[SMM Tin Midday Review: The Most-Traded SHFE Tin Contract Fluctuated at Highs, Downstream Enterprises Mostly Took a Wait-and-See Approach with Limited Follow-Through]

SMM April 21 update: SHFE aluminum 2605 fluctuated downward in early trading. End-users mainly made just-in-time procurement, while traders' buying sentiment was relatively positive, influenced by declining aluminum prices and widening premiums. Mainstream transactions centered around SMM A00 aluminum at -10 yuan/mt to +10 yuan/mt. East China shipment sentiment index was 3.36 today, down 0.04 MoM; purchasing sentiment index was 3.16, up 0.1 MoM. Affected by recent reductions in invoicing quotas for central China traders, some traders were concerned about insufficient invoicing quotas. The market trading atmosphere was slightly subdued today, with both shipment and buying sentiment declining slightly. Buyers preferred to purchase at lower prices, but suppliers held prices firm, and market prices ultimately rebounded slightly after weakening. Transaction prices in central China ranged from parity to a premium of 20 yuan above the central China price. Central China shipment sentiment index was 2.83 today, down 0.02 MoM; purchasing sentiment index was 2.36, down 0.03 MoM. Inventory side, aluminum ingot inventory in major consumption areas increased by 5,500 mt MoM today, with inventory buildup mainly in Gongyi and Guangdong.

What Is "Borrowing Ships to Go Global"?— Definition and Estimation Logic of Indirect Steel Exports "Indirect steel trade" refers to steel that is not exported in the form of raw materials, but rather embedded as parts or structural materials in finished products such as machinery equipment, automobiles, and home appliances, achieving implicit exports through the cross-border trade of these goods. SMM Indirect Steel Export Model: Based on the volume of finished steel consumed per mt/unit/set of specific finished products, approximately 43 categories of steel-containing products covering a total of 497 tariff codes are classified in detail according to the Harmonized Commodity Description and Coding System (HS codes, up to 8 digits). SMM categorises indirect export data into six major industry segments: machinery, home appliances, motorcycles & bicycles, automobiles, containers, and steel products. The "Steel Torrent" Hidden in Manufacturing— Scale and Landscape of Indirect Steel Exports Steel Indirect Export Data, 2020-2026 Data source: SMM; General Administration of Customs From 2020 to 2021, China, benefiting from supply chain integrity and efforts to ensure supply and stabilise prices, maintained rapid growth in indirect exports even during the pandemic; In 2022, as the severity of the pandemic eased and major central banks such as the US Fed aggressively raised interest rates to curb high inflation, global manufacturing sentiment pulled back. Coupled with the very high base in 2021, when the "stay-at-home economy" and supply chain congestion drove a surge in global demand for Chinese-manufactured goods, 2022 represented a natural cooling as the dividend faded; In 2023, China's indirect steel exports reversed course, with the YoY growth rate turning from negative to positive, and maintained rapid growth for three consecutive years; By 2025, China's total indirect steel exports grew approximately 96% compared to 2020. In the first two months of 2026, cumulative indirect steel exports totalled 29.43 million mt, with a YoY growth rate of 48.07%. Analysis of China's Manufacturing Export Price & Volume Index ( MoM ) Curves Data source: General Administration of Customs Contrary to the increase in indirect exports, China's manufacturing export price index declined. In 2021, China's manufacturing export price and volume indices exhibited a rare phenomenon of "simultaneous price and volume increases," driven by the gradual recovery of the global economy — particularly the sustained production recovery in Europe and the US — which boosted China's exports of production-related products. The price increases were primarily cost-driven, as upstream raw material prices (non-ferrous metals, steel, etc.) surged sharply, compounded by global supply chain shortages and soaring ocean freight rates. Over the subsequent four years, prices and volumes exhibited clearly opposite trends. As of February 2026, China's manufacturing export price index stood at 97.4, down 8.2 from its historical same-period high, while China's manufacturing export volume index stood at 95.9, up 20.9 from its historical same-period high. This indicates that China's manufacturing exports remain in a relatively fragile stage of "volume discount." Who Is Driving This "Invisible Giant Ship"?