[SMM Analysis]Weak Supply-Demand Pattern; Secondary Aluminum Prices Were Expected to Come Under Pressure and Pull Back in April

[SMM Lithium Battery Electrolyte Market Weekly Review: Electrolyte Prices Remained Temporarily Stable This Week (2026.3.30-4.2)] From March 30 to April 2, 2026, electrolyte prices remained temporarily stable. Subsequent price trends will still need to focus on changes in upstream raw material prices

Inter-product price spreads are a segment of the rebar spread system characterized by complex logic and abundant trading opportunities. Unlike the spot-futures price spread, which reflects the spot-futures structure, and calendar spreads, which reflect near- and far-term expectations, the core of inter-product price spreads lies in macroeconomic structural adjustment and profit distribution across the industry chain. From the perspective of the industry chain, inter-product price spreads for long steel products are mainly concentrated in the following four areas:

[SMM Daily Chrome Commentary: Weak Trading Sentiment, Market Remained Temporarily Stable] April 1, 2026: The ferrochrome and chrome ore markets saw limited fluctuations...

Weekly average electricity prices dropped across most major European markets last week, driven by falling gas prices and increased solar and wind output, according to AleaSoft Energy Forecasting. Spain and Portugal recorded the lowest daily averages at €0.18/MWh on March 29, the lowest since 2013 for Spain. Meanwhile, Italy and Spain set new all-time daily solar generation records for March, reaching 139 GWh and 194 GWh, respectively. TTF gas futures also trended downwards following geopolitical developments, although low European storage levels caused a slight rebound late in the week. AleaSoft anticipates further electricity price declines in early April, noting that 'gas price trends will continue to shape European electricity market prices.'

SMM News, March 31， In Q1 2026, amid macro tailwinds, expectations of a supply gap, and successive geopolitical conflicts in the Middle East, aluminum prices repeatedly hit new highs. The quarterly average SMM A00 aluminum price reached 24,028 yuan/mt, up 17.5% YoY; the quarterly average closing price of the LME aluminum 3M contract at 15:00 Beijing time reached $3,196/mt, up 21.8% YoY. High prices suppressed downstream consumption: At the end of 2025, SMM expected China’s primary aluminum consumption growth in 2026 to be 2.0%; as of February, that growth rate had fallen to 1.1%. As a result, the proportion of liquid aluminum in the aluminum industry declined significantly, and aluminum social inventory hit a nearly three-year high. As of March 31, the inflection point in China’s aluminum social inventory was still unclear, while the absolute inventory level had already entered the upper range of SMM’s previous forecast of 1.35-1.4 million mt. However, affected by geopolitical conflicts in the Middle East, aluminum supply and demand were both weak, fundamental risks increased, and prices saw wild swings. Under the impact of high prices, aluminum ingot inventory may continue to build further. According to SMM, as of the end of March, some aluminum ingots in certain regions were still backlogged at rail platforms and outside warehouses. High prices also accelerated supply growth: As of the end of Q1, average profits in China’s aluminum industry exceeded 8,000 yuan/mt. Stimulated by high profits, China’s aluminum supply growth is expected to exceed expectations. At the end of 2025, SMM expected China’s aluminum supply growth in 2026 to reach 1.7%; as of the end of Q1 2026, SMM expected that growth rate had risen to 1.9%. Outside China, supply growth was also boosted by high prices: 1) A smelter in Spain had originally planned to resume full production by 2026, and according to foreign media reports in March, it had already resumed to 90% of operating load; 2) In October 2025, an Icelandic smelter cut production on one line due to equipment failure. It had originally planned to resume production in September-October 2026, but has now moved the plan forward to start by the end of April; 3) At the end of 2025, expectations were that Indonesia’s operating aluminum capacity would reach 2 million mt by the end of 2026; that expectation has now been raised to 2.2-2.5 million mt. Q2 Outlook: At present, one of the decisive factors for global aluminum fundamentals and price trends is the geopolitical situation in the Middle East. SMM analysis showed that outside China, aluminum capacity that had already cut production or faced substantial production reduction risk exceeded 3 million mt. If subsequent production cuts from this portion of capacity are confirmed, outside China aluminum supply is expected to maintain negative YoY growth for an extended period, and global aluminum fundamentals are expected to face a large gap, with the gap outside China far exceeding that in China. In this case, aluminum prices in and outside China are expected to rise sharply again, with overseas prices expected to outperform domestic prices. China’s net aluminum imports are expected to decline, while exports from downstream aluminum plants are expected to increase. However, if actual production cuts come in below expectations, while consumption sees a marked reduction due to factors such as energy and inflation, the upward move in aluminum prices may face insufficient momentum. At present, geopolitical conflicts in the Middle East are disrupting the global aluminum supply-demand pattern, and SMM will continue to follow related developments.