[Macro and Fundamentals Send Mixed Signals; Domestic Aluminum Prices Move Sideways] On the macro front, US consumer confidence edged down, confirming growing anxiety among American consumers over high living costs. Although the labour market remained generally stable with few signs of large-scale layoffs, the recent surge in fuel prices posed particular challenges for low-income households, and the bearish sentiment from external markets indirectly weighed on aluminum prices. On the fundamentals side, supply shortfalls and low inventory outside China continued to provide floor support, but elevated domestic inventory levels remained the core factor suppressing significant price rallies. Additionally, weak trading activity in the spot market further limited upside room for aluminum prices. In the near term, aluminum prices are expected to continue moving sideways in a pattern where LME outperforms SHFE.

Today, SMM battery-grade spot lithium carbonate price rose significantly compared to the previous working day. Futures side, the lithium carbonate 2609 contract opened high today at 191,500 yuan/mt, briefly pulled back to 191,000 yuan/mt after the opening before quickly rallying, stabilizing above the 193,000 yuan/mt level in the morning session. Around midday, bulls continuously increased open interest, driving prices to accelerate upward. In the afternoon session, prices fluctuated at highs with an upward bias, further surging to 199,600 yuan/mt near the close, ultimately settling at 199,400 yuan/mt, up 7.31%, with open interest increasing by 21,281 lots.

Sandfire Resources reported record earnings driven by strong copper prices and production growth, but warned that rising diesel costs could pressure margins going forward.

Recently, China's EMM market displayed a distinct dual pattern of "strong cost support with loosening at highs," with intensifying industry supply-demand and cost dynamics.

According to the latest data released by the General Administration of Customs China (GACC) imported 104.74 Mt of iron ore and concentrates in March 2026, representing a month-on-month increase of 7.38 Mt , or 7.6% . Cumulative imports for the first quarter reached 314.76 Mt, marking a 10.5 % Y-O-Y growth. Beyond underlying fundamental factors, geopolitical friction also contributed to the elevation of iron ore import volumes during March. Specifically, escalating tensions in the Middle East have severely disrupted commercial shipping lanes traversing the Strait of Hormuz. Although direct export volumes from the Middle Eastern region to China remain comparatively marginal, the destabilisation of global logistics networks precipitated by regional conflicts has forced vessels initially scheduled to transit through the Middle East or adjacent maritime corridors to reroute. Consequently, these diverted cargoes have been redirected towards East Asian markets, prominently including China. Furthermore, the progressive ramp-up of domestic blast furnace utilisation rates throughout March has augmented the steel sector's raw material requirements, thereby providing an additional stimulus for iron ore imports. Looking ahead to April, the direct impact of the Middle Eastern situation on China's aggregate iron ore import volumes is anticipated to remain relatively constrained. However, should the regional conflict fail to de-escalate substantively within the month, international dry bulk vessels may continue to bypass Middle Eastern ports for transshipment, inadvertently resulting in China passively absorbing additional cargoes from alternative origins. Additionally, as major overseas mining projects progressively advance, global iron ore supply remains generally accommodative. Dispatches, spearheaded by the Simandou project—which boasts an estimated annual output of 20 million tonnes—are projected to generate a moderate uplift in iron ore shipments directed towards China in April. From a cyclical perspective, the second quarter conventionally represents a traditional peak season for iron ore dispatches. Synthesising these multifaceted variables, we project that Chinese iron ore import volumes will exhibit a tangible upward trajectory throughout April.

