SMM Morning Meeting Minutes: Overnight, LME copper opened at $12,794.5/mt. After dipping to $12,734/mt in early trading, its center rose throughout the session, touching a high of $12,968.5/mt near the close, and finally settled at $12,919/mt, up 0.39%. Trading volume rose to 31,000 lots, an increase of 6,518 lots from the previous trading day; open interest rose to 303,000 lots, down 5,089 lots from the previous trading day, mainly reflecting bears reducing positions overall. Overnight, the most-traded SHFE copper 2604 contract opened at 100,230 yuan/mt. After bottoming at 100,050 yuan/mt in early trading, its center rose throughout the session, touching a high of 101,250 yuan/mt at the close, and finally settled at 101,160 yuan/mt, up 1.28%. Trading volume fell to 46,000 lots, down 148,000 lots from the previous trading day; open interest fell to 197,000 lots, down 3,094 lots from the previous trading day, mainly reflecting bears reducing positions overall.

Japanese Prime Minister Kishida Fumio failed to reach a trade agreement with US President Trump during the Group of Seven (G7) summit, a result that has brought Japan's economy closer to the brink of recession amid the impact of US tariffs. "We will continue to actively coordinate with the US to reach an agreement that benefits both sides without sacrificing Japan's national interests," Kishida told the media on Monday on the sidelines of the G7 meeting in Calgary, Canada. "Currently, there are still differences between the two sides on some issues." Trump, for his part, told the media that he had a "very good conversation" with Kishida and said an agreement was still possible. "The Japanese are tough," Trump said. Regarding the potential consequences of failing to reach an agreement, he said, "At the end of the day, you have to understand that we'll send a letter telling them this is the price you have to pay, or else don't do business with us." Like other countries, Japan faces 25% tariffs on automobiles and parts, as well as 50% tariffs on steel and aluminum products. In addition, the Trump administration has imposed a reciprocal tariff rate of 24% on Japan (currently temporarily reduced to 10%). According to a report released by Daiwa Institute of Research in May this year, if the so-called "reciprocal tariff" rises from the current 10% to 24%, Japan's real GDP will be reduced by approximately 2.2% by 2029. Automobile tariffs are a key focus of negotiations between Japan and the US. The automotive industry is crucial to Japan's economy. According to data from the Japan Automobile Manufacturers Association (JAMA), the industry employs approximately 5.6 million people, accounting for 8.3% of the country's total workforce, and contributes about 10% of GDP. Major Japanese automakers such as Toyota, Honda, Mazda, and Subaru expect to face collective losses exceeding $19 billion in the current fiscal year alone due to the impact of tariffs. "For Japan, automobiles are indeed a matter of national interest. We will protect them at all costs," Kishida said in a media interview. When asked whether automobile tariffs were included in the negotiation agenda, Trump did not reveal much, only saying, "We'll see." According to previous media reports, Japan has proposed a series of potential concessions in an attempt to narrow its trade surplus with the US, including increasing imports of soybeans from the US and strengthening cooperation in the shipbuilding sector. In addition, Japan has also tried to persuade the US by emphasizing its status as the largest investor in the US, arguing that if tariffs weaken Japan's domestic economy, it will affect its ability to invest in the US. However, so far, these commitments still seem not enough to facilitate a trade agreement between the US and Japan.

According to SMM, the Central Bank of Chile announced that Chile's copper export value in May was $4.48 billion, up 4.4% compared to the same period last year. Chile is the world's largest copper producer. The country's trade surplus in May was $1.52 billion, whereas analysts had previously expected a surplus of $1.4 billion.

According to CME's "FedWatch Tool": The probability that the US Fed will maintain interest rates unchanged in May is 96.3%, and the probability of a 25-basis-point interest rate cut is 3.7%. The probability that the US Fed will maintain interest rates unchanged by June is 22.1%, the cumulative probability of a 25-basis-point interest rate cut is 75.0%, and the cumulative probability of a 50-basis-point interest rate cut is 2.8%.

