The UK construction industry has strongly criticized proposed trade measures that would introduce stricter steel tariffs of 50% alongside quota reductions of up to 60%. Industry representatives warn these measures will drastically inflate costs for private housing and public infrastructure, particularly threatening the viability of companies involved in the €115 billion HS2 railway project, where large volumes of imported steel are already contracted. Thorsten Gerber, CEO of the Gerber Group, warned that these protectionist approaches disproportionately harm SMEs, automotive manufacturers, and the entire downstream metal processing sector, urging both London and Brussels to reconsider their strategies to avoid massive economic damage and widespread job losses.

In January 2026, the European Union and India reached a historic Free Trade Agreement (FTA), with the elimination of steel tariffs of up to 22% becoming a major market focus. However, clearing the policy fog of "bilateral exemptions" and analyzing actual export and carbon emission data reveals that the steel industry faces a highly asymmetric trade reshaping. This seemingly fair reduction is actually Europe trading a "capped" ticket for India's "uncapped" massive incremental market.

Since Q2, the issuance of local government bonds has significantly accelerated. A review of the Special Bond Information Network by reporters revealed that as of June 12, local government bond issuance this year had exceeded 4 trillion yuan, with newly added special bonds accounting for nearly 40%. Experts stated that fiscal policy will remain one of the key supports for economic resilience in Q2, and the issuance of local government bonds is expected to further increase, driving steady growth in infrastructure investment throughout the year. This year, there has been a notable increase in the issuance scale of new bonds allocated to major projects through local government bonds, primarily in the form of newly added special bonds. Data shows that among the 4,483.4 billion yuan of local government bonds issued so far, 1,645.7 billion yuan are newly added local government bonds, and 359.6 billion yuan are newly added general bonds.

After Trump initiated a global trade war, the UK's merchandise exports to the US in April saw the largest monthly decline since records began in 1997. The latest data released by the UK's Office for National Statistics (ONS) showed that from March, exports of goods to the US, including precious metals, fell by £2 billion (approximately $2.7 billion) to £4.1 billion, the lowest level since February 2022. Meanwhile, imports of goods from the US dropped by £400 million to £4.7 billion. The UK's statistics office stated, "This may be related to the US imposing tariffs on all imported goods." This can be attributed to Trump's announcement on April 2, "Liberation Day," of a 10% base tariff on all UK goods, with higher tariffs of 25% on steel, aluminum, cars, and auto parts exported to the US. Although a framework agreement was reached between the UK and the US on May 8 to reduce car tariffs and eliminate aluminum and steel tariffs, the specific agreement has yet to be fully finalized. Liz McKeown, Director of Economic Statistics at the ONS, said, "After four consecutive months of growth, April saw the largest monthly decline in merchandise exports to the US on record, with most types of goods experiencing a decline following the recent implementation of tariffs." The ONS also noted that most major commodities exported from the UK to the US declined in April: exports of machinery and transport equipment fell by £800 million due to a decline in car shipments, and chemical exports decreased by £300 million. In addition, the UK's economic output also contracted significantly in April. ONS data showed that the UK's gross domestic product (GDP) contracted by 0.3% MoM in April, worse than the expected decline of 0.1%, and marking the largest monthly decline since October 2023. Among them, the services sector, which accounts for the largest share of the economy, contracted by 0.4%, while manufacturing declined by 0.9%.

According to sources familiar with the matter, the US and Mexico are expected to reach an agreement that would eliminate the 50% tariff imposed by former US President Trump on certain steel imports, reviving a similar deal from Trump's first term. Trump was not directly involved in the negotiations, but any agreement would require his approval. The talks were led by Commerce Secretary Howard Lutnick, the sources said. The agreement has not yet been finalised, the sources added. Under the current terms, US buyers would enjoy duty-free treatment as long as they keep Mexico's total steel imports within a quota based on historical trade levels. The new cap would be higher than the limit allowed under the similar agreement during Trump's first term, though these so-called "quotas" were never fixed numbers but rather designed to "prevent surges," according to the sources. US Commerce Department data shows that last year, the US imported approximately 3.2 million mt of steel from Mexico, accounting for 12% of total US steel imports. During Trump's first term, the US and Mexico reached a deal in 2019 agreeing to prevent imports from exceeding the average level from 2015 to 2017. As of press time, neither the White House nor the office of Mexican President Claudia Sheinbaum had responded to requests for comment. At an event on Tuesday, Mexican Minister of Economy Marcelo Ebrard said he told US officials during a meeting last week that imposing steel tariffs on Mexico was unjustified, as the US exports more steel to Mexico than it imports. Last Friday, he also posted a photo showing him shaking hands with a smiling Lutnick in Washington. "We are waiting for their response because last Friday we provided them with details of our arguments, and we are right," Ebrard told reporters on Tuesday. "So we will wait for their response, most likely this week." The negotiations come as Sheinbaum seeks to reach an understanding with Trump on border migration and drug smuggling, issues for which Trump has demanded Mexico take action. Meanwhile, Sheinbaum confirmed on June 9 local time that she would attend the upcoming G7 summit in Canada. She also mentioned the possibility of a bilateral meeting with US President Trump during the event. Sheinbaum added that migration would be one of the topics discussed during the meeting. Currently, the Mexican Foreign Minister is coordinating the arrangements for various meetings, and has pointed out that in addition to a possible meeting with President Trump, President Sheinbaum will also hold bilateral talks with Canadian Prime Minister Carney.

