[SMM Tin Commentary: The SHFE Tin Contract Consolidated Near the 370,000 Level, with Market Sentiment Remaining Predominantly Cautious Ahead of the Interest Rate Cut Decision]

On March 10, 2026, Lynas and Japan’s JARE signed a long-term deal featuring PrNd floor prices, profit-sharing, and heavy rare earth priority. Analyzing 2025 production data, this report evaluates the partnership’s commercial terms, operational progress, and downstream demand security.

SMM Nickel News, March 18: Macro and Market News: (1) "Fed Chairman whisperer" Nick Timiraos said the US Fed may be more inclined to remain silent this week. But forecasts force them to sketch out a path. Two former Fed Chairmen told me they hoped to avoid forecasting interest rate cuts in the near term. Whether current officials will adopt the same stance has become the core focus of this meeting, with both hawks and doves potentially sticking to their positions by pointing to the same shock. (2) US President Trump again expressed his personal dissatisfaction with NATO at the White House on March 17 local time. Trump said whether the US should withdraw from NATO "is indeed something we should consider." Spot Market: On March 18, the SMM price of #1 refined nickel fell by 1,950 yuan/mt from the previous trading day. In terms of spot premiums, the average price of Jinchuan #1 refined nickel was 6,550 yuan/mt, unchanged from the previous trading day; the range for mainstream electrodeposited nickel brands in China was -300-400 yuan/mt. Futures Market: The most-traded SHFE nickel 2605 contract continued to fluctuate downward during the session and closed the morning session at 135,110 yuan/mt, down 1.49. Heightened geopolitical tensions in the Middle East pushed up oil prices and intensified inflation concerns. The market expects the US Fed may slow down the pace of interest rate cuts, while the US dollar continued to strengthen, creating clear pressure on nickel prices. Although macro pressure remained significant, the industrial support logic has not changed. The market is still concerned that supply of nickel intermediate products tightens. Short term, the most-traded SHFE nickel contract is expected to move sideways in the 135,000-145,000 yuan/mt range.

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

In mid-March 2026, CAAM and the China Automotive Power Battery Industry Innovation Alliance successively released relevant data on the auto and power battery markets for February 2026. According to CAAM’s analysis, auto production and sales declined YoY under the combined impact of multiple factors, including policy transition adjustments, front-load demand release, the timing shift of the Chinese New Year holiday, insufficient willingness to consume, and a high base in the same period last year. Among them, the passenger vehicle market and NEV market both declined YoY, while the commercial vehicle market continued to improve, and auto exports grew rapidly. .......SMM compiled the relevant data on the auto market and power battery market for February 2026 for readers’ reference. Automobiles CAAM: February Auto Output and Sales Reached 1.672 Million and 1.805 Million Units, Respectively In February, auto output and sales totaled 1.672 million and 1.805 million units, down 31.7% and 23.1% MoM, and down 20.5% and 15.2% YoY, respectively. From January to February, auto output and sales totaled 4.122 million and 4.152 million units, down 9.5% and 8.8% YoY, respectively. CAAM: February NEV Sales Reached 765,000 Units; January-February NEV Output and Sales Reached 1.71 Million Units In February, NEV output and sales totaled 694,000 and 765,000 units, down 21.8% and 14.2% YoY, respectively. NEV sales accounted for 42.4% of total new vehicle sales. From January to February, NEV output and sales totaled 1.735 million and 1.71 million units, down 8.8% and 6.9% YoY, respectively. NEV sales accounted for 41.2% of total new vehicle sales. CAAM: Auto Exports Continued to Grow in February; NEV Exports up 1.1x YoY In February, NEV exports were 282,000 units, down 6.6% MoM, up 1.1x YoY ; traditional fuel vehicle exports were 391,000 units, up 2.8% MoM and up 26.2% YoY . From January to February, NEV exports were 583,000 units, up 1.1x YoY; traditional fuel vehicle exports were 769,000 units, up 22.2% YoY . Regarding the auto market in February, CAAM said that this year’s Chinese New Year fell in mid-to-late February, and the holiday was extended. As a result, there were only 16 effective working days in February, which had a certain impact on enterprise production and operations, and overall market activity declined. Judging from industry performance from January to February, auto production and sales declined YoY under the combined