The US Treasury Department released the Treasury International Capital (TIC) report for March 2025 last Friday (May 16) local time. The report showed that for the first time since the beginning of this century, China's holdings of US Treasuries fell below those of the UK, allowing the latter to surpass China and become the second-largest overseas "creditor" of the US, with China dropping to third place. According to data from the US Treasury Department, the recorded scale of China's holdings of US Treasuries by US banks and custodians fell to $765 billion at the end of March, down from $784 billion the previous month. During the same period, the UK's holdings of US Treasuries increased by nearly $30 billion to $779 billion. This change made the UK the second-largest overseas "creditor" of the US after Japan, with China dropping to third place. It was also the first time since October 2000 that the UK's holdings of US Treasuries exceeded those of China. Since April 2022, China's holdings of US Treasuries have remained below $1 trillion. This further reduction has brought China's holdings close to the low of $759 billion seen in December last year, which was the lowest level since February 2009. In February 2009, China's holdings of US Treasuries stood at $744.2 billion. Since reaching a peak of over $1.3 trillion in 2011, China has been gradually reducing its holdings of US Treasuries and shifting towards other assets such as US agency bonds and gold. The decline in the value of China's US Treasury holdings may also partially reflect market volatility. March was just before the current round of turbulence in the US Treasury market. Alicia García-Herrero, Chief Economist for Asia-Pacific at Natixis Bank in France, said, "China has been slowly but steadily selling (US Treasuries), which is a warning to the US. This warning has been around for years and is not sudden in itself." It is worth mentioning that while reducing its holdings of US Treasuries, China has also been increasing its gold reserves. According to the latest statistics released by the State Administration of Foreign Exchange, as of the end of April 2025, China's gold reserves stood at 73.77 million ounces, up 70,000 ounces MoM. This marked the sixth consecutive month that the central bank has increased its gold reserves. The increase in gold reserves has become a testament to the diversification trend in China's foreign exchange reserve investments. China's massive holdings of US Treasuries are the result of decades of trade surpluses with the US, which US President Trump is currently seeking to reduce. However, at the same time, US government officials have also expressed concern about foreign countries selling off US Treasuries, as this could push up US Treasury yields and make debt refinancing more expensive. Industry insiders said that among China's holdings of US Treasuries, the proportion of short-term Treasury bills reached its highest level since 2009 in March. These short-term Treasury bills are the most liquid securities and are most likely to be sold off during times of crisis. Brad Setser, a senior fellow at the Council on Foreign Relations and a former US Treasury official, said, "Based on available data, there is no doubt that China has shortened the duration of its US asset portfolio." Changes in Open Interest of Other "Creditors" Industry insiders said that the increase in the UK's holdings of US Treasuries may not reflect changes in its own foreign exchange reserves. Instead, analysts said it reflects London's role as an international capital hub. European holders of US Treasuries include insurance companies, banks, and custodians. Some hedge funds hold US Treasuries and engage in arbitrage by selling futures or swaps—these positions are colloquially known as "basis trades," and the unwinding of these trades was one of the triggers for the significant sell-off of US Treasuries in April. Setser pointed out that the UK's open interest figures "may reflect the increase in global banks' holdings of US Treasuries in March, the availability of custodial services in London, and some potential activities of hedge funds." As the largest overseas "creditor" of the US, Japan increased its holdings of US Treasuries by $4.9 billion in March, marking the third consecutive month of increase , reaching $1.1308 trillion. Since surpassing China in holdings in June 2019, Japan has remained the largest overseas holder of US Treasuries. Overall, the scale of US Treasuries held by foreign investors in March increased from $8.8164 trillion in February to $9.0495 trillion, marking the third consecutive month of growth. Among the top ten overseas "creditors" of the US, only China and Ireland reduced their holdings of US Treasuries that month. However, analysts said that since the report only shows data on changes in open interest as of the end of March, it does not reflect actions taken by countries after Trump escalated the trade war under the pretext of a so-called "Liberation Day," so significant changes may still appear in the April TIC report to be released next month. According to the schedule, the US Treasury Department is set to release the April TIC report on June 18, 2025. At that time, all parties are expected to closely monitor the movements of major overseas "creditors" of the US to determine whether they are related to the abnormal fluctuations in the US Treasury market in April. In April this year, the US market experienced a "triple hit" in stocks, bonds, and the currency, with the yields on 10-year and 30-year US Treasuries briefly touching 4.5% and 5%, respectively. Last Friday local time, Moody's, one of the three major international credit rating agencies, downgraded the US's sovereign credit rating from Aaa to Aa1, citing the increasing proportion of US government debt and interest payments. Moody's is the last of the three major rating agencies to strip the US of its AAA rating.

