According to multiple media reports, on Monday, Eastern Time, US President Trump and UK Prime Minister Starmer jointly announced that they had finalised the general terms of the trade agreement reached last month. UK and US Finalise Trade Agreement At the G7 Summit held in Canada, Trump stood alongside Starmer. Waving the document he had just signed, Trump stated that his relationship with the UK was "very good" and that "we signed the agreement, it's done." Starmer, on the other hand, indicated that the document would implement agreements reached between the two sides on automotive tariffs and the aviation sector, but did not provide details. He said, "This is a very good day for both our countries, a true sign of strength." According to the latest statement released by the White House, the newly reached agreement between the UK and the US covers multiple areas including steel, automobiles, ethanol, beef, and aerospace. In terms of agricultural products: The UK will increase market access worth billions of US dollars for US exports, particularly beef, ethanol, and certain other US agricultural products. Additionally, the UK will reduce or eliminate multiple non-tariff barriers targeting US products that harm the US manufacturing base and threaten US national security. In terms of automobiles: The US plans to set a quota of 100,000 units per year for British car imports and impose a 10% tariff. In terms of steel and aluminum products : The UK commits to working to meet US requirements regarding the security of the supply chain for steel and aluminum products proposed for export to the US, as well as the nature of ownership of relevant production facilities. Subject to the UK meeting these requirements, the US intends to promptly establish most-favored-nation tariff quotas for steel and aluminum products, as well as certain derived steel and aluminum products, produced in the UK, within the context of implementing the General Terms. In terms of pharmaceuticals: The US and the UK commit to negotiating significantly preferential treatment outcomes for pharmaceuticals and pharmaceutical ingredients originating from the UK. However, this is subject to the findings of the Section 232 investigation into pharmaceuticals and pharmaceutical ingredients, and the UK's compliance with certain supply chain security standards. In terms of aerospace: The US and the UK further commit to strengthening the aerospace and aircraft manufacturing supply chain by establishing duty-free bilateral trade for certain aerospace products. Trump's First Trade Deal Since Trump's return to the White House and the imposition of a series of tariffs on global trading partners, the UK has been the first country to reach a trade agreement with the US. However, the implementation of this trade agreement had been delayed due to the failure to finalise the details. The UK said the agreement was a huge win for its aerospace and automotive industries, noting that it was the only country to have reached such a deal with the US. "It may take months to bring the trade deal into force, but we will deliver the first agreements within weeks. We won't stop there," UK Trade Secretary Jonathan Reynolds said in a statement. He said the two countries remained committed to securing a "clearly preferential outcome" for the UK's pharmaceutical industry and would continue to work to protect the sector from any further tariffs imposed by the ongoing Section 232 investigation by the US Department of Commerce.

According to sources familiar with the matter, the US and Mexico are expected to reach an agreement that would eliminate the 50% tariff imposed by former US President Trump on certain steel imports, reviving a similar deal from Trump's first term. Trump was not directly involved in the negotiations, but any agreement would require his approval. The talks were led by Commerce Secretary Howard Lutnick, the sources said. The agreement has not yet been finalised, the sources added. Under the current terms, US buyers would enjoy duty-free treatment as long as they keep Mexico's total steel imports within a quota based on historical trade levels. The new cap would be higher than the limit allowed under the similar agreement during Trump's first term, though these so-called "quotas" were never fixed numbers but rather designed to "prevent surges," according to the sources. US Commerce Department data shows that last year, the US imported approximately 3.2 million mt of steel from Mexico, accounting for 12% of total US steel imports. During Trump's first term, the US and Mexico reached a deal in 2019 agreeing to prevent imports from exceeding the average level from 2015 to 2017. As of press time, neither the White House nor the office of Mexican President Claudia Sheinbaum had responded to requests for comment. At an event on Tuesday, Mexican Minister of Economy Marcelo Ebrard said he told US officials during a meeting last week that imposing steel tariffs on Mexico was unjustified, as the US exports more steel to Mexico than it imports. Last Friday, he also posted a photo showing him shaking hands with a smiling Lutnick in Washington. "We are waiting for their response because last Friday we provided them with details of our arguments, and we are right," Ebrard told reporters on Tuesday. "So we will wait for their response, most likely this week." The negotiations come as Sheinbaum seeks to reach an understanding with Trump on border migration and drug smuggling, issues for which Trump has demanded Mexico take action. Meanwhile, Sheinbaum confirmed on June 9 local time that she would attend the upcoming G7 summit in Canada. She also mentioned the possibility of a bilateral meeting with US President Trump during the event. Sheinbaum added that migration would be one of the topics discussed during the meeting. Currently, the Mexican Foreign Minister is coordinating the arrangements for various meetings, and has pointed out that in addition to a possible meeting with President Trump, President Sheinbaum will also hold bilateral talks with Canadian Prime Minister Carney.

