【SMM Steel】Demand for finished steel in Sweden is shifting toward steady recovery after years of stagnation, driven by government-backed green transformation, energy/infrastructure investment, and improving macro conditions. Sweden uses a public-private partnership model covering 10-15% of green modernization costs. Industrial power prices in northern Sweden are €30-45/MWh vs EU industrial average ~€95/MWh. Total steel consumption is expected to rise 3% in 2026 to 3.4m tonnes. Flat products are expected to rise 2% supported by auto, defense, and wind power; long products are expected to rise 4.5% driven by construction and infrastructure. Imports account for 75-85% of domestic consumption, with strict low-carbon certification requirements.

According to SMM statistics, on May 14, aluminum billet inventory across China's major consumption regions totaled 234,000 mt, down 24,500 mt WoW. The destocking trend continued. Warehouse withdrawals during 5.07-5.11 totaled 41,500 mt, with performance being modest due to the limited number of trading days. Driven by downstream restocking after the holiday, aluminum billet inventory destocked smoothly. However, due to production cuts at aluminum billet enterprises in south China and limited aluminum billet inventory in south-west China, warehouse inflows were relatively low. In the Wuxi area, persistently tight warehouse capacity reduced the priority of aluminum billet inflows, leading to decreased warehouse inflows. As export orders gradually recover, combined with tight warehouse capacity, aluminum billet social inventory is expected to maintain its destocking pace, with inventory likely to pull back below 220,000 mt in late May.

At the hosted by SMM, Ouyang Yichang, SMM secondary copper industry research analyst, shared insights on the topic of "Analysis of Japan's Secondary Copper Market." He noted that, according to SMM, Japan's copper scrap market is gradually transitioning toward a fiercely competitive "seller ecosystem." Trade models that rely solely on spot cargo procurement are increasingly exposed to the risk of supply disruptions. To secure long-term resource supply, ex-China purchasing enterprises need to move beyond the traditional spot trading mindset and establish structural partnerships through deep-binding approaches such as signing long-term contracts and equity cooperation, in order to adapt to the persistently tight market landscape. Global Positioning of Japan's Copper Scrap Market Global Positioning of Japan's Copper Scrap Market Key Drivers Behind Japan's Leading Position in Asia 1 Precision Sorting: Exceptional classification accuracy ensures high-quality scrap output. 2 Well-Established Infrastructure: A mature "urban mine" system and advanced logistics provide a highly reliable supply foundation. 3 Strategic Geographical Advantage: Proximity to China (accelerating capital turnover), while serving as a key trans-Pacific logistics hub connecting the Americas and Asia. 4 Favorable Trade and Tax Policies: Zero export tariffs and transparent regulations ensure seamless global operations. 5 Commercial Reliability: High standards of packaging and business ethics minimize quality claims. Japan's Average Unit Price of Copper Scrap Significantly Leads the Top Five Global Exporters In 2025, Japan and Thailand each accounted for approximately 7% of global copper scrap exports. However, Japan commanded the highest average export price among major peers ($8,112/mt), thanks to a substantial quality premium. This price spread revealed fundamental differences in product mix. Thailand primarily served as a processing hub, with limited high-grade copper scrap output domestically. In contrast, Japan was organically driven by its mature "urban mine" ecosystem, consistently producing high-purity, high-grade materials. Flow of Japan's Copper Scrap Flow of Japan's Copper Scrap Rising Trade Volume and Shrinking Net Exports: A Shift Toward Domestic Retention Smelters Drove Copper Scrap Consumption Growth While Downstream Processing Enterprises Saw Declining Usage According to SMM, compared with 2021, processing enterprises' copper scrap usage declined by 8% in 2025. Processing enterprises: Weak downstream demand (automotive, construction) and fierce global competition for high-quality copper scrap severely squeezed domestic processing enterprises, resulting in a sustained 8% decline in their absolute usage. Smelters: Tightened environmental protection and export policies implemented since 2023 restricted the outflow of copper scrap, significantly accelerating this structural "reflux" toward smelters. Combined with the plunge in TC/RC, Japanese smelters were forced to rely on these raw materials to maintain production. Consequently, the share of copper scrap consumed by the smelting segment has maintained an overall upward trend in recent years. Japan's overall scrap supply is contracting; despite robust growth in domestic consumption, the structural decline in net exports is the primary driver. Since the 2021 peak, Japan's total apparent supply of copper scrap has been on an overall downward trend. This indicates structural tightening in domestic scrap generation and social recovery rates, with increasingly scarce available resources. Despite the overall supply contraction, domestic apparent consumption demonstrated strong resilience, as Japanese smelters actively secured local raw materials to maintain production amid plunging TC. This robust local demand is significantly squeezing exports. Net exports have consequently declined structurally to low levels. Japan is shifting from a "resource overflow" model to an "internal absorption" model, which will severely exacerbate raw material shortages for Southeast Asian and Chinese buyers. Bare bright copper payable indicator stays high: supply tightness and China's tax-driven demand outweigh the impact of recent copper price rebound Since early 2026, market copper prices have risen steadily overall; in March, copper prices experienced a periodic pullback, and copper scrap sellers held prices firm with strong willingness to defend price floors, directly driving the bare bright copper payable indicator passively higher. Entering April, futures copper prices rebounded and stabilized at highs, but the copper scrap payment ratio deviated from conventional pricing logic and did not pull back accordingly, remaining firmly in the 98.5%-99.0% range. The core supporting logic lies in: continued tightening of domestic tax regulation, with China's downstream processing enterprises increasingly relying on imported copper scrap to obtain compliant input tax deductions, forming rigid procurement demand; coupled with tight spot copper scrap supply, the dual support of supply and demand underpins the copper scrap payment ratio to stay high. Japan's Scrap Policies Japan's Scrap Policies Regulatory Shift: Building an "Invisible Wall" Although Japan has not explicitly imposed export bans, it strengthens its domestic closed-loop system through a strategic policy combination. For global buyers, this signals a structural shift in the Japanese market going forward: intensified competition, soaring procurement costs, and increasing difficulty in accessing high-quality scrap. Regulatory maturity and standardized transparency are the primary drivers of the "Japan premium." Policy Lag vs. Market Reality: Although the EU Waste Shipment Regulation and potential US export restrictions have not yet been formally enacted, the market has already priced in expectations of future supply contraction, compelling downstream buyers to proactively pivot toward trade hubs with higher compliance and transparency. "Reliability Premium" Logic Emerges: As a pioneer in industry compliance and market transparency, Japan can effectively hedge against risks prevalent in other regions, such as insufficient information transparency and origin rerouting, providing the market with an important safe-haven and pricing anchor function. Outlook and Forecast Strategic Outlook and Forecast Driven by aggressive development targets at both enterprise and national levels, scrap consumption by domestic smelters in Japan is set to experience significant structural growth. According to SMM, the climb in scrap consumption by Japanese smelters is not a short-term cyclical response triggered by declining mine TCs, but rather a fundamental structural transformation underpinned by strong capital strength and long-term commitment. As 2030 ESG-related targets continue to materialize, the trend of retaining domestic scrap for internal use in Japan will deepen further, structurally tightening global circulating scrap supply over the long term and continuously compressing the available sourcing volume for ex-China buyers. Response Logic for the "New Normal" in Japan's Copper Scrap Market Volume and Flow Direction: Steady Decline Net exports of copper scrap will not plunge to zero abruptly, but rather exhibit a sustained structural decline trend. As domestically subsidized capacity comes fully online, exports of high-grade secondary copper such as bare bright copper and No.1 copper will enter a steady contraction trajectory. Pricing Logic: The traditional medium and long-term linkage of "rising copper prices, declining scrap payment ratios" has been structurally reshaped. Under the dual effects of persistently tight copper concentrates supply and China's rigid tax-driven procurement demand providing a floor, the payment ratio for Japan's high-quality copper scrap is expected to establish a long-term upward baseline. Strategic Pivot: Constrained by the upper limit of domestic secondary copper output and tight labor supply, Japanese recycling industry alliances will accelerate their expansion into markets outside China. Japanese enterprises will invest in overseas joint venture projects to solidify downstream processing capacity deployment while maintaining Japanese-led control over raw material supply chains. According to SMM analysis, the current Japanese copper scrap market is gradually transitioning toward a fiercely competitive "seller ecosystem." Trade models that rely solely on spot purchases are increasingly exposed to the risk of supply disruptions. To secure long-term resource supply, ex-China purchasing enterprises need to move beyond the traditional spot trading mindset and establish structural partnerships through deep-binding approaches such as signing long-term contracts and equity cooperation, thereby adapting to the persistently tight market landscape.

