[SMM Brass Billet Flash] Looking ahead to next week (6.12-6.18), most brass billet enterprises will continue production based on prior orders. Currently, the industry fundamentals—tight raw material supply, elevated costs, and sluggish end-use demand—have yet to show meaningful improvement. SMM expects the industry operating rate to pull back slightly by 0.32 percentage points WoW to 52.27% next week, with operating rates remaining under pressure in the near term.

During the week (6.05-6.11), the operating rate of the brass billet industry in China was 52.59%, up 0.74 percentage points WoW and up 0.58 percentage points YoY. Copper prices pulled back sharply this week, stimulating a moderate release of downstream rigid demand orders. Producers' enthusiasm for starting production increased, leading the industry operating rate to edge up. The decline in copper prices prompted enterprises to proactively stockpile at low prices. However, secondary brass supply remained tight and prices stayed high, constraining enterprises’ restocking room. As a result, raw material inventory only edged up to 3.57 days. On the demand side, the traditional off-season impact continued. Rigid demand from end-use industries such as home appliances, sanitary ware, and hardware was insufficient. Downstream cargo pick-up pace was slow, and overall market trading sentiment was mediocre. Currently, the industry's finished product inventory days remained high at 5.31 days, and destocking was under pressure. Most brass billet enterprises still needed to destock. Looking ahead to next week (6.12-6.18), most copper billet enterprises are expected to continue production based on previous orders. At present, with tight raw material supply, high costs, and weak end-use demand, the industry fundamentals have not improved significantly. SMM expects the industry operating rate next week to pull back slightly by 0.32 percentage points WoW to 52.27%, and up 1.0 percentage points YoY. The industry operating rate will remain under pressure in the short term.

Following Trump’s post suspending airstrikes recently, platinum group metals (PGMs), which had been under severe downward pressure, staged a sharp rebound. Rhodium halted its streak of consecutive declines and edged higher, with prices hovering around RMB 1,970 per gram. Market participants note that PGMs are currently at a double low in technical indicators and market sentiment, endowing them with upward rebound momentum.

Spot circulation was limited this week, with MHP and high-grade nickel matte payables fluctuating at highs.

Aldoro Resources reported that hydrometallurgical testing of the Kameelburg niobium and rare earth deposit in Namibia yielded encouraging results, with a simple process but relatively high recoveries of rare earths and strontium, while drilling also intersected high-grade niobium ore. Tests commissioned by the company and conducted by ALS Metallurgy Services in Western Australia showed that Kameelburg can be treated using a direct acid leaching method, eliminating the need for flotation or magnetic separation processes used at MP Materials' Mountain Pass operation in the US and Lynas Rare Earth's Mt Weld rare earth mine in Western Australia. The hydrochloric acid leaching process can be carried out at ambient temperature and pressure, and if scaled up, is expected to significantly reduce development costs.

[U.S.-Iran Conflict Sees Dramatic Reversal, ECB Rate Hike Weighs on Metal Prices] On the fundamentals side, the supply gap outside China is expected to provide strong bottom support for aluminum prices, and expectations of rising energy costs also create a bullish driver for aluminum prices; this Thursday, the destocking pace of China's aluminum ingot social inventory noticeably accelerated, effectively alleviating the previous high inventory pressure. However, China's high inventory pressure remains relatively pronounced and is expected to limit the upside room for domestic aluminum prices. In the short term, domestic aluminum prices are expected to mainly undergo volatile adjustments.

[SMM Cast Aluminum Alloy Morning Comment: Supply Contracts While Off-Season Demand Suppresses the Market] Overnight, the aluminum alloy 2608 contract retreated after a rapid rise in the night session, opening at 23320, hitting a high of 23355, then fluctuating downward to a low of 23235, and closing at 23240, edging down 30 points (a decline of 0.13%).

