According to SMM data, during the first week of the traditional "Golden March" peak season (March 2 - March 6, 2026), the most-traded stainless steel futures contract (SS2604) exhibited a strong, high-level oscillating trend. This was driven by the resonance of international geopolitical storms and the tone set by China's macroeconomic policies. By the close at 10:15 on March 6, the contract traded higher at 14,235 yuan/mt (approx. $2,063/mt), up 85 yuan/mt (approx. $12/mt) (+0.60%) from last Friday's close of 14,150 yuan/mt (approx. $2,051/mt). The market this week was characterized by "strong expectations but weak reality." A sudden global supply chain crisis and firm raw material costs provided a solid floor for market valuations. However, high spot inventories and the looming pressure of resumed production kept prices cautious when attempting upward breakouts. Macro-Economy: A "Super Macro Week" Defined by Geopolitics and Policy Support On the macroeconomic front, this was undeniably a "super macro week" with exceptionally strong signals from China and the global market. Internationally, a geopolitical "black swan" emerged as Iran claimed the Strait of Hormuz was closed and threatened to strike passing vessels. This extreme event immediately sparked fears of a global supply chain crisis and surging energy expectations. U.S. Federal Reserve officials subsequently voiced concerns over the war's spillover effects and a potential rebound in inflation, significantly cooling expectations for interest rate cuts. However, in the commodities market, trades driven by "inflation hedging" and "supply chain disruptions" boosted the overall premium of the base metals sector. In China, the government work report delivered at the "Two Sessions" set the 2026 economic growth target at 4.5%-5%. It explicitly proposed utilizing capacity regulations and standard-setting to deeply rectify "involutionary" (cut-throat) competition. This policy direction provides strong expectation-driven support for supply-side optimization in traditional Chinese manufacturing. Fundamentals: Inventories Near Peak, Clash of Supply and Demand Imminent Fundamentally, social inventories are showing early signs of peaking, though the market will soon face the test of surging supply. The latest SMM data shows social inventories at 1.0164 million mt this week, a marginal increase of just 300 mt from last week's 1.0161 million mt. The seasonal inventory accumulation around the Spring Festival fully aligns with industry patterns and remains within market expectations. Traders have not resorted to panic selling, keeping short-term inventory pressure manageable. However, a shift is brewing on the supply side. The output reduction caused by concentrated maintenance at Chinese steel mills in February is nearing its end. As mills enter a concentrated resumption phase in March, scheduled production is expected to rise sharply. This surge in supply will clash head-on with recovering demand during the "Golden March and Silver April" period, leading to a phased reshaping of the market's supply-demand dynamics. Costs: Robust Upward Resilience Sets a Solid Floor On the cost side, raw materials continued to show robust upward resilience, establishing a solid baseline for futures prices. Driven by the ongoing fallout from Indonesian nickel ore quotas and premium news, raw material prices rose across the board this week. As of March 6, high-grade nickel pig iron (NPI) quotes climbed to 1,088 yuan/mtu (approx. $158/mtu), and high-carbon ferrochrome prices were adjusted upwards to 8,600 yuan/50 mt (approx. $1,246/50 mt). Although mainstream steel mills currently show low acceptance of high NPI prices and remain cautious in procurement—resulting in sparse actual market transactions—the raw material sector has minimal room to yield on price, dominated by expectations of tight ore supply and bullish sentiment. The steady climb in spot costs has effectively capped the downside risk for stainless steel prices. Outlook and Strategy In conclusion, the stainless steel market this week sought a balance amid the fierce tug-of-war between "geopolitical premiums + cost support" and "million-ton inventories + production resumption expectations." The macroeconomic shifts triggered by the Strait of Hormuz crisis, coupled with China's "Two Sessions" mandate to curb cut-throat competition, have injected immense confidence into the bulls regarding macro sentiment. Looking ahead to next week, the market will deeply enter the reality-check phase of the "Golden March" peak season. The core focus will shift to the actual implementation of steel mill resumptions in March and the pace at which downstream end-users digest substantial orders. In the short term, futures prices are expected to maintain wide fluctuations at high levels, underpinned by the cost line. Industry clients are advised to closely monitor geopolitical developments and the pace of spot inventory destocking, while rationally utilizing futures tools to lock in production margins.

