[US-Iran Talks Ease, Pressuring LME Aluminum; SHFE Aluminum Destocking Support Limits Decline] In the absence of new macro bullish catalysts, SHFE aluminum tracked LME aluminum under pressure, but the decline was relatively contained by destocking in China. Going forward, close attention should be paid to: the progress of physical production resumptions at Middle Eastern aluminum enterprises after the Strait of Hormuz fully reopens for navigation; the trajectory of the US dollar after hawkish signals from the US Fed materialize and its transmission to commodities; and whether destocking in China continues to accelerate. Aluminum prices are expected to remain in the doldrums in the near term.

[SMM Morning Meeting Summary: LME Zinc Held Up Well on Expectations of De-escalation in Geopolitical Conflict] Overnight, LME zinc formed a bullish candlestick, with the 10/20-day moving averages providing support below and the upper Bollinger Band exerting resistance above. Preliminary talks between the U.S. and Iran may pave the way for a war agreement, reigniting optimism and keeping LME zinc firm.

[SMM Analysis: Impact on Solid-state Batteries of the Ministry of Commerce Adding 10 US Entities to the Export Control List] On June 22, 2026, the Ministry of Commerce issued an announcement and, effective immediately, formally implemented the "Export Control List (June 22, 2026)," which includes 10 US entities. This export control measure has almost no direct impact on China's solid-state battery industry, but attention should be paid to the indirect link of the rare earth supply chain. (1) China already has export controls on high-end batteries with an energy density exceeding 300 Wh/kg (including semi-solid and all-solid-state), and this measure targeting specific entities is an extension of the existing control framework rather than a new restriction specifically aimed at the solid-state battery industry. (2) The solid-state battery industry is still in the development stage and has not yet generated a significant export demand.