impact of multiple factors, including policy transition adjustments, front-load demand release, the timing shift of the Chinese New Year holiday, insufficient willingness to consume, and a high base in the same period last year. Among them, the passenger vehicle market and NEVs declined YoY, while the commercial vehicle market continued to improve and auto exports grew rapidly. This year’s government work report explicitly proposed to stimulate the endogenous momentum of household consumption and advance consumption-promoting policies in parallel, continue to amplify the effect of the policy package, further rectify “involution-style” competition, and foster a sound market ecosystem. It is believed that, as detailed local subsidy measures are fully implemented after the holiday, spring auto show sales promotions begin, and automakers roll out new models one after another, this will help boost consumer confidence, energize the auto market, and promote the healthy and stable operation of the industry. Subsequently, the CPCA also released data on the passenger vehicle market for February 2026. From February 1 to 28, retail sales in China’s passenger vehicle market reached 1.034 million units, down 25.4% YoY and down 33.1% MoM. Cumulative retail sales since the beginning of the year totaled 2.578 million units, down 18.9% YoY. As market factors have become more complex, the pattern of “low at the beginning and high at the end” in annual sales has become more evident in recent years. Affected by disruptions such as Chinese New Year, February retail sales have seen wild YoY swings over the years, for example: 2019 (-19%), 2020 (-79%), 2021 (373%), 2022 (5%), 2023 (10%), 2024 (-21%), and 2025 (26%). Therefore, the -25.4% in 2026 was at the lower-middle end of the range of sharp fluctuations in February growth rates over the years. NEVs, retail sales in the passenger NEV market were 464,000 units in February, down 32.0% YoY; from January to February, retail sales in the passenger NEV market were 1.06 million units, down 25.7% YoY. Retail sales of conventional fuel passenger vehicles were 570,000 units in February, down 19% YoY. In February, passenger NEV producer exports were 269,000 units, up 124.7% YoY and down 7.0% MoM; from January to February, passenger NEV producer exports were 559,000 units, up 114.7% YoY, while exports of conventional fuel passenger vehicles were 290,000 units in February, up 21% YoY. NEV exports, as the scale advantages of China’s new energy vehicles become more apparent and market expansion demand grows, more and more China-made new energy brand products are going outside China, and their recognition outside China continues to improve. Among them, PHEVs accounted for 38% of NEV exports (38% in the same period last year). Although they have recently been affected by some disruptions from external countries, exports of independently developed PHEVs to developing countries have grown rapidly, with bright prospects. In February, passenger NEV exports were 269,000 units, up 124.7% YoY and down 7.0% MoM. They accounted for 48.5% of passenger vehicle exports, up 14.8 percentage points YoY; BEVs accounted for 58% of NEV exports (59% in the same period last year), and A00- and A0-class EVs, the core focus, accounted for 55% of BEV exports (56% in the same period last year). The CPCA stated that after the NEV purchase tax exemption policy, which had been implemented since September 2014, was formally phased out at the end of December 2025, the NEV market in 2026 entered a recovery period amid adjustments to tax subsidies. Some consumers brought forward purchases to 2025 to benefit from the policy, resulting in a certain pull-forward effect in January-February this year. This was an expected short-term fluctuation and does not represent the market’s long-term trend. However, with Chinese New Year falling later this year, making it a major consumption year, growth in the auto market diverged, and NEVs did not perform strongly, indicating that more policy support is still needed. Key features of the passenger vehicle market in February 2026: 1. In February, passenger vehicle producers’ daily average exports hit a record high for the month, fully demonstrating the steadily improving competitiveness of China’s automotive industry in the global market and continued robust demand outside China; 2. The retail pullback after the expiration of the vehicle purchase tax exemption was evident, but structural changes were also clear, namely a higher share of high-end NEVs and a lower share of entry-level consumption, which is conducive to the industry’s transition toward high-quality development; 3. New vehicle launches were steady in 2026, and together with the advance of