SMM, June 12: Overnight, the LME lead 3M contract opened at $1,960/mt. Initially, the price briefly fluctuated upward, hitting a high of $1,974/mt. Then the bulls' upward momentum faded and the price fluctuated downward. During the European session, it continued to fluctuate downward, hitting a low of $1,942/mt. At the end of the session, the price rebounded quickly, finally settling at $1,957.5/mt, forming a small bearish candlestick, down $5/mt, or 0.25%. Overnight, the SHFE lead 2607 contract opened lower with a gap at 16,135 yuan/mt. As bears entered, the SHFE lead price fluctuated downward from early to mid-session, hitting a low of 16,000 yuan/mt. Near the end of the session, it rebounded slightly and lifted, finally settling at 16,040 yuan/mt, forming a small bearish candlestick, down 180 yuan/mt, or 1.11%. Middle East geopolitical conflicts weakened overseas consumption and export expectations. LME lead inventories remained at multi-year highs, with ex-China lead prices under pressure, dragging on the Chinese market. Currently, downstream has entered the consumption off-season, battery enterprises are conducting half-year inventory checks, and later-stage procurement tends to contract, making it difficult for the demand side to lift prices. Supply side, some secondary lead smelters plan to cut production due to losses, while some primary lead smelters are in maintenance, coupled with production resumption expectations at some secondary lead smelters. Supply-side bullish and bearish factors are intertwined, and lead prices are expected to fluctuate in the near term.

Futures: Overnight, the LME lead 3M contract opened at $1,960/mt. In early trading, prices briefly fluctuated upward, reaching a high of $1,974/mt before bulls’ upward momentum faded and prices fluctuated downward. During the European session, the downward fluctuation continued, with prices touching a low of $1,942/mt. Near the close, prices rebounded quickly and settled at $1,957.5/mt, recording a small bearish candlestick, down $5/mt or 0.25%. Overnight, the most-traded SHFE lead 2607 contract opened lower with a gap at 16,135 yuan/mt. As bears entered the market, SHFE lead prices fluctuated downward from early to mid-session, touching a low of 16,000 yuan/mt. Near the close, prices rebounded slightly and settled at 16,040 yuan/mt, recording a small bearish candlestick, down 180 yuan/mt or 1.11%. On the macro front: Trump canceled planned strikes on Iran tonight; the US-Iran agreement has entered the final drafting stage and is expected to be signed in Europe this weekend. US media disclosed behind-the-scenes negotiations on the US-Iran deal: three major differences have narrowed under Qatar’s mediation. Iran’s Foreign Ministry stated that no final conclusion has been reached on the US-Iran agreement. US Treasury Secretary Bessent said the US would withdraw funds from Iran’s accounts to compensate Gulf states for losses if necessary. The European Central Bank raised its three key interest rates by 25 basis points as scheduled. The CME Group plans to launch round-the-clock crude oil and gold futures contracts. The State Administration for Market Regulation, together with the Cyberspace Administration of China and the National Railway Administration, held talks with seven third-party platforms involved in train ticket sales. “Ten-billion-yuan subsidies” are not truly 10 billion yuan—Taobao, JD.com, Pinduoduo, Douyin, and Xiaohongshu were summoned for talks. Kweichow Moutai Chairman Chen Hua stated the company has no plan for a stock split. Spot fundamentals: SHFE lead rebounded after stopping its decline, with suppliers selling at prevailing prices. Some quotes were at wider discounts than yesterday, and mainstream primary lead smelters offered ex-works at parity with the SMM #1 lead average price. For secondary lead, smelters’ selling sentiment improved relatively, but quotes remained scarce, with secondary refined lead offered at premiums of 0–25 yuan/mt over the SMM #1 lead price ex-works. Downstream enterprises mainly made just-in-time procurement, with some purchasing under long-term contracts or drawing on inventory; overall purchasing enthusiasm was moderate, and spot market transactions were sluggish. Inventories: As of June 11, LME lead inventories decreased by 575 mt to 306,650 mt. Total social inventories of SMM lead ingots across five regions increased by 700 mt to 65,400 mt. Lead price forecast for today: Geopolitical conflicts in the Middle East are weakening overseas consumption and export expectations. LME lead inventories remain at multi-year highs, and overseas lead prices are under pressure, dragging down the Chinese market. The downstream sector is entering the off-season, with battery enterprises conducting mid-year account settlements and stock takes; procurement is expected to contract going forward, making it difficult for the demand side to support higher prices. Supply side, some secondary lead smelters plan to cut production due to losses, while some primary lead smelters are in maintenance, combined with expectations for production resumptions at some secondary lead smelters, bullish and bearish factors are intertwined on the supply side, and lead prices are expected to show a volatile pattern in the short term.