On Friday, Mitsuhiro Furusawa, a former Japanese vice finance minister, stated that amid the narrowing trend of the interest rate gap between the US and Japan, the yen is expected to continue appreciating against the US dollar, potentially reaching around 135-140 yen per US dollar by the end of the year. Furusawa previously served as a deputy managing director at the International Monetary Fund (IMF) and as Japan's vice finance minister for international affairs, making him the top official responsible for exchange rate matters in Japan. Currently, he serves as the president of the Sumitomo Mitsui Banking Corporation's Global Financial Affairs Research Institute, maintaining close ties with current central bank policymakers in Japan and overseas. Yen Expected to Continue Appreciating The market widely speculates that Trump, who previously accused Japan of currency manipulation, will pressure the Japanese government to help weaken the US dollar against the yen to give US exports a trade advantage. However, Furusawa stated that it remains unclear whether the Trump administration will explicitly adopt a weak dollar policy. "It is not easy for policymakers to intentionally push down the dollar," Furusawa said. "After clearly stating that tariffs are the main tool (for negotiations), I believe the US government does not need to rely too much on currency to achieve its goals." Nevertheless, Furusawa noted that the US may wish to avoid further appreciation of the dollar to prevent harm to exports. Meanwhile, Japan aims to prevent excessive yen weakness from driving up inflation. "Therefore, their intentions in this regard are aligned. This suggests that the yen may gradually appreciate," he said. Additionally, the divergence in monetary policy directions between Japan and the US will also support the yen. Amid widespread market concerns about a US recession triggered by tariff shocks, there is speculation that the US Fed's next move could be an interest rate cut, while the Bank of Japan (BOJ) is currently considering further rate hikes. BOJ Governor Kazuo Ueda recently stated that if Japan's economic conditions improve and inflation continues to meet the 2% target, the central bank will proceed with rate hikes. However, he also hinted that rate hikes would need to wait until the impact of Trump's tariffs becomes clearer. "If Japan successfully reaches a broad trade agreement with the US—possibly at the G7 summit this month—it will reduce uncertainty," Furusawa said. Once real wages in Japan rise, it will support consumption. "If we see these positive developments, the BOJ may raise interest rates again in the second half of the year," Furusawa said, adding that the yen "may appreciate to around 135-140 yen per US dollar by the end of the year." As of press time this Friday, the US dollar-Japanese yen exchange rate was hovering around 144.11. Furusawa said that the Bank of Japan may ultimately want to raise its short-term policy interest rate target, currently at 0.5%, to above 1%, though success is uncertain. Japan may struggle to use US debt as a bargaining tool Japan is continuing trade negotiations with the US, with a focus on making progress on automobile tariffs. According to Japanese media reports, the two sides may seek to reach an agreement before the G7 summit on June 15-16. Last month, Japanese Finance Minister Shunichi Suzuki said that Japan might use its holdings of over $1 trillion in US Treasury bonds as leverage in trade negotiations with the US government, a statement that caused a stir. However, Furusawa believes that as a negotiating strategy, it is reasonable for Japan to claim that "all options are on the table." But it is doubtful whether Japan can actually use US debt as a bargaining tool. He explained that part of the reason is that if Japan were to actually sell off US Treasury bonds, it could anger Trump and disrupt trade negotiations, potentially backfiring.

