The global aluminum market is currently characterized by a distinct divergence between overseas and domestic markets. Overseas markets have performed strongly amid supply-side disruptions, while the domestic market has also strengthened due to similar supply disturbances but remained relatively weak compared with the LME. Details on supply, demand, trade and market structure are as follows: I. Overseas Aluminum Market: Prominent Supply Tightness and Sustained Pressure on Inventories The core contradiction in overseas aluminum markets lies in supply contraction and low inventory levels, exacerbated by geopolitical conflicts, further intensifying supply tightness. In terms of LME inventory data, current inventories remain on a continuous downward trend, greatly weakening their supportive role in the market. Historically and recently, LME cancelled warrants peaked at 178,000 tonnes earlier, accounting for 39% of total inventory. As a result, the effectively available LME inventory has dropped to its lowest level since May 2025, further highlighting tight overseas supply. Supply contraction has widened the market deficit, with production cuts at two key projects—EGA and Alba—having a particularly significant impact.On March 28, EGA’s Al Taweelah smelter in the UAE and Alba’s plant in Bahrain were attacked, causing equipment damage and sharply raising risks of capacity disruptions. This came on top of earlier disruptions: March 15: Alba reduced output at three production lines due to shipping disruptions in the Strait of Hormuz; March 12: Qatar’s Qatalum smelter suspended 40% of capacity due to natural gas supply cuts. Overseas primary aluminum supply deficits are expected to continue widening. Meanwhile, high energy costs in Europe have also reduced local semi-fabricated aluminum output, further tightening supply. Supply tightness has directly driven a sharp rise in overseas spot premiums. Amid supply concerns from escalating Middle East geopolitical conflicts, the Q2 MJP premium rose by approximately USD 156.5/t to USD 351.5/t. Specifically, major regional premiums rose markedly at end-March: CIF South Korea: from USD 168/t (early March) to USD 292/t; CIF Thailand: from USD 183/t to USD 317/t; European Duty Unpaid: from USD 345/t to USD 400/t; US Midwest DDP: from 103.75 cents/lb to 105.5 cents/lb. This fully reflects that expectations of tight primary aluminum supply have enabled sellers to push up quotations. Downstream demand and purchasing patterns vary significantly across regions: South Korea: Phase-wise restocking completed; weak downstream restocking sentiment, limited demand support. Southeast Asia: Dominated by term contract execution with limited spot restocking; insufficient incremental buying momentum. Europe: Rising supply shortage concerns amid production cuts in Qatar and Bahrain; downstream restocking underway, relatively strong demand. United States: Low inventories entering a restocking cycle, providing moderate market support. II. Domestic Aluminum Market: High Inventory Pressure, Weak and Constrained Demand In contrast to strong overseas markets, the domestic aluminum market has strengthened amid supply disruptions but underperformed relative to the LME, characterized by high inventories and constrained demand. High domestic aluminum prices have continued to suppress downstream purchasing. Current buying is mainly order-based rigid demand, with low willingness for active restocking, providing limited upward support. Domestic inventory pressure has not eased effectively: primary aluminum inventories remain elevated, and inventory destocking has progressed slower than expected, likely prolonging the digestion period.High inventories and high prices form dual constraints. Although the domestic market has upward momentum, it is weaker than overseas. Domestic spot premiums are expected to remain under pressure and further widen in the short term.

The United States currently operates no domestic nickel smelters, leaving North America entirely reliant on just two remaining pyrometallurgical facilities in Canada. Compounding this critical supply chain vulnerability, a recent report by the Carnegie Endowment for International Peace projects that the US will face a massive annual nickel deficit of approximately 741,987 tonnes by 2035. To address this severe shortfall, awaruite (a naturally occurring nickel-iron alloy) is emerging as a strategic solution. Because awaruite concentrate can bypass traditional smelting and be directly converted into nickel sulfate, it is favorably positioned to qualify for the US Section 45X Advanced Manufacturing Production Credit, helping to secure domestic defense and EV battery supply chains.

Korea’s battery industry is expanding beyond EVs into ESS and other applications. As a result, competition is shifting from product performance toward broader supply chain capabilities. InterBattery 2026 highlighted this transition.

India’s steel market in 2026 is expected to remain balanced, with demand slightly outpacing supply. Domestic consumption will absorb most output, while imports decline overall and exports increase modestly as a balancing mechanism. Supported by strong growth and infrastructure investment, India is transitioning toward a demand-led steel market with solid long-term potential.

SMM Nickel, March 27: Macro and Market News: (1) On March 26 local time, multiple US officials and informed sources revealed that the US Department of Defense was formulating a so-called "final blow" military option against Iran, and the relevant plans may include the deployment of ground forces and large-scale airstrike operations. (2) In response to US President Trump saying that he would visit China in mid-May, Foreign Ministry spokesperson Lin Jian said at a regular press conference on March 26 that head-of-state diplomacy plays an irreplaceable strategic guiding role in China-US relations, and the two sides have remained in communication regarding President Trump's visit to China. Spot Market: On March 27, the SMM price of #1 refined nickel fell by 350 yuan/mt from the previous trading day. In terms of spot premiums, the average price premium of Jinchuan #1 refined nickel was 4,900 yuan/mt, down 500 yuan/mt from the previous trading day; spot premiums for mainstream electrodeposited nickel brands in China were -600-400 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2605) maintained rangebound fluctuations and closed the morning session at 137,010 yuan/mt today, up 0.01%. Policy expectations that Indonesia may impose a nickel export tax, together with firm ore prices on the raw material side and easing macro sentiment, jointly drove nickel prices higher. Nickel prices are expected to hold up well in the short term, with the core trading range of the most-traded SHFE nickel contract at 133,000-143,000 yuan/mt.

Global crude steel production declined by 2.2% year-on-year in February 2026, dropping to 141.8 million metric tons, according to data from the World Steel Association. However, production outside of the largest Asian markets showed strong localized growth, driven by robust domestic demand and infrastructure spending. India surged ahead with a 7.7% year-on-year increase to reach 13.6 million tons, while the United States recorded a 5.8% jump to 6.5 million tons. Germany also demonstrated a noticeable recovery, pushing its national steel output up by 4.8% to 2.8 million tons for the month