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.

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Introduction In Q1 2025, the global hydrogen industry underwent a quiet yet profound transformation—the green hydrogen supply chain shifted from single-technology competition to a system reconstruction dominated by geo-economics. With the EU's Carbon Border Adjustment Mechanism (CBAM) taking effect, the US Inflation Reduction Act (IRA) details being finalized, and the joint promotion of the Northeast Asia Hydrogen Corridor by China, Japan, and South Korea, the cross-border trade rules, production standards, and supply chain layout of green hydrogen accelerated differentiation, forming a "multi-polar supply chain network" centered on regional blocs. In this process, driven by both technological breakthroughs and policy games, green hydrogen leaped from a "supplementary energy role" to a strategic bargaining chip in great power competition. This article will focus on the reconstruction logic of the global green hydrogen supply chain, analyzing the geo-economic motivations and industrial impacts behind it. I. Three Drivers of Supply Chain Reconstruction: Policy, Technology, and Capital 1. Policy Barriers: From "Subsidy Competition" to "Standards War" EU: Defining Trade Boundaries with "Green Hydrogen Certification" In February 2025, the European Commission passed the revised Renewable Energy Directive (RED III), requiring imported green hydrogen to meet a life cycle carbon emission of ≤3 kg CO₂/kg H₂ and introducing blockchain technology to track the origin of green hydrogen. This standard, referred to as the "WTO rules of the hydrogen market" by the industry, directly excluded Brazilian sugarcane bagasse hydrogen and Middle Eastern natural gas blending projects from the "green" label. The EU's "carbon tariff" and certification system essentially built a "moat" for its internal hydrogen industry. Chain Reaction: Brazil filed a lawsuit with the WTO, accusing the EU of "setting up trade barriers in disguise"; Middle Eastern countries accelerated the layout of blue hydrogen capacity to hedge policy risks. US: Localization Rate Requirements Tear Apart the Global Supply Chain In March 2025, the US Department of Energy clarified that clean hydrogen tax credits must meet a localization rate of ≥60% for electrolyzer equipment, and the power source must be domestic renewable energy or nuclear energy. This forced companies like Germany's McPhy and Norway's NEL Hydrogen to adjust their strategies: either invest in building factories in the US or exit the North American market. Data Confirmation: In Q1 2025, European exports of electrolyzers to the US fell by 28% YoY, while the utilization rate of domestic electrolyzer capacity in the US increased to 75%. Asia: Regional Alliance Against Geo-Isolation On April 16, China, Japan, and South Korea signed the "Northeast Asia Hydrogen Corridor Memorandum of Understanding," planning to use wind and solar resources in Inner Mongolia, China, to produce hydrogen, which would be liquefied and transported by ship to Japan and South Korea. This cooperation was seen by the outside world as Asia's "strategic leverage" against the EU's dominance in green hydrogen, attempting to break the monopoly of European and American standards through the "resource-technology-market" triangular complementarity. 2. Technological Breakthroughs: Storage and Transportation Revolution Breaks Geographic Constraints of the Supply Chain Solid-State Hydrogen Storage: From Laboratory to Cross-Border Logistics In March, China's CORUN Group released a titanium-iron-based solid-state hydrogen storage tank with a hydrogen storage density of 50 kg/m³ and a cycle life exceeding 10,000 cycles. This technology allows hydrogen to be safely transported at room temperature and pressure, reducing costs by 40% compared to high-pressure gaseous storage and transportation. In April, Japan's Chiyoda and France's Air Liquide collaborated to deploy the world's first organic liquid hydrogen storage (LOHC) pilot facility at the Port of Rotterdam, increasing the hydrogen storage density to 60 kg/m³. Strategic Significance: The maturity of solid-state and liquid storage and transportation technologies enables countries with abundant wind and solar resources, such as Australia and the Middle East, to convert green hydrogen into transportable forms, directly connecting with East Asian and European markets. Liquid Hydrogen Carriers: The "New Oil Pipelines" of the Maritime Network In April, France's Total launched the construction of the world's first liquid hydrogen carrier, designed with a capacity of 50 mt per voyage, aiming to establish the Australia-Europe liquid hydrogen trade route; the US's Amprius built the world's longest (500 km) high-pressure gaseous hydrogen pipeline, using nitrogen blending technology to reduce hydrogen embrittlement risk by 70%. Cost Analysis: When the transportation cost of liquid hydrogen drops below $2.5/kg, green hydrogen trade from Australia to Japan will become economically feasible. 