According to SMM, mainstream Indonesian stainless steel mills have raised their export quotations by a significant USD 50/mt today. Beyond the fundamental tightness in raw materials, this sharp upward adjustment is heavily driven by the lingering ripple effects of global geopolitical conflicts. The prolonged war has severely disrupted international supply chains, triggering a broad rally in safe-haven commodities and driving up global energy and shipping costs. This macroeconomic spillover has intensified cost-push inflation across the nickel and stainless steel industry chain, forcing mills to aggressively hike prices to hedge against surging comprehensive costs and mounting geopolitical uncertainties.

According to SMM data, during the first week of the traditional "Golden March" peak season (March 2 - March 6, 2026), the most-traded stainless steel futures contract (SS2604) exhibited a strong, high-level oscillating trend. This was driven by the resonance of international geopolitical storms and the tone set by China's macroeconomic policies. By the close at 10:15 on March 6, the contract traded higher at 14,235 yuan/mt (approx. $2,063/mt), up 85 yuan/mt (approx. $12/mt) (+0.60%) from last Friday's close of 14,150 yuan/mt (approx. $2,051/mt). The market this week was characterized by "strong expectations but weak reality." A sudden global supply chain crisis and firm raw material costs provided a solid floor for market valuations. However, high spot inventories and the looming pressure of resumed production kept prices cautious when attempting upward breakouts. Macro-Economy: A "Super Macro Week" Defined by Geopolitics and Policy Support On the macroeconomic front, this was undeniably a "super macro week" with exceptionally strong signals from China and the global market. Internationally, a geopolitical "black swan" emerged as Iran claimed the Strait of Hormuz was closed and threatened to strike passing vessels. This extreme event immediately sparked fears of a global supply chain crisis and surging energy expectations. U.S. Federal Reserve officials subsequently voiced concerns over the war's spillover effects and a potential rebound in inflation, significantly cooling expectations for interest rate cuts. However, in the commodities market, trades driven by "inflation hedging" and "supply chain disruptions" boosted the overall premium of the base metals sector. In China, the government work report delivered at the "Two Sessions" set the 2026 economic growth target at 4.5%-5%. It explicitly proposed utilizing capacity regulations and standard-setting to deeply rectify "involutionary" (cut-throat) competition. This policy direction provides strong expectation-driven support for supply-side optimization in traditional Chinese manufacturing. Fundamentals: Inventories Near Peak, Clash of Supply and Demand Imminent Fundamentally, social inventories are showing early signs of peaking, though the market will soon face the test of surging supply. The latest SMM data shows social inventories at 1.0164 million mt this week, a marginal increase of just 300 mt from last week's 1.0161 million mt. The seasonal inventory accumulation around the Spring Festival fully aligns with industry patterns and remains within market expectations. Traders have not resorted to panic selling, keeping short-term inventory pressure manageable. However, a shift is brewing on the supply side. The output reduction caused by concentrated maintenance at Chinese steel mills in February is nearing its end. As mills enter a concentrated resumption phase in March, scheduled production is expected to rise sharply. This surge in supply will clash head-on with recovering demand during the "Golden March and Silver April" period, leading to a phased reshaping of the market's supply-demand dynamics. Costs: Robust Upward Resilience Sets a Solid Floor On the cost side, raw materials continued to show robust upward resilience, establishing a solid baseline for futures prices. Driven by the ongoing fallout from Indonesian nickel ore quotas and premium news, raw material prices rose across the board this week. As of March 6, high-grade nickel pig iron (NPI) quotes climbed to 1,088 yuan/mtu (approx. $158/mtu), and high-carbon ferrochrome prices were adjusted upwards to 8,600 yuan/50 mt (approx. $1,246/50 mt). Although mainstream steel mills currently show low acceptance of high NPI prices and remain cautious in procurement—resulting in sparse actual market transactions—the raw material sector has minimal room to yield on price, dominated by expectations of tight ore supply and bullish sentiment. The steady climb in spot costs has effectively capped the downside risk for stainless steel prices. Outlook and Strategy In conclusion, the stainless steel market this week sought a balance amid the fierce tug-of-war between "geopolitical premiums + cost support" and "million-ton inventories + production resumption expectations." The macroeconomic shifts triggered by the Strait of Hormuz crisis, coupled with China's "Two Sessions" mandate to curb cut-throat competition, have injected immense confidence into the bulls regarding macro sentiment. Looking ahead to next week, the market will deeply enter the reality-check phase of the "Golden March" peak season. The core focus will shift to the actual implementation of steel mill resumptions in March and the pace at which downstream end-users digest substantial orders. In the short term, futures prices are expected to maintain wide fluctuations at high levels, underpinned by the cost line. Industry clients are advised to closely monitor geopolitical developments and the pace of spot inventory destocking, while rationally utilizing futures tools to lock in production margins.