Market Overview According to SMM data, during the first trading week following the Lunar New Year holiday (February 24 – February 27, 2026), the dominant stainless steel contract (SS2604) opened high and maintained a strong trend, driven by significantly rising raw material costs. By the close on February 27, the contract price had climbed to 14,150 CNY/mt ($2,065.69/mt) , an increase of 385 CNY/mt ($56.20/mt) or +2.80% compared to the pre-holiday closing price of 13,765 CNY/mt ($2,009.49/mt) . In the early post-holiday period, the market's upward logic was primarily dominated by rising costs on the supply side. However, as the price center shifted upward rapidly, the substantial accumulation of social inventory during the holiday formed a tangible suppression on the upside potential. Consequently, futures prices maintained a fluctuating struggle within the 14,100–14,200 CNY ($2,058.39–$2,072.99) range. Macroeconomic Analysis From a macro perspective, the market is navigating an interplay between reasonably ample domestic liquidity and uncertainties regarding overseas trade policies. Domestic: On February 25, the central bank conducted a 600 billion CNY ($87.59 billion) one-year Medium-term Lending Facility (MLF) operation. This continued to maintain ample liquidity in the banking system, providing macro support for the traditional "Golden March and Silver April" peak consumption season and stabilizing market expectations. Overseas: The U.S. Trade Representative stated they would continue to advance the Section 301 investigation regarding the Phase One trade agreement, with proposals to raise "global import tariff" rates from 10% to 15% or higher. Potential tariff changes have intensified uncertainty in the external macro environment, which may have a negative impact on future export expectations for stainless steel and related end-products. Fundamentals: Inventory & Demand Fundamentally, the post-holiday market faces the reality of a massive inventory buildup while end-user demand is still in a recovery phase. Inventory: Latest SMM data shows that, due to the long Spring Festival holiday, social inventory significantly increased to 1.0161 million tons this week. This is an increase of 121,600 tons compared to the pre-holiday level of 894,500 tons , breaching the one-million-ton mark. Spot Transactions: The market is currently in a gradual restart phase. Downstream processing factories have not yet fully resumed work, and current spot circulation is mostly concentrated on resource allocation between traders. The end-market's actual ability to digest current high-priced resources remains to be verified after enterprises fully resume work next week. Sentiment: In the short term, high inventory levels pose significant pressure on prices. However, supported by expectations for the "Golden March and Silver April" peak season, holders' sentiment remains temporarily stable, with no large-scale sell-offs observed. Cost Analysis The significant strengthening of the cost side was the core driver for the high market opening this week. Driven by news of tighter Indonesian nickel ore quotas and fluctuating rises in nickel prices post-holiday, there is a strong willingness to support prices on the raw material side. High-grade Nickel Pig Iron (NPI): As of February 27, quotes were raised significantly, rising by 33.5 CNY ($4.89) in a single week to 1,085 CNY/nickel point ($158.39/nickel point) . High Carbon Ferrochrome: Prices remained temporarily stable at 8,550 CNY/50 basis tons ($1,248.18/50 basis tons) . The expectation of tight ore supply materialized quickly after the holiday, substantially raising the immediate production costs for steel mills. The upward shift in the cost center effectively limited the room for market correction and forced a passive, steady rise in the center of spot transaction prices. Outlook & Strategy Overall, the stainless steel market in the first week after the holiday presented a tug-of-war pattern: "Strong Expectations & High Costs" vs. "Weak Reality & High Inventory." While the sharp rise in NPI prices established a tone for a strong fluctuating market, the social inventory exceeding one million tons—coupled with end-user demand that has yet to kick in—constrained further upside potential. Looking ahead to next week, the market trading logic will gradually shift from "sentiment-driven" to "fundamental verification." Short-term: Futures prices are expected to maintain a strong fluctuation at high levels. Medium-to-long-term: The trend will depend on the actual realization of demand during the "Golden March and Silver April" peak season after downstream sectors fully resume work. Industrial clients are advised to closely monitor the inventory inflection point (destocking) and actual spot transaction conditions next week. Carefully assess the risks of chasing highs and reasonably utilize hedging tools to manage exposure.

This week's average price for SMM 8-12% high-grade nickel pig iron (NPI) reached 947.3 RMB per nickel point (ex-factory, including tax), an increase of 5.4 RMB per nickel point compared to last week. This indicates a stabilization and recovery trend in the high-grade NPI prices following recent fluctuations.

Indonesian HPM prices saw an increase during the second pricing period of May, leading to a corresponding rise in pyrometallurgical-grade ore prices. However, nickel pig iron (NPI) prices remain under continued downward pressure in the short term.