[Inventory Buildup and Macro Tailwinds Offset Each Other, Aluminum Prices Trade in a Range] The risk of supply disruptions to aluminum outside China has not yet subsided, and the ex-China aluminum ingot supply-demand gap will continue to provide support for aluminum prices. Meanwhile, the continuation of higher-than-expected inventory buildup in China will weigh on domestic aluminum prices. At the same time, tightened invoicing regulations may lead to structural tightness in spot cargo, and the weakening spot market will further limit upside room for domestic aluminum prices. Close attention should be paid to the potential emergence of a turning point in China's social inventory, which could drive a rebound and rise in aluminum prices.

Asian copper scrap supply is severely tight due to decline in the volume and quality of US exports due to recovering domestic consumption; depleted inventories from early-year copper price volatility; and China's tax compliance pressures restricting local scrap flows, which intensifies regional competition for imports. Boosted by bullish hoarding, pricing coefficients have defied expected corrections despite surging copper prices. Bare Bright Copper is currently converging around 98.5%, with No. 1 Copper at 97%-97.5%. Notably, No. 2 Copper coefficients have spiked "abnormally" to 95%-96%. This anomaly is primarily driven by high precious metal prices, as scrap batches rich in gold and silver impurities command high premiums, lifting the overall No. 2 Copper pricing benchmark.

As of April 30, the most-traded SHFE zinc contract closed at 23,645 yuan/mt, up 165 yuan/mt for the month, a gain of 0.7%. Zinc prices rebounded from lows in April, touching a low of 23,430 yuan/mt at the beginning of the month and a high of 24,515 yuan/mt at month-end, though the overall price center pulled back. Heading into May, with the tight domestic ore supply situation persisting, how will zinc prices perform?