SMM June 22 news: Metals market: As of the midday close, base metals on the domestic market mostly fell, with only SHFE aluminum rising, up 0.4%. SHFE tin led the decline with a drop of 1.31%, SHFE nickel fell 0.84%, SHFE lead and SHFE zinc both fell 0.7%, and SHFE copper edged down 0.34%. The most-traded alumina contract fell 0.52%, while the most-traded casting aluminum contract rose 0.47%. In addition, the most-traded lithium carbonate contract fell 6.08%, the most-traded polysilicon contract fell 0.25%, and the most-traded silicon metal contract fell 0.58%. The most-traded European route container shipping index futures rose 0.11%. In the ferrous metals segment, all except stainless steel rose. Stainless steel rose 0.36%, while hot-rolled coil and iron ore both fell around 0.6%. In the coking coal and coke segment, coking coal fell 2.24% and coke fell 1.78%. On the overseas market front, as of 11:38, base metals on the LME all rose, with LME nickel leading the gains at 1.23%, LME tin up 0.88%, LME copper up 0.53%, and the other metals showing relatively small fluctuations. In precious metals, as of 11:38, COMEX gold fell 1.15%, COMEX silver fell 0.73%. Domestically, SHFE gold fell 3.25% and SHFE silver fell 5.65%. In addition, the most-traded platinum contract fell 4.77% and the most-traded palladium contract fell 3.51%. As of 11:38 on June 22, selected futures midday quotes: Spot and fundamentals Zinc: Today, mainstream transaction prices for #0 zinc were concentrated in the range of 24,495-24,790 yuan/mt, Shuangyan brand mainstream transaction prices were at 24,595-24,890 yuan/mt, and #1 zinc mainstream transaction prices were at 24,425-24,720 yuan/mt. In the morning session, quotations against the SMM average price were at premiums of 10-30 yuan/mt, while no quotes were offered against the futures market. In the second trading session, quotations for ordinary domestic brands against the 2607 contract were at discounts of 40-20 yuan/mt..... Macro front Domestic aspect: [Unchanged for the 13th consecutive month! China's latest LPR quotes released: 3.5% for the over-five-year term and 3% for the one-year term.] China’s June Loan Prime Rate (LPR) was released on June 22, with both the one-year and over-five-year LPRs unchanged. The People's Bank of China authorized the National Interbank Funding Center to announce that the LPRs on June 22, 2026 were: the one-year LPR at 3.0%, and the over-five-year LPR at 3.5%. These LPRs will remain valid until the next LPR release. [During the three-day Dragon Boat Festival holiday, cross-regional person trips nationwide are expected to exceed 650 million.] According to the Ministry of Transport, during the three-day Dragon Boat Festival holiday (June 19-21, 2026), the total cross-regional person trips nationwide were expected to be 652.78 million, with a daily average of 217.593 million, flat YoY. (（CCTV News） On the dollar front: As of 11:38 AM, the US dollar index rose 0.11% to 100.88, with markets continuing to monitor developments following the US-Iran talks. US federal funds rate futures extended their decline, indicating a 76% probability of a Fed rate hike in September. On June 19, Citadel Securities released a research note stating that under new Fed Chair Warsh, the Fed has shifted from inertial decision-making to proactive, adaptive policymaking. Citadel Securities warned that the market should not interpret this signal with inertial thinking. Its core assessment: the next move is a rate hike, and that hike is likely imminent. At the same time, the note stressed that the Fed will no longer continue its previous market-coddling approach of "pre-communicating policy paths". This shift holds significant implications for the interest rate market, the US dollar, and the stock market. Citadel Securities set its baseline scenario as three 25-basis-point rate hikes over the next two years, in September 2026, December 2026, and March 2027, and views the July meeting as a "live meeting", meaning action could be taken at any time. The Fed projects that core PCE inflation will average about 90 basis points above the 2% target over 2026-2027. Based on the inflation gap and classic monetary policy rules, Citadel Securities calculates that the policy rate should exceed the neutral rate by 1.5 times the inflation gap, implying an additional 135 basis points of tightening. Assuming a neutral rate of 3%, the target policy rate should fall in the 4.25%–4.50% range, corresponding to exactly three rate hikes. (Wall Street Insights) According to the CME FedWatch Tool: The probability that the Fed holds rates steady in July is 61.5%, and the probability of a cumulative 25-basis-point hike is 38.5%. For September, the probability of rates remaining unchanged is 24.9%, the probability of a cumulative 25-basis-point hike is 52.2%, and the probability of a cumulative 50-basis-point hike is 22.9%. (Jin10 Data) On the data front: Today will see the release of Canada's May CPI month-over-month rate, the Eurozone's preliminary June consumer confidence index, and other data. Furthermore, the State Council Information Office will hold a press conference on policies and measures to stabilize, improve, and optimize the utilization of foreign investment. ECB President Lagarde speaks at the European Parliament, and Fed Governor Waller delivers welcome remarks at a conference on the international role of the US dollar. Crude Oil: As of 11:38, both oil benchmarks fell together, with US crude down 0.11% and Brent crude down 1.24%. Crude oil prices experienced sharp rises and falls today. Earlier, Trump issued threats again during the negotiations, driving oil prices sharply higher. Subsequently, progress in the US-Iran peace negotiations dragged oil prices down. Qatar and Pakistan issued a joint statement on social media platform X, saying that the first round of high-level US-Iran talks concluded in Burgenstock, Switzerland. The parties agreed to establish a high-level committee. Chief negotiators will report regularly to the high-level committee and lead working groups responsible for nuclear issues, sanctions, and monitoring and dispute resolution. The high-level committee agreed on a roadmap aiming to reach a final agreement within 60 days. To avoid accidents and miscommunication and ensure the safe passage of merchant ships through the Strait of Hormuz, communication channels have been established. It was also agreed to set up a de-escalation group to ensure the implementation of the commitment to cease military operations within Lebanese territory. For the rest of the week, technical talks will continue in Burgenstock, discussing all related issues. (From Wallstreetcn APP) Ali Nizar, head of Iraq’s State Oil Marketing Organization (SOMO): Currently, two vessels are loading crude oil at the country’s southern terminal, but more vessels need to enter the Strait of Hormuz for production to continue rising. (Iraq 24 TV) (From Wallstreetcn APP) Iran is shipping large volumes of oil that were previously unable to be exported due to US sanctions, potentially giving it a boost after signing a temporary peace deal with Washington last Wednesday. Shipping data showed that a total of 11 tankers were spotted leaving Iran’s Chabahar port in the Gulf of Oman last week, carrying a combined 20 million barrels of crude oil. (Bloomberg) Spot Market Overview: ► ► ► ► ► ► ► ► ► ►