SMM Nickel News on June 11: Macro News: (1) Recently, various automakers have announced that they will shorten the payment period for suppliers to within 60 days, in response to the requirements of the state and relevant ministries to ensure the stability of the industry chain and supply chain and promote the high-quality development of the automotive industry. Experts pointed out that automotive supply chain enterprises previously faced long payment cycles, sometimes up to nine months or even longer, leading to tight capital chains for many small and medium-sized supporting suppliers, who had to rely on discounting, short-term loans, and other means to maintain operations. Shortening the payment period can alleviate the financial pressure on suppliers and enhance their operational resilience and innovation capabilities. (2) According to informed sources, the US and Mexico are on the verge of reaching an agreement to eliminate Trump's 50% tariff on steel imports below a certain quantity. Meanwhile, Indian and US negotiators have made progress, with negotiations focusing on market access, tariff reductions, and non-tariff barriers for industries and some agricultural products. India and the US are expected to reach an interim trade agreement before the end of this month. Spot Market: Today, the SMM 1# refined nickel price is 121,400-124,000 yuan/mt, with an average price of 122,700 yuan/mt, a decrease of 100 yuan/mt from the previous trading day. The mainstream spot premiums quotation range for Jinchuan #1 refined nickel is 2,400-2,500 yuan/mt, with an average premium of 2,450 yuan/mt, an increase of 50 yuan/mt from the previous trading day. The spot premiums and discounts quotation range for electrodeposited nickel from mainstream domestic brands is 0-300 yuan/mt. Futures Market: The most-traded SHFE nickel contract (NI2507) opened lower and fluctuated slightly during the night session yesterday, with no significant volatility during the daytime session. As of 11:30, SHFE nickel closed at 121,710 yuan/mt, an increase of 50 yuan/mt or 0.04% from the previous trading day. Positive signals have been released from China-US economic and trade consultations, and expectations for US Fed interest rate cuts are diverging. However, the weak demand situation is difficult to improve, and the supply surplus continues to suppress the upside room for nickel prices. In the short term, nickel prices may fluctuate rangebound between 118,000-123,000 yuan/mt.

Analysts from Morgan Stanley stated that US President Trump's decision to double aluminum import tariffs to 50% could drive up aluminum prices and the costs for its users.

This week, the SHFE/LME zinc price ratio pulled back to around 8.4, closing the import window for zinc ingots. From an overseas perspective, the "steel tariffs" imposed by the Trump administration once again escalated global trade tensions. Coupled with the intensification of the Russia-Ukraine conflict, geopolitical risks rose rapidly, and market risk-averse sentiment continued to strengthen, driving up the price of LME zinc.

[SMM News] This week, the SHFE/LME zinc price ratio pulled back to around 8.4, closing the import window for zinc ingots. From an overseas perspective, the "steel tariffs" imposed by the Trump administration once again escalated global trade tensions. Coupled with the intensification of the Russia-Ukraine conflict, geopolitical risks rose rapidly, and market risk-averse sentiment continued to strengthen, driving up the price of LME zinc.

[Macro sentiment dominated by risk aversion, center of zinc prices on SHFE and LME moved upward] At the beginning of the week, LME zinc maintained the volatile trend of the previous week; subsequently, the "steel tariff" imposed by the Trump administration escalated global trade tensions, while the intensification of the Russia-Ukraine conflict earlier also led to a rapid rise in geopolitical risks, continuously strengthening market risk aversion and driving LME zinc prices higher; however, the subsequent conclusion of direct negotiations between Russia and Ukraine, as well as news of possible direct consultations between heads of major powers, weakened market risk aversion. Meanwhile, the US dollar index continued to strengthen, causing LME zinc to drop back slightly...