— The "Twin Engines" Behind High GrowthHigh Growth in Indirect Steel Exports Driven by Recovery of Manufacturing Outside China China's Indirect Steel Exports by Product Category Data source: SMM; General Administration of Customs Global Major Regions Manufacturing PMI Index, 2021-2026 Data source: China Federation of Logistics & Purchasing According to the SMM indirect steel export model, from January to December 2025, total indirect steel exports reached 149.64 million mt, +19.10% YoY. The reasons behind this were inseparable from the strong boost of downstream manufacturing exports and the diversification of export markets. Specifically, machinery, steel products, and automobiles remained the main drivers of indirect steel exports, with machinery +21.38% YoY, steel products +19.30% YoY, and automobiles +28.66% YoY, contributing 48.05%, 28.91%, and 16.90% to total export growth, respectively. The growth in ex-China demand was also inseparable from the recovery of manufacturing outside China. Since 2023, PMI readings in major regions have been on a rebound trend from the bottom, but due to the overall slow pace of recovery, some regions remained below the 50 mark, resulting in strong dependence outside China on price-competitive finished steel products exported from China. Indirect Steel Exports Accelerating Shift Toward Emerging Markets On the other hand, to cope with increasing trade barriers in some developed markets, export markets accelerated their shift toward emerging markets along the Belt and Road Initiative (ASEAN, West Asia, Africa, etc.). For example, the share of indirect exports to regions such as ASEAN and the BRICS Ten increased notably. See the charts below for specific data. China's Indirect Steel Exports by Economic Zone (2020) Data source: SMM China's Indirect Steel Exports by Economic Zone (2025) Data source: SMM According to the SMM indirect export model, in 2025, China's total steel consumption for indirect steel exports to countries and regions along the Belt and Road Initiative reached 49.5966 million mt, accounting for 33% of China's total indirect steel exports, a share largely unchanged from 2020. The economic zones with more notable changes were mainly NAFTA, EU-27, ASEAN, and the BRICS Ten. Among them, NAFTA and EU-27 showed a declining trend, with shares dropping by 4% and 3%, respectively; ASEAN and the BRICS Ten showed an upward trend, with shares rising by 2% and 5%, respectively. The incremental volumes from these regions effectively offset the gap left by declining exports to Europe and the US. As of 2025, the share of China's indirect steel exports to the US dropped by 4% compared to 2020, the share to Japan fell by 2%, and the share to Germany fell by 2%, with some European countries even removed from the top 15 export destinations (the Netherlands). ASEAN countries saw increasingly robust demand for NEVs, PV, and smart devices. The signing of the China-ASEAN Free Trade Area 3.0 added chapters on the digital economy and green economy, removing institutional barriers for such product exports. BRICS countries had robust demand in infrastructure and agriculture, directly boosting China's exports of related equipment. On the other hand, many ASEAN countries imported core parts and intermediate products from China, assembled them locally, and then re-exported globally, forming an industry chain division-of-labor network of "R&D in China, production in neighboring countries, markets worldwide." China's Indirect Steel Exports by Continent (2020) Data source: SMM China's Indirect Steel Exports by Continent (2025) Data source: SMM By continent, Asia remained the primary destination for China's indirect steel exports. As of 2025, China's indirect steel exports to Asia totaled 60.8719 million mt, accounting for 41% of China's total indirect steel exports. The share of North America declined, while the shares of Africa and South America rose accordingly. Top 10 Destination Markets for China's Indirect Steel Exports Data source: SMM Based on the historical changes in the top 10 destinations for China's indirect steel exports, the compound growth rate of the original major destination markets — European and American countries — has been narrowing, while destination markets led by Southeast Asia and the Middle East have been climbing rapidly at a compound growth rate exceeding 20%. The US share of China's indirect steel exports has also been declining from 15% in 2020 to 10% in 2025. Meanwhile, the shares of major Southeast Asian countries and the UAE rose from 8% and 1.2% to 10.3% and 2.3%, respectively. The "Cost" of Growth— When "Steel Going Global" Meets the "Pain of Backlash"First, Strong Exports Led to Excessive External Dependence Trends in China's Indirect Steel Exports & Crude Steel Production Data source: SMM; General Administration of Customs; According to data from the National Bureau of Statistics, cumulative crude steel production in 2025 totaled 960.81 million mt, while indirect exports reached 149.64 million mt, accounting for as high as 15.57%, up 8.42% from the 2020 ratio. If direct steel exports were also factored in, the ratio would be as high as 29%, meaning that nearly one-third of China's crude steel supply relied on ex-China consumption for absorption. The deep adjustment in China's real estate sector caused domestic steel consumption to decline for the fifth consecutive year, and the difficulty in reducing crude steel production and the slow pace of transformation made exports an inevitable "flood discharge channel." Looking at the external dependence of some major industries, the external dependence of containers exceeded 100% in 2025, mainly because export data reflected not only current-period production but also the drawdown of prior inventory. In 2024, due to the "Red Sea crisis," the industry entered a "frantic stockpiling" mode, and in 2025, as the impact of the crisis waned, it switched to a "rational destocking" mode. Refrigerators ranked second in external dependence. The structural