SMM Morning Meeting Summary: Last Friday evening, LME copper opened at $13,474.5/mt, initially fluctuating rangebound and reaching $13,527/mt. Later, the center of copper prices gradually shifted downward, touching $13,290/mt near the end of the session, and finally closed at $13,296/mt, with a gain of 0.28%. Trading volume reached 25,300 lots, and open interest stood at 315,000 lots, down by 497 lots from the previous trading day, mainly due to bears reducing their positions. The most-traded SHFE copper 2604 contract opened at 104,230 yuan/mt, quickly rising to 104,520 yuan/mt, then fluctuated downward, bottoming out at 103,100 yuan/mt, and finally closed at 103,280 yuan/mt, with a gain of 0.45%. Trading volume reached 77,700 lots, and open interest stood at 202,000 lots, down by 2,150 lots from the previous trading day, also characterized by bears reducing their positions.

[SMM Lead Morning Meeting Summary: Coexistence of Energy Supply Pressure and Lead Ingot Inventory Buildup May Lead to Continued Price Consolidation] The escalation of geopolitical tensions in the Middle East, obstruction of major shipping routes, and expectations for rising transportation costs are anticipated to increase pressure on Europe's energy supply. After the domestic holiday, the lead market has experienced severe inventory buildup...

On February 26, local time in the US, the third round of indirect negotiations between the US and Iran took place in Geneva, Switzerland, mediated by Oman. The talks went through two stages with a break of several hours in between, and a new round of negotiations is expected to take place next week. On February 27, Beijing time, the Ministry of Foreign Affairs advised Chinese citizens in Iran to evacuate as soon as possible. The external security risks facing Iran have significantly increased, with multiple countries issuing advisories for their citizens to leave. Given the current security situation in Iran, the Ministry of Foreign Affairs and the Chinese Embassy and Consulates in Iran reminded Chinese citizens not to travel to Iran and advised those already there to strengthen safety precautions and evacuate as soon as possible. The Chinese Embassies and Consulates in Iran and its neighboring countries will provide necessary assistance for the evacuation of Chinese citizens via commercial flights or land routes. On February 27, platinum and palladium showed a significant rise, with platinum's weekly gain reaching 19.29%, making it a standout in the precious metals futures sector. Market uncertainties brought about by US tariffs and geopolitical risks continue to support the performance of precious metals. Fundamentals side, tight supply provided fundamental support for platinum. Coupled with many market participants' bullish outlook, some suppliers held prices firm, providing sentiment support for the rise in platinum and palladium. As of around 3:58 PM on February 27, the main platinum contract rose 5.34% to 623.75 yuan/gram, with a weekly gain of 19.29%; the main palladium contract rose 2.77% to 464.85 yuan/gram, with a weekly gain of 10.86%. The A-share market responded in kind, with the precious metals sector closing up 3.55% on February 27. On February 27, spot platinum was quoted at 606~610 yuan/gram, with an average price of 608 yuan/gram, up 3.67% from the previous trading day. The post-holiday rise in platinum, besides being supported by macro factors and safe-haven demand, also benefited from tight supply, positive market expectations, and some suppliers holding prices firm. Due to some suppliers' optimistic outlook, they were unwilling to sell at low prices, making it difficult to find low-priced goods in the market. However, the supply-demand relationship has not changed significantly since before the holiday. The post-holiday rise was more driven by optimistic sentiment, with downstream players adopting a wait-and-see attitude. It is expected that platinum prices will continue to fluctuate in the short term. Future developments will need to focus on changes in the demand side. Throughout February 2026, platinum and palladium prices experienced a roller-coaster ride amid macroeconomic shocks and geopolitical risks. For the whole month, macro sentiment dominated the pace of fluctuations, with supply-side events reinforcing support, and the structural feature of "strong platinum, weak palladium" continued. At present, geopolitical and macro situations strongly support precious metals: the tense Middle East situation directly boosted safe-haven demand; the downward revision of US GDP coupled with stubborn inflation highlighted gold's value preservation function; the legal battle over tariff policies weakened the US dollar's credibility, and expectations for US Fed interest rate cuts, along with global central banks' gold buying spree, collectively provided a solid bottom for precious metal prices. Fundamentals side, the expansion elasticity of platinum and palladium supply is relatively weak. Since platinum's demand structure is less dependent on traditional fuel vehicle consumption compared to palladium, the supply-demand pattern for platinum is tighter, and it is expected to have strong upward momentum, while palladium is likely to follow platinum in a weaker trend. Risk Warning: US Economic Resilience Exceeds Expectations, US Tariff Adjustments on Platinum and Palladium Exceed Expectations, Geopolitical Risks in Major Production Areas, etc.