On Thursday (May 8) local time, US President Trump stated that the UK and the US had reached an agreement on the terms of a tariff and trade deal. In a social media post, Trump said that Thursday would be a "very important and exciting day" for both countries, and that the White House would provide more details at a later press conference. He also wrote, "The trade deal with the UK is a comprehensive and complete agreement that will solidify the relationship between the US and the UK for many years to come. Given our long history and shared aspirations, the UK is our first announced agreement partner, with many more to follow, all of which are currently in serious negotiations!" Despite Trump's grandiose rhetoric, any agreement is likely to be limited in practice. The US-UK trade deal has never been promoted as a comprehensive free trade agreement, which typically takes years of negotiations to reach. A UK official said that Thursday's announcement would outline general terms and focus on specific industries, with UK Prime Minister Starmer scheduled to speak about the agreement later in the day. The US is the UK's largest trading partner, importing goods and services worth 179 billion pounds (222 billion US dollars) from the UK annually. A spokesperson for the UK Prime Minister's Office stated, "The US is an indispensable ally for our economy and national security. Negotiations on an agreement between our two countries are ongoing, and the Prime Minister will provide an update later today." It is understood that the UK government has agreed to make concessions on importing US food and agricultural products in exchange for the US reducing tariffs on British car exports. The US, however, has retained a 10% base tariff, which US government officials view as the minimum requirement for trading partners. US government officials have stated that retaining the 10% base tariff is a precaution against some manufacturers evading tariffs by changing the final assembly or packaging location of their goods. Multiple polls indicate that Americans are increasingly dissatisfied with Trump's handling of the economy. Thursday's agreement suggests that Trump is seeking to back away from his plan to raise US tariffs to their highest levels in a century. Trump stated that as he works to eliminate barriers to US exports and ease market turbulence caused by tariffs, more trade agreements will be reached. So far, negotiations between the US and several countries have, at best, resulted in a basic agreement centered around commitments and intentions, with many details traditionally included in comprehensive trade agreements likely to be negotiated later.Other countries that have held high-level talks with the US include Japan, India, and Israel. Regardless of the announced terms, the relationship between the UK and the US, its largest single trading partner, will still be worse than before Trump initiated the tariff war, providing a potential point of attack for Stammer's domestic political opponents. As the Trump administration investigates the pharmaceutical industry, the UK is also exploring the possibility of avoiding tariffs on pharmaceuticals, a major export from the UK to the US. Trump recently threatened to impose tariffs on another of the UK's advantageous industries—the film industry—adding another sector that the UK needs to protect. The expansion of tariffs from goods to services is an ominous sign for the UK's service-oriented economy. Update: The US and UK governments subsequently released more details of the trade agreement. As part of the US-UK trade agreement, the US will maintain a base tariff rate of 10%. Trump stated at a press conference that this is not a template for future agreements. "This number is low; they got a good deal." Trump indicated that tariff rates for other countries could be "much higher" because "they have huge trade surpluses and, in many cases, they have not treated us fairly." He added that the base tariff rate of 10% is non-negotiable. The US-UK trade agreement removes barriers in the UK market for US exports of ethanol, beef, fruits, vegetables, animal feed, tobacco, and other products. Under the agreement, the vehicle quota for UK automakers subject to a 10% tariff is limited to 100,000 units per year, after which a 25% tariff will apply. Trump said, "This trade agreement includes billions of dollars in increased market access for US exports, particularly in agriculture, significantly expanding market access for US beef, ethanol, and nearly all products produced by our great farmers." Notably, Trump also claimed that the final details of the agreement would still be negotiated in the "coming weeks." However, under the agreement, the UK will expedite the customs clearance process for US goods and reduce barriers to agricultural, chemical, energy, and industrial exports. UK Prime Minister Stammer subsequently stated that the US-UK trade agreement would eliminate tariffs on UK steel and aluminum, reducing them to zero, and would provide "unprecedented access for US farmers without compromising our high standards." Stammer added, "We are sending a message to the world that the UK is open for business: seeking a trade agreement with India on Tuesday, reaching a trade agreement with the US today, and working to promote trade with other partners, including, of course, the EU." The two sides still have differences on some key details, indicating that the trade agreement was hastily arranged. Shortly after Starmer announced that the US would reduce tariffs to zero on steel and aluminum from the UK, the White House issued its own description, stating that instead of directly eliminating tariffs, it would seek a "substitute solution" through negotiations.

