[SMM Tin Morning Briefing: The Most-Traded SHFE Tin Contract Opened Sharply Higher in the Night Session and Then Rebounded in Volatile Trading, While the Spot Market Will Gradually Cool Down]

According to SMM data, the operating rate of copper pipe & tube enterprises was 58.74% in February, down 14.13 percentage points MoM and down 11.54 percentage points YoY. February was affected by the Chinese New Year holiday. Leading enterprises maintained stable production and supply, with production showing strong resilience, basically sustaining “no holiday shutdowns” or only 0–3 days , and ensuring normal operations during the Chinese New Year period through shift rotations on production lines. Although orders saw slight fluctuations of 2%–10%, they remained overall under control. However, small and medium-sized enterprises performed poorly in February, dragging down the overall operating rate. Looking ahead to March, the operating rate of copper pipe & tube enterprises is expected to be 77.88%, up 19.14 percentage points MoM and down 7.35 percentage points YoY. The March production schedule of key air-conditioner enterprises fell 9.3% YoY from last year, in line with the YoY decline trend in copper pipe & tube operating rates. However, most copper pipe & tube enterprises said March production is expected to be better than expectations, and there are concerns over advance production and stockpiling. Worth noting is that R&D on high-performance alloy copper tubes by China’s leading enterprises will further reduce copper consumption in air conditioners, and most other enterprises are currently developing this type of technology as well. This has also increased orders for those domestic copper pipe & tube enterprises that already possess such technology, diluting the market share of other enterprises. In addition, the conflict in the Middle East reduced some home appliance export orders to the region, and the April production schedules of some domestic air-conditioner enterprises with relatively high market share exposure there are expected to decline.

SMM, March 24: SHFE aluminum 2604 fluctuated downward in early trading, slightly higher than the previous trading day. Overall market buying sentiment was relatively good, and sellers held prices firm as aluminum prices remained at relatively low levels. Today’s mainstream transaction prices were concentrated at SHFE aluminum 04 contract +10 yuan/mt. Today, the east China market shipments sentiment index was 2.79, up 0.07 MoM; the purchasing sentiment index was 3.34, up 0.04 MoM. As aluminum prices extended their decline, traders in the central China market showed weak purchase sentiment. With the month-end settlement date approaching, suppliers made heavy shipments and showed limited willingness to hold prices firm. Downstream processing enterprises were wary of further price declines, with no expectation of large-scale stockpiling at low prices for now. Overall market purchase activity was sluggish, and prices showed a continued price collapse trend. Ultimately, actual transaction prices in the central China market were concentrated in the range from a premium of 20 yuan over the central China price to a discount of 20 yuan to the central China price. Today, the central China market shipments sentiment index was 2.63, flat MoM; the purchasing sentiment index was 2.4, down 0.08 MoM. Inventory side, aluminum ingot inventory in major consumption areas increased by 6,500 mt MoM today, with destocking mainly coming from Gongyi and Guangdong. In the short term, after the Chinese New Year, aluminum ingot inventory continued to see seasonal inventory buildup. Affected by bullish sentiment, premiums are expected to remain on a narrowing trend.

[SMM Tin Brief Commentary: SHFE Tin Stopped Falling and Rebounded, Closing Up 2.94% as Macro Pressure and Bottom Support Vied Against Each Other]

As of March 24, titanium dioxide prices continued to rise, with the SMM index up 4.6% since early 2026. Two rounds of price hikes were issued in March amid low inventories. Strong exports and production cuts supported gains, though sustainability post-peak season remains uncertain, hinging on downstream acceptance.

According to SMM data, during the second half of the traditional "Golden March" peak consumption season (March 16 - March 20, 2026), the most-traded stainless steel futures contract (SS2605) trended lower from its highs under the dual pressure of macroeconomic headwinds and tepid actual demand. By the close on March 20, the contract retreated to 14,150 yuan/mt (approx. $2,051/mt), down 125 yuan/mt (approx. $18/mt) from last Friday's close of 14,275 yuan/mt (approx. $2,069/mt). The market's core feature this week was the marginal weakening of previous bullish factors: international macro signals tilted hawkish, raw material upward momentum stalled, and the substantive recovery of end-user demand during the peak season remained lackluster, prompting a rational pullback in futures prices after hitting resistance. Macro-Economy: Divergence Between Global Hawkishness and Chinese Resilience On the macroeconomic front, a significant divergence emerged between global and Chinese economic data and policy directions. Internationally, the U.S. Federal Reserve ushered in a "Super Central Bank Week," deciding to hold its benchmark interest rate steady at 3.5%-3.75%. Influenced by developments in the Middle East and sticky inflation, the Fed's latest dot plot—despite maintaining expectations for one rate cut this year and next—revealed a distinctly hawkish tilt. Market bets on rate cuts for the entire year were slashed to less than 11 basis points. The dashed hopes for loose dollar liquidity weighed on the overall valuation of the base metals sector. In China, the National Bureau of Statistics released January-February economic data showing a stable start to the year. Value-added industrial output grew by 6.3% year-on-year, and total retail sales of consumer goods increased by 2.8%, though real estate development investment still fell by 11.1% YoY. This structural divergence indicates a certain resilience in Chinese manufacturing, but the drag from the property sector continues to cap the upward elasticity of end-user consumption. Fundamentals: Destocking Continues, But Spot Market Feels Lukewarm Fundamentally, social inventories maintained a destocking trend, but the spot market still lacked vigor. The latest SMM data shows social inventories falling further to 979,300 mt this week, a decrease of 18,800 mt from last week's 998,100 mt. The continuous decline in inventories sent a positive industry signal, stabilizing market sentiment to some extent. However, the spot market still felt cold. Overall quotes remained stable, and end-user procurement strictly followed a just-in-time purchasing model, failing to exhibit the across-the-board boom expected during a peak season and leading to a strong wait-and-see sentiment. Currently, although the destocking trend is preserved, constrained by high absolute inventory levels and the anticipated supply increment from March steel mill resumptions, traders are maintaining a steady pace of shipments without resorting to aggressive panic selling. Costs: High-Level Loosening Pauses Cost-Driven Logic The cost side also showed signs of loosening from its highs. As of March 20, high-grade nickel pig iron (NPI) quotes ended their previous unilateral rally, edging down to 1,084 yuan/mtu (approx. $157/mtu), while high-carbon ferrochrome prices held steady at 8,650 yuan/50 mt (approx. $1,254/50 mt). With the pullback in futures prices and the sustained caution of steel mills regarding high-priced raw materials, NPI faced resistance in breaching the 1,100 yuan mark. The stabilization of raw material prices at high levels, coupled with slight price concessions, has temporarily alleviated the upward pressure on steel mills' cost centers, bringing the previously strong "cost-driven" logic to a temporary halt. Outlook and Strategy In conclusion, the stainless steel market this week entered a "deep water" zone where peak season expectations are repeatedly tested against reality. The Fed's hawkish stance pressured macro sentiment, while the "tepid" state of just-in-time end-user demand left fundamentals lacking intrinsic upward momentum. However, two consecutive weeks of steady destocking and stable spot quotes have effectively limited the depth of the market's correction. Looking ahead to next week, the market will continue to seek a balance between "high inventories + supply increments" and "continuous destocking + just-in-time demand floor." The key focus will be whether the destocking slope reverses due to concentrated arrivals at steel mills. In the short term, the most-traded SS contract is expected to shift into a broad range-bound trend.