anti-involution efforts curbing disorderly price cuts, NEV sales promotions stayed at 10.4% in February, remaining around 10% for six consecutive months. No vicious volume discount competition emerged, helping maintain market order; 4. The historical pattern of internal combustion engine vehicles outperforming NEVs before Chinese New Year continued again. In February, retail sales in China of internal combustion engine vehicles fell 19% YoY, while pure electric vehicle retail sales fell 35% YoY, range-extended vehicles fell 16% YoY, and PHEVs fell 31% YoY. As time goes by, consumers are expected to gradually adapt to the normalization of NEV taxation, and the NEV market is expected to return to a track of positive growth; 5. This February was still a pre-Chinese New Year consumption phase dominated by internal combustion engine vehicles. NEV penetration rate in retail sales in China was 44.9%, and export penetration rate was 48.5%, which was a relatively good performance; 6. In February 2026, exports of self-owned-brand internal combustion engine passenger vehicles reached 247,000, up 21% YoY, while exports of self-owned-brand NEVs reached 231,000, up 110% YoY. NEVs accounted for 48.4% of self-owned-brand exports. In particular, the high growth of NEV exports in Europe, Southeast Asia, and other regions marked the expanding influence of China’s NEV brands in the international market, laying a solid foundation for future export growth. Power Battery In February, China’s cumulative sales of power and ESS batteries reached 113.2 Gwh, up 25.7% YoY In February, China’s sales of power and ESS batteries reached 113.2 Gwh, down 23.9% MoM, up 25.7% YoY . Of this, power battery sales were 74.5 Gwh, accounting for 65.9% of total sales, down 27.4% MoM and up 11.4% YoY; ESS battery sales were 38.6 Gwh, accounting for 34.1% of total sales, down 16.2% MoM and up 67.3% YoY. From January to February, China’s cumulative sales of power and ESS batteries were 262 Gwh, up 53.8% YoY . Of this, cumulative power battery sales were 177.2 Gwh, accounting for 67.6% of total sales and up 36.5% YoY; cumulative ESS battery sales were 84.8 Gwh, accounting for 32.4% of total sales and up 108.9% YoY. From January to February, cumulative power battery installations were 68.3 Gwh, with LFP installations accounting for 77.9% In February, China’s power battery installations were 26.3 Gwh, down 37.4% MoM and down 24.6% YoY. Of this, ternary battery installations were 5.7 Gwh, accounting for 21.7% of total installations, down 39.1% MoM and down 11.4% YoY; LFP battery installations were 20.6 Gwh, accounting for 78.3% of total installations, down 36.9% MoM and down 27.5% YoY. From January to February, cumulative power battery installations in China were 68.3 Gwh, down 7.2% YoY. Of this, cumulative ternary battery installations were 15.1 Gwh, accounting for 22.1% of total installations and up 0.6% YoY; cumulative LFP battery installations were 53.3 Gwh, accounting for 77.9% of total installations and down 9.2% YoY. More Than 60% of A/H-Share Automakers Achieved YoY Growth, March Auto Market Production and Sales Will See Rapid MoM Growth Earlier, CLS compiled the January-February sales performance of 14 A/H-share listed automakers, of which 9 achieved YoY growth, accounting for more than 60%, and 3 automakers recorded February sales outside China exceeding those in the Chinese market. Among emerging EV makers, Leap Motor still firmly held the top spot in deliveries, with 28,067 units delivered in February, up 10.99% YoY; cumulative deliveries in 2026 reached 60,126 units, up 19.16% YoY. While releasing its February delivery figures, Leap Motor said its March car purchase incentives had gone live, with discounts of up to 46,000 yuan for in-stock vehicles. Li Auto delivered 26,421 units in February, up 0.6% YoY. Cumulative deliveries in 2026 reached 54,089 units, down 3.74% YoY. As of February 28, 2026, Li Auto’s historical cumulative deliveries totaled 1.594 million units. Li Auto said that as of February 28, 2026, it had 539 retail centers nationwide, covering 160 cities; 548 after-sales repair centers and authorized service centers, covering 223 cities. Li Auto had put into use 4,054 Li Auto supercharging stations nationwide, with 22,447 charging piles. NIO delivered 20,797 new vehicles in February, up 57.65% YoY. Cumulative deliveries in the first two months of 2026 reached 47,979 units, up 77.34% YoY. To date, NIO has delivered a total of 1,045,571 new vehicles. At 22:33:18 on February 6, NIO completed its 100 millionth battery swap; during the 2026 Chinese New Year holiday, NIO provided a cumulative 2,073,500 battery swapping services, with daily average services up 29.4% YoY versus the Chinese New Year holiday last