3. Capital Restructuring: From "Single-Point Investment" to "Industry Chain Bundling" Saudi Aramco and Hyundai Motor: Binding Resources and End-Use Markets Saudi Aramco plans to invest $10 billion in the Middle East to build an integrated "green hydrogen-ammonia-fuel cell" base, converting green hydrogen into green ammonia for export to Asia, where it will be cracked into hydrogen for fuel cell trucks. This model not only avoids the high costs of liquid hydrogen transportation but also reconstructs the supply chain through the mature ammonia trade network. Industry Impact: Saudi Arabia's layout in the green hydrogen sector directly threatens Australia's strategic position as a "hydrogen export powerhouse." China's "Wind and Solar Hydrogen Integration": Binding Resources and Technology China Petrochemical's Xinjiang Kuqa Phase II PV hydrogen production project (with an annual output of 20,000 mt of green hydrogen) uses domestically produced ALK electrolyzers, reducing the life cycle cost by 35% compared to imported equipment. Such projects, through the bundling model of "wind and solar resources + domestic technology + ultra-high voltage transmission," form cost advantages, forcing European and American companies to adjust their supply chain strategies. II. Three Blocs and Focal Points of Supply Chain Reconstruction 1. EU's "Green Fortress": Regional Closed Loop Under High Thresholds Core Strategy: Build a "hydrogen trade firewall" through CBAM and RED III, mandating that imported green hydrogen complies with EU standards and imposing tariffs on "non-green" hydrogen. Bloc Members: Nordic countries (Norway, Iceland) provide hydropower hydrogen, Germany and France lead electrolyzer and fuel cell technology, and Southern Europe (Spain, Italy) focuses on PV hydrogen. Weakness: Significant differences in internal hydrogen production costs (Nordic green hydrogen costs $3.5/kg, Southern Europe $5.2/kg), and the reliance on Russia's natural gas pipeline network for energy storage and peak shaving has not been fully replaced. 2. US's "Local First": Technological Decoupling and Supply Chain Internalization Core Strategy: The IRA bill details link localization rate requirements with tax credits, forcing companies to keep key equipment such as electrolyzers and compressors in North America. Bloc Members: Domestic companies (Plug Power, NEL Hydrogen) lead electrolyzer manufacturing, First Solar and NextEra Energy provide green electricity, and Tesla and Nikola Motors drive end-use applications. Risk: Excessive localization slows down technological iteration, and the "semi-local" supply chains in Canada and Mexico face compliance disputes. 3. Asia's "Multi-Polar Alliance": Resource and Market Hedging Layout China-Japan-South Korea Alliance: Focuses on hydrogen production from China's wind and solar resources, Japan's liquid hydrogen transportation technology, and South Korea's fuel cell applications, attempting to bypass EU standards. Middle East-Southeast Asia Alliance: Saudi Arabia and the UAE focus on blue/green hydrogen exports, while Indonesia and Malaysia use biomass hydrogen to participate in regional trade. Focal Point: The China-Japan-South Korea alliance needs to address high hydrogen liquefaction costs and insufficient storage and transportation infrastructure; the Middle East faces competitive pressure from Europe's "green ammonia substitution" strategy. III. Industrial Impacts and Future Challenges Under Reconstruction 1. Role Split of Traditional Energy Giants Companies like Saudi Aramco and Shell must balance maintaining traditional oil and gas interests with investing in the new green hydrogen track. Saudi Aramco reduces transition risks through its "hydrogen-ammonia" strategy, while Shell faces resistance in the European market due to its adherence to the "blue hydrogen transition" route. 2. Intensified Technology Route Competition and Standard Setting Power Struggle The competition between high-temperature proton exchange membrane (HT-PEM) and solid oxide electrolyzer (SOEC) technologies has extended from the laboratory to trade rules. The EU attempts to establish HT-PEM as the sole standard for "green certification" through RED III, while the US supports SOEC to align with domestic nuclear power resources. 3. Geopolitical Conflicts Catalyze Supply Chain "De-Risking" In the aftermath of the Russia-Ukraine conflict, Europe accelerated its decoupling from Russia's natural gas pipeline network but fell into a "green hydrogen supply gap"; Middle Eastern and North African countries seized the opportunity to expand hydrogen exports to Europe, reshaping the geo-economic landscape. IV. Trend Outlook: The "Triple Transformation" of Supply Chain Reconstruction 1. Trade Form Transformation: From "Direct Green Hydrogen Exports" to "Hydrogen-Based Intermediate (Ammonia, LOHC) Trade," with global hydrogen-based intermediate trade volume potentially exceeding 5 million mt in 2025. 2. Standard System Transformation: The EU, US, and Asia may form three sets of green hydrogen certification systems, requiring companies to build "standard-compatible" supply chains to reduce compliance costs. 3. Competition Logic Transformation: The green hydrogen industry shifts from "technological leadership" competition to "resource-technology-market" full-chain control, requiring companies to reposition themselves among the three blocs. Conclusion The reconstruction of the global green hydrogen supply chain is essentially a projection of international order transformation in the energy sector. As green hydrogen transitions from a "technological experiment" to a "geopolitical strategic material," its development logic has surpassed mere economic considerations, evolving into a new battlefield for great power competition. In the future, whoever can first break through storage and transportation bottlenecks, build a cross-border supply chain closed loop, and dominate standard setting will gain a voice in this reconstruction. The outcome of this process may determine the final shape of the global energy power structure in the mid-21st century.