On Thursday, Eastern Time, buoyed by news of a trade deal between the US and the UK, the three major US stock indices closed collectively higher, with the Nasdaq rising by 1%. (Minute-by-minute charts of the three major indices, source: TradingView) By the close of trading, the Dow Jones Industrial Average rose by 0.62% to 41,368.45 points; the S&P 500 rose by 0.58% to 5,663.94 points; and the Nasdaq Composite rose by 1.07% to 17,928.14 points. On Thursday, US President Trump announced at the White House the framework of a trade deal between the US and the UK, with UK Prime Minister Starmer participating via speakerphone. This is the first trade agreement the US has reached with another country since Trump announced the so-called reciprocal tariff in early April. According to charts released by Trump on Truth Social, the US benchmark tariff on the UK is 10%. However, Trump noted that the 10% rate would likely be the lower end of the tariff levels in the trade deal, with some countries facing significantly higher tariffs due to their substantial trade surpluses with the US. Beyond this, Trump did not disclose further details, and no formal agreements were signed during the meeting. Trump indicated that more agreements are in the works. "Every country wants a deal," he said. Trump also mentioned that the US is currently negotiating trade issues with the EU. The EU has stated that if negotiations collapse, it is prepared to impose tariffs on over $100 billion worth of US products, including automobiles and aircraft. Boeing shares rose more than 3% after Trump announced that the UK had agreed to a $10 billion purchase agreement for Boeing aircraft. Alphabet, Google's parent company, saw its shares rise nearly 2% after issuing a statement that Google's search query volume was still growing, refuting media reports citing Apple executives that claimed "Google search usage on Safari browsers had declined." Thanks to the US-UK trade deal, Bitcoin broke through the $100,000 mark for the first time in months. Performance of Popular Stocks Large-cap tech stocks collectively rose, with Apple up 0.63%, Microsoft up 1.11%, NVIDIA up 0.26%, Google up 1.92%, Amazon up 1.79%, Meta up 0.20%, and Tesla up 3.11%. Popular Chinese ADRs generally rose, with the Nasdaq Golden Dragon China Index up 0.97%. Alibaba rose 2.08%, JD.com rose 0.89%, Pinduoduo rose 0.47%, NIO rose 3.12%, XPeng Motors rose 2.19%, Li Auto rose 3.58%, Bilibili rose 1.76%, Baidu rose 1.10%, NetEase rose 0.01%, and Tencent Music fell 0.28%. Company News [Apple Reportedly Developing Chips for Smart Glasses, New Mac Computers, and AI Servers] It has been reported that Apple is developing new dedicated chips for its future devices, including its first pair of smart glasses, more powerful Mac computers, and artificial intelligence (AI) servers. Sources familiar with the matter have revealed that Apple has made progress in developing chips for smart glasses. This move indicates that Apple is accelerating the R&D of this device, which will compete with Meta's Ray-Ban smart glasses. The sources also mentioned that other chips currently under development by Apple will be used in future Mac computers and AI servers that support the Apple Intelligence platform. [US Regulator Lifts Supervision of Google's Payment Business] The US Consumer Financial Protection Bureau (CFPB) has terminated the designated supervision order for Google Payment Corp, overturning the Biden-era decision to regulate the non-bank financial platform. [Coinbase to Acquire World's Largest Crypto Options Trading Platform Deribit for Nearly $2.9 Billion] Cryptocurrency exchange Coinbase announced on the 8th that it has reached an agreement to acquire Deribit, the world's largest crypto options and futures trading platform, for nearly $2.9 billion, with the transaction expected to be completed by the end of this year. Coinbase stated that this acquisition will accelerate the company's global derivatives strategy. [Pinterest Shares Surge Over 17% in After-Hours Trading] Pinterest shares surged over 17% in after-hours trading. The company reported Q1 revenue of $855 million, exceeding analysts' expectations of $846.3 million. The company expects Q2 revenue to be between $960 million and $980 million, compared to analysts' expectations of $963.7 million.

