mixed performance, with SHFE nickel leading the gains with a 0.99% increase, SHFE zinc fell 0.68%, SHFE lead closed flat at 16,750 yuan/mt, and alumina main contract rose 0.46%. Additionally, lithium carbonate main contract fell 0.4%, polysilicon main contract fell 1.33%, silicon metal main contract fell 0.93%, and the European container shipping main contract fell 1.67%. In the overseas market, as of 15:04, only LME copper and LME aluminum fell among the base metals, with LME copper down 0.64% and LME aluminum down 0.15%. LME tin rose 1.09%. The rest of the metals saw slight increases. In the ferrous metals series, most were in the red, with only iron ore rising, up 0.07%. Stainless steel fell 0.04%, HRC fell 0.75%, and rebar fell 0.45%. In the coking coal and coke sector, coking coal fell 2.26% and coke fell 1.69%. In the precious metals sector, as of 15:04, COMEX gold fell 0.06%, slightly pulling back after hitting a record high earlier. COMEX silver fell 1.47%. Domestically, SHFE gold rose 2.18%, once hitting 796.7 yuan/gram during the session, continuing to set new record highs. SHFE silver fell 0.23%. As of 15:04 today's market. Click to view SMM market board. Macro Front: Domestic: Liao Min, member of the Party Leadership Group and Vice Minister of the Ministry of Finance, chaired the 2025 Forum of the Ministry of Finance's International Financial Research Expert Studio on the afternoon of April 14, 2025, listening to experts' views and suggestions on the current international economic and financial situation. At the meeting, Zhang Yuyan, Cui Fan, Lu Feng, Peng Wensheng, Xue Lan, and Feng Zhongping expressed their views and made suggestions on related issues. Liao Min stated that the current century-long changes are accelerating, a new round of technological revolution and industrial transformation is deepening, economic globalization is encountering headwinds, and the global economic governance system is undergoing profound adjustments. The financial sector must embrace the "greatness of the nation," calmly respond to external risks and challenges, and serve Chinese-style modernization and promote high-quality development through high-level international financial cooperation. The International Financial Research Expert Studio effectively serves major bilateral and multilateral financial dialogues, and should further strengthen interaction and exchange with government departments, provide more forward-looking suggestions on new situations and problems in China and the global economy, and further enhance the scientificity and effectiveness of financial work and international financial cooperation. Responsible comrades from 14 departments including the Department of International Economic Relations of the Ministry of Finance attended the forum. MIIT: Organize and carry out the 2025 Industrial Energy Conservation and Carbon Reduction Diagnosis Service Work. The Ministry of Industry and Information Technology recently issued a notice to organize and carry out the 2025 Industrial Energy Conservation and Carbon Reduction Diagnosis Service Work. It will focus on industries such as steel, ethylene, synthetic ammonia, calcium carbide, aluminum, polysilicon, lithium battery, cement, ceramics, flat glass, and electronic appliances, as well as information infrastructure such as data centers and communication base stations, organizing energy conservation and carbon reduction service institutions to carry out public welfare energy conservation and carbon reduction diagnosis services for enterprises. On April 17, the central parity rate of the RMB in the interbank foreign exchange market was 7.2085 yuan per US dollar. US Dollar: As of 15:03, the US dollar index rose 0.29%. US March retail sales MoM rose 1.4%, the largest increase since January 2023, expected to rise 1.3%, previous value rose 0.20%. US March core retail sales MoM rose 0.5%, expected to rise 0.3%, previous value revised from 0.30% to 0.7%. US March retail sales surged, with US consumers seemingly engaging in "panic buying" before the imposition of car tariffs. However, this strong growth momentum may fade in the coming months, as tariff policies have led to a bleak economic outlook and a significant drop in consumer confidence, which will prompt consumers to spend cautiously. Fed Chairman Powell reiterated on Wednesday the long-held view of Fed chairmen over the decades that the growth of US federal debt needs to be controlled, but he believes politicians are going about it the wrong way. Powell said the trade policies pursued by the Trump administration will challenge the Fed's ability to complete its employment and inflation tasks this year; the Fed is ready to provide dollar liquidity through its swap lines with other central banks if necessary; the market's expectation that the Fed will step in to calm volatility may be wrong. Traders currently believe that by the end of 2025, the Fed will cut interest rates by about 91 basis points. (Wenhua Comprehensive) Data: Today, the US March building permits annualized total preliminary value, US initial jobless claims for the week ending April 12, US April Philadelphia Fed manufacturing index, US March housing starts annualized total, Eurozone April ECB main refinancing rate, Eurozone April ECB deposit facility rate, Eurozone April ECB marginal lending rate, Japan March merchandise trade balance - unadjusted, Japan March seasonally adjusted merchandise trade balance, Japan March merchandise exports - unadjusted, Australia March RBA foreign exchange transactions - market channels, Australia March seasonally adjusted unemployment rate, Australia March employment population change, New Zealand March trade balance, New Zealand Q1 CPI YoY and other data will be released. In addition, Fed Chairman Powell will speak at the Chicago Economic Club, Fed Governor