adjustment of global refrigerator capacity featuring "rising in the East and declining in the West" provided a historic opportunity for China's refrigerator exports. Following closely were motorcycles and bicycles, for which the shrinking Chinese market left no choice but to seek the "blue ocean of demand" in Latin American countries. Data source: SMM Second, Strong Exports Led to Escalating Trade Disputes Anti-dumping Cases Against Chinese Steel Products Since 2020 Data source: SMM; China Trade Remedies Information However, this model of "insufficient domestic demand supplemented by exports" was encountering increasingly severe external challenges. Since 2020, industries related to China's indirect steel exports faced 143 overseas anti-dumping investigations (tallied based on the timing of their latest developments). As steel products were involved in the most cases, they are presented in a pie chart, which shows that Mexico, the US, and Australia initiated the most anti-dumping actions against Chinese steel products, together accounting for over 50%. Anti-dumping Cases Against Chinese Home Appliances,Automobiles, Machinery, etc. Since 2020 Data source: SMM; China Trade Remedies Information In the home appliance industry, Turkey and Argentina, through continuous "sunset reviews," extended anti-dumping duties on Chinese air conditioners for nearly twenty years, forming DAS solar and stable trade barrier. In the washing machine industry, the sector was facing a three-dimensional siege of complete units plus parts, anti-dumping plus carbon tariffs, and traditional markets plus emerging markets. Water heaters were involved in a relatively large number of cases, but among them, Uruguay's anti-dumping measures expired in 2025, while Ukraine was still in the investigation phase. Refrigerators and microwave ovens encountered fewer anti-dumping investigations. In the automobile industry, overseas anti-dumping investigations against China-related automotive products showed a trend of a continuously increasing number of cases, with products involved expanding from parts to complete vehicles, and emerging markets becoming new battlegrounds. There were only 4 anti-dumping cases against complete vehicles, among which Tunisia and the Philippines had no updated developments for the time being, while the EU and US anti-dumping measures against Chinese automobiles remained in their enforcement period. Compared with the automobile and home appliance industries, although the motorcycle and bicycle industry faced a relatively small number of direct anti-dumping cases, two notable characteristics emerged: first, extremely long duration — some cases had been extended for over 30 years through sunset reviews; second, sharp recent increases in duty rates — Mexico's anti-dumping duty on Chinese children's bicycles surged from $13.12/unit to $57.19/unit (preliminary ruling), an increase of over three times. The machinery industry faced anti-dumping actions involving the widest range of countries, and the trend was escalating from traditional anti-dumping to Section 337 investigations — the US was increasingly launching investigations against Chinese machinery products on the grounds of intellectual property infringement, a trade restriction measure more severe and costlier to defend against than anti-dumping. Since 2024, the US launched Section 337 investigations into Chinese construction machinery, industrial machinery, and sports equipment, among others. Beyond anti-dumping measures targeting specific industries, China's manufacturing sector also faced a category of comprehensive trade barriers, as detailed in the table below. Data source: SMM What Lies Ahead?— The Path from "Indirect" to "Value"The Growth Trend of Indirect Steel Exports Remains Unchanged Total Indirect Steel Exports Data source: SMM; General Administration of Customs Overall, SMM forecasts that indirect steel exports will grow by approximately 17% in 2026. Going forward, indirect steel exports will maintain a solid growth trend, but the growth rate will gradually slow down. In the long term, the iron element export model relying on manufacturing remains reliable, primarily driven by the mutual reinforcement between China's manufacturing scale and supply capabilities and the industrialization and urbanization demand in emerging markets. Per Capita Steel Consumption by Major Countries and Regions Data source: World Steel Association Per capita steel consumption in Southeast Asia, India, the Middle East, South America, and Africa remains relatively low. According to worldsteel, per capita steel consumption in 2024 for these five regions was 220, 215, 260, 120, and 40 kg, respectively, with South America and Africa significantly below the global average. It can be said that the export competitiveness of China's manufacturing sector has met the requirements of emerging markets for scale and efficiency during urbanization/industrialization, lowering the development threshold to a certain extent. The relatively broad demand space ex-China has also matched the release of China's manufacturing capacity. Specific industries: Machinery sector, with the global economy undergoing a mild recovery, global end-user growth in the construction machinery industry will drive export demand. Currently, overseas gross margins for construction machinery are