According to media reports citing sources, during trade negotiations with the US, India proposed a mutual tariff exemption scheme for steel, auto parts, and pharmaceutical products, but only for a certain volume of imports. Sources familiar with the matter said that industrial products imported beyond a certain volume threshold would revert to normal tariff levels. This proposal was made by Indian trade officials during their visit to Washington at the end of last month to expedite negotiations on a bilateral trade agreement, which is expected to be reached this autumn. It is understood that the US and India are prioritizing consultations on some key industries, aiming to reach a preliminary trade agreement before the end of the 90-day suspension period of the "reciprocal tariff" imposed by US President Trump. In early April, Trump announced that reciprocal tariffs would be imposed on more than 180 trading partners, with India facing a 26% tariff rate. However, Trump soon announced a 90-day tariff "suspension period" for most countries, temporarily shelving the additional reciprocal tariffs, but still imposing a 10% benchmark tariff. US Treasury Secretary Bessent said last week that India may be one of the first countries to sign a trade agreement with the US. Trump said last Sunday that some trade agreements could be finalised as early as this week. Asian economies, including South Korea, Japan, and India, are actively engaging with the US to take the lead in reaching provisional agreements. Sources also said that the US has asked India to address its concerns about the "Quality Control Orders" (QCO), which the US believes constitute non-tariff barriers to its exports. The QCO requires local and foreign manufacturers to meet mandatory quality standards before entering the Indian market, but these regulations have been criticized for lacking transparency and fairness. India is willing to revisit its existing QCO system in industries such as medical devices and chemicals and has proposed signing a "Mutual Recognition Agreement" with the US to achieve mutual recognition of regulatory standards and enforcement rules between the two countries. It is not yet clear whether the above proposals will be included in the final agreement. It is worth mentioning that, according to previous media reports, India had considered eliminating import taxes on US liquefied natural gas (LNG) to expand procurement and help reduce its trade surplus with the US. Last year, India's total trade surplus with the US reached $45.4 billion.

On Thursday, April 24, local time, the German government revised down its economic growth forecast for this year, predicting that its GDP would stagnate after two consecutive years of contraction. Outgoing German Minister of Economy Habeck stated in a press release in Berlin on Thursday that Germany's economic growth rate this year could be zero, lower than the 0.3% growth forecast in January. In October last year, the German government had predicted a 1.1% growth rate for this year. As the largest economy in Europe, Germany has experienced two consecutive years of economic contraction, making it the only G7 member that failed to achieve economic growth in the past two years. Habeck attributed Germany's persistent economic weakness to the uncertainty caused by the trade war initiated by US President Trump, weak export demand, and declining competitiveness. For a long time, Germany has relied on exports to drive economic growth, leading the world in high-end manufacturing sectors such as industrial machinery and luxury cars. Trump's tariff policies have further increased the risks faced by German exports, as he previously imposed a 20% reciprocal tariff on the EU. Germany is the US's largest trading partner in Europe, with a record trade surplus of 70 billion euros with the US in 2024. "Given Germany's deep integration into global supply chains and high degree of openness to foreign trade, the new wave of US trade protectionism could have significant direct and indirect impacts on our economic growth," he said. Habeck called for negotiations to resolve the transatlantic trade dispute. Habeck also noted that since early November last year, Germany has not had a governing majority in parliament, and a new government has yet to be formally formed after the February elections. In the February elections, the conservative Union Party (composed of the CDU and CSU) won the most seats. The German parliament is scheduled to meet on May 6, and if the parties of the new government approve the coalition agreement reached earlier this month, the parliament will vote to elect CDU leader Merz as the new chancellor. Previously, the Union Party had reached a coalition agreement with the center-left Social Democratic Party. Last month, the Union Party, together with the SPD and the Greens, pushed through an investment plan aimed at significantly increasing defense and infrastructure spending in an attempt to boost the economy. However, Habeck stated that the economic boost from these fiscal stimulus measures would not be felt until next year, when growth is expected to reach 1%. German Central Bank President Nagel was more pessimistic, saying in a media interview on Wednesday that if Trump's tariff policies are fully implemented, the German economy could contract for the third consecutive year this year.

On April 23, at the CCIE 2025 SMM (20th) Copper Industry Conference & Copper Industry Expo - Main Forum, Hou Zhenhai, Chief Strategist of Straits Financial Group, delivered a speech named "Global Macroeconomic Uncertainties and Outlook for Commodity Allocation".