War damage to Iran’s key steel mills threatens ~14 Mt of capacity, sharply reducing crude steel output and exportable supply. While domestic demand remains relatively stable, energy shortages and logistics disruptions amplify losses, tightening regional supply, supporting semi-finished steel prices, and reshaping trade flows.

SMM News on May 16: Metal Market: As of the daytime close, domestic market base metals generally declined, with SHFE zinc down 1.06%, SHFE nickel down 0.78%, and SHFE lead down 0.76%. The declines in other metals fluctuated slightly. The main alumina contract fell by 3.34%. In addition, the main lithium carbonate contract dropped by 4.19%, the main silicon metal contract fell by 3.89%, and polysilicon declined by 3.26%. The main European container shipping contract fell by 6.37%. The ferrous metals series collectively declined, with rebar down 1.15%. In the coking coal and coke sector, coking coal fell by 3.84%, and coke declined by 1.93%. In the overseas market, as of 15:05, overseas base metals collectively declined, with all declines within 1%. LME lead fell by 0.85%, and LME zinc dropped by 0.61%. The declines in other metals fluctuated slightly. In precious metals, as of 15:05, COMEX gold fell by 0.25%, and COMEX silver declined by 0.54%. Domestically, SHFE gold rose by 0.88%, and SHFE silver increased by 0.61%. Market conditions as of 15:05 today 》Click to view SMM Market Dashboard Macro Front Domestic Aspects: [Preview] The State Council Information Office will hold a press conference for 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 with Chinese and foreign journalists to discuss "Fulfilling the Mission of Civil Affairs and Enhancing People's Well-being." [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. The balance of medium and long-term manufacturing loans at the end of April was 1.8 trillion yuan, with a focus on supporting the export of manufacturing products such as ships and construction machinery. The bank actively met the full-cycle financial needs of technology-based enterprises, fully supporting the construction of a modern industrial system. [CPCA's Cui Dongshu: China's Power Battery Installations Reached 54.1 GWh in April, Up 52.8% YoY] CPCA Secretary General Cui Dongshu released an analysis of the new energy vehicle lithium battery market 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, the cumulative installed capacity of ternary batteries was 34.3 GWh, accounting for 18.6% of the total installed capacity, with a cumulative year-on-year decrease of 15.9%. The cumulative installed capacity of LFP batteries was 150.0 GWh, accounting for 81.4% of the total installed capacity, with a cumulative year-on-year increase of 88.0%. (Cailian Press) ► The central parity rate of the RMB exchange rate in the inter-bank foreign exchange market on May 16 was 7.1938 RMB per US dollar. US dollar: As of 15:05, the US dollar index fell by 0.22%. Fed Chairman Powell stated that the US may be entering a period of more frequent and longer-lasting supply shocks. The narrative of tariff easing has been somewhat absorbed, and trade disputes have left the US economic outlook uncertain, leading to a weaker US dollar and a decline in US bond yields. The monthly rate of US retail sales in April rose by 0.1%, against expectations of no change, with the previous figure revised from a 1.4% increase to a 1.5% increase. The sluggish growth in US retail sales in April indicates that the boost from households purchasing cars ahead of tariff implementation has faded, and households have cut back on other spending amid an uncertain economic outlook, with concerns about slowing economic growth intensifying. In addition, the US PPI in April rose by 2.4% YoY, lower than expected and the previous figure, with the growth rate declining for the third consecutive month and hitting a new low since September last year. The PPI in April fell by 0.5% MoM, the largest decline in five years. The number of Americans filing initial claims for unemployment benefits remained stable last week, with the layoff rate staying at a low level. On May 15 local time, Fed Chairman Powell delivered a speech at the second Thomas Laubach Research Conference. Powell stated that inflation may become more volatile in the future, and the US may be entering a period of more frequent and longer-lasting supply shocks, posing a daunting challenge to the economy and the central bank. Powell indicated that the Fed is adjusting its overall policy framework to address significant changes in the inflation and interest rate outlook following the 2020 pandemic. Fed Governor Barr said on Thursday that the US economy is on a solid footing, with inflation returning towards the Fed's 2% target, but trade policies are casting a shadow over the outlook. Macro: Today, data such as China's total electricity consumption in April - monthly, the initial monthly rate of US housing starts in April, the initial annualized total of US housing starts in April, the monthly rate of the US import price index in April, the annual rate of the US import price index in April, the annualized total of US housing starts in April, the initial value of the University of Michigan Consumer Sentiment Index for the US in May, the seasonally adjusted trade balance of the Eurozone in March, the initial value of the seasonally adjusted real GDP quarterly rate for Japan in Q1, the initial value of the seasonally adjusted nominal GDP quarterly rate for Japan in Q1, the initial value of the seasonally adjusted real GDP annualized quarterly rate for Japan in Q1, the expected inflation rate for New Zealand over the next two years in Q2, and the expected inflation rate for New Zealand over the next year in Q2 will be released. Crude Oil Market: As of 15:05, oil prices in both markets fell simultaneously, with US crude down 0.41% and Brent crude down 0.34%. The International Energy Agency (IEA) {{yesterday}} forecast that global oil inventories would surge in 2025 and 2026, as trade uncertainties exacerbate the decline in oil demand from the Organisation for Economic Co-operation and Development (OECD), and Saudi Arabia and its partners ease production cuts. The report stated that policy uncertainty remains high, putting pressure on consumer and business confidence. The tariff supply shock appears less severe than previously anticipated, prompting an upward revision of the economic growth assumptions underpinning demand forecasts. Despite recent economic weakness, emerging economies are expected to continue driving demand growth, with total demand forecasted to average 103.9 million barrels per day (bpd) in 2025. However, oil consumption data from non-OECD countries has been disappointing. The IEA forecasts an accelerated decline in overall oil demand from advanced OECD economies, with a drop of 120,000 bpd in 2025 and 240,000 bpd in 2026. The report noted that, despite continued growth in emerging market demand, "the latest delivery data from non-OECD countries, particularly major consumers like India, have consistently fallen short of expectations." The IEA stated that after global oil inventories declined at a rate of 140,000 bpd in 2024, they are expected to increase by 720,000 bpd in 2025 and 930,000 bpd in 2026. (Wenhua Comprehensive) SMM Daily Review ► May 16: Aluminum prices end their upward streak, while aluminum billet processing fees continue to face downward pressure amid adjustments [Daily Review of Spot Aluminum Billet] ► [SMM MHP Daily Review] May 16: MHP prices in Indonesia increase slightly ► [SMM Nickel Sulphate Daily Review] May 16: Demand for nickel salts weakens SMM Weekly Review ► Mixed sentiments in the Asian offshore market, with Yangshan copper premiums peaking and pulling back [SMM Weekly Review of Yangshan Copper] ► Domestic processing fees remain stable, while import processing fees rise slightly [SMM Weekly Review of Zinc Concentrates] ► Orders on hand support production at copper wire and cable enterprises, but new orders raise concerns [SMM Weekly Review of Wire and Cable Market] ► First-round inquiries for mainstream steel tenders fall short of expectations, with SiMn prices stabilizing after a slight increase [SMM Weekly Review] ► Favourable macro front spurs firm quotes from manganese plants [SMM Weekly Review of EMM]