year. From February 15 to February 23, NIO Energy's cumulative highway charging and battery swapping volume exceeded 25.28 million kWh, accounting for 15% of the national highway charging and battery swapping total. Starting from February 18 (the second day of the Chinese New Year), NIO battery swapping set new single-day service records for five consecutive days. XPeng Motors delivered a total of 15,256 new vehicles in February, bringing cumulative deliveries in the first two months of 2026 to 35,267 units, down 42% YoY. In February, the all-new XPeng G6 launched in the UK, with the entire lineup equipped as standard with an 800V high-voltage platform and a new-generation LFP battery, while introducing an all-wheel-drive performance black edition for the first time. The XPeng G6 has now been exported to more than 40 countries and regions worldwide, covering Asia-Pacific, Europe, the Middle East and North Africa, and Latin America, and continues to win favour among an increasing number of overseas consumers. As for Xiaomi Auto, its deliveries exceeded 20,000 units in February, while January deliveries exceeded 39,000 units, bringing cumulative deliveries in the first two months of 2026 to 59,000 units. Notably, the Xiaomi YU7 continued to rank first in sales in February and has now held the top spot for six consecutive months. In February 2026, Xiaomi YU7 sales reached 20,196 units, ranking among the top three passenger vehicle models nationwide for the month. As for BYD, China's "EV king," February sales reached 190,190 units, retaining its position as China's NEV sales champion. In January-February 2026, BYD Group's cumulative sales reached 400,241 units, while cumulative overseas sales of passenger vehicles and pickups totaled 200,160 units, and cumulative new energy vehicle sales exceeded 15.5 million units. On March 5, BYD unveiled the second-generation blade battery. Wang Chuanfu, Chairman of BYD Group, said that the second-generation blade battery can charge from 10% to 70% in 5 minutes, and from 10% to 97% in just 9 minutes. The second-generation blade battery offers 5% higher battery energy density than the first-generation blade battery. Car models equipped with the second-generation blade battery include the Yangwang U7, Denza N9, Fangchengbao Tai 3, Seal 07, Datang, Sea Lion 06, Song Ultra, Fangchengbao Tai 7, Denza Z9GT, and Yangwang U8L, among which the Denza Z9GT has a driving range of 1,036 km. Regarding auto industry sales in February 2026, Cailian Press quoted an executive at a new carmaker as saying, "Affected by the longest-ever nine-day Chinese New Year holiday in February, the auto industry's effective production and sales period was significantly shortened, making it a typical off-season for auto consumption. Combined with the phased reduction in the vehicle purchase tax incentive, the auto industry as a whole remained subdued and full of challenges.” Looking ahead to the passenger vehicle market in March, the CPCA said that March this year had 22 working days, one more than the 21 working days in March 2025. As industries across the board rapidly returned to normal operations after the Chinese New Year holiday, production and sales growth in March is expected to rise sharply MoM. The post-Chinese New Year period is an important window for new product launches, and many producers rolled out a large number of new vehicles. Driven by national pro-consumption policies, many provinces and cities introduced corresponding measures to stimulate consumption, while the full resumption of offline activities such as auto shows will also accelerate the return of foot traffic. As prices of lithium carbonate, copper, and other materials have remained high recently, coupled with the continued anti-involution trend, producers are expected to launch relatively few new energy car models offering better-than-expected value for money, leaving limited potential for an explosive rebound in auto consumption. Although the recent Middle East crisis caused some transportation disruptions, China’s complete vehicle enterprises shifted from “chartering vessels and waiting for shipping space” to “building ships and controlling transport,” with rapid expansion of their own fleets, greater autonomy and control over shipping capacity, and significant optimization in cost and efficiency. Our sales support capabilities are stronger than those of other international automakers, and if the crisis does not last long, export transportation will not be significantly affected. As the national trade-in policy is fully implemented, the consumer potential for replacement and upgrade purchases will be gradually released, helping the auto market strengthen steadily in March. In 2026, policy