Domestic base metals closed broadly lower on the Shanghai Futures Exchange Wednesday, with only lead bucking the downtrend to edge up 0.09%. Zinc and tin both fell more than 3%, dropping 3.06% and 3.07% respectively. Copper declined 2.45%, aluminium slipped 1.38%, and nickel shed 1.82%. Alumina main contracts retreated 2.64%, while casting aluminium fell 1.76%. In other commodities, lithium carbonate main contracts tumbled 4.99%, polysilicon slipped 1.49%, and industrial silicon lost 2.55%. Meanwhile, the Europe-bound container shipping index jumped 3.57% to 2032.

The ferrous complex posted widespread declines, with losses hovering around 1%. Stainless steel contracted 1.77%, iron ore fell 1.78%, rebar slid 1.24%, and hot-rolled coils eased 1.16%. Coking coal dropped 3.44% and coke retreated 3.1%. On the London Metal Exchange, base metals showed mixed performance as of 15:08 Beijing time. Zinc led gains with a 1.39% advance, while copper and aluminium rose 0.86% and 0.53% respectively, with other metals posting minimal fluctuations.

Precious metals painted a weaker picture during Asian trading hours. COMEX gold eased 0.31% and COMEX silver slipped 0.75%. Domestically, Shanghai gold fell 1.35%, while Shanghai silver tumbled a sharp 5.11%. Platinum main contracts declined 3.94%, and palladium dropped 3.15%.

Macro developments: A major financial press conference featured coordinated statements from the securities regulator, central bank, financial regulatory administration, and foreign exchange authority. Nine government departments, including the Ministry of Industry and Information Technology, released the 15th Five-Year Plan for intelligent connected new energy vehicles, outlining measures to deepen pilot programs for automobile circulation and consumption reform, implement new energy vehicle tax incentives, accelerate removal of restrictive policies, and support trade-in programs and new energy vehicle insurance reform. The Ministry of Natural Resources reported that China's energy resource security has improved significantly, with mineral reserves growing substantially and 14 minerals ranking first globally in reserves, while production and smelting capacity maintain the world's leading position.

The People's Bank of China conducted 4 billion yuan in reverse repurchase operations with no maturing operations today, resulting in a net injection of 4 billion yuan. For the week, the central bank injected 8.5 billion yuan through 7-day reverse repos and 500 billion yuan through outright reverse repos, with 10 billion yuan and 500 billion yuan maturing respectively, yielding a weekly net withdrawal of 1.5 billion yuan. The yuan central parity was set at 6.7743 per US dollar on September 11.

US dollar and rates: The dollar index slipped 0.01% to 99.06 ahead of US inflation data. Bearish bond investors are pushing benchmark Treasury yields toward the closely-watched 5% level, with 10-year yields climbing 18 basis points this week. Friday's reading of 4.98% marked the highest since 2023 and approaches levels not seen since 2007. The US CPI report due Friday is critical, with markets pricing roughly a 70% probability of a rate hike at the September 16 FOMC meeting. CME FedWatch data shows a 28.8% probability of holding rates steady in September versus 71.3% for a 25-basis-point hike. For October, probabilities stand at 17.6% for no change, 54.8% for a cumulative 25-basis-point hike, and 27.6% for a cumulative 50-basis-point increase.

Treasury Secretary Bessent dismissed criticism that his intervention in the Treasury market contradicts Fed Chair Warsh's stance on allowing markets to price freely, calling the narrative of conflict "nonsense" and describing concerns about demand for long-dated debt as "a pile of noise." US August PPI came in at 5.4% year-over-year, exceeding the 5.3% expectation, while core PPI rose 0.2% month-over-month, below the 0.3% forecast—a mixed signal as policymakers debate next week's rate decision. Markets now fully price an October rate hike. Rising oil prices amid ongoing US-Iran hostilities add further complexity to the outlook.

The Bank of Japan is reportedly set to hike rates next week, most likely by 25 basis points to 1.25%, which would mark a 31-year high for the policy rate. The move would come just three months after June's increase, signaling a faster tightening pace. BOJ officials believe conditions are aligning for another hike as the economy recovers moderately and price pressures build, though the central bank reportedly holds no preset view on the terminal rate. Governor Ueda is expected to avoid committing to a specific future timetable but may reiterate July's language about accelerating hikes if financial conditions become too loose.

ANZ Bank suggests that renewed Middle East conflict and its impact on energy prices mean markets should price a 25-basis-point ECB rate hike in December, bringing the deposit facility rate to 2.75%, with markets currently pricing about a 90% probability of an October move.

Data and events: Today's calendar includes US CPI figures for August, September Michigan consumer sentiment and inflation expectations, UK GDP and manufacturing data, Swiss consumer confidence, and China's August M2 money supply. Domestic refined oil products enter a new price adjustment window, the IEA releases its monthly oil market report, and Russian President Putin visits India through September 13.

Oil markets: Both WTI and Brent crude declined as of 15:08 Beijing time, falling 1.32% and 1.56% respectively, though prices remain above the $100-per-barrel threshold supported by supply concerns from escalating Middle East conflict. Gulf foreign ministers plan to meet with Iran's foreign minister Monday in Salalah, Oman, seeking support for a temporary agreement on managing shipping through the Strait of Hormuz—the first such meeting since the US-Iran conflict began in late February. Preliminary vessel tracking data shows transits through the strait fell to seven ships Thursday from eleven the prior day, well below the 10-day average of fifteen, though the data excludes vessels potentially operating with transponders disabled to avoid detection.