SMM Jun 12 News: Metal markets: Overnight, domestic base metals broadly rose. SHFE copper rose 0.13%. SHFE aluminum rose 0.62%, SHFE lead fell 0.74%, SHFE tin rose 1.91%. SHFE zinc fell 0.19%. SHFE nickel rose 0.25%. In addition, the most-traded alumina futures contract rose 1.18%, and the most-traded cast aluminum contract rose 0.04%. Overnight, ferrous metals showed mixed performance. Iron ore closed flat at 766.5 yuan/mt, hot-rolled coil (HRC) flat at 3,365 yuan/mt, stainless steel rose 1.91%, and rebar fell 0.33%. Coking coal and coke: The most-traded coking coal futures contract fell 0.33%, while the most-traded coke futures contract rose 0.35%. Overnight overseas market: LME base metals nearly all rose. LME copper rose 0.94%. LME aluminum rose 0.87%, LME lead fell 0.25%. LME zinc rose 1.64%. LME tin rose 2.01%. LME nickel rose 0.37%. Overnight precious metals : Overnight COMEX gold rose 2.43%, COMEX silver rose 4.25%. Overnight the most-traded SHFE gold contract rose 0.75%, and the most-traded SHFE silver contract rose 2.41%. As of 7:15 on Jun 12, overnight closing prices: Macro front China: [SAMR Approves Release of a Batch of Important National Standards] Recently, the State Administration for Market Regulation (Standardization Administration of China) approved the release of 389 important national standards, covering high-tech, traditional industries, environmental protection, agricultural production, and people's livelihoods. After publication, these standards will play a vital role in promoting high-quality industrial development, improving people's quality of life, and safeguarding life and property. In the high-tech sector, 33 national standards were released for artificial intelligence, cybersecurity, blockchain, etc., clarifying technical and safety specifications. Six national standards were released for industrial internet and industrial digital twins, promoting smart manufacturing upgrades. Fifteen national standards were released for spacecraft grounding requirements, manned spacecraft markings and usage requirements, and general requirements for parachute systems of civil light and small rotary-wing drones, laying a solid foundation for the large-scale application of China's aerospace equipment. (SAMR) [SHFE: Adjusting Price Limit and Margin Requirements for Gold and Silver Futures Contracts] SHFE announced that for the gold AU2609 contract, the price limit is 17%, the hedging position margin rate is 18%, and the speculative position margin rate is 19%; for the silver AG2706 contract, the price limit is 17%, the hedging position margin rate is 18%, and the speculative position margin rate is 19%. [GFEX: Matters Regarding Polysilicon Futures PS2706 Contract and Lithium Carbonate Futures LC2706 Contract] GFEX announced that for the polysilicon futures PS2706 contract, the trading fee rate is 0.025% of the transaction value, the intraday closing fee rate is 0.025% of the transaction value; the minimum order size per trade is 5 lots for opening and 1 lot for closing; non-futures company members or clients are limited to a maximum daily opening volume of 200 lots. For the lithium carbonate futures LC2706 contract, the trading fee rate is 0.032% of the transaction value, the intraday closing fee rate is 0.032% of the transaction value; the minimum order size per trade is 5 lots for opening and 1 lot for closing; non-futures company members or clients are limited to a maximum daily opening volume of 400 lots. [DCE: Trading Schedule for 2026 Dragon Boat Festival Holiday] DCE announced that the market will be closed from Jun 19 (Friday) to Jun 21 (Sunday) and resume trading on Jun 22 (Monday). There will be no night session on the evening of Jun 18 (Thursday). On Jun 22 (Monday), the call auction for all contracts will take place from 08:55 to 09:00. Night session trading will resume on the evening of Jun 22 (Monday). US dollar: Overnight, the US dollar index fell 0.35% to 99.69. Market expectations for US Fed interest rate hikes were pushed back from December this year to January next year, with markets no longer fully pricing in a rate hike this year. (Jin10 Data APP) According to CME "Fed Watch": The probability that the US Fed will keep rates unchanged through June is 98.5%, and the probability of a cumulative 25bp rate cut is 1.5%. For the meeting through July, the probability that the Fed will keep rates unchanged is 91.3%, the probability of a