According to the latest data from the General Administration of Customs, China imported 104.743 million mt of iron ore and concentrates in March 2026, an increase of 7.375 million mt MoM, up 7.6% MoM; cumulative imports of iron ore and concentrates from January to March totaled 314.762 million mt, up 10.5% YoY. Beyond fundamental factors, geopolitical conflicts also contributed to the increase in iron ore imports in March to a certain extent. Specifically, the escalation of tensions in the Middle East severely disrupted commercial shipping along the Strait of Hormuz. Although direct exports from the Middle East to China were relatively small, the disruption to the global logistics system caused by regional conflicts forced some vessels originally planned to transit through the Middle East or pass through those waters to reroute. These resources were redirected to East Asian markets including China. In addition, as domestic blast furnace capacity utilization rates gradually improved in March, the steel industry's demand for ore further increased, thereby stimulating iron ore imports. Looking ahead to April, although the direct impact of the Middle East situation on China's total iron ore imports is relatively limited, if the Middle East conflict fails to achieve substantive de-escalation within the month, some international bulk carriers are likely to continue avoiding Middle Eastern ports for transshipment, resulting in China passively receiving more cargoes from other regions to a certain extent. Furthermore, as large-scale ex-China mining projects progressively advance, global ore supply remains generally ample, and shipments led by Simandou (estimated at 20 million mt for the full year) are expected to bring a certain degree of uplift to iron ore supply exported to China in April. From a seasonal perspective, Q2 is typically the traditional peak shipping season for iron ore. Therefore, taking all the above factors into consideration, China's iron ore imports in April are expected to show a certain growth trend.

LG Energy Solution announced on April 3 that it has joined the automotive software open marketplace platform SDVerse, becoming the first battery manufacturer to participate. SDVerse is a B2B vehicle software platform founded by General Motors, Magna International, and Wipro. The platform provides an open ecosystem where automakers, global suppliers, and software developers can trade software solutions, supporting the transition toward software-defined vehicles (SDVs).

SMM Alumina Morning Comment 3.1 Futures: During the night session, the most-traded alumina futures contract AO2605 opened at 2,893 yuan/mt, reaching a high of 2,903 yuan/mt and a low of 2,851 yuan/mt, and closed at 2,859 yuan/mt, down 46 yuan/mt from the previous day. Open interest increased by 9,670 lots to 314,000 lots. The market saw continued tug-of-war between bulls and bears, with alumina futures fluctuating notably. On one hand, geopolitical factors caused wild swings in ocean freight rates for bauxite on the raw material side, and some overseas mines indicated they would control shipments. Meanwhile, new capacity in Guangxi is about to be commissioned, which will intensify the alumina surplus. From a technical perspective, the closing price was above MA5 (2,835.60), MA10 (2,819.20), and MA30 (2,795.97), providing certain bottom support for prices. At the same time, the MACD indicator DIF (15.44) crossed above DEA (10.85), with the bullish crossover at low levels continuing and the histogram at 9.18. Alumina futures are expected to be in the doldrums in the short term, and continued attention should be paid to geopolitical impacts and commissioning plans for new capacity. Industry Updates: 1) According to an SMM survey, a new alumina refinery in Guangxi is preparing for trial production recently, with new capacity of 2.4 million mt, and is expected to reach full production in Q2 2026. According to SMM statistics, its current bauxite inventory exceeds 1 million mt. Ore: As of March 6, 2026, the SMM imported bauxite index was at $62.26/mt, up $0.14/mt from the previous trading day. The SMM Guinea FOB average price was at $37.5/mt, flat from the previous trading day. The SMM Guinea bauxite CIF average price was at $62/mt, up $0.5/mt from the previous trading day. The SMM Australian low-temperature bauxite CIF average price was at $60/mt, up $0.5/mt from the previous trading day. The SMM Australian high-temperature bauxite CIF average price was at $55/mt, up $0.5/mt