With the inflation outlook under the trade war remaining unclear, many US Fed officials are currently waiting for more data before making any decisions on interest rate cuts. On Wednesday, Chicago Fed President Austan Goolsbee described himself as a "data dog," stating that he simply wants to better assess the economic situation. During an interview on the same day, Goolsbee said that the US Fed is still waiting for more economic data, which will ultimately influence its decision on whether to adjust interest rates. Earlier, the April CPI report released by the US Bureau of Labor Statistics on Tuesday was generally lower than expected. The data showed that the overall inflation rate in April was 2.3%, while the core inflation rate, excluding volatile food and energy prices, was 2.8%. This relatively mild inflation report suggests that the most severe concerns about soaring prices due to the White House's tariff policies have not materialized—at least not yet. Much of the anxiety among businesses and consumers stems from a lack of certainty about the economic outlook. When this happens, they tend to cut back on spending. However, Goolsbee cautioned against being overly optimistic about the inflation data, noting that some components of April's inflation reflected the lagging nature of the data. The US Fed is still observing the situation. Current inflation trends will take some time to be reflected in the data. "When there's a lot of dust in the air, like what we saw in April, it can lead to a kind of stagnation, and the effects take some time to show up in the data," Goolsbee said. In April, the US financial market experienced significant turmoil as the new tariff policies implemented by the US Fed and Trump disrupted trade between the US and most of the world. The drastic policy fluctuations led many businesses to adopt a wait-and-see attitude, awaiting clarity on the White House's trade policies. "I think it's unrealistic to expect businesses or central banks to draw conclusions about long-term trends given the high degree of short-term uncertainty. It's truly a very challenging environment," Goolsbee said. "People will ask me, 'Are you a dove or a hawk?'" Goolsbee quipped. "I'll say I don't even know if I like birds." Instead, Goolsbee described himself as a "data dog" who makes decisions based on objective and measurable economic data. He said he is still waiting for more information. "The first rule of being a data dog is to know when to act and when to observe. When more information is needed, it's time to keep observing," Goolsbee said. Goolsbee pointed out, "No matter how severe the daily fluctuations are, the US Fed will not pay excessive attention. It's important to remember that at the US Fed, our job is to be a steady hand, not to react to daily fluctuations in the stock market or policy statements. The data we continue to receive at least suggests that things are going okay for now."

