【SMM Steel】The EU will take necessary measures to protect its interests if Trump imposes new 25% tariffs on EU cars, an EC spokesperson said. Trump announced he will raise tariffs on EU cars/trucks to 25% next week, claiming the bloc is not adhering to a previous trade agreement signed in summer 2025 that capped US tariffs on EU cars/parts at 15%. The EU says it is fulfilling its obligations. The EU has previously considered trade measures, including €93bn in retaliatory tariffs. German companies cut US investments by ~45% in the first year of Trump's second term due to trade uncertainty.

[SMM Tin Morning Briefing: The Most-Traded SHFE Tin Contract Opened Slightly Higher in the Night Session and Then Fluctuated Downward, While Downstream Enterprises Concentrated Their Restocking on Dips]

The US is expected to launch two new trade investigations into the “surplus industrial capacity” of 16 major trading partners, including China. According to officials from the Office of the United States Trade Representative, the move could trigger new tariff measures. In response, Chinese Foreign Ministry spokesperson Guo Jiakun pointed out that the so-called “overcapacity” is utterly groundless, and that China firmly opposes using this as a pretext for political manipulation. Meanwhile, the European Commission also made its position clear: if the US takes actions that violate trade agreements, the EU will “respond firmly.”

[SMM Aluminum Morning Meeting Summary: The SHFE/LME Price Ratio Continued to Weaken, and Aluminum Prices Were Expected to Fluctuate at Highs in the Short Term] Against the backdrop of continued tightening LME liquidity, LME aluminum still had upward momentum, with strong support from overseas prices, and the backwardation structure was expected to persist in the short term. China was in a phase of high inventory + weak fundamentals, and its upward momentum was clearly weaker than that outside China. Amid diverging domestic and external drivers, the SHFE/LME price ratio was expected to continue weakening, and aluminum prices were expected to continue fluctuating at highs in the short term.

He Yongqian, spokesperson for the Ministry of Commerce, stated that during German Chancellor Merz's visit to China, the two countries engaged in in-depth exchanges in the economic and trade field and reached over ten commercial agreements spanning multiple industries. Regarding the strengthening of export controls against Japan, He Yongqian noted that China has included relevant Japanese entities in its export control list and watchlist. This measure aims to curb Japan's "remilitarization" and nuclear ambitions and is entirely justified, reasonable, and lawful.

According to market reports, the European Union continues to contest the 2025 extension of US Section 232 tariffs on steel and aluminum derivatives, viewing them as a violation of existing trade agreements. While the EU seeks a rollback—emboldened by a recent US Supreme Court ruling that struck down separate "emergency" IEEPA tariffs—the US maintains that investigations into these derivatives were initiated before any trade deal was finalized. Currently, most EU steel exports face a 15% tariff entering the US, while nearly 40% of machinery imports from the EU are hit by a 50% tariff on their metal content. The dispute has notably stalled the ratification of the 2025 EU-US trade deal in the European Parliament.

SMM Morning Meeting Minutes: LME copper opened at $12,967/mt overnight, hitting an early high of $12,984/mt before copper prices fluctuated downward, touching a low of $12,804/mt near the close and finally settling at $12,901/mt, down 0.76%. Trading volume reached 12,000 lots, down 4,963 lots from the previous session, while open interest stood at 318,000 lots, up 327 lots from the previous session, primarily driven by increased bear positions. The most-traded SHFE copper contract was closed overnight due to the Chinese New Year holiday.

According to CCTV News, on February 5, Canadian Prime Minister Mark Carney announced a new electric vehicle strategy, including the reinstatement of car purchase subsidies, and stated that Canada will cooperate with China to promote the local production and export of EVs in Canada. According to a statement released by the Prime Minister's Office of Canada, the country will make full use of existing and newly established trade agreements, including a recently reached EV cooperation agreement with China, to facilitate large-scale investment in this sector, diversify Canada’s automotive export markets, and position Canada as one of the global leaders in the electric vehicle industry.

[SMM Tin Futures Review: The Most-Traded SHFE Tin Contract Fluctuated at Highs Amid Mixed Factors, Downstream Enterprises Remained Cautious and Watchful]

The President of the German Association of the Automotive Industry (VDA), Hildegard Mueller, stated that the trade agreement between the European Union and India sends a strong signal that tangible action is possible. "Although not all trade barriers have been eliminated, in a global environment where protectionism is gradually gaining traction, this agreement will bring much-needed improvements in market access." She particularly welcomed the arrangement on automotive tariffs in the agreement, which involves gradually reducing import tariffs on complete vehicles based on an initial quota of 250,000 units and fully eliminating tariffs on automotive parts within 5 to 10 years. This agreement will not only strengthen bilateral trade between the EU and India but also significantly enhance the attractiveness of mutual investment between the two sides.