Looking back at 2025, as the transitional implementation year for the "reverse invoicing" policy, the National Development and Reform Commission's "Document No. 770" explicitly required the termination of local governments' non-compliant investment promotion cooperation. Under the policy guidance of building a unified national market, the copper scrap industry has been gradually moving toward a standardized and compliant development track.

[SMM Tin Midday Commentary: Under Macro Pressure, SHFE Tin Contracts Fell to 366,000, and Trading in the Spot Market Was Relatively Active]

[SMM Morning Meeting Summary: The Tin Market Weakened After Fluctuating at Highs, Under Short-Term Pressure Amid Intertwined Bullish and Bearish Factors]

According to SMM’s latest tracking, the total planned volume of cold-rolled commercial products for this month across 31 mainstream cold-rolled coil steel mills was 4.073 million mt, up 257,500 mt from last month’s actual production of cold-rolled commercial products, an increase of 6.7%.

[SMM Tin Morning Brief: Macro Sentiment and Spot Trades in a Tug-of-War; Tin Prices Retreat After Rapid Rise and Enter Consolidation]

After the Chinese New Year holiday, the first fundamental indicator to watch post-holiday is undoubtedly inventory! SMM compiles the latest inventory data from three markets (LME, COMEX, SHFE) and the evolving logic for the future outlook.

Around the Chinese New Year holiday, the lithium carbonate market exhibited a pattern of first declining then rising, with intensified volatility before the holiday. From late January to early February, prices came under pressure and declined, with battery-grade lithium carbonate dropping to a low of 134,500 yuan/mt. However, in the final week before the holiday, driven by improved macro sentiment and industrial capital flows, the futures market warmed up, and the most-traded contract once broke through the 150,000 yuan/mt level. During the Chinese New Year holiday, the Guangzhou Futures Exchange was closed, and the spot market saw sluggish trading as logistics were largely halted. Supply side, lithium chemical plants showed clear price-firming sentiment during the pre-holiday price decline phase, with a generally weak willingness to sell spot orders. Meanwhile, February coincided with a period of concentrated maintenance at upstream lithium chemical plants, and domestic lithium carbonate production is expected to drop about 15% MoM for the month. Demand side, downstream material plants entered a stockpiling cycle before the holiday, and purchase willingness significantly strengthened when prices fell to relatively low levels, with increased inquiry and trading activity. Benefiting from the progress of downstream buying the dip, industry inventory structure underwent dynamic adjustments. As of February 12, 2026, the downstream inventory share in SMM's total lithium carbonate sample inventory rose to 43.2%, up nearly 2 percentage points from the previous week; meanwhile, upstream and other segment inventories saw pullbacks, down 7.8% and 4.4% WoW respectively. Overall inventory showed a downward trend, though the direction of inventory changes varied across segments. Looking ahead, on the supply side, as lithium chemical plants complete maintenance and gradually resume production, coupled with new capacity coming online, domestic lithium carbonate production is expected to rebound gradually. On the demand side, from after the holiday to late February, downstream material plants will start the March stockpiling cycle and are expected to maintain a strategy of buying the dip. Under a pattern of simultaneous supply and demand growth, market competition may intensify.

The fundamental challenge in the 304 stainless steel industrial chain is Instrument Asymmetry, a scenario where the dominant cost driver, Nickel Pig Iron (NPI), lacks a direct futures contract and forces participants to manage 75% of their risk using standardized proxies like pure nickel. This creates a lethal threat not from price volatility itself, but from the Basis Risk that occurs when physical assets and hedging tools decouple.

SMM data showed that during the week (February 9-13, 2026), the final trading week before the Chinese New Year holiday, the stainless steel market essentially entered a "market closure" mode, with price movements primarily driven by capital flows in the futures market. The most-traded contract officially switched to SS2604, and as of 10:30 on February 13, the contract was quoted at 13,765 yuan/mt. Affected by pre-holiday capital outflows, trading in the futures market was sluggish, and the price center fluctuated rangebound within the range of 13,700-13,800 yuan/mt. Despite the lack of immediate guidance from the spot market, an unexpected rebound in raw material prices provided strong support at the bottom for the futures market, limiting the downside room during the vacuum period. From a macro perspective, policy signals from China and the US set the tone for the post-holiday macroeconomic backdrop. Domestically, the central bank released its monetary policy report, clearly stating the continuation of moderately accommodative policies and maintaining ample liquidity to provide support for the post-holiday economic recovery. Overseas, US non-farm payrolls increased by 130,000 in January, and the unemployment rate fell to 4.3%. The strong economic data significantly reduced the probability of a near-term interest rate cut by the US Fed (the probability of a March rate cut was less than 20%). The expectation that "tight monetary conditions will persist longer" exerted some downward pressure on commodity valuations. However, during the extended Chinese New Year holiday, the market focused more on the cumulative effects of domestic policies and the resilience of post-holiday demand recovery. From a fundamental perspective, the spot market had fully entered the holiday mode, with inventories showing a seasonal buildup. The latest SMM data showed that social inventory rose to 894,500 mt this week, an increase of 25,900 mt compared to 868,600 mt last week. This inventory buildup aligns with the seasonal pattern around the Chinese New Year, primarily due to downstream end-user shutdowns and the stagnation of goods circulation. Regarding spot transactions, the vast majority of traders had already left for the holiday, with only a small number of post-holiday orders being locked in, leaving the market in a frozen state characterized by "existing prices but no market." Although inventories increased noticeably, considering the previously low inventory base, the total volume remains within a reasonable range. Furthermore, the market generally holds an optimistic outlook for the post-holiday "Golden March, Silver April" peak season. Suppliers maintained a steady mindset, with no signs of panic selling pressure emerging. The "counter-trend rebound" on the cost side was the highlight of the week. Against the backdrop of stalled finished product trading, raw materials showed unexpected resilience. As of February 13, the price of high-grade NPI rebounded to 1,051.5 yuan/mtu, up 11.5 yuan WoW, recouping some of the previous losses; high-carbon ferrochrome held steady at 8,550 yuan/mt (50% metal content). The recovery in raw material prices was supported, on one hand, by continued expectations regarding Indonesian ore policy and, on the other hand, reflected upstream optimism about post-holiday demand. The upward shift in the cost center directly raised the break-even point for steel mills, building a more solid cost floor for stainless steel prices upon their return after the holiday. Overall assessment: This week's market exhibited a typical "pre-holiday closing" pattern, with capital outflows leading to reduced volatility and a spot market shutdown causing distortions in the spot-futures price spread. Although the 894,500 mt inventory confirmed an inventory buildup trend, the rebound in NPI indicates that the industrial fundamentals have not deteriorated. Looking ahead to the post-holiday market, the core focus of market dynamics is expected to quickly shift from "capital risk aversion" back to "supply-demand verification." As the peak season of "Golden March, Silver April" approaches, the market holds strong expectations for a demand recovery. If the post-holiday inventory buildup remains within a controllable range, coupled with raw material cost support above 1,050 yuan per mtu, stainless steel is poised to get off to a good start or experience a stabilization and rebound.

The beginning of 2026 did not bring the calm usually expected in the global stainless steel industry chain ahead of the traditional Lunar New Year offseason. Instead, under the double pincer attack of surging raw material costs and escalating trade protectionism, the market is undergoing a violent restructuring.