Supply glut, cautious demand, and fading cost support drag the benchmark contract down RMB 205/mt in the week of March 30 – April

This week, ferrous metals were in the doldrums. The main logic during the week remained weakening cost support. On Tuesday, Iran proposed charging transit fees for the Strait of Hormuz, while Trump made conciliatory remarks, saying that “even if the Strait of Hormuz remained largely closed, he would still be willing to end military action against Iran.” Market expectations for tighter crude oil supply weakened, and declines in the energy sector dragged down the coal sector, weakening the cost-side logic. During the week, inventories of the five major steel products continued to decline, but apparent demand remained at a low level for the same period in previous years, providing limited fundamental-driven momentum to futures. In the spot market, purchasing interest was average, mainly focused on restocking at low prices. Spot prices were relatively firm, and the spot-futures price spread widened somewhat......

In the spot market, with the Qingming Festival holiday approaching this week (March 30-April 3, 2026), some downstream battery enterprises mentioned pessimistic expectations for April orders. Coupled with lead prices holding up well, enthusiasm for stockpile procurement declined, and wait-and-see sentiment in the market was strong. This week, mainstream transaction prices for primary lead in Henan fell to parity or small discounts against the SMM #1 lead average price, while some suppliers concluded deals at discounts of 180 yuan/mt against the SHFE lead 2605 contract. Near the weekend, except for a few producers that held prices firm and held back from selling, smelters and suppliers in Hunan and Guangdong lowered their premiums against the SMM #1 lead average price to quoted premiums of 0-30 yuan/mt, but actual transactions were thin. Downstream producers told SMM that some suppliers in the market were dumping lead ingots at discounts ahead of the holiday to reduce inventory pressure. Lead consumption in the market softened slightly this week, downstream enterprises generally stayed on the sidelines, some procurement demand was postponed until after the holiday, and inquiries and transactions in the spot primary lead market shrank.

[SMM Chrome Weekly Review: Weak Demand Performance, Market Remained in the Doldrums] News on April 3, 2026: The ferrochrome and chrome ore markets saw limited fluctuations...

Recently, end-use consumption in the lead-acid battery market has remained weak, while lead prices have held up well. Battery enterprises have found it difficult to adjust prices, and the battery wholesale market has also struggled to catch up. During the period, e-bike enterprises successively issued notices saying that, due to rising raw material costs, they plan to raise the selling price of complete vehicles by 200-300 yuan per unit in April. In addition, on the lead-acid battery producer side, lead prices strengthened during the week, downstream enterprises' purchasing enthusiasm weakened significantly, spot transactions also turned lighter WoW, and spot premiums declined.

This week, stainless steel spot prices fell slightly more than production costs, further worsening the inversion between stainless steel mill prices and costs. Taking 304 cold-rolled products as an example, based on raw material prices on the day, the full cost profit margin was -1.19% this week; calculated based on raw material inventory costs, the margin was -0.55%. Nickel-series raw material costs, high-grade NPI prices remained in the doldrums this week. Although nickel ore prices are currently holding firm and NPI traders are broadly bullish, SHFE nickel futures have been weak recently, while downstream stainless steel prices have struggled to rise. Stainless steel mills themselves are under heavy cost pressure and have shown low acceptance of high-priced raw materials, resulting in sparse market transactions recently; affected by this, high-grade NPI traders have faced considerable transaction pressure, and the price center edged lower slightly. As of this Friday, high-grade NPI with a grade of 10-12% fell by 2 yuan per nickel unit to 1,081.5 yuan/nickel unit. Stainless steel scrap market, stainless steel scrap prices were stable this week, and the decline in finished stainless steel prices did not transmit to the steel scrap market, while prices of substitute furnace charge also remained stable. Tightness in tax invoices eased, the economic advantage of steel scrap became more evident, and high stainless steel mill production schedules drove higher consumption, lifting market transactions and easing inventory pressure. However, finished product prices struggled to rise, limiting upside room for steel scrap prices, which are expected to remain stable in the short term. As of this Friday, the price of 304 off-cuts in Shanghai rose by 100 yuan/mt, with the latest quote at around 10,150 yuan/mt. Chrome-series raw material costs, high-carbon ferrochrome prices dropped back slightly this week. Although some ferrochrome producers recently reported maintenance and production cuts, and stainless steel production schedules for April remained high, leaving retail spot supply in the ferrochrome market relatively tight, stainless steel mills had built relatively ample ferrochrome raw material inventories earlier. Meanwhile, high port inventories of chrome ore recently caused some loosening in chrome ore spot prices. In addition, ferrochrome capacity has already reached a high level, the rainy season in south China is approaching, and ferrochrome producers outside China are resuming production. With ferrochrome producers lacking confidence in the outlook, ferrochrome prices still faced some downward pressure. As of this Friday, high-carbon ferrochrome prices in Inner Mongolia fell 25 yuan/mt (50% metal content) WoW to 8,625 yuan/mt (50% metal content).

[SMM Daily Brief Review of Coking Coal and Coke] In terms of supply, coking coal costs for coke producers declined somewhat, and with the first round of coke price increases now fully implemented, losses at coke producers narrowed significantly, boosting production enthusiasm. Coke supply increased steadily, while downstream demand remained moderate, shipments were smooth, and producers' own inventory continued to decline. Demand side, steel mill blast furnaces gradually resumed production, and daily average hot metal production continued to increase, driving up rigid demand for coke. However, steel mills have recently seen good coke arrivals, with most mills' coke inventory at mid-range levels and overall procurement sentiment remaining average. In summary, coke market fundamentals have shifted toward looser supply and demand, and coupled with weaker recent cost support for coke, the coke market may remain temporarily stable in the short term, with further price increases facing greater difficulty.

[SMM Steel] Thyssenkrupp Steel Europe urged the European Commission to strengthen safeguards for grain-oriented electrical steel as low-cost Asian imports disrupt the market. Producers warn that current measures are insufficient, with cheaper imports already forcing production cuts in parts of Europe, particularly in France. The industry cautions that without stronger protections, domestic capacity and technical expertise may further decline.

[SMM Steel] Nucor expects Q1 2026 earnings to increase modestly versus Q4 2025, with the Steel Mills division seeing the largest improvement. The company also anticipates better performance in its raw materials segment, while steel products earnings are expected to remain broadly stable. Pricing pressure continues to challenge North American producers, indicating profitability is increasingly driven by pricing discipline and value-added product mix.

On April 3, the SMM average price of battery-grade nickel sulphate declined slightly.