Iron ore futures rallied to approximately $109 per tonne on January 7, reaching their highest level since February 2025, driven by supply constraints from major miners and pre-holiday restocking demand. The price surge reflects market optimism regarding potential macroeconomic support policies, despite broader concerns about steel output levels in some regions

From Washington to London, more than a dozen central banks will hold policy meetings this week, with the economies they represent accounting for two-fifths of the global economy. Among them, in addition to the highly anticipated US Fed, another G10 central bank's policy meeting this week will also attract widespread attention: the Swiss National Bank (SNB), which has been continuously pushing global interest rates to new lows. According to industry surveys of economists, the SNB is likely to cut interest rates to zero this week and maintain them at this low level for some time. Nearly 80% of the surveyed economists expect that SNB policymakers will lower borrowing costs by 25 basis points to 0% this Thursday. This move will return the benchmark interest rate to a level not seen since September 2022, when the SNB just ended its seven-year negative interest rate policy. And this will also become the lowest interest rate among major economies globally at present. Among the 22 forecasting institutions surveyed, only three institutions—Pantheon Macroeconomics, Capital Economics, and Swiss Life Asset Managers—predict that the SNB will directly cut interest rates by 50 basis points to -0.25% this week. Another six institutions, including Goldman Sachs, Nomura, and Barclays, expect the SNB to enter "negative interest rate" territory in September, but most surveyed institutions believe the easing cycle will end in June. SNB officials can cite the country's extremely weak CPI growth as a reason for a sixth consecutive interest rate cut: Last month, Switzerland's inflation rate turned negative for the first time since early 2021. Meanwhile, economists surveyed by the industry predict that the average annual inflation rate will be only 0.3% this year and 0.6% in 2026. In addition, exchange rate fluctuations may also be one of the factors considered by the SNB this week. SNB policymakers are trying to take measures to curb capital inflows into the Swiss franc. Since US President Trump announced "Liberation Day" tariff measures in early April, the Swiss franc has appreciated more than 8% against the US dollar. Since then, the Swiss franc has also continued to appreciate against the euro, a currency pair of particular concern to the SNB. The strength of the Swiss franc has pushed down import costs and the consumer price index. It is worth mentioning that although SNB President Martin Schlegel stated in mid-May that officials had had productive discussions with Washington on central bank exchange rate intervention measures, the US Treasury still included Switzerland in its list of economies closely monitored for exchange rate policies in its semi-annual report on exchange rate policies last week.

This week, the SHFE/LME zinc price ratio fluctuated around 8.4, with the import window for zinc ingots remaining closed. Overseas, macro data indicated a cooling in both US employment and inflation, strengthening expectations for a US Fed interest rate cut within the year. The escalating tensions in the Middle East exacerbated geopolitical risks, and the resurgence of US tariff disputes added further downward pressure on LME zinc.