subsidies and structural optimization in the auto industry will become key factors in leveraging overall market prosperity and accelerating the premiumization of new energy vehicles. Although the 2026 consumer goods trade-in subsidy fund of 250 billion yuan was down 50 billion yuan from 2025, the 100 billion yuan in special fiscal and financial coordinated funding to boost domestic demand can reduce financing costs for residents’ car purchases and automakers through loan interest subsidies and financing guarantees, effectively stimulating endogenous consumption momentum and expanding new room for domestic demand. Huachuang Securities pointed out that since March, the passenger vehicle retail market has begun to improve, with foot traffic and transactions gradually recovering, mainly due to the digestion of deferred wait-and-see demand from last year and the launch of new models. Attention should be paid to market acceptance of new vehicles after price increases and to dynamic adjustments by automakers. Although the subsidy amount per vehicle declined this year, coverage may expand. Combined with the low base in H2 last year, industry retail sales growth in H2 is expected to turn positive, with full-year retail growth expected at 1%, including +5% for EVs. Export data for January-February exceeded expectations, and full-year exports are expected to surpass 7.1 million units, boosting wholesale growth by about 3%, including +8% for EVs. In February, due to weaker demand during the Chinese New Year, the new energy penetration rate remained firm at 48%. Current total channel inventory is about 3.4 million units, an increase of about 600,000 units compared to the same period last year. Rising Prices of Memory Chips and Precious Metals, Some Automakers Warn of Cost Pressure It is worth noting that as memory chip and precious metal prices have fluctuated upward recently, some automakers in the market have begun trying to respond to supply chain cost pressure through “price increases.”Monitoring data from TrendForce showed that since H2 2025, prices of DDR4 memory used in automotive-grade DRAM have risen by more than 150% cumulatively, while DDR5 memory prices have surged by 300%. Data provided by UBS showed that over the past three months, automotive-grade DRAM prices as a whole increased by 180%. According to incomplete statistics, since the start of 2026, multiple automakers, including NIO, Li Auto, VOYAH, Xiaomi, and Zeekr, have issued warnings or been reported to be facing cost challenges brought by chip price increases. In a livestream, Deepal Chairman Deng Chenghao said that current production costs have risen by several thousand yuan compared with earlier levels, with the pressure mainly coming from wild swings in power battery and in-vehicle memory chip prices; Li Auto Vice President of Supply Chain Meng Qingpeng even warned that the supply fulfillment rate for automotive memory chips in 2026 may be less than 50%; Xiaomi Chairman Lei Jun mentioned in a livestream in January that the new Xiaomi SU7 is facing memory cost pressure that is jumping quarter by quarter, with memory cost per vehicle expected to increase by several thousand yuan. However, according to the latest news from NIO on March 11, NIO founder and chairman Li Bin said that rising prices of memory and other raw materials have impacted the cost of high-end new energy car models by 3,000 to 5,000 yuan respectively, with the total impact nearing 10,000 yuan. At present, NIO’s existing system can support the pressure brought by rising costs, and the company currently has no plan to adjust prices. At the Q4 and full-year 2025 earnings call, Li Auto President Ma Donghui said that in response to the impact brought by the current increase in parts prices, Li Auto will strengthen coordination with supply partners and sign long-term LTA agreements with relevant suppliers to lock in prices or allocations in advance. If there is a price adjustment mechanism, it will be strictly implemented in accordance with the contract; where there is no price adjustment mechanism, the company will also share costs with suppliers. It will absorb as much of the pressure from external price increases internally as possible, including through its self-developed range extender and self-developed chips. “Li Auto will comprehensively consider parts costs and user value in determining the pricing of new car models, and is confident that through a series of measures it can keep the impact of raw materials within a reasonable range,” Ma Donghui said. UBS warned that chip shortages may begin disrupting global auto production as early as Q2 this year, with EV manufacturers that are highly dependent on advanced chips expected to be affected the most.