from the previous trading day. The Malaysian bauxite CIF average price was at $47/mt, flat from the previous trading day. The Malaysian bauxite CIF (washed) average price was at $59/mt, flat from the previous trading day. The Ghanaian bauxite CIF price was at $70.5/mt, flat from the previous trading day. The bauxite CFR (Turkey) price was at $69.5/mt, flat from last Friday. Domestic ore side, according to an SMM survey, domestic ore production and shipments were normal, with prices under continued negotiation. Imported ore side, affected by geopolitical factors, crude oil prices rose, and the latest ocean freight rate had risen to $29/wmt, up $5.5/wmt WoW. According to an SMM survey, some mines had controlled shipments, with no new offers emerging for now, adopting a wait-and-see approach. Traders only offered sporadic quotes, with prices rising from earlier levels. Guinea bauxite with a grade of 45/3 was quoted at $65/mt, but downstream alumina refineries had limited acceptance of price increases and currently found it difficult to accept quotes of $63/mt. SMM will continue to monitor production, shipment conditions, and price trends of mines in and outside China. Spot Price: As of March 9, 2025, the SMM alumina index was at 2,655.22 yuan/mt, up 5.91 yuan/mt WoW. The SMM Shandong alumina index was at 2,601.80 yuan/mt, up 8.14 yuan/mt WoW. The SMM Henan alumina index was at 2,658.13 yuan/mt, up 5.12 yuan/mt WoW. The SMM Shanxi alumina index was at 2,646.69 yuan/mt, up 5.57 yuan/mt WoW. The SMM Guizhou alumina index was at 2,729.00 yuan/mt, up 8.06 yuan/mt WoW. The SMM Guangxi alumina index was at 2,700.95 yuan/mt, up 5.95 yuan/mt WoW. Spot-Futures Price Spread Daily Report: According to SMM data, on March 9, the SMM alumina index was at a discount of 349.78 yuan/mt against the latest transaction price of the most-traded contract at 11:30 AM. Warrant Daily Report: Data on March 9 showed that total registered alumina warrants rose, decreasing by 13 mt from the previous trading day to 337,200 mt. By region, total registered alumina warrants in Shandong, Henan, and Gansu were all flat from the previous trading day, at 17,700 mt, 6,011 mt, and 36,400 mt respectively. Guangxi's total registered alumina warrants increased by 2,409 mt to 20,700 mt, while Xinjiang's total registered alumina warrants decreased by 2,422 mt to 256,400 mt. Markets Outside China: As of March 9, 2026, the FOB Western Australia alumina price was $306/mt, the ocean freight rate was $26.55/mt, and the USD/CNY selling rate was around 6.94. This translated to a selling price at mainstream Chinese ports of approximately 2,686.83 yuan/mt, which was 31.61 yuan/mt higher than the SMM alumina index price. According to the SMM model, the import window was closed. Summary: As of last Thursday, the domestic alumina market continued the prior destocking trend, but total inventory remained at a high level, and the oversupply pattern had not been reversed. The overall industry operating rate was stable, but regional production saw minor adjustments: some enterprises operated at reduced loads or underwent phased maintenance, while some previously under maintenance ramped up operating capacity, creating a certain offset and driving the overall operating rate slightly lower, with weekly alumina production down 1,000 mt WoW. Inventory side, aluminum smelter raw material inventory was affected by the Chinese New Year holiday, as enterprises continued to consume previously high inventory levels, reducing in-factory alumina inventory by 51,000 mt and gradually returning to relatively reasonable levels. Due to earlier production cuts at some alumina refineries, they were still consuming their own inventory, with alumina refinery in-factory inventory down 10,000 mt, showing a slight destocking trend. Warrant inventory decreased by 14,000 mt, mainly due to the cancellation of some expired warrants after contract expiry. Post-holiday shipments gradually recovered, with logistics bottlenecks increasing somewhat, and in-transit and platform inventory increased by 28,000 mt. Overall, national alumina inventory continued a slight destocking trend, but the pace of decline slowed down. Close attention still needs to be paid to changes in industry operating rates and dynamic adjustments in enterprise operations. It is expected that as the industry operating rate sees a slight rebound next week, inventory may shift toward a slight inventory buildup pattern. [Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.]