[Ex-China Premium Collapse vs. Accelerated Domestic Destocking, Aluminum Prices Under Pressure in Short-Term Fluctuations] China side, the accelerating destocking pace is a highlight, but absolute inventory remains in a relatively high range. In the absence of new macro positives, SHFE aluminum follows LME aluminum under pressure, but supported by domestic destocking, the decline is relatively controllable. Short-term aluminum prices are expected to be in the doldrums.

SMM Morning Meeting Summary: Last Friday night, LME copper opened at $13,625.5/mt, dipped to $13,584.6/mt early in the session, then fluctuated upward to a high of $13,675.7/mt, and finally closed at $13,587/mt, down 0.50%. Trading volume reached 10,500 lots, and open interest reached 253,000 lots, an increase of 2,615 lots from the previous trading day, reflecting bearish position building. Meanwhile, SHFE copper was closed last Friday night due to a holiday.

The LME announced new restrictions on the warranting of Russian-origin copper and cobalt in EU-listed warehouses. Metals imported after the EU sanctions deadline will no longer qualify for registration. The move reflects the continuing reshaping of European metal supply chains.

[SMM Analysis] Sulfur Price Outlook: The Game Between Geopolitical Premium Fade and Supply Recovery Lag

The London Metal Exchange (LME) announced new requirements for the registration of Russian-origin copper and cobalt in EU-based LME warehouses as part of measures to comply with the European Union's latest sanctions package against Russia. Under the updated rules, Russian-origin copper and cobalt can only be registered in EU-listed warehouses if evidence is provided showing the material was imported into the EU before July 25, 2026. The measure follows the EU's 20th sanctions package, which includes restrictions on imports of Russian copper and other metal products. The LME noted that no Russian-origin copper or cobalt has been warranted in EU-based LME warehouses for more than a year and therefore expects limited market impact from the new requirements.

