SMM News, March 5: Data Brief: As of Thursday, March 5, SMM copper inventories in major regions nationwide increased 8.56% WoW from last Thursday, with total inventories up 209,200 mt YoY versus the same period last year, showing divergent performance across regions. By region, Shanghai’s copper cathode inventories continued to build up. Despite some recovery in consumption, inventories still trended upward due to continued arrivals of imported cargoes; in Jiangsu, recovering downstream consumption drove a slight destocking; in Guangdong, downstream enterprise consumption gradually recovered, and inventories edged down. Looking ahead, on the supply side, imported cargoes are expected to continue arriving at ports, while deliveries of domestic supply are expected to remain stable. On the demand side, downstream enterprises have resumed work and production; coupled with a pullback in copper prices, consumption has recovered notably. Based on the overall supply-demand pattern, supply is expected to remain normal next week and consumption is expected to recover steadily, with weekly inventories expected to see some destocking.

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.

[Frequent Supply Disruptions; Imported TCs Continued to Decline]: Weekly data showed that the average weekly TC for SMM Zn50 domestic remained flat at 1,550 yuan/mt in metal content, while the SMM Imported Zinc Concentrate Index fell by $8.37/dmt MoM to $15.38/dmt...

A blocked Strait of Hormuz would upend global methanol supplies, hammer conventional methanol markets, and elevate green methanol’s strategic value, pushing China to diversify imports and boost green methanol for supply security.

SMM News on March 6: This week, secondary lead premiums showed clear regional divergence, with parity prevailing overall, and most suppliers refusing to ship at a discount; only some cargoes in South China and Central China were offered at a discount of 100-50 yuan/mt against the SMM #1 lead average price. In terms of profits, scrap battery prices stayed firm, making it difficult for smelters to reduce costs, and industry losses continued. As of March 6, 2026, the theoretical comprehensive profit/loss for large-scale enterprises was -330 yuan/mt, and -543 yuan/mt for small and medium-sized enterprises (by-product revenue in the model excluded tin and antimony). Looking into next week, SMM expected supply tightness in raw materials to persist, leading the secondary lead operating rate to maintain its downward trend; under loss pressure, suppliers were likely to narrow discounts or keep parity offers, while downstream battery producers still made just-in-time procurement on a wait-and-see basis, resulting in relatively light market transactions. 》Subscribe to view SMM metal spot historical prices

Today, the most-traded BC copper 2604 contract opened at 90,100 yuan/mt. Early in the session, the center maintained a fluctuating downward trend and hit bottom at 88,740 yuan/mt, then fluctuated upward to a high of 90,860 yuan/mt. After the afternoon open, the center fell, and it finally closed at 89,670 yuan/mt, down 0.16%. Open interest rose to 6,128 lots, up 232 lots from the previous trading day, while trading volume rose to 6,338 lots, down 2,507 lots from the previous trading day. On the macro front, market concerns that tensions in the Middle East would further push up inflation expectations drove the US dollar index to close higher, weighing on copper prices. High inflation expectations in the US weakened market expectations for further US Fed interest rate cuts, also weighing on copper prices. In addition, global copper visible inventory continued to build up, further dragging on copper prices. Fundamentals, as imported supplies continued to arrive, overall market circulating supply remained ample. Demand side, downstream enterprises had resumed work and production, and with the pullback in copper prices, consumption continued to recover. Inventory, as of Thursday, March 5, SMM copper inventories in major regions nationwide rose 8.56% WoW from last Thursday. The SHFE copper 2604 contract closed at 101,080 yuan/mt. Based on the BC copper 2604 contract at 89,670 yuan/mt, its after-tax price was 101,327 yuan/mt. The price spread between the SHFE copper 2604 contract and BC copper was -247 yuan/mt. The spread remained in backwardation and widened from the previous day.