In times of peace, oil and gas are cost variables; in a war context, traditional energy becomes a security variable. The escalation of conflict in the Middle East at the end of February led to a high opening for oil prices on the first trading day of March. During peacetime, energy prices fluctuate around the supply-demand gap, with the market focusing on production, inventory, and cost curves. However, in a war environment, the market first trades not on production but on deliverability. Whether key shipping routes are open, whether insurance costs soar, and whether sanctions spread, all quickly translate into risk premiums. As a result, oil prices exhibit high fluctuations, even if actual supply has not significantly decreased, as prices are pushed up by delivery uncertainties. Energy thus transforms from a commodity into a strategic resource. As an analyst in the new energy sector, I believe that this change does not simply benefit new energy. Rising oil prices reinforce the logic of electrification, making EVs and renewable energy more economically attractive. However, the macroeconomic uncertainty brought about by war may also dampen consumer and investment confidence. If high oil prices drive inflation and slow growth, overall demand for cars and industry will slow down, and new energy will not be immune. Therefore, the investment logic for new energy is no longer unidirectional, but depends on the balance between substitution effects and macroeconomic contraction effects. A deeper change lies in the fact that capital is beginning to re-evaluate energy security. The traditional oil and gas system is highly dependent on cross-border transportation and continuous fuel supply, with its vulnerabilities lying in shipping and geopolitics. In contrast, wind and PV do not require continuous fuel input during operation, and energy storage can enhance the stability of the power system, giving new energy strategic value in a war environment. They are not only low-carbon tools but also a path to reducing external dependence. The security attributes of new energy are thus being revalued. However, it must be recognized that this security attribute is not absolute. The manufacturing of new energy is highly dependent on critical minerals such as lithium, nickel, and cobalt, with their mining and processing concentrated and heavily reliant on transportation. If upstream resource policies tighten or logistics are disrupted, risks will also propagate through the industry chain. Therefore, the security of new energy is operational security, not supply security. This means that future investment logic will shift from simply pursuing the lowest cost to focusing on supply chain control capabilities and regional diversification. In a war environment, the allocation of risk premiums by capital changes. Transportation premiums, geopolitical premiums, and supply chain concentration premiums all rise. The volatility of traditional energy intensifies; new energy generation assets gain a security bonus; and critical minerals and midstream processing capabilities become new strategic nodes. Efficiency is no longer the sole criterion, with redundancy and controllability becoming important components of the valuation system. Deglobalization and supply chain restructuring may push up the cost center of the industry, but they also enhance the strategic position of assets. In this context, the value of energy storage and power grid assets stands out. If conflicts persist, the core goal of the energy system will shift from cost optimization to system resilience. Distributed energy, microgrids, and energy storage have insurance-like attributes, and their value becomes more evident in extreme scenarios. Even if high raw material prices increase project costs, an elevated policy priority may still provide long-term support. Over the past five to ten years, the narrative of the energy transition has largely focused on new energy as a tool for decarbonization to ensure sustainable development of the planet. However, geopolitical tensions in the last two to three years have redefined new energy as part of the energy security framework. Within new energy, it is not just the power generation assets that are being repriced, but also energy storage and the power grid. 1) In a war environment, the core issue of the energy system shifts from efficiency to resilience During peacetime, the goal of the energy system is to maximize efficiency: lowest cost, highest utilization rate, and optimal allocation. Cross-border trade and centralized power generation have made the global energy structure highly globalized and scaled. War exposes the vulnerabilities of such a system. Maritime transport routes, natural gas pipelines, tanker insurance, key ports, and large power plants can all become risk nodes. At this point, the system's priority is no longer efficiency but resilience – the ability to maintain basic operational capacity under shocks. Energy storage and the power grid are at the core of a resilient system. 