Barr will speak, 2025 FOMC voter, Kansas City Fed President Schmid and Dallas Fed President Logan will have a fireside chat on the US economy and banking, 2026 FOMC voter, Cleveland Fed President Mester will participate in a Q&A, the ECB will announce its interest rate decision, and ECB President Lagarde will hold a monetary policy press conference. Crude Oil: As of 15:04, oil prices in both markets rose, with US oil up 0.74% and Brent oil up 0.61%. The latest OPEC+ compensatory production cut plan has been released, with Iraq and Kazakhstan taking the main share. On Wednesday, OPEC's website released an announcement stating that the OPEC Secretariat has received the latest compensatory plans for previous overproduction from Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, and Oman. According to the plan, from April 2025 to June 2026, OPEC and its allied countries must compensate for 4.572 million barrels of previous overproduction, with Russia compensating 691,000 barrels; Saudi Arabia compensating 15,000 barrels; Oman compensating 97,000 barrels; the UAE compensating 386,000 barrels; Iraq compensating 1.934 million barrels; Kazakhstan compensating 1.299 million barrels; and Kuwait compensating 150,000 barrels. The actual implementation effect of the compensatory production cuts will need to be followed up. Low oil prices are suppressing the expansion speed of US shale oil supply, while Iran's energy exports are also facing the risk of interruption. According to the Q1 survey by the Dallas Fed, the average break-even cost of drilling new wells for US shale oil increased by $1/barrel YoY to $65/barrel, with the marginal extraction costs for large and small enterprises corresponding to WTI $61/barrel and $66/barrel, respectively. After the WTI oil price fluctuation range fell to around $60/barrel, the US Department of Energy estimated that the US crude oil production growth rates for this year and next year would be 300,000 barrels/day and 50,000 barrels/day, respectively, down 90,000 and 100,000 barrels/day from the March report. In addition, the US continues to maintain its sanctions stance on Iran, with US Treasury Secretary Besant hinting that the US is prepared to reduce Iran's energy exports to zero. The risk of interruption to Iran's crude oil exports has further alleviated the crude oil market's concerns about a supply surplus. (Wenhua Comprehensive) SMM Daily Review: Aluminum prices rebounded, with prices for raw and processed aluminum diverging [Scrap Aluminum Daily Review]. April 17: SHFE aluminum's center of gravity moved up, aluminum billet processing fees slightly lowered [Aluminum Billet Spot Daily Review]. The market mostly held a wait-and-see sentiment, spot prices remained stable [SMM EMM Daily Review]. The high-grade NPI market's center of gravity continued to move down, short-term high-grade NPI prices under pressure [NPI Daily Review]. [SMM Nickel Sulphate Daily Review] April 17: Nickel sulphate prices slightly decreased. [SMM MHP Daily Review] April 17: Indonesian MHP prices rebounded. Silicon prices continued to hit new lows, silicon enterprises' production remained under pressure [SMM Silicon Daily Review]. Silver prices first fell then rose, spot premiums slightly lowered [SMM Daily Review]. The rare earth market was polarized, light rare earth prices continued to decline [SMM Rare Earth Daily Review].

Tariff policies are expected to significantly drag down global economic performance, which will have a particularly pronounced impact on the crude oil market, as economic downturns will suppress the rebound in crude oil demand. Goldman Sachs' latest analysis indicates that the global crude oil market is expected to face a daily surplus of 800,000 barrels in 2025, increasing to 1.4 million barrels in 2026. The trade war and OPEC+'s relaxation of supply restrictions are continuously exacerbating market pessimism. Goldman Sachs analysts warn that although the market has already priced in the impact of future inventory increases, a significant surplus is still expected in 2025 and 2026, which will further depress oil prices. They predict that Brent crude will average around $63 per barrel for the remainder of this year, but this price is based on the assumption that the US will not fall into a recession and that OPEC+ will only increase its supply slightly. Demand Shadows Last week, the US sharply revised down its forecast for global crude oil demand growth in 2025 to 900,000 barrels per day, a reduction of approximately 400,000 barrels from the previous forecast. On Monday, OPEC also released its monthly report, significantly lowering its global oil growth forecasts for 2025 and 2026 to 1.3 million and 1.28 million barrels per day, respectively. The OPEC report noted that oil demand is expected to be supported by air travel and road traffic, but this outlook is affected by global economic development uncertainties as the US announces new tariff policies. The latest International Energy Agency (IEA) report on Tuesday also disappointed the market. The report revised down the global oil demand growth rate for 2025 by 300,000 barrels per day MoM to 730,000 barrels per day and expects the growth rate to further slow to 690,000 barrels per day in 2026. The IEA stated that due to the surge in US tariffs and heightened recession concerns, risk sentiment has further deteriorated, with global oil prices plummeting by about $10 per barrel in March and early April. The IEA also warned that the sharp decline in oil prices has put the US shale oil industry in distress. According to the latest energy survey report from the Dallas Fed, companies believe that oil prices need to stabilize at $65 per barrel to make drilling new wells profitable. As of press time, WTI crude futures are fluctuating around $61, while Brent crude is trading around $65.