[Overnight, LME Aluminum and SHFE Aluminum Edged Up Slightly, but Aluminum Prices Faced Short-Term Pressure at High Levels] Continued destocking in LME inventory provided bottom support for LME aluminum, but amid tightening fund liquidity and profit-taking by bulls, upward momentum remained insufficient, and the backwardation structure weakened somewhat. China’s social inventory rose to a high for the same period in nearly five years, and the inventory buildup cycle had yet to end, with high inventory and weak spot fundamentals jointly weighing on upward momentum. The divergence between domestic and overseas drivers continued, the SHFE/LME price ratio kept weakening, and prices were mainly under pressure in the short term.

According to a US official and people familiar with the matter, after three weeks of fighting in Iran so far, the Trump administration has begun preliminary consultations on arrangements for the next phase of action and possible peace talks with Iran. However, US officials said the fighting is expected to continue for another two to three weeks. In addition, the official said that any ceasefire agreement must meet the following conditions: the reopening of the Strait of Hormuz, a resolution to the issue of Iran’s stockpile of highly enriched uranium, and the conclusion of a long-term agreement on Iran’s nuclear program, ballistic missiles, and its support for proxy armed groups in the region.

This week, the rare earth market outside China showed a divergent pattern of “cerium up, the rest down.” Driven by price increases in China and rising ocean freight rates, cerium oxide FOB and CIF prices rose by $55/mt and $60/mt, respectively, while FOB offers for mainstream magnetic material raw materials such as praseodymium, neodymium, dysprosium, and terbium were generally lowered by $3-19.5/kg due to lower prices in China and tight supply caused by export controls. Although limited trading volumes supported premiums in markets outside China, expectations of an industrial slowdown in Europe triggered by the Middle East situation may suppress subsequent demand. On industry developments, Lynas’ Malaysia plant started samarium oxide production ahead of schedule, consolidating its position as the only commercial heavy rare earth separator outside China and advancing its 2030 strategy. In Australia, Terrain discovered high-grade magnetic rare earth ore intervals during drilling at its Western Australia project, highlighting significant resource potential.

Renascor Resources Drilling at Bulloo Creek intersected cobalt and copper mineralisation associated with magnetic anomalies, delivering several intervals with economically promising grades. The results indicate a south-dipping cobalt ± copper mineralised horizon, with mineralisation confirmed in both eastern and western anomalies, suggesting a broader mineralised trend. At the Marree Project, negotiations on a Native Title agreement have progressed, which is expected to facilitate exploration of uranium as well as copper-gold targets. Uranium targeting work has also commenced at the Wooltana Project, while rare earth exploration at the Tumby Bay prospect on Eyre Peninsula is advancing, with plans to expand soil geochemistry programs to further define the scale and extent of mineralisation.

UK rare earth exploration company Harena Rare Earths signed an exclusivity agreement to evaluate the acquisition of Paradigm Critical Minerals’ heavy rare earth and uranium assets in California. The asset is located in San Bernardino County, about 100 miles from Mountain Pass mine, MP Materials’ rare earth mine, the only producing rare earth mine in North America. Historical drilling showed significant potential for the project, with surface exploration identifying a light-to-heavy rare earth ratio of about 50:50 and grab samples with TREO grades of up to around 2%. Uranium grades reached 10 times those of currently operating projects worldwide. Harena will conduct due diligence to advance the transaction, and the project will complement its ionic clay rare earth project in Madagascar.

Futures: Overnight, LME lead opened at $1,987.5/mt, hovering around the daily moving average during the Asian session. Entering the European session, it rose to a high of $1,994.5/mt before weakening, touching a low of $1,972/mt before the close, and finally closed at $1,979/mt after a slight rebound, down $16.5/mt, a decrease of 0.83%. Overnight, the most-traded SHFE lead contract opened at 16,800 yuan/mt, fell to a low of 16,740 yuan/mt after opening, then rebounded to a high of 16,820 yuan/mt, and finally closed at 16,800 yuan/mt after brief consolidation, forming a doji, up 45 yuan/mt from the previous settlement price, an increase of 0.27%. Data released by the State Administration for Market Regulation showed that 25.745 million new business entities were established nationwide in 2025, with rapid growth in enterprises related to emerging industries and future industries, indicating strong innovation momentum. Among them, frontier fields such as humanoid robots, civil aviation, and generative artificial intelligence led the gains. The number of Americans applying for unemployment benefits increased less than expected, indicating that layoffs remained at a low level. The third round of indirect talks between the US and Iran concluded, with the Iranian foreign minister stating that the two sides were close to reaching a consensus in some areas, and technical negotiations would be held in Vienna next Monday. The foreign minister of Oman, the mediating party, described the talks as having made significant progress. Media reports indicated that differences between the two sides remained significant, with the US insisting that Iran completely dismantle its nuclear facilities and transfer all enriched uranium out of the country; Iran proposed stopping nuclear activities for a limited number of years, after which enrichment activities would resume within a regulated regional framework. Spot fundamentals: In the Shanghai market, Chihong and Honglu lead was quoted at discounts of 50 yuan/mt to premiums of 50 yuan/mt against the SHFE lead 2604 contract. SHFE lead continued to hold up well. Some suppliers completed month-end inventory clearance, with individual large discount quotations narrowing, while other suppliers followed the market in shipments, mainly with cargoes self-picked up from primary lead smelters' production sites. Few secondary lead smelters had resumed production, with some having delayed plans; secondary refined lead quotations were scarce, and prices were firm, with mainstream producing areas offering at parity with the SMM #1 lead average price ex-works. Downstream enterprises resumed work gradually, but most still had certain inventory, resulting in low enthusiasm; spot order market transactions were sluggish. Inventory: On February 26, LME lead inventory was 286,300 mt, flat from the previous trading day. As of February 26, the total social inventory of lead ingots in five regions tracked by SMM continued to accumulate. Today's lead price forecast: This week, spot order procurement demand from downstream enterprises remained primarily for small, rigid needs. Many downstream enterprises were still consuming lead ingots stockpiled before the holiday after resuming work, and post-holiday lead ingot consumption appeared slightly weak. On the refined lead supply side, large-scale primary lead smelters in Henan maintained stable supply during the holiday. Smelter inventories accumulated significantly after the holiday, while the pace of production resumptions for secondary lead smelting enterprises that halted during the Chinese New Year was noticeably delayed compared to previous years. Under the current scrap battery and lead price conditions, secondary lead enterprises remained in a loss-making state upon resuming work, and concentrated production resumptions are expected to be delayed until March. This week, the supply and demand in the spot refined lead market have not fully recovered. Lead prices have moderate support at lower levels but struggle to rise due to pressure from increasing domestic inventory. In the short term, lead prices are expected to continue moving sideways.