[SMM Analysis] Sulphuric Acid: A Key Variable Reshaping Copper Pricing Logic

[SMM Steel] UK Steel warned that Britain’s steel industry still relies heavily on imports, with domestic producers supplying only around 30% of local demand, far below levels seen in the EU and US. The association expressed concern that tighter EU quotas could hurt British exports, as around 80% of UK steel exports are shipped to the EU market. UK Steel also criticized growing preference for imported “green steel” produced via electric arc furnaces (EAF), warning that this trend could undermine investment in domestic steel decarbonization. The UK government plans to cut steel import quotas by 60% from July 1 and raise over-quota tariffs from 25% to 50%.

[SMM Steel] The American Iron and Steel Institute (AISI) urged the USTR to impose cumulative tariffs under the Section 301 investigation targeting economies linked to global steel overcapacity. AISI highlighted record Chinese steel exports of 131 million mt in 2025 and rising shipments from India, Indonesia, South Korea, Japan, and Mexico. The institute argued that subsidized exports and redirected trade flows are pressuring the US steel market. If approved, additional Section 301 tariffs could be added on top of existing Section 232 duties, potentially lifting total US steel tariffs on some countries to 60-75%.

Asian copper scrap supply is severely tight due to decline in the volume and quality of US exports due to recovering domestic consumption; depleted inventories from early-year copper price volatility; and China's tax compliance pressures restricting local scrap flows, which intensifies regional competition for imports. Boosted by bullish hoarding, pricing coefficients have defied expected corrections despite surging copper prices. Bare Bright Copper is currently converging around 98.5%, with No. 1 Copper at 97%-97.5%. Notably, No. 2 Copper coefficients have spiked "abnormally" to 95%-96%. This anomaly is primarily driven by high precious metal prices, as scrap batches rich in gold and silver impurities command high premiums, lifting the overall No. 2 Copper pricing benchmark.

Since the beginning of this year, China's energy storage product exports have been impressive in both scale and growth rate. According to customs data, in Q1 this year, the export value of lithium-ion batteries — one of the most core and critical components of energy storage equipment — increased by over 50% compared to the same period last year.

The International Copper Association (ICA) announced that Indonesian mining and copper smelting company PT Amman Mineral Nusa Tenggara (AMMAN) has officially joined the association, becoming the first member headquartered in Southeast Asia. Indonesia has been accelerating downstream copper processing and domestic smelting expansion in recent years, strengthening Southeast Asia’s role in the global copper supply chain. Increasing investment in copper smelting, fabrication and energy-transition related sectors is also reinforcing the region’s importance in refined copper supply, copper product exports, and demand from AI infrastructure and power grid development.

Indonesian state-owned steel giant PT Krakatau Steel (Persero) Tbk (IDX: KRAS, hereinafter referred to as "Krakatau") released its 2025 consolidated financial statements on March 31, 2026. On the surface, the company recorded a net profit of 339.6 million USD (approximately 5.68 trillion IDR), its best performance since 2019. However, unpacking the core steel business reveals that the steel segment's operating loss in 2025 actually widened from 40.79 million USD in 2024 to 102.5 million USD.