generally 5–10% higher than in China, and there is still significant room for expansion in market share and product categories. Therefore, machinery exports are expected to further increase in 2026. Automobile sector, as the marginal effects of "trade-in" and "retirement subsidy" policies diminish, coupled with the halving of purchase tax reduction and exemption policies, growth in the Chinese market will slow down, and "going global" will become an inevitable path for automakers. Currently, NEV penetration rates in Europe, Southeast Asia, Latin America, and other markets remain low, and acceptance of Chinese brands continues to rise. Exports are still expected to increase in 2026, but as China's market share grows, trade barrier risks should be watched closely. Home appliance sector, home appliance exports in 2026 are expected to achieve mild growth on the basis of 2025, with emerging markets becoming the primary growth engine. Container sector, with the "super replacement cycle" ending and concentrated delivery of container ships causing capacity surplus, there is still a possibility of negative YoY growth. In the long term, China's manufacturing sector has demonstrated strong competitiveness in the global market, and total exports of related industries are expected to maintain rapid growth over the next five years. Breaking Through: An Imperative Path Forward As China's indirect steel exports have surged rapidly, the country is currently facing multiple challenges: intensifying external barriers, rising internal costs, low-end lock-in within the value chain, and the restructuring of global division of labor. To break through, the core lies in shifting from price competition to value competition, and from scale expansion to quality- and innovation-driven growth. 1 Strategic Upgrade: From "Products Going Global" to "Manufacturing Taking Root" Deploy a "China+N" capacity layout, circumventing tariff barriers through a "China + Southeast Asia/Mexico/Middle East" capacity configuration; build "micro-factories" by establishing highly automated assembly plants in Europe and other regions to achieve localized production and delivery. 2 Market Expansion: Diversified Layout and Deep Cultivation of the "Global South" Develop emerging markets by redirecting export growth drivers toward the "Global south" markets in Asia, Africa, and Latin America, reducing dependence on any single market; deepen channel penetration by leveraging cross-border e-commerce, overseas warehouses, and other new business models to build omni-channel sales networks covering major markets. 3 Value Reshaping: Technology-Driven and Brand Elevation Define standards through technological iteration—in fields such as robotic lawn mowers and new energy, establish generational advantages through RTK vision, AI algorithms, and other technologies, shifting from "selling products" to "setting standards"; build local brands by moving beyond the pure toll processing model, and through sponsoring communities, embracing ESG standards, and hiring localized teams, create brands with emotional resonance. 4 Policy and Systemic Support: Optimizing the Ecosystem and Ensuring Compliance Strengthen financial support by establishing manufacturing overseas development funds, improving overseas investment insurance systems, and utilizing cross-border financial service solutions to manage exchange rate risks; build comprehensive overseas service systems by leveraging national-level overseas comprehensive service platforms to provide one-stop services for hundreds of thousands of foreign trade entities, while strengthening legal and compliance guidance; regulate overseas competition by leveraging the role of industry associations, implementing coordinated "united front" coopetition strategies, prohibiting low-price dumping, and fundamentally resolving the problem of "exporting involution." 5 Mechanism and Pathway Reshaping: Governing Vicious Competition and Safeguarding Value Exports The ongoing anti-involution campaign in China has formed a synergistic relationship with indirect steel exports, driving a shift from "scale competition" to "value upgrading." By governing disorderly competition within China and guiding steel to be exported in higher value-added forms (such as automobiles and machinery), industrial upgrading can be achieved, transforming steel exports from the form of "raw materials" to exports of "parts" or "finished products" embedded in global supply chains. Data Source Disclaimer: Data other than publicly available information is derived by SMM based on public information, market communication, and SMM's internal database models, and is for reference only and does not constitute decision-making advice. Note: This article is an original article of this official account. For any needs regarding reprinting, whitelisting, or cooperation, please contact us. Without permission, the above content shall not be reprinted, modified, used, sold, transferred, displayed, translated, compiled, disseminated, or disclosed to any third party in any other form, nor shall any third party be licensed to use it. Otherwise, once discovered, SMM will pursue legal action for infringement liability, including but not limited to claiming contractual breach liability, return of unjust enrichment, and compensation for direct and indirect economic losses.