2) Energy storage: from an arbitrage tool to system insurance In normal circumstances, the value of energy storage mainly comes from electricity arbitrage, ancillary services, and peak load regulation, with its return on investment depending on fluctuations in electricity prices and policy subsidies. However, in a wartime context, the value of energy storage is redefined. It is no longer merely an economic optimization tool but a guarantee of power system stability. Energy storage can provide emergency support during fuel supply disruptions or grid shocks, preventing the power system from collapsing due to a single point of failure. This means that energy storage assets have insurance-like attributes. When system risks rise, capital's risk appetite for these assets increases. Even if high raw material prices drive up project costs, there may still be stronger policy support because of the rising strategic value. The valuation logic of energy storage thus transitions from "IRR-driven" to "system safety premium." 3) Power grid: an undervalued strategic hub The impact of war on the energy system often first manifests in the transmission and distribution network. Centralized energy structures rely on a few key periods, and once damaged, the impact is widespread. Therefore, power grid upgrades and digitalization have become the focus of secure investments. Enhancements in smart grids, regional interconnections, grid redundancy, and distributed access capabilities can significantly strengthen the system's resilience to shocks. The investment logic for power grid assets becomes clearer in a wartime context: it is not only infrastructure but also the backbone of national energy security. In the long term, power grid upgrades will be a necessary prerequisite for the expansion of new energy. The fluctuations in new energy generation require more robust transmission, distribution, and dispatching capabilities. When risk environments rise, countries are more inclined to accelerate grid construction to reduce dependence on external energy. 4) Distributed Energy and Microgrids: The Strategic Significance of Decentralization While centralized energy systems are efficient, they are also highly vulnerable. Although distributed PV, community energy storage, and microgrids are relatively small in scale, they possess the capability for independent operation. In a war context, distributed energy has two advantages: first, it reduces the risk of single-point failures; second, it decreases reliance on cross-border fuel transportation. The strategic value of such assets is being re-evaluated in high-risk environments. 5) Deep Changes in Investment Logic The rising value of energy storage and power grids means that new energy investments no longer solely revolve around installation growth and cost reduction, but rather around system security and supply chain control. Key changes include: a. Capital is more focused on localized manufacturing and supply chain diversification; b. The weight of security in investment decisions has increased; c. The cost center may shift upward in stages, but the strategic premium has risen. The valuation system of the new energy industry is transitioning from a growth premium to a strategic premium. What opportunities and risks does geopolitics bring to China's new energy industry? 1) China's Energy Security Structure: From Import Dependence to Electrification Advantage China has long been one of the world's largest crude oil importers, with persistent energy security issues. In a wartime environment, oil price fluctuations and transportation risks increase, directly affecting energy costs and macro expectations. However, unlike before, China has established the most complete new energy manufacturing system globally. The high integration of the PV, wind, energy storage, battery, and EV industry chains gives China a manufacturing and scale advantage during the energy transition. In a war context, this advantage is beginning to translate into security attributes: an increase in electrification means a reduction in dependence on external fuels; an increase in new energy installations means a more resilient energy structure. Thus, China's new energy system has the potential for alternative security. 2) Energy Storage and Power Grid: China's Most Strategic Assets If the war becomes protracted, the core of the energy system will no longer be power generation capacity itself, but system stability. China's layout in energy storage and power grid gives it a relative advantage at this stage. In terms of energy storage, China possesses the world's largest battery manufacturing capacity and cost advantages. Under the logic of energy security, energy storage is no longer solely about economics, but has become an important tool for ensuring the stability and emergency response capability of the power system. At the policy level, there may be an emphasis on increasing the proportion of energy storage in the power system. Regarding the power grid, China has developed the world's largest ultra-high voltage transmission network and grid construction capabilities. The increased redundancy and interconnectivity of the grid help to absorb more new energy installations while enhancing the system's resilience against shocks. In a high-risk environment, investment in the grid may accelerate. This means that, under the security logic, China's energy storage and power grid assets have structural strategic premiums. 