SMM Nickel News, May 26: Macro and market news: (1) A draft agreement between the US and Iran was reportedly reached, allowing free and open passage through the Strait of Hormuz and the clearing of mines; navigation through the Strait of Hormuz is to be restored within 30 days. (2) Iran's Ministry of Foreign Affairs: No transit fees will be imposed on the Strait of Hormuz. Charging for services provided is normal, but it should not be regarded as a toll. Spot market: On May 26, SMM #1 refined nickel prices fell 2,600 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 1,100 yuan/mt, down 50 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -400-500 yuan/mt. Futures market: The most-traded SHFE nickel 2606 contract plunged sharply in the morning session, closing at 142,280 yuan/mt, down 1.08%. The Strait of Hormuz is about to reopen, and the sulfur supply deficit is expected to ease. The fading of geopolitical risk premiums weakened the short-term cost-side support for nickel prices, leading to a sharp decline. Currently, global refined nickel visible inventory remains at elevated levels, and sluggish downstream consumption has slowed the destocking process. Nickel prices lack upward momentum, and the most-traded SHFE nickel contract is expected to trade in the range of 137,000-145,000 yuan/mt in the short term.

[Bullish and Bearish Factors Intertwined — Aluminum Prices Maintain LME Outperforms SHFE with Volatile Trend in the Short Term] On the fundamentals side, the supply gap outside China and low inventory continued to provide bottom support, but elevated inventory levels in China remained the core factor suppressing significant price rallies. In addition, weak trading performance in the spot market further limited the upside room for aluminum prices. Aluminum prices are expected to continue the pattern of LME outperforming SHFE and fluctuate at highs in the short term.

[SMM Analysis] Weak Downstream Consumption Increases Pressure on Ex-China Steel Trading Price spread model, the price inversion of Chinese steel relative to overseas markets (India, Japan, Turkey, Black Sea) deepened further in late May. In particular, Chinese resources were cheaper compared to Indonesia, and the price spread was "narrowing at an accelerating pace." For pure ex-China inter-regional price spreads, India's decline was more pronounced compared to other regions, as weak domestic demand drove aggressive low-price bidding. Segment-wise, steel procurement sentiment in Southeast Asia became more cautious last week, with coil prices weakening. In Vietnam, coated steel and steel pipe prices began to slow down after a prolonged rally, and buyers became increasingly cautious about restocking ahead of the rainy season. Meanwhile, due to weak demand and growing pressure from low-priced imports, Formosa Ha Tinh Steel, a subsidiary of Taiwan's China Steel Corporation, also cut its HRC quotations by $5-10/mt to $598-603/mt CIF Vietnam. Although some Vietnamese downstream steel mills continued to raise or maintain prices due to earlier increases in raw material costs and tight spot supply, some producers had begun to limit orders or delay quotations while waiting for a clearer market direction. Notably, Indonesian HRC quotations remained competitive with relatively active exports, with FOB prices at around $565/mt. According to SMM survey, recent transaction prices to Vietnam were around $585/mt CFR. Turkey market: As the Middle East was set to enter a long holiday mid-week, most market participants had already exited early. According to SMM survey, no clear large-volume transactions were seen in the Turkish steel scrap market last week. Meanwhile, as domestic rebar demand remained sluggish, steel mills pushed their target purchase prices for European HMS 1&2 (80:20) scrap below $400/mt CFR to pass on the pressure. The recent euro depreciation and slight correction in ocean freight rates opened up some discount room for European sellers to a certain extent, but judging from actual market transactions, sellers still found it difficult to accept such low prices. At the same time, US exporters continued to hold prices firm at $420/mt CFR. In addition, mainstream quotations for Turkish domestic HRC remained at $660-675/mt EXW. Due to exchange rate fluctuations and high production costs, steel mills were striving to hold prices firm, but downstream buyers remained cautious in purchasing, with expected psychological prices 15-20 $/mt lower. Copyright and Intellectual Property Statement: This report is independently created or compiled by SMM Information & Technology Co., Ltd. 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[SMM Cast Aluminum Alloy Morning Comment: Weak Supply-Demand Pattern for Aluminum Alloy Continues, Short-Term Sideways Movement Expected] Last Friday, the ADC12 market overall maintained a stable-price wait-and-see pattern. Market sentiment was cautious, and the SMM ADC12 price held steady from the previous day at 23,700 yuan/mt.

[SMM Morning Meeting Minutes: Tug-of-War Between Longs and Shorts, Zinc Prices Maintain Range-Bound Trading] Last Friday, LME zinc recorded a small bullish candlestick, with various moving averages below forming support. On the macro front, there are expectations of easing geopolitical conflicts, but inflationary pressure remains significant. The tug-of-war between longs and shorts keeps LME zinc in range-bound trading.