[Copper] On Friday, SHFE copper closed lower amid sideways movement, with accelerated position reduction in the delivery month. Today, spot copper prices fell to 78,205 yuan. The premium for Shanghai copper rapidly pulled back to 80 yuan, while the premium in Guangdong dropped to 155 yuan. In April, the highlight of domestic and overseas trade exports remained in ASEAN, where production maintained strong momentum during the reciprocal tariff exemption period. In the first four months, domestic imports of unwrought copper reached 1.742 million mt, down 3.9% year-on-year. Despite extremely low processing fees, copper concentrate imports remained stable, with a cumulative increase of 7.8% in the first four months. Consider shorting the SHFE 2507 contract or participating in calendar spreads between near-month contracts amid the rebound. [Aluminum and Alumina] Today, SHFE aluminum fluctuated rangebound, with spot aluminum in east China trading on par with futures, while spot aluminum in south China traded at a discount of 45 yuan. Yesterday, social inventories of aluminum ingots and aluminum billets in east China fell by 16,000 mt and 9,000 mt, respectively, compared to Monday, with total inventory remaining at the lowest level for the same period in recent years. Amid the shadow of trade wars, demand faces seasonal weakness and pressure from trade frictions. SHFE aluminum faces strong resistance in the 20,000-20,300 yuan range, corresponding to the upside gap. However, since the beginning of the year, aluminum market demand has exceeded expectations. Monitor inventory and spot feedback after price pullbacks, and maintain a cautiously bearish stance without excessive pessimism. Recently, the capacity under maintenance and production cuts in the alumina sector has continued to rise, leading to a temporary reduction in production and a decline in industry inventory. However, once profits recover, capacity will resume on a large scale, and new capacities in Shandong and Hebei will gradually produce finished products. The transaction price of Guinea bauxite at the cost side has fallen from $110 at the beginning of the year to $75, with the average cost of alumina dropping to around 2,900 yuan. This week, spot alumina transactions have slightly increased. In the short term, the rebound height of the futures market will be limited by the surplus outlook and cost collapse. Consider shorting on rallies when futures trade at a premium. [Zinc] The spot import window for zinc has opened, and with the gradual supplementation of overseas zinc elements, domestic zinc ingot supply is unlikely to be tight. Progress in Sino-US tariff negotiations has been sluggish, keeping demand under pressure. The domestic peak season has ended, and the probability of simultaneous weakness in domestic and overseas demand is high. As consumption trickles down, maintain short positions in SHFE zinc from previous highs. [Lead] Profits at secondary smelters are poor, leading to reduced production. Primary smelters in north and south China have enterprises planning maintenance, supporting lead prices. The tight supply of raw materials remains unchanged, with secondary lead operating at a loss and insufficient enthusiasm for raising prices to purchase. Scrap battery suppliers are unwilling to sell at low prices, keeping scrap battery prices stable. Downstream purchase willingness is mediocre. SMM 1# lead is trading at a discount of 110 yuan/mt to near-month futures, with a price difference between primary metal and scrap of 25 yuan/mt. The import window remains closed, and the tug-of-war between costs and consumption continues. Temporarily, view SHFE lead as fluctuating rangebound in the 16,300-17,000 yuan/mt range. [Nickel and Stainless Steel] SHFE nickel fluctuated rangebound, with mediocre market trading activity.On the spot market, the premium for Jinchuan nickel fell to 2,250 yuan, the premium for imported nickel was 100 yuan, and electrodeposited nickel traded at a discount of 50 yuan. Supply side, the shipment volume of nickel ore from the Philippines increased significantly compared to earlier periods, replenishing smelters' nickel ore inventory. NPI prices continued to decline, with domestic acceptance of high-priced nickel ore decreasing. The impact of Indonesia's new policy on costs may gradually be absorbed by the market. The quoted price for high-grade nickel pig iron (NPI) stood at 962 yuan per mtu, having fallen by nearly 7% over the past month. In terms of inventory, nickel pig iron inventory increased by 4,200 mt to 28,400 mt, refined nickel inventory decreased by 560 mt to 44,000 mt, and stainless steel inventory decreased by 10,000 mt to 975,000 mt. SHFE nickel is at the tail end of another rebound, with bears gradually gaining strength. [Tin] The weighted average of SHFE tin continued to oscillate above 260,000 yuan and the 250-day moving average (MA250). Currently, there is a tight supply of tin concentrate raw materials. Domestic refined tin output fell MoM in April, with a particularly large YoY decline. However, both supply and demand in the tin market are weak, primarily supporting domestic spot prices. Today, SMM tin was quoted at 262,200 yuan, with a real-time premium of 770 yuan over the delivery month. It is expected that tin prices will mainly complete a right-shoulder oscillation pattern in May, with significant resistance above. Short positions can be held against 265,000 yuan. (Source: Guotou Junan Futures)

[SMM Flash Report] April 30 – According to price data released on April 30, the price range for Indonesian high-grade nickel pig iron (NPI) with 12–14% nickel content (CIF, including tax) is USD 117.71–118.92 per wet metric ton, with an average price of USD 118.31/wmt. For Indonesian NPI with 10–12% nickel content (CIF, including tax), the price range is USD 116.86–118.31 per wet metric ton, with an average price of USD 117.59/wmt. Compared to the previous month, the average price for 12–14% NPI decreased by 6.3%, while the average price for 10–12% NPI dropped by 6.37%.