[SMM Cast Aluminum Alloy Morning Comment: Cast Aluminum Alloy Swung Wildly in Night Session to Close Higher, ADC12 Moved Sideways Driven by Cost] The most-traded cast aluminum alloy contract surged to an intraday high of 24,245 yuan/mt overnight before pulling back rapidly, once probing the low of 24,035 yuan/mt during the session, exhibiting a pattern of wild swings. Prices gradually stabilized and rebounded in the latter half of the night session, with the center steadily rising amid repeated tug-of-war around the average price line, recovering most intraday losses by the close. It finally settled at 24,155 yuan/mt, up 0.04% from the previous close.

[SMM Steel Export Special Report] Steel exports are projected to increase by 0.9% in 2026, and billets may become the main force of growth through "conflict spillover" 一Review of Steel Exports in 2025 and Forecast for 2026 Looking back at the previous text ( https://mp.weixin.qq.com/s/XRKfmCwJbx6eUBrgJe_xug ), SMM, now combining market research from over 50 customer questionnaires and market analysis, makes a forecast for steel exports in 2026. First, we present the conclusion: the total export volume of steel (steel products + billets) in 2026 is expected to reach 135 million tons, still showing a growth trend year-on-year, with a growth rate of 0.9%. Data sources: SMM, General Administration of Customs Forecast by Variety: Coated and Galvanized Products Continue to Top the List, While Billets Leverage "Conflict Spillover" to Catch Up Data sources: SMM, General Administration of Customs Looking back at the product mix distribution over the past 25 years, coated and plated products ranked first, followed closely by hot-rolled products and steel billets. In addition, products such as pipes and wire rods also performed quite prominently. Data source: Directly compiled from SMM's research on exporters According to the results of the SMM questionnaire survey, it can be found that the export varieties in 2026 that are more favored by exporters are mainlygalvanized steel, hot-rolled steel, and profiles. It is worth noting that silicon steel also made the list, presumably for two reasons: first, with the global power grid undergoing upgrades, the demand for orientedsilicon steelin transformers has entered a growth phase; second, as the core material for new energy vehicle motors, it is also a major source of profit for China's high-value-added exports. Based on past export data and current market analysis, SMM has estimated and predicted that the main export products in 2026 will be ① Coated and plated products (24%, with positive growth for three consecutive years), As the domestic manufacturing industry transforms towards high-end, industrial transfer, and the booming of home appliance exports, home appliance and automobile factories in regions such as Southeast Asia and North America have all entered the production stage, with rigid demand for high-quality galvanized and color-coated sheets from China. Meanwhile, compared with ordinary hot-rolled, medium and heavy plate, and other deep-processed products, coated and plated products enjoy lower anti-dumping tax rates in some countries, which is also an important means to avoid trade frictions. ② As the product with the greatest development potential this year, billets (14%) currently have obvious advantages. On the one hand, billets in China are low in price and have faced very few trade barriers to date. In the whole year of 2025, the total export volume of billets reached as high as 14.83 million tons, with a year-on-year increase of 134%. According to the latest customs data compiled by SMM, the cumulative export volume of billets from January to February 2026 reached 1.7745 million tons, still achieving a year-on-year increase of 16%. On the other hand, against the backdrop of the US-Iran conflict, Iran's billet exports to Southeast Asia have nearly come to a halt, while China, with fewer overseas trade barriers for billets, will directly fill the market gap left by Iran's exit. The recent SMM Steel Export Weekly Report's research on the booming billet exports has repeatedly confirmed this situation. In summary, it is projected that billet exports will continue to maintain a high-speed growth trend in 2026, with a total volume of 19 million tons, a year-on-year increase of 28%. ③ Hot-rolled (13%) , with the implementation of Vietnam's anti-circumvention measures against Chinese hot-rolled coils this year, the total volume of hot-rolled exports will continue to decline. Meanwhile, in 2025, China's total hot-rolled exports to Saudi Arabia were second only to Vietnam, but now maritime blockades, high insurance costs, and freight rates will all become obstacles to exports to the Middle East, so the outlook for hot-rolled coil exports is not optimistic. However, as the saying goes, "a starved camel is still bigger than a horse." As a necessary product of the "Made in China" machinery and equipment going global (indirect exports), its market dominance remains difficult to shake in the short term. Therefore, even though the decline is significant, its total volume ranking remains relatively high. Data Sources: SMM, General Administration of