Iran’s threat to drive oil prices up to $200 a barrel may sound like hyperbole, but as the energy crisis persisted, that outcome already looked more likely than US President Trump’s prediction that oil prices would soon pull back to pre-war levels… The conflict involving Israel and the US against Iran entered its third week — and escalated into one spanning the entire Middle East — yet the global oil benchmark’s response so far was surprisingly “mediocre.” Brent crude oil was currently trading near $100 a barrel, up about 65 from the start of the year. Although that level would have been unimaginable just a few weeks ago, it still remained below last Monday’s brief peak of nearly $120. Given that since the conflict began, the effective closure of the Strait of Hormuz had trapped about one-fifth of global oil supply — roughly 20 million barrels a day — crude oil prices should, in theory, have been much higher. That seemed to suggest investors still retained a degree of trust in Trump , betting that the crisis would be resolved quickly and that the Strait of Hormuz would soon reopen — whether it was called the “Trump put,” the “TACO trade,” or “buy Trump,” many oil traders appeared to be wagering that the president would ultimately be able to limit the market damage. “When this is over, oil prices will come down very, very quickly,” Trump said on Monday this week. Yet that optimism looked increasingly difficult to reconcile with realities on the ground — whether on a battlefield where the conflict was intensifying, or in the physical oil market, where supply bottlenecks were steadily spreading. Signals Being Overlooked In fact, the physical crude oil market was sending an increasing number of stress signals, even though the international benchmark “paper oil” market had so far largely ignored them. Although trade had stalled under the impact of the Iran conflict, Middle Eastern crude benchmarks still surged to record highs, making them the most expensive crude in the world. The spike in these benchmark indicators, which are used to price millions of barrels of Middle Eastern crude sold to Asia, was raising costs for Asian refiners and forcing them to seek alternatives or make further production cuts in the coming months. S&P Global Platts said Dubai spot crude assessments for May-loading cargoes hit a record $157.66 a barrel on Tuesday, surpassing the previous all-time high of $147.5 set by Brent crude oil futures in 2008. That left Dubai crude’s premium to swaps at $60.82 a barrel, compared with an average premium of just 90¢ in February. Meanwhile, Oman crude oil futures hit a record high of $152.58 per barrel on Tuesday, with its premium to the Dubai swap set at $55.74 per barrel, versus an average premium of just 75¢ in February. Oman crude oil is exported from a terminal outside the Strait of Hormuz. This surge reflected massive uncertainty over actually available supply in the Middle East after Iran repeatedly attacked Oman's oil terminal and the UAE's major oil export terminal of Fujairah outside the Strait of Hormuz. Are Brent and WTI Failing to Reflect the "True Severity" of the Oil Market? As JPMorgan's head of commodities, Natasha Kaneva, pointed out in her latest research note on Tuesday , there was a clear mismatch between international benchmark crude pricing and the Middle Eastern geography of the supply disruptions. The core issue was that Brent and WTI are benchmark indicators at opposite ends of the Atlantic basin, while the current shock is concentrated in the Middle East. As a result, these benchmark crude prices were particularly influenced by relatively loose regional fundamentals—commercial oil inventory in both the US and Europe were ample in early 2026, and supply across the Atlantic basin was also relatively abundant in the short term. In addition, expectations for a release from the US Strategic Petroleum Reserve (SPR)—as well as a partial release that will soon materialize—further eased prompt tightness in Brent- and WTI-linked markets. By contrast, Middle Eastern crude benchmarks such as Dubai and Oman more accurately reflected the current dislocation in the physical market. Dubai and Oman spot prices were both trading above $150 per barrel, underscoring the severity of crude oil shortages originating in the Gulf region. These Middle Eastern oil prices were directly affected by export disruptions and therefore more effectively reflected marginal supply deficits than Atlantic-linked crude prices. Crucially, trade geography intensified this dynamic. Most of the crude transported