cumulative 25bp rate hike is 7.4%, and the probability of a cumulative 25bp rate cut is 1.4%. Data released by the US Bureau of Labor Statistics on Thursday showed that the producer price index (PPI) rose 6.5% YoY in May, the largest increase since November 2022 and above the expected 6.4%; it rose 1.1% MoM, also exceeding the market forecast of 0.7%. The data echoed the consumer price index (CPI) released earlier, which also recorded the fastest pace in three years. The combination of these two inflation figures is expected to further cement market expectations that the US Fed will begin raising rates in 2026. With momentum rebuilding in the labor market, taming inflation has become the Fed's top priority for now. (From Wallstreetcn APP) Last week, US initial jobless claims increased slightly, indicating that the labor market retained resilience in early June. The US Department of Labor said on Thursday that in the week ending June 6, initial claims for unemployment benefits rose by 4,000 to a seasonally adjusted 229,000, above market expectations. Claims typically rise at the start of summer, as some states allow non-teaching staff to file for unemployment benefits during long school holidays. However, the government's model for stripping out seasonal fluctuations may not fully capture these changes. Last week, the government reported that the economy added jobs for the third straight month in May. The unemployment rate held at 4.3% for the third consecutive month. Some of the strength in job growth may be due to fewer layoffs. (Jin10 Data APP) Other currencies: [ECB Becomes First Major Central Bank to Raise Rates Since Inflation Reemerged] The European Central Bank raised interest rates for the first time in nearly three years, making it the first major central bank in the developed world to respond to inflation triggered by the Iran war. The bank lifted its main rate from 2% to 2.25%, a move widely expected but also highlighting the challenges faced by major economies due to rising energy prices resulting from the prolonged closure of the Strait of Hormuz. Investors widely expect the ECB to raise rates at least once more this year. The decision also made the ECB the first major central bank to tighten monetary policy in response to rising energy prices, which have pushed eurozone inflation above 3%. The US Fed, under Chair Warsh, is expected to hold rates steady next week as Warsh faces a dilemma between Trump's demand for low rates and mounting inflationary pressure; the Bank of England is also expected to keep rates unchanged next week. (Zhitong Finance) Data: Today will see the release of Germany's final May CPI MoM, the UK's April three-month GDP MoM, UK April manufacturing output MoM, UK April seasonally adjusted goods trade balance, UK April industrial output MoM, France's final May CPI MoM, US June one-year ahead inflation expectations preliminary, and US June University of Michigan consumer sentiment preliminary, among others. Also of note: the Huawei Developer Conference will be held from Jun 12-14; Elon Musk's commercial space company SpaceX is scheduled to list on the Nasdaq on Jun 12, 2026. Crude oil: Overnight, both oil futures fell, with WTI crude down 4.01% and Brent crude down 4.26%. Oil prices tumbled after Trump signaled that the US and Iran are about to reach a peace deal. OPEC's monthly report showed that OPEC lowered its forecast for 2026 global oil demand growth to 970,000 bpd (previously expected at 1.17 million bpd). It raised its 2027 global oil demand growth forecast to 1.73 million bpd (previously 1.54 million bpd). OPEC+ (including former member UAE) crude oil production averaged 33.13 million bpd in May 2026, down 190,000 bpd from April, mainly due to lower Iranian output. (From Wallstreetcn APP) Additionally, CME Group announced that, pending regulatory review, it will offer 24/7 (around the clock) trading for new, smaller crude oil and gold contracts. The new crude oil contract will be one-tenth the size of CME's existing micro WTI crude oil futures contract and will launch on August 30. Around-the-clock trading for the company's existing 1-ounce gold futures contract will begin on July 26. Derek Sammann, Global Head of Commodity Markets at CME Group, said: "In the face of geopolitical uncertainty, offering appropriately sized, regulated products available 24/7 enables traders to manage risk whenever news breaks." (Jin10 Data APP)