SMM June 18 News: In metals markets: Overnight, base metals on both domestic and overseas markets collectively rose. LME zinc led the gains with a 1.4% increase, LME tin rose 0.85%, LME aluminum gained 0.99%, SHFE zinc climbed 0.67%, and SHFE nickel added 0.6%. All other metals saw small fluctuations. Alumina main contract rose 0.52% and aluminum casting main contract rose 0.17%. Overnight, the ferrous metals complex generally fell. Iron ore dropped 1.13%, recording a three-day losing streak. HRC, rebar, and stainless steel all fell within 1%. Coking coal and coke both declined, with coking coal down 2.26% and coke down 1.25%. Overnight in precious metals, COMEX gold fell 1.79% and COMEX silver fell 2.93%. Domestically, SHFE gold fell 0.84% and SHFE silver fell 1.36%. Overnight closing prices as of 6:43 AM on June 18: Macro Front China: [PBoC: Improve the Short-End Interest Rate Adjustment Mechanism] Pan Gongsheng, Governor of the People's Bank of China, stated that the short-end interest rate adjustment mechanism will be improved. Building on the temporary overnight repo and reverse repo tools established in July 2024, the mechanism for using the tools will be improved, and the operating rates will be adjusted to the 7-day reverse repo rate plus and minus 25 basis points, narrowing the corridor from 70 basis points to 50 basis points. The open market operations toolbox will be further enriched, and overnight reverse repo operation varieties will be added at appropriate times to better match the short-term liquidity needs of the banking system. (CCTV News) [PBoC Optimizes the Mechanism for Temporary Overnight Repo and Reverse Repo Open Market Operations] To flexibly and efficiently utilize temporary overnight repo and reverse repo open market tools, the People's Bank of China decided to optimize the operational elements effective immediately. The operation time is adjusted to 15:00-15:30 on working days, and the operating rates are adjusted to the 7-day reverse repo rate minus 25bp and plus 25bp, respectively. The rules for using the tools are further clarified. When the money market overnight rate (DR001) is persistently lower or higher than the corresponding tool's operating rate, the People's Bank of China will initiate corresponding operations based on the needs of primary dealers. (People's Bank of China) [Wu Qing‘s Speech at Lujiazui Forum: Expand the Scope of the Fifth Set of Standards to the AI Field, Support Hong Kong-Listed Companies for Domestic Listing] Wu Qing, Chairman of the China Securities Regulatory Commission, intensively released policy signals at the 2026 Lujiazui Forum on the 17th, covering reforms to the tech listing system, capital market opening-up, guiding long-term capital, and AI regulation, outlining the regulatory layer's policy blueprint for deepening capital market reforms. In his speech, Wu Qing said that the scope of the fifth set of listing standards will be expanded to the artificial intelligence field, actively supporting the listing of high-quality AI large model companies, and supporting qualified Hong Kong-listed companies to list domestically. He also stated that research on promoting RMB foreign exchange futures pilot programs will be accelerated. He further stated that efforts will be made to enhance cross-border regulatory collaboration, support legal and compliant cross-border investment and financing activities, and lawfully crack down on various cross-border illegal activities. Guiding opinions for regulating the development of capital market AI will be released in due course, with strict investigations and punishments for illegal activities such as riding hot topics, hyping concepts, or even market manipulation and insider trading in the name of technology. US Dollar: As of the overnight close, the US dollar index rose 0.82% to 100.38. The US Federal Reserve's monetary policy meeting this week stood pat as widely expected. The post-meeting statement emphasized the commitment to price stability by reducing high inflation, and the dot plot reflected a strong hawkish bias among Fed policymakers. On Wednesday, June 17 US Eastern Time, the Federal Reserve announced after its FOMC meeting that it would keep the target range for the federal funds rate unchanged at 3.50% to 3.75%. To date, after cutting rates at three consecutive meetings through last year-end, the FOMC has stood pat at all four monetary policy meetings in 2026. This decision was completely within market expectations. This was the first FOMC meeting with Warsh as Fed Chairman. Judging from the rate decision, his first major act in the new role was to significantly shorten the statement, including the rate guidance. The new statement emphasized only the inflation side of the dual mandate on employment and inflation. Its assessment of inflation and other economic areas was consistent with the previous one, reiterating that inflation remains high and noting that the Middle East conflict brings high uncertainty to the economy. Compared with the statement, the dot plot released after the meeting reflected an even more pronounced hawkish tilt: half of the Fed officials providing rate forecasts projected at least one rate hike