》Check SMM aluminum product quotes, data, and market analysis SMM News on June 4: Today, the most-traded SHFE aluminum 2507 contract opened at 20,005 yuan/mt, with a high of 20,110 yuan/mt, a low of 19,975 yuan/mt, and closed at 20,075 yuan/mt, up 0.43%. Trading volume was 97,500 lots, and open interest was 190,000 lots. SMM Commentary: Although the increase in US steel and aluminum tariffs to 50% is bearish, China's direct aluminum semis exports to the US have been restricted by high tariffs for years, so the actual incremental impact is limited. It mainly affects overall market sentiment, suppressing global aluminum trade liquidity, particularly impacting countries highly dependent on US exports, and exacerbating regional supply surplus pressure in the short term. On the fundamental side, domestic aluminum smelters' operating capacity remains stable. Notably, some aluminum smelters in north China have increased the proportion of liquid aluminum used in alloying, reducing casting ingot volumes and affecting the arrival of goods in major consumption areas. On the demand side, some downstream sectors are showing expectations of an off-season slowdown. Demand for PV aluminum is decreasing, and automotive aluminum demand is expected to weaken in mid-to-late June. Construction aluminum demand remains lukewarm, but currently benefits from orders from State Grid, keeping the operating rate of aluminum wire and cable high. Overall, short-term market sentiment may suppress aluminum prices due to tariff impacts. Meanwhile, domestic aluminum ingot inventory has declined more than expected, supporting aluminum prices and spot premiums. Although some sectors are showing expectations of a weakening off-season, the overall decline is better than expected, and demand resilience remains. It is expected that the most-traded SHFE aluminum contract will maintain a fluctuating trend in the short term, with solid support below. If macro pressures do not escalate significantly, prices may show mild strength. Today, the most-traded alumina 2509 contract opened at 3,036 yuan/mt, with a high of 3,086 yuan/mt, a low of 3,010 yuan/mt, and closed at 3,063 yuan/mt, up 0.89%. Trading volume was 316,000 lots, and open interest was 300,000 lots. SMM Commentary: According to SMM statistics, alumina's weekly operating capacity continued to rebound, reaching 86.67 million mt/year as of last Thursday, up MoM, further alleviating spot supply pressure and slowing the rise in spot prices. Recent overseas alumina transactions have been sluggish, with relatively small price fluctuations. As domestic prices continue to rise, alumina imports have shifted from losses to profits, and the domestic alumina import window is gradually opening. In the short term, with the gradual resumption of production from some alumina maintenance and production cuts, alumina supply pressure is expected to gradually ease. The average profit of the alumina industry has entered a profitable state, and the market has strong expectations for alumina production resumptions. Alumina futures prices have taken the lead in pulling back, which may drive spot prices weaker. Subsequent attention should be paid to changes in the capacity of domestic alumina enterprises and the supply of imported alumina. [The information provided is for reference only. This article does not constitute direct advice for investment research and decision-making. Customers should make decisions cautiously and should not replace their own independent judgment with this information. Any decisions made by customers are not related to SMM.]

Overnight, LME copper opened at $9,566.5/mt, dipping to a low of $9,557.5/mt shortly after the opening bell.

[SMM Analysis: Deep B's performance is not enough, while transition to C is not yet complete] SMM believes that the backwardation structure of SHFE will weaken in the future market. The premise of our following discussion is based on the existing tariff levels in the US.

[SMM Weekly Survey on Aluminum Downstream: Operating Rate of Aluminum Processing Industry Remains Flat WoW at 61.4%, Mid-Year Consumption Promotions Expected to Support Operating Rates] This week, the operating rate of leading enterprises in China's aluminum processing downstream sector remained flat WoW at 61.4%, with continued divergence across different segments.

The monthly Metal Index (MMI) for copper showed a downward trend, declining by 4.23% from March to April. Based on current copper prices, analysts appear to be grappling with ongoing changes in trade policies.