Last Friday, Eastern Time, the latest non-farm payrolls report released by the US Bureau of Labor Statistics brought relief to the market. The report showed that the seasonally adjusted non-farm payrolls in the US for May recorded 139,000 new jobs, the lowest since February but still higher than the market expectation of 130,000. Meanwhile, the US unemployment rate remained at 4.2% for the third consecutive month, easing concerns that the labour market was beginning to slow down significantly. However, Samuel Tombs, chief US economist at Pantheon Macroeconomics, warned that these figures might not tell the whole story. He believes that the US labour market is grappling with weak hiring and an accelerating trend of downward revisions. He cited the March non-farm payrolls data as an example, where the initial figure of 224,000 new jobs was nearly halved to 120,000 in subsequent revisions. Therefore, the May figures may also have been overstated. Tombs wrote in his latest report: "We expect that in the third estimate, to be released in early August, the employment figure for May will be revised down to around 100,000. " As per usual practice, the US Department of Labor releases the initial estimate, followed by a revision the next month, and the final estimate the month after that. He pointed out that since January 2023, the initial estimate of monthly data has been revised down by an average of 30,000 compared to the third estimate, possibly due to delayed payroll data submissions from small businesses. Small companies are often hit hardest by high interest rates and tariff costs. "In this economic downturn, small businesses are truly like canaries in a coal mine. They lack the financial resources to handle many of the upfront costs associated with tariffs. They still face very high borrowing costs, so they are extremely cautious in hiring and capital expenditures," he added. Tombs believes that the retail, wholesale, transportation, and logistics sectors will continue to weaken, and he projects that employment in these sectors will decline by 50,000 by the end of this year, due to the fading "front-loading effect" of tariffs, with many businesses and consumers rushing to make purchases before tariff-related price increases. In addition to data revisions, hiring also appears to be slowing down. The National Federation of Independent Business (NFIB) Small Business Hiring Plans Index fell to its lowest level since May 2020. Regional surveys by the US Fed indicate that employment in the service sector, excluding healthcare and education, continues to decline. The chart below shows that hiring intentions tracked by the US Fed's regional surveys are below the average from 2015 to 2024. Actual employment growth in the private services sector is often closely tied to hiring intentions, which means that when hiring intentions decline, actual hiring tends to follow suit shortly after. Tombs believes that after the "layoff wave" driven by the Department of Government Efficiency (DOGE), government jobs will continue to decline as federal employees who accept voluntary buyouts will be removed from payrolls in September—government jobs have already decreased by 59,000 this year, including a drop of 22,000 in May. Following this trend, Tombs projects that the unemployment rate will peak at 4.8% in December. Tombs states that, in summary, the labor market is weaker than it appears on the surface. Therefore, he believes that the US Fed will need to start cutting interest rates in September, to alleviate pressure on businesses before inflation peaks.