this year. Bloomberg rates strategist Ira Jersey commented that given half of Fed officials foresee hikes, the market focusing on the dot plot makes the bear-flattening of the Treasury yield curve look logical. Nick Timiraos, a veteran Fed correspondent known as the "new Fed wire," described the dot plot as "very hawkish." He pointed out in the article title that the Fed held rates steady, but more officials expect the next move to be a hike. (Wall Street CN) According to CME "FedWatch": The probability that the Fed keeps rates unchanged in July stands at 64.0% (was 91.0% before the decision). The probability of a cumulative 25-basis-point rate hike is 35.1% (was 8.9%), and the probability of a cumulative 50-basis-point hike is 1% (was 0%). For December, the probability that the Fed holds rates steady is 14.2% (was 38.2%), with the chances for a cumulative 25-basis-point hike at 36.4% (was 43.0%), a 50-basis-point hike at 33.8% (was 16.2%), a 75-basis-point hike at 13.5% (was 2.4%), and a 100-basis-point hike at 2.1% (was 0.1%). (Jin10 Data App) Data: Today, China's May Swift RMB share in global payments, the US Federal Reserve's June 17 interest rate decision (upper bound), US initial jobless claims for the week ending June 13, the US Philadelphia Fed Manufacturing Index for June, and the US Conference Board Leading Index month-over-month change for May will be released. Also due are Switzerland's May trade balance and Swiss National Bank policy rate on June 18, the UK's ILO unemployment rate for the three months to April, UK May unemployment rate, UK May claimant count change, and the Bank of England‘s June 18 interest rate decision, as well as the Eurozone’s seasonally adjusted current account for April, among other data. In addition, China will open a new refined oil product pricing window. The Fed's FOMC will release its interest rate decision and Summary of Economic Projections. Fed Chairman Warsh will hold a monetary policy press conference. The Swiss National Bank and the Bank of England will announce their interest rate decisions, with the BoE also releasing meeting minutes. Notably, on June 18, there will be no night trading session on the Shanghai Gold Exchange, SHFE, Zhengzhou Commodity Exchange, and DCE in China due to the eve of the Dragon Boat Festival. On June 19, the NYSE will be closed for Juneteenth. On the same day, trading of precious metals, energy, foreign exchange, equity index, and US Treasury futures contracts on the US-based CME will close early at 01:00 Beijing Time on June 20 for Juneteenth. Also due to Juneteenth, trading of Brent crude oil futures contracts on the US-based ICE will close early at 01:30 Beijing Time on June 20. Crude Oil: As of the overnight close, both oil benchmarks fell. Brent crude fell 0.38% and WTI crude fell 0.35%. On June 17 local time, senior US officials read out the 14 terms of a US-Iran memorandum of understanding aimed at ending the war and promoting the reopening of the Strait of Hormuz to the media. According to the arrangement, both sides will begin 60 days of further negotiations this Friday (June 19) in Switzerland to reach a final agreement. The US commits that, effective immediately upon the signing of this memorandum and until sanctions are lifted, the US Treasury Department will issue exemption licenses for Iran's exports of crude oil, petroleum products, and derivatives, as well as related supporting services (including banking transactions, insurance, and transportation). (Jin10 Data App) Amid the chain reaction from easing Middle East tensions, the International Energy Agency (IEA) judged in its monthly oil market report released Wednesday that if a peace arrangement proves sustainable, the global crude market could shift to a clear oversupply next year. The IEA systematically assessed the impact of the end of the Iranian conflict for the first time in this report. The agency analyzed that as oilfields shut down for months due to the conflict gradually resume production, supply from the Gulf region will show a "gradual" recovery trend this year. On this basis, global crude oil production is expected to increase by 8 million barrels per day by next year, reaching a total scale of 110 million barrels per day. In contrast, global demand growth is estimated at about 2 million barrels per day, described as "relatively mild." The IEA noted in the report that this supply-demand mismatch will lead to a "massive surplus," which it suggested "could provide a welcome breathing space for the market and an opportunity to replenish depleted stocks or build new strategic reserves." Currently, oil inventories in OECD countries have fallen to their lowest levels since 1990. (Jin10 Data) The IEA also noted that oil prices experienced a sharp correction between May and mid-June, driven by market optimism about a peace deal and changes in Asian demand. Reduced crude oil procurement from Asia exerted clear downward pressure on prices. Affected by these combined factors, North Sea crude prices cumulatively fell by more than $40 per barrel during this period to around $82, indicating the market had already priced in expectations of increased supply and slowing demand. (Jin10 Data)