Customs Regional Forecast: Asia Seeks Change Amid Stability, Africa Mines Potential, and European and American Markets Seek Differentiated Penetration Under "Barriers" Data sources: SMM, General Administration of Customs Reviewing the 25-year steel export data by region, it is clearly evident that the Asian market has a core region and diversified other regions. Regarding the forecast for the flow in 26 years, SMM believes that the general regions will remain unchanged, but in terms of breakdown, ① the Southeast Asian market located in Asia (60%) will see a slight increase in its share in the game between the growth of billets and coated products and the decline of hot-rolled coils, but the share of the Middle East regions such as Saudi Arabia is likely to weaken due to geopolitical conflicts, while the share of the Indian market, which serves as a transit point for transportation to the Middle East, may increase. ② Africa (16%) It is still a blue ocean with huge potential. The promotion of the African Continental Free Trade Area will accelerate the housing and infrastructure building in North Africa and West Africa, and local mineral and energy projects will continue to drive the demand for mining machinery special steel. ③ South America (9%), Europe (8%), and North America (6%) are competing. Among them, under the dual-wheel drive of new infrastructure and resource development, the South American region is expected to continue to expand compared with the same period; while the European market is expected to continue to adjust steel exports to "less but better" under the strict CBAM (carbon border adjustment mechanism) implementation.North America continues to be constrained by high Section 232 tariffs and trade protectionism, and its low share is an objective reality. Data sources: SMM, General Administration of Customs The following figure shows the ranking of export regions preferred by exporters in the SMM questionnaire, which can be used as a reference. Data source: Directly compiled from SMM's research on exporters 70% of merchants are turning to "upholding integrity while seeking innovation": SMM research reveals the compound survival logic of export trade in 2026 Meanwhile, we have also conducted relevant research on the destination countries and their corresponding export varieties. As shown in the figure, the hotspots are concentrated in Latin America, Africa, the Middle East, and Southeast Asia, and the star products remain coated and plated products, hot-rolled products, wire rods, section steels, and steel billets. Data source: Directly compiled from SMM's research on exporters In the current context where the wave of globalization is facing headwinds and the international political and economic landscape is undergoing drastic upheaval, export trade enterprises are standing at an unprecedented crossroads. Faced with the complex external environment of supply chain fluctuations, geopolitical games, and the iteration of consumer demand, waiting for death or passive maintenance is no longer an option. According to the survey data from SMM questionnaires, nearly 70% of exporters, after reviewing their own business maps, have resolutely chosen a compound response strategy of "upholding integrity while seeking innovation": that is, on the basis of ensuring the stable operation of existing advantageous products, they are extending their reach to more forward-looking new product development and new track expansion. We must admit that in the crucible of complex situations, only by continuously iterating the product matrix and responding to the ever-changing market demands with a flexible and adaptable stance can enterprises stand firm in the storm. 二Core factors influencing steel exports in 2026 Although the forecast for the overall steel exports in 2026 is relatively optimistic, we must also pay attention to some external challenges we are currently facing. Apart from the previously mentioned Chinese export license incident, SMM believes that there are mainly three factors affecting exports this year: the first is the expectation of production restrictions (2026 is the first year of the 15th Five-Year Plan, and the National Development and Reform Commission has clearly stated that it will continue to implement the reduction of crude steel production); the remaining two are the EU CBAM (Carbon Border Adjustment Mechanism) and anti-dumping cases. Below, we will provide an interpretation of these two major factors. 