At 20:30 Beijing time on Wednesday, the US Bureau of Labor Statistics will release the May Consumer Price Index (CPI) report. People will closely monitor these data to see if US President Trump's tariffs are beginning to impact consumer prices. Chicago Fed President Austan Goolsbee has warned that April's inflation report may represent the last calm before tariffs lead to a rise in inflation. The median forecast from economists indicates that the overall US CPI for May is expected to maintain a MoM growth rate of 0.2%, with the YoY growth rate rising from the four-year low of 2.3% touched last month to 2.5%. For the core CPI, which excludes the more volatile food and energy categories, the MoM growth rate is expected to increase from 0.2% in April to 0.3%, while the YoY growth rate is projected to rise from 2.8% to 2.9%, reversing the downward trend seen so far this year. Forecasters suggest that core inflation in the US may rebound in May, reflecting the mild impact of tariffs being passed on to major imported goods, while prices for some services, such as airfares, are expected to narrow their gains or fall outright. Samuel Tombs and Oliver Allen, economists at Pantheon Macroeconomics, noted in a report: "Only a handful of goods prices are likely to rise in May due to new tariffs—June will be different—while some non-essential service providers may cut or maintain low prices to support demand." Rising Goods Inflation, Weakening Service Prices Economists have been closely watching how tariff costs will be passed on to consumers. As of April, the CPI report showed minimal impact, as firms absorbed some of the costs and relied on inventories purchased before the tax increases. However, companies, including Walmart, have indicated they will begin raising prices for some goods. Bank of America economists Stephen Juneau and Jeseo Park stated in a report that the impact of tariffs on May's data should be broader than in April. The most obvious sign of tariff-driven price increases in April was the 8.8% MoM surge in audio equipment prices. Other notable categories include heavily taxed goods such as clothing, new cars, and household appliances. Wells Fargo economists Sarah House and Nicole Cervi pointed out: "Inventory accumulation ahead of the tax increases and expectations of potential reductions in the current tariff scale have so far curbed cost increases. However, as high tariffs persist, it may become more challenging to shield consumers from cost shocks." On the other hand, forecasters have pointed out that disinflation in the services category may have curbed the overall CPI increase . Andrew Schneider of BNP Paribas said that airfare and hotel prices have remained sluggish in recent months, and deflation is expected in both categories in May. In his report, he noted that the decline in foreign tourists may have contributed to the price weakness. Anna Wong, a strategist at Bloomberg Economics, believes that the price drops in some service categories reflect consumers cutting back on non-essential spending. She also expects airfares to decline. "Both consumers and government departments are cutting back on travel spending this year, and airfares continued to deflate in May," Wong wrote in her report. How many more months will the US Fed have to wait? Economists and US Fed officials have differing views on when the impact of tariffs on inflation will fully materialize. Goldman Sachs expects tariffs to push up commodity prices and overall inflation in the coming months, but this increase will be one-off, after which prices will return to normal. In the May CPI data, the institution expects the impact to be relatively small, with core inflation projected to rise 0.05% to 0.25% MoM. Looking ahead, Goldman Sachs expects core inflation to reach 3.5%, up from 2.8% in April, but with easing pressures in the labour market, housing, and automotive sectors. The institution also expects hotel and airfare prices to remain flat in the short term, with most inflation coming from goods rather than services. Other perspectives suggest that companies may not raise prices until surplus inventories are digested. Due to the inventory surplus before April, it may take several more months to digest inventories. According to information as of May 23, the US Fed's latest Beige Book shows that companies planning to pass on tariff-related costs expect to achieve this goal within three months . Debates on the inflation outlook have also taken place within the US Fed. Minneapolis Fed President Neel Kashkari said that the Federal Open Market Committee (FOMC) had a useful debate on whether to view price-related increases through the lens of tariffs, and he found the argument against ignoring the impact of tariffs on inflation more compelling. Several others, including US Fed Governor Adriana Kugler, seem to agree with this view. Kugler noted that the impact of tariffs on prices may be more persistent. Atlanta Fed President Raphael Bostic has said he is particularly concerned about inflation and the public's expectations for future price increases, believing that "it will take three to six months to see how things unfold."Goolsbee, however, expressed some "trepidation" about the claim that tariffs would have a temporary impact on inflation. On the other side of the argument was Fed Governor Waller, who believed that tariffs would lead to a one-time increase in prices and stated that it was standard practice for central banks to overlook one-time price hikes. Fed Chairman Powell and his colleagues have indicated that there is time to assess the impact of trade policies on the economy, inflation, and the job market. The market widely expects the Fed to keep interest rates unchanged at its meeting next week. The recent strong non-farm payrolls report has already led traders to lower their expectations for a Fed interest rate cut. The money market expects the Fed to cut interest rates by 45 basis points before the end of the year, suggesting that only one rate cut by the Fed this year is fully priced in, with an 80% probability of a second cut. The latest Reuters Fed survey showed that 59 out of 105 analysts believe the Fed will resume interest rate cuts next quarter, possibly in September, and 60% of analysts think the Fed will cut interest rates at least twice, but this is only a slim majority. In the absence of guidance from the Fed, analysts' expectations are also widely dispersed. Fed officials have generally urged a wait-and-see approach, avoiding providing any specific guidance on the path of interest rate cuts. San Francisco Fed President Daly has previously stated that two rate cuts this year still seem reasonable, while Bostic still expects only one rate cut. However, both have warned that this largely depends on how the economy develops. Market Reaction A few hours after the release of the CPI data, the US Treasury will hold two crucial Treasury auctions. It will sell $39 billion in 10-year Treasury notes in the early hours of Thursday and $22 billion in 30-year Treasury notes in the early hours of Friday. These results could have a significant impact on the direction of the economy, the Fed's response, and its interest rate policy stance. Coupled with the comprehensive tax and spending bill currently under consideration in Congress, volatility in the US Treasury market is set to intensify. This week's Treasury auction results will be closely watched, although economists and investors generally believe there will be no major surprises. Chip Hughey, head of fixed income at Truist Advisory Services, said, "If you look at the current yield levels relative to global peers, US Treasuries still offer a relatively attractive advantage... I expect demand to be quite strong, especially for the 10-year note auction." The US dollar index, which typically fluctuates with US Treasury yields, rebounded in the first half of May before pulling back to consolidate above the three-year low near the 98 mark. The counter-trend rebound has alleviated the oversold condition of the US dollar index's 14-day Relative Strength Index (RSI) , potentially laying the groundwork for the next round of declines, especially if inflation falls short of expectations. Technically speaking, the lows around 98 represent the most significant support level to watch , while the nearest clear overhead resistance comes from the downtrend line near 99.50 . Even if a hotter-than-expected inflation report triggers a rebound in the US dollar index, bears may look to sell into strength, joining the ongoing downtrend at more favorable prices. For gold, the current technical setup favors the bulls. If gold prices strengthen further and break through the immediate resistance level of $3,352-3,353 , it will reaffirm the bullish outlook and advance towards the intermediate resistance level of $3,377-3,378, thereby challenging the round-number resistance at $3,400. On the other hand, a pullback in gold below the $3,323-3,322 area may continue to attract some buyers and find decent support around $3,300 . If subsequent selling intensifies, gold prices may subsequently break below the $3,288-3,287 area, shifting market bias in favor of the bears and dragging prices down to the monthly swing low near $3,245, with this corrective decline potentially extending even further to near $3,200. In the current environment, tariff headlines and any potential trade agreements (especially between the US and China) may have a greater impact on the market than this month's inflation report , making it crucial to monitor developments in these areas as well.