This week, operating rates across sub-sectors of China's aluminum processing industry continued their overall weak trend. The post-Labour Day holiday effect, combined with wild swings in aluminum prices, led to varying degrees of WoW pullback in operating rates across most sectors, with the overall rate recorded at 64.2%. Specifically, aluminum plate/sheet and strip operating rate fell to 72.6%, aluminum foil edged down to 74.7%, aluminum wire and cable recorded 66.6%, primary aluminum alloy rose slightly to 58%, leading secondary aluminum enterprises dropped to 57.0%, and aluminum extrusion operating rate also slipped slightly to 56.1%. Demand side, post-holiday aluminum prices fell by 480 yuan/mt in a single day, causing some traders to incur book losses, with cargo pick-up sentiment generally subdued. Underperforming real estate terminal completions continued to drag on construction extrusions and the air-conditioner foil segment within aluminum foil. PV frame enterprises also reduced their May production schedules, and passenger NEV growth falling short of expectations placed certain constraints on primary aluminum alloy. Overall, the consumption side was gradually showing traditional off-season characteristics. Cost side, high aluminum prices suppressed downstream enterprises' willingness to stockpile, compliant aluminum scrap sources remained tight with prices staying elevated, secondary aluminum industry profits continued to be under pressure, and some enterprises had already fallen into losses. However, aluminum wire and cable export orders continued to climb, with April expected to approach historical highs. Within aluminum extrusion industrial orders, heat sinks and industrial machinery accessories performed relatively well. Within aluminum foil, demand for food packaging foil, pharmaceutical foil, and battery foil remained stable. Automotive aluminum sheets & plates orders also benefited from the YoY and MoM double growth in April passenger NEVs, maintaining a recovery trend. Overall, in the short term, the aluminum processing industry's overall operating rate still faces downward pressure. The demand off-season and cost pressure form a dual suppression, and operating rates across sectors are expected to be under pressure in May. However, strengthening export orders and structural recovery in certain industrial demand segments will provide some bottom support for the industry. Primary aluminum alloy: This week, the primary aluminum alloy operating rate was 58%, showing a slight recovery WoW, but the rebound remained limited. Structurally, aluminum consumption at some enterprises increased, driving the overall operating rate slightly higher. However, most enterprises continued to primarily execute long-term contracts as normal, with overall operations running steadily. Current aluminum prices remained at elevated levels, suppressing downstream enterprises' willingness to stockpile, with most enterprises maintaining low inventory operations. Additionally, passenger NEV growth falling short of expectations also resulted in relatively slow demand growth. Overall, the primary aluminum alloy operating rate is expected to remain at the current level next week. Aluminum plate/sheet and strip: The operating rate of leading aluminum plate/sheet and strip enterprises edged down 0.4 percentage points WoW from pre-holiday levels to 72.6% this week. On the operational front, production lines at leading aluminum plate/sheet and strip enterprises ran normally during the Labour Day holiday with a steady production pace, but initial signs of operational pressure emerged in the industry. Post-holiday, aluminum prices pulled back, with a single-day drop of 480 yuan/mt. Some traders and dealers incurred book losses after purchasing, and sentiment for picking up goods was generally low. By product, domestic end-use demand for can stock packaging remained stable; auto sheets & plates orders benefited from the recovery of passenger NEVs in April with both YoY and MoM growth, still in a recovery trend; 1-series common plates and civilian general aluminum semis saw weak orders due to delayed cargo pick-up for engineering orders and shrinking civilian demand. In the short term, constrained by factors such as wild swings in aluminum prices and pressure on common plate orders, downward pressure on the operating rate of leading aluminum plate/sheet and strip enterprises is gradually increasing in May. Aluminum wire and cable: The operating rate of China's aluminum wire and cable industry registered 66.6% this week, edging down 1 percentage point WoW from pre-holiday levels. Although top-tier enterprises still held some power grid orders, they proactively reduced production loads due to the holiday factor and order losses, resulting in a decline in capacity utilization rate. Currently, domestic power grid end-use demand still dominates consumption, but the concentrated cargo pick-up cycle has passed, providing limited support to the overall industry operating rate. In contrast, export orders for aluminum stranded wire climbed, and Q2 exports are expected to increase significantly this year. April exports are expected to approach or break historical highs, and May exports are expected to increase by 10,000-20,000 mt MoM. Export orders will provide support to industry operations. Aluminum extrusion: The operating rate of China's aluminum extrusion industry was 56.1% this week, down 0.4 percentage points WoW, showing a generally stable but weakening trend. By segment, for architectural extrusion, dragged by domestic real estate terminal completion progress falling short of expectations, engineering orders continued their weak trend this week, and demand growth in the home decoration doors and windows segment was limited, failing to provide effective support, slightly dragging down the overall operating performance of architectural extrusion. For industrial extrusion, downstream tier-one PV module enterprises' May production schedule plans contracted, and PV frame enterprises saw a decline in operating rates. Some Hebei frame enterprises chose to shut down for 5 days during the Labour Day holiday to offset order pullback and ease cost pressure, maintaining a relatively full production schedule after the holiday; some Anhui frame enterprises reported that orders on hand remained generally stable with no significant reduction, resulting in relatively limited drag on operations. Additionally, large Guangdong aluminum extrusion enterprises reported that recent orders for heat sinks, industrial machinery accessories, and other industrial extrusion products performed well, providing support to regional industrial extrusion operations. In the short term, the weakness in architectural extrusion and the structural recovery in industrial extrusion offset each other, and the aluminum extrusion operating rate is expected to show a stable and improving trend. Aluminum foil: This week, the operating rate of leading aluminum foil enterprises fell 0.3 percentage points WoW from pre-holiday levels to 74.7%. Order side, demand for food packaging foil, pharmaceutical foil, and battery foil remained stable, supporting the baseline operating rate. Air-conditioner foil was under pressure, with May orders on hand declining MoM, as demand was dragged down by factors including a sluggish real estate market, tapering of national subsidies, high inventories outside China, and capacity relocation. Both domestic sales and export schedules declined, and weak end-use demand is expected to pull down the overall aluminum foil operating rate. In the short term, demand for packaging foil and battery foil can still support the aluminum foil operating rate at a relatively high level, but the deep weakness in air-conditioner foil will set the stage for an overall pullback in the aluminum foil industry's operating rate in May. Secondary aluminum: This week, the operating rate of leading secondary aluminum enterprises in China fell 0.7 percentage points WoW to 57.0%. During the holiday, sampled major plants maintained normal production, but affected by some downstream enterprises being on holiday and declining orders, enterprises compressed their production pace, and operating levels pulled back slightly. Currently, both demand and raw materials exerted dual pressure on production: on one hand, May gradually entered the traditional consumption off-season, downstream procurement became more cautious, market transaction activity continued to decline, and manufacturers' order performance was poor; on the other hand, finished alloy ingot prices fell more than raw material prices, compliant aluminum scrap sources remained tight with prices fluctuating at highs, industry profits continued to narrow, and some enterprises even fell into losses, with operating rates passively under pressure. After the holiday effect fades next week, the operating rate is expected to recover slightly, but the demand off-season and cost pressure are unlikely to improve significantly in the short term, and the industry's overall operating rate still faces downward expectations. [Data source statement: 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.]

The US Department of Commerce (DOC) has announced the preliminary results of its administrative review of the antidumping (AD) duty order on large diameter welded pipe from India for the period of May 1, 2023, to April 30, 2024. The DOC preliminarily found that Welspun Corp Limited and its affiliates did not sell the subject merchandise at less than normal value, assigning a dumping margin of 0.00%. Additionally, the review was rescinded for 12 other Indian companies as they had no reviewable shipments during the period. This preliminary zero-margin finding for a major producer suggests a potential easing of trade barriers for specific Indian pipe exports, though final results are pending.

India's crude steel production rose by 6% year-on-year in April 2026 to reach 12.1 million metric tons (Mt). Domestic finished steel consumption outpaced production growth, increasing by 8% to 11.3 million mt, driven by strong infrastructure activity. During the month, finished steel output stood at 11.6 million mt (+5.5% YoY), while imports jumped 12% to 0.6 million mt and exports fell by 15% to 0.5 million mt. The data confirms India's status as a primary driver of global steel demand, with strong domestic absorption reducing export surpluses and making the country a net importer for the period, which may support global steel prices amid tightening regional supply.