2026: The Inaugural Year of the "Carbon Tax" Kicks Off: With Substantive Imposition Looming, How Can China's Steel Exports to the EU Break the Deadlock? Starting from January 1, 2026, CBAM has officially concluded the transitional period of "only reporting, no payment" and entered the substantial collection phase. This mechanism is regarded as a key piece of the puzzle for the EU to achieve its "2050 Carbon neutrality" goal, with its core logic being to levy taxes equivalent to the EU's internal carbon price on high-carbon products imported into the EU, so as to eliminate the risk of "carbon leakage" and protect the competitiveness of the EU's domestic industries. Data source: SMM compiled from public information According to the latest research by SMM, most traders are currently taking a wait-and-see attitude towards steel exports to the EU region due to the issue of certificate fees. Meanwhile, to provide a buffer period for traders, the EU will not impose 100% fees in 2026, but will instead assess based on the "free allowances" of EU domestic enterprises. That is, at present, only a small portion of emissions need to pay for certificate fees, but this coefficient will decline year by year over time (reaching 0 in 2034, i.e., full fees will be charged). In summary, there is no need to be overly worried in the short term. However, due to the significant differences between China's steel production structure (dominated by long blast furnace processes) and that of the EU (where short electric furnace processes account for a relatively high proportion), the medium- to long-term impact on China's steel industry should not be underestimated. For details, please refer to the analysis in the figure below. Data sources: SMM, public information To maintain steel exports to the EU under the influence of policies, we propose the following optimization suggestions: ① Data compliance: As soon as possible, improve the full life cycle (LCA) carbon footprint accounting of export products, establish a carbon ledger that meets EU standards, and actively prepare all relevant materials. ② Product optimization: Prioritize low-carbon emission production lines (such as electric arc furnace lines with a high proportion of scrap steel) to undertake orders for export to the EU. ③ Premium transfer: Explore the brand premium of "green steel" and attempt to offset part of the carbon tariff cost through environmental premiums. ④ Layout adjustment: Focus on the production capacity layout in regions such as Southeast Asia, and evaluate the feasibility of avoiding or mitigating carbon footprint pressure through overseas bases. Break through the fog of "anti-dumping" and jump out of the trap of "pessimistic expectations" Finally, we have compiled the anti-dumping cases that have been adjudicated for the second half of 2025 and 2026. The main product categories affecting steel exports in 2026 are hot-rolled, coated, silicon steel, and medium and heavy plates, and the markets are mostly concentrated in countries such as South Korea, Brazil, Egypt, and India. Data sources: SMM, General Administration of Customs Considering that there is usually a time period of 1 to 1.5 years from case filing to ruling, we have also compiled the following table for relevant cases that may affect steel exports in 2026 in terms of market and product variety. Summary of anti-dumping cases to be implemented in 2026 Data sources: SMM, China Trade Remedy Information Network It should be noted that although there were also many new anti-dumping cases in 2025, they did not have the expected pessimistic impact on the actual total export volume for that year. Therefore, the proportion of the impact factor of this part in the SMM balance model is not large. So, even when evaluated based on the maximum impact upon implementation, there is still an expected increase in this year's actual export volume, with the growth rate of billets remaining the main driver. Copyright and Intellectual Property Statement: This report is independently created or compiled by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), and SMM legally enjoys complete copyright and related intellectual property rights. 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Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating); 2. Disclose the content of this report to any third party; 3. License or authorize any third party to use the content of this report; 4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses. 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SMM April 7 update: SHFE aluminum 2604 fluctuated upward in the morning session, with the price center moving lower than the previous day. As the delivery date approached, some traders purchased to earn the price spread between futures contracts. Combined with limited shipments from smelters, market transactions gradually picked up. Transactions were mainly concentrated between the SMM A00 aluminum discount average price and a premium of 20 yuan/mt. The east China market shipment sentiment index was 3.31 today, down 0.03 MoM; the purchasing sentiment index was 3.64, up 0.09 MoM. Before the market opened, central China traders' quotes continued the trend from the previous trading day, but prices edged slightly lower later. Excessive market inventory limited price increases, and with aluminum prices at elevated levels, the lack of peak-season characteristics in end-user orders constrained downstream manufacturers' buying sentiment, resulting in an overall sluggish trading atmosphere. Ultimately, actual transaction prices in the central China market ranged from parity to a premium of 30 yuan over the central China price. The central China market shipment sentiment index was 2.7 today, unchanged MoM; the purchasing sentiment index was 2.46, down 0.03 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 27,500 mt MoM today, with all three regions showing inventory buildup.