In early April, the release of the US tariff policy significantly reduced risk appetite in global investment markets, leading to notable selling pressure in the gold market. On April 9, the intensifying downward pressure on the US economy and trade frictions sparked concerns about the US's debt repayment capacity, with its large and continuously expanding debt scale coming under market scrutiny. Against this backdrop, from April 7 to 11, the US Treasury bond market, a traditional safe-haven asset, experienced a reversal, with long-term US Treasury bond prices falling by a maximum cumulative 8.7% over three trading days, fully reflecting the shift in global investors' market expectations. Influenced by this, the safe-haven attribute of gold once again became prominent. From April 9 to 22, market allocation demand surged, driving a significant increase in gold prices. As the trade situation evolved, potential risks in the financial system and policy constraints gradually emerged. By month-end, market sentiment stabilized, and gold prices returned to a rational range. Subsequent tariff trade negotiations continued to advance, and with the emergence of unexpected signals, gold prices extended their downward trend. From the current market landscape, it appears that gold prices may struggle to achieve a unidirectional trend breakout in the short term. The latest economic data shows that in Q1, the US's real gross domestic product contracted by 0.3% on an annualized QoQ basis, marking the lowest quarterly performance in nearly three years. The trade sector also faced pressure, with the US trade deficit continuing to widen since December 2024. Data released by the US Department of Commerce on May 5 showed that, after seasonal adjustment, the US goods and services trade deficit surged by 14% MoM in March, reaching a historical peak of $140.5 billion, dragging down GDP growth for the quarter by more than 4%. On the monetary policy front, the Federal Open Market Committee (FOMC) repeatedly emphasized the upward pressure on inflation and the risk of rising unemployment in its May monetary policy statement. Influenced by multiple factors such as geopolitical conflicts, global inflation expectations, and intensifying trade imbalances, gold prices are likely to hover at highs in the short term, with its safe-haven attribute and value storage function continuing to provide effective support for prices. The expansion of upside room in the gold market in the future will highly depend on the evolution of risks in areas such as US trade, economy, and fiscal deficits. Once systemic risks emerge in these areas, accompanied by spillover effects, they will form the core driving force for gold prices to embark on a new round of upward cycles. Looking back at US fiscal data, since 2020, the scale of US federal debt has accelerated its expansion. In 2024, the US federal deficit reached $1.8 trillion, accounting for 6.4% of that year's GDP, while debt interest payments exceeded the $1 trillion threshold in fiscal year 2024. Reviewing the market performance in mid-April, the market adjustments triggered by fluctuations in US economic data and changes in policy expectations provided important reference points for the current trends in the gold market. Against the backdrop of rising global economic uncertainty, the allocation value of gold as a safe-haven asset will exhibit phased fluctuations in line with the evolution of US economic risks. Sino-US bilateral trade demonstrates significant complementary characteristics, with the growth trend of US exports to China being particularly prominent, significantly outpacing its global export growth rate. Since China's accession to the World Trade Organization, the scale of US exports to China has entered a phase of rapid expansion, and China has gradually developed into an important goods export market for the US. According to United Nations statistics, from 2001 to 2024, US goods exports to China surged from $19.18 billion to $143.55 billion, marking a substantial increase of 648.4%. During the same period, the growth in US global goods exports was only 183.1%. Against the backdrop of positive progress in recent Sino-US trade talks, gold prices have entered a correction phase and are gradually testing the support levels below. Market risk appetite has stabilized, and the likelihood of gold prices breaking out of the current range in the short term is relatively small. It is expected that gold prices will oscillate between recent highs and lows. Compared to gold, silver possesses dual characteristics of both industrial and safe-haven attributes. With the gradual improvement in market sentiment in recent times, industrial demand expectations have rebounded somewhat. Supported by the potential safe-haven attribute, silver prices have an opportunity to exhibit relative strength in the short term. (Author's affiliation: Haizheng Futures)

[US to Significantly Reduce Tariffs on Chinese Lithium Batteries, Lithium Battery Industry Optimistic About Exports to the US] On May 12, China and the US issued a joint statement on the Geneva Economic and Trade Talks, announcing a general reduction in US tariffs on Chinese goods, potentially signaling a turning point for the lithium battery industry's exports to the US. Based on calculations from this statement, the current US tariff on Chinese automotive lithium batteries has been reduced to 58.4%, while the tariff on non-automotive lithium batteries has dropped to approximately 41%. "The (tariff) rate is lower than expected, which is a significant positive," multiple industry insiders from lithium battery companies told Caixin. US lithium battery products already have a base tariff of 3.4%. In August 2024, the US imposed an additional 25% tariff on Chinese automotive lithium batteries. If calculated based on the 145% tariff on China announced by the White House on April 10, prior to the joint statement, the cumulative import tariff on Chinese automotive lithium batteries reached as high as 173.4%, and the tariff on non-automotive lithium batteries was approximately 156%.