[SMM Analysis]Weak Supply-Demand Pattern; Secondary Aluminum Prices Were Expected to Come Under Pressure and Pull Back in April

Supply glut, cautious demand, and fading cost support drag the benchmark contract down RMB 205/mt in the week of March 30 – April

On April 2, 2026, the White House ushered US steel trade policy into "Version 2.0." This strategic shift goes beyond simple tariff hikes. It uses full-value taxation and melt-and-pour traceability to block low-end imported raw materials, while applying structural tariff reductions to finished products to ease manufacturing inflation. Ultimately, this two-pronged approach aims to forcibly bring the global supply chain back to domestic US steel production.

On April 1, 2026, the launch ceremony for the Zhongke Liquid Sunshine (Shawan) Green Hydrogen Coupled Zero‑Carbon Liquid Sunshine Methanol Circular Economy Industrial Project was held in Shawan, Tacheng Prefecture, Xinjiang. As a flagship project of China’s 15th Five-Year Plan strategic hydrogen energy layout, the project has officially entered the construction phase. Led by the research team of Academician Li Can of the Chinese Academy of Sciences (CAS) and developed by Zhongke Liquid Sunshine (Shawan) Hydrogen Energy Technology Co., Ltd . , the project will build an integrated zero‑carbon circular economy system centered on wind‑solar power, green hydrogen, and methanol. It comprises three core modules: an annual output of 3.6 million tonnes of methanol, 13.5 GW of photovoltaic hydrogen production capacity, and an annual output of approximately one million tonnes of coal. Compared with conventional coal chemical industry, this model cuts coal consumption by two-thirds while enabling efficient utilization of green electricity and green hydrogen. The project adopts domestically developed oil‑methanol co‑refining technology to produce polyester fiber, supporting high‑value resource utilization in conjunction with Xinjiang’s textile industry. Multiple enterprises have participated in the joint construction, including China National Chemical Engineering Third Construction Co., Ltd. In alignment with national policies such as the West Hydrogen East Delivery pipeline initiative, the project will help upgrade Xinjiang’s wind and solar energy resources. It is expected to create nearly 2,000 jobs, serve as a model for Xinjiang’s green energy transition, and support national energy security and low‑carbon development.

In the spot market, with the Qingming Festival holiday approaching this week (March 30-April 3, 2026), some downstream battery enterprises mentioned pessimistic expectations for April orders. Coupled with lead prices holding up well, enthusiasm for stockpile procurement declined, and wait-and-see sentiment in the market was strong. This week, mainstream transaction prices for primary lead in Henan fell to parity or small discounts against the SMM #1 lead average price, while some suppliers concluded deals at discounts of 180 yuan/mt against the SHFE lead 2605 contract. Near the weekend, except for a few producers that held prices firm and held back from selling, smelters and suppliers in Hunan and Guangdong lowered their premiums against the SMM #1 lead average price to quoted premiums of 0-30 yuan/mt, but actual transactions were thin. Downstream producers told SMM that some suppliers in the market were dumping lead ingots at discounts ahead of the holiday to reduce inventory pressure. Lead consumption in the market softened slightly this week, downstream enterprises generally stayed on the sidelines, some procurement demand was postponed until after the holiday, and inquiries and transactions in the spot primary lead market shrank.

It was learned that the SMM weekly composite operating rate of lead-acid battery enterprises in five provinces was 73.45% from March 27 to April 2, 2026, down 0.47 percentage points WoW from the previous week. In April, the lead-acid battery market entered the traditional consumption off-season. Some enterprises reported softer end-use consumption and a decline in finished product orders, and planned to scale back their April production plans. The weekly operating rate edged down this week. Recently, the Chinese market coincided with the Qingming Festival holiday, and lead-acid battery enterprises planned holidays ranging from 0 to 3 days. Among them, automotive battery enterprises mostly took 1 day off, while e-bike lead-acid battery enterprises mostly took 2-3 days off. The holiday impact will be reflected in next week's weekly operating rate of lead-acid batteries.