via the Strait of Hormuz goes to Asia—before the outbreak of the Middle East conflict, about 11.2 million barrels of crude and 1.4 million barrels of refined products flowed through the strait to Asia each day. As a result, the direct physical shortage—and the surge in oil prices—was concentrated in Asian markets most dependent on Gulf crude. In fact, early signs of demand destruction had already emerged in Asia as product prices surged and spot crude became prohibitively expensive. JPMorgan noted that timing effects further reinforced this divergence. A typical voyage from Gulf Cooperation Council (GCC) countries to Asia takes about 10 to 15 days, while cargoes bound for Europe via the Suez Canal require nearly 25 to 30 days, or 35 to 45 days if rerouted around the Cape of Good Hope. Therefore, the impact of disrupted Gulf flows would hit Asian markets sooner and more severely, while Atlantic Basin benchmarks such as Brent and WTI would enjoy a longer buffer because of surplus inventory and slower supply adjustments. The US, with crude oil production exceeding 13 million barrels per day, would be affected the least. JPMorgan believed that, in this context, the apparent price stability shown by Brent and WTI should not be taken as evidence of adequate global supply. It reflected a temporary buffer created by regional surplus inventory, benchmark composition, and policy intervention. In fact, for refiners, especially those in Asia, the current crude oil shortage had already become a serious problem. About 60% of the region’s crude oil imports depended on the Middle East, and the difficulty of finding alternative, timely supplies was rapidly becoming acute. The pressure had already forced many countries into painful adjustments. Refiners across Asia had begun cutting run rates to conserve dwindling inventory. Some countries had banned exports of refined products, a defensive move that could further tighten the global market. As the crude oil shortage worsened, refined product prices surged. Asian jet fuel prices were approaching $200 a barrel, near the record high of about $220 reached earlier this month. The Crisis Could Spread Further Ultimately, this crisis was expected to extend beyond Asia. Data from analytics firm Kpler showed that Europe accounted for about three-quarters of Middle Eastern jet fuel exports shipped through the Strait of Hormuz last year—about 379,000 barrels per day—but since the conflict began, no such cargoes had passed through the strait. Unsurprisingly, jet fuel barge prices in the Amsterdam-Rotterdam-Antwerp refining hub had surged to a record $190 a barrel, exceeding the previous peak set after the Russia-Ukraine conflict in February 2022. The comparison with the Russia-Ukraine crisis may be even more compelling. Before the outbreak of the Russia-Ukraine conflict in 2022, Russia supplied about 30% of Europe’s crude oil imports and one-third of its refined product imports. As traders feared Europe would lose supplies from one of the world’s largest oil producers, Brent crude rose to $130 a barrel after the Russia-Ukraine conflict—even though that worst-case scenario never fully materialized in the end. By contrast, according to Morgan Stanley, the physical disruption caused by the Iran conflict had already exceeded that level of concern by more than threefold. Even if the Strait of Hormuz were to reopen immediately, it would not bring immediate relief. According to the International Energy Agency, about 10 million barrels per day of production in the Middle East has been shut in since the conflict began. Restoring these flows will take weeks, if not months. To be sure, the oil market entered the Iran conflict in a relatively loose state, and the International Energy Agency had projected that global supply would exceed demand by about 3.7 million barrels per day. But that surplus has now been erased by the current turmoil. Last week, the International Energy Agency announced plans to release a record 400 million barrels from member countries' strategic petroleum reserves, which will help cushion the initial shock. But drawing down inventories cannot substitute for deliveries of new oil. In other words, the supply shock to the oil market is real and may persist. Once the Strait of Hormuz finally reopens, oil prices could initially plunge in a relief rebound, but given the harsh realities of the physical market, traders may need to think twice before betting that the return to normalcy promised by Trump is about to arrive…