3) Critical Minerals and Supply Chain: Advantages and Risks Coexist China has advantages in the new energy manufacturing sector, but still relies on overseas layouts for upstream resources. The supply chains for critical minerals such as lithium, nickel, and cobalt are highly internationalized, and wars or geopolitical risks may amplify policy and logistics uncertainties. For China's new energy industry chain, the real challenge lies not in the manufacturing end, but in the stability and cost fluctuations of the resource end. The trend of supply chain deglobalization may push up the cost center, compressing profit margins. The core of future competition will shift from scale expansion to resource control capabilities and the diversification of global layouts. 4) New Energy Vehicles: China's Structural Advantages and Short-term Fluctuations The impact of the war environment on new energy vehicles also has a dual nature. On one hand, rising oil prices reinforce the economic advantages of EVs. In a context of high oil prices, the cost advantages of using EVs become even more evident, which is conducive to increasing the penetration rate among end-users. China has the world's largest EV capacity and supply chain system, with scale and cost advantages. On the other hand, high oil prices may suppress consumer confidence through inflation and macroeconomic uncertainty. If the war continues for a long time, global economic growth may slow down, putting overall car demand under pressure. Although new energy vehicles have a substitution logic, they cannot be completely independent of the macro cycle. Therefore, the short-term performance of China's new energy vehicle industry will depend on the relative strength of the substitution effect and macroeconomic drag. 5) Long-term Structure: Re-stratification of Strategic Assets In the era of energy security, the competitiveness of China's new energy system will be more reflected in three aspects: First, manufacturing scale and cost control capabilities; Second, the system support capacity of the power grid and energy storage; Third, the diversification of upstream resources and supply chain layout. War has accelerated the stratification of the global energy system. Traditional energy bears higher fluctuation risks; new energy power generation and power grid assets gain a safety premium; critical minerals become the focal point of geopolitical competition. For China, the new energy industry is no longer just an engine for growth but also a part of the energy security system. The investment logic will shift from pure growth rate and subsidies to strategic position and supply chain stability. Overall, as energy transitions from a cost variable to a security variable, the strategic value of China's new energy system rises, but it also faces higher supply chain risks and global competitive pressures. Energy storage and the power grid are becoming the core of system stability; new energy vehicles benefit under the substitution logic, but one must be wary of macro cycles; critical minerals will determine the cost center and industrial profit margins. In an era where war reshapes the energy order, stability is more important than growth. SMM New Energy Analyst Yang Le 13916526348

SMM February 28: According to SMM statistics, overseas aluminum production in February 2026 increased 2.5% YoY; new aluminum projects in Indonesia and Angola continued ramping up, with overseas daily average production rising 0.9% MoM. On February 17, 2026, Alba released its Q4 and annual report for 2025. The report showed Alba’s production hit a record high of 1,623,139 mt in 2025, exceeding targets despite a fire incident at year-end. The affected production line is currently in the recovery phase. On February 19, 2026, Century Aluminum announced its Q4 results. The report indicated primary aluminum shipments fell 14% QoQ in Q4 2025, mainly due to production declines caused by equipment failure at its Iceland plant. In 2026, the 50,000 mt idle capacity at Mt. Holly is expected to resume production in April, reaching full capacity by the end of Q2; the Iceland plant is expected to restart earlier than planned, now scheduled to begin production resumptions by the end of April 2026 and approach full capacity by the end of July. South 32’s performance report maintained Mozal aluminum smelter’s FY2026 production guidance at 240,000 mt, with the plant expected to begin maintenance shutdown from March 15. However, foreign media reported the government is taking necessary measures to maintain Mozal’s operations. SMM will continue monitoring. Looking ahead to March 2026, operating capacity at new aluminum projects in Indonesia and Angola is expected to continue climbing, but production cuts or shutdown risks at the Mozambique plant may cause daily average aluminum production to turn negative. Nevertheless, high aluminum prices continue to stimulate global aluminum supply acceleration, with the Iceland plant’s restart expected ahead of schedule and other plants slightly increasing operating rates. Overall, aluminum supply is expected to maintain growth, though global aluminum inventory trends warrant ongoing attention.