[Tianjin Zinc Ingot Premiums Declined, Market Trading Was Weak]: Spot premiums in Tianjin declined this week, down 5 yuan/mt WoW. As of this Friday, domestic ordinary brands were quoted at a discount of 40-80 yuan/mt against the 2606 contract, premium brands were quoted at a discount of 0-40 yuan/mt against the 2606 contract, and Tianjin was quoted at a discount of 80 yuan/mt against Shanghai.

Platinum prices held up well today, with market logic still revolving around developments in US-Iran tensions and expectations for US Fed interest rate hikes. Ultimately, the most-traded platinum contract on GFEX closed the morning session at 485.95 yuan/gram, edging up 0.34%. The SGE Pt9995 best offer price remained persistently inverted against GFEX PT2606, with the price spread maintained at around 5 yuan/gram. There were no transactions for SGE Pt9995 during the morning session. Spot side, mainstream quotations for spot platinum premiums were basically flat compared to the previous trading day. Morning mainstream quotations from traders were at parity to a discount of 2 yuan/gram against GFEX PT2606. Transaction side, according to SMM, morning transactions from suppliers at mainstream quotations of parity to a discount of 2 yuan/gram against the most-traded GFEX platinum contract faced resistance. Downstream consumption was sluggish, with some downstream enterprises reporting sufficient stockpiling levels and weak procurement sentiment, while most suppliers also had limited room for price negotiation due to the approaching delivery period. Overall, spot market activity was relatively low today.

Today, #1 copper cathode spot prices in North China against the front-month contract were reported at an average discount of 350 yuan/mt to a discount of 270 yuan/mt, with the average discount of 310 yuan/mt down 50 yuan/mt from the previous trading day. The average transaction price was 104,195 yuan/mt, down 590 yuan/mt from the previous trading day.

SMM, May 21: The most-traded SHFE lead 2607 contract opened at 16,635 yuan/mt during the session. It edged up briefly at the start before pulling back momentarily, then fluctuated upward again to touch a high of 16,740 yuan/mt. Later in the session, lead prices came under pressure, ultimately closing at 16,645 yuan/mt, recording a second consecutive positive session with a gain of 105 yuan/mt, up 0.63%. This week, secondary lead enterprise production and finished product inventories rose WoW, weighing on lead prices. However, imported lead supplies decreased somewhat, and social lead ingot inventory continued to pull back, providing support for prices. Currently, the supply side presents mixed signals, while downstream consumption remains weak. In the short term, lead prices are expected to maintain a fluctuating trend. The SHFE lead 2606 contract recorded a trading volume of 54,093 lots with open interest of 25,155 lots; the SHFE lead 2607 contract recorded a trading volume of 90,303 lots with open interest of 70,821 lots. The most-traded SHFE lead contract officially completed its contract rollover to the 2607 contract. Data source disclaimer: Data other than public 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.

[SMM Analysis] Demand Resilience Persists at Tail End of Peak Season, Stainless Steel Social Inventory Continues Destocking On May 21, SMM reported that stainless steel social inventory continued its mild destocking trend this week. Total inventory across the two core markets of Wuxi and Foshan pulled back slightly, dropping from 947,100 mt on May 14, 2026 to 939,200 mt on May 21, down 0.83% WoW, sustaining a mild destocking pattern. Stainless steel market prices were overall in the doldrums this week. Against the backdrop of declining prices, traders generally felt weak market conditions, and wait-and-see sentiment intensified. However, end-use demand demonstrated strong resilience. The market is still at the tail end of the traditional peak consumption season, and downstream end-user just-in-time procurement transactions remained generally stable, without concentrated purchasing halts due to weakening futures or subdued market sentiment, continuously supporting the digestion of market supplies. Meanwhile, steel mill agents proactively cut prices and actively pushed shipments, accelerating the depletion of circulating market supplies. Multiple factors jointly drove stainless steel social inventory to pull back slightly further this week. Overall, sustained release of end-user just-in-time procurement combined with proactive shipments from steel mills jointly dominated the mild destocking trend in inventory this week. Currently, stainless steel mills still maintain reasonable profit margins with strong production willingness, and overall production is expected to stay high, with sustained pressure on the market supply side. As the traditional peak consumption season gradually draws to a close, downstream consumption is about to enter the off-season, and subsequent demand pullback will exert notable pressure on continued inventory destocking. In the short term, inventory is expected to continue its mild destocking trend, but the degree of destocking will most likely slow down gradually. Going forward, close attention should be paid to the sustainability of downstream just-in-time procurement, steel mill production schedules and delivery pace, peak season...