On Wednesday local time, Jamie Dimon, CEO of JPMorgan Chase, stated that as Trump's tariff policies continue to disrupt the market, a US economic recession has become a very likely outcome. Currently, the trade war is intensifying, with US stocks and bonds being heavily sold off, and concerns that tit-for-tat policies could lead to significant issues in the US financial markets and economy. Dimon said in an interview that day: "I think a recession is probably a high-probability event because that's what the market is indicating. When the Dow Jones falls by 2,000 points, such a decline triggers a chain reaction, further exacerbating market panic. People see their 401(k) accounts losing money, your pension is losing money. You have to cut back on spending." According to JPMorgan's market-based recession indicator dashboard, the Russell 2000 Index, which is dominated by small-cap stocks and has been hit hard in recent sell-offs, currently shows a 79% probability of a US economic recession. JPMorgan economists expect the US GDP to shrink by 0.3% this year, a mild recession forecast, but following a year of strong economic growth. Analysts pointed out that the last time the US saw an action like Trump's significant tariff hikes was in 1930. After then-President Herbert Hoover signed the Smoot-Hawley Tariff Act that year, global trade collapsed, and the trend towards global depression intensified. After Trump announced tariff hikes and many countries took countermeasures, the sharp decline in the US stock market foreshadowed similar consequences. The reason is clear: Trump's tariffs are actually much higher than those enacted in 1930. Dimon believes that markets are not always right, but most of the time they are. "I think they are right this time because they are just pricing uncertainty at the macro and micro levels, and then considering how it affects consumer confidence." Dimon pointed out: "No one wants this to happen, but if it does, hopefully it won't last too long." Dimon added, "Resolving these tariff and trade issues would be a good thing." It is worth noting that Trump quoted a statement from Dimon (resolving tariff and trade issues would be a good thing) in his latest social media post on Wednesday, but did not mention the recession. Trump also said: "Calm down! Everything will be fine. The US will be bigger and better than ever!" Earlier on Wednesday, the 27 member states of the EU voted to impose a 25% tariff on US imports in retaliation for the Trump administration's announcement on March 12 to impose tariffs on EU steel and aluminum. The Chinese government also quickly took firm countermeasures against the US government's unilateral bullying act of increasing tariffs on Chinese exports to the US from 34% to 84%, raising the tariff rate on all US-origin imports from 34% to 84%. Dimon said he has seen a change in business confidence and expects many companies to cut back on spending. He claimed that JPMorgan Chase has also controlled its headcount, will not lay off employees immediately, but will not hire in large numbers either.

【SMM Daily Coke Review】 In terms of supply, after the eleventh round of coke price cuts, coking enterprises' profits declined, and some even fell into losses. As a result, these coking enterprises reduced production, leading to a slight decrease in coke supply. On the demand side, steel mill profits have recently been restored, with an increase in pig iron production and daily coke consumption. Some steel mills have started purchasing and restocking coke, reducing the control over arrivals. Overall, coke inventory at coking enterprises has decreased, and the fundamental situation for coke has improved. With limited downside room due to cost support, the coke market is expected to stabilize this week.

[SMM Analysis: Global Copper Cathode Production Expected to Polarize] The topic of production cuts at Chinese copper smelters has remained a hot issue. In fact, since the end of 2023, some small and medium-sized smelters have implemented indirect production cuts by reducing the efficiency of copper concentrate feeding, shutting down production lines, lowering the grade of copper concentrate fed into furnaces, and increasing the proportion of copper-bearing materials fed into furnaces.

Large changes are underway across the global supply chain for metals due in large part to the growth in the new energy industry. Global demand for cobalt, lithium, and nickel-three of the key metals at the heart of EVs, advanced batteries, and renewable energy technologies-is at unprecedented levels, radically changing worldwide markets in ways that have potential long-term implications for manufacturers, investors, and policymakers alike. Demand for these three metals in the active parts of rechargeable batteries and other green energy storage systems has skyrocketed as governments and companies further ramp up efforts to decarbonize their respective economies.

[SMM Analysis: Year-End Approaching, Weak Supply and Demand for Anode Materials] SMM, January 26: Demand side, in January, demand for anode materials across various sectors showed varying degrees of pullback. Power side, with Chinese New Year approaching, end-user demand for battery cells...

SMM, January 16: This week, the macro cycle rebounded, aluminum inventory experienced unexpected destocking, and aluminum prices showed a steady rise. However, aluminum billet processing fees faced multiple pressures, and market trading sentiment hit a freezing point. Currently, aluminum billet manufacturers have gradually shut down furnaces and reduced production, focusing on equipment maintenance before the Chinese New Year. However, considering the consumption of liquid aluminum, upstream aluminum smelters may exert pressure on aluminum billet manufacturers. Even during the Chinese New Year, aluminum billet manufacturers plan to maintain the operation of a small portion of their capacity.

[Zinc prices soar significantly, how about the performance of downstream enterprises?] After the news of smelters' production reduction spread, zinc prices rose sharply this week, and galvanizing production rebounded, however, die-casting zinc alloy and zinc oxide are still weak. In terms of sectors...