[SMM Analysis] Freight Rates Surge, Making Deals Difficult for Steel Expor ters Affected by the US-Iran conflict, tight energy supply and sharply higher fuel costs, compounded by exchange rate fluctuations, have continuously pushed up China's export offers in recent days. Compared with the beginning of the month (March 6), SMM HRC prices have been raised by $9/mt; galvanizing prices rose by $11/mt; CRC rose by $5/mt; billet rose by $6/mt; and rebar rose by $6/mt. However, looking back at market transaction performance, deals weakened again recently. According to the SMM survey, ocean freight rates surged sharply, with current freight to the Middle East as high as $50-60. Most outside China clients remained on the sidelines; shipowners also refused to commit tonnage while waiting for the market to stabilize. For China exporters, there were offers but no market, making shipments difficult. Meanwhile, market sources said Hadeed, the GCC's only flat steel producer, raised its May hot-rolled coil (HRC) prices, still related to shipping restrictions in the Strait of Hormuz. HRC cargoes previously booked from China and other origins were also being redirected to the west coast, mainly heading to Jeddah Port, bringing high inland transportation costs. As for global steel prices, in India, in addition to rising raw material costs and rupee depreciation, a sudden LNG energy shortage further pushed up production costs, forcing steel mills to maintain a strong willingness to hold prices firm despite the traditional domestic off-season and blocked exports. In the Southeast Asian market, price increases were accepted entirely passively, mainly due to the rigid pass-through of high ocean freight rates by overseas suppliers. Although Southeast Asian buyers hesitated to take orders, they had no choice but to passively accept the increases against the backdrop of persistently high geopolitical logistics costs. At the same time, CIS export offers also rose significantly, benefiting from the intensifying geopolitical conflict in the Middle East and the resulting short-term global supply tightens. In the Middle East market, meanwhile, as war tensions continued to escalate, the closure of the Strait of Hormuz completely disrupted transportation, while freight rates and delivery uncertainty pushed the sheets & plates import markets in the UAE and Saudi Arabia into a complete standstill. Copyright and Intellectual Property Statement: This report is independently created or compiled by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), and SMM legally enjoys complete copyright and related intellectual property rights. The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders. The above rights are strictly protected by relevant laws and regulations of the People's Republic of China, such as the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as applicable international treaties. Without prior written authorization from SMM, no institution or individual may: 1. Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating); 2. Disclose the content of this report to any third party; 3. License or authorize any third party to use the content of this report; 4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses. Data Source Statement: (Except for publicly available information, other data in this report are derived from publicly available information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, brokerage reports, data from the National Bureau of Statistics, customs import and export data, various data published by major associations and institutions, etc.), market exchanges, and comprehensive analysis and reasonable inferences made by the research team based on SMM's internal database models. This information is for reference only and does not constitute decision-making advice. SMM reserves the final interpretation right of the terms in this statement and the right to adjust and modify the content of the statement according to actual circumstances.

[SHFE Zinc Continued to Decline Today, with Focus on Overseas Rate Decisions and China Social Inventory] The most-traded SHFE zinc 2605 contract opened at 23,470 yuan/mt. After the opening, bulls and bears engaged in fierce competition, and SHFE zinc fluctuated rangebound below the daily average line. During the session, SHFE zinc touched a high of 23,475 yuan/mt and a low of 23,260 yuan/mt, and finally closed down at 23,345 yuan/mt, down 110 yuan/mt, or 0.47%. Trading volume increased to 55,115 lots, and open interest increased by 3,955 lots to 95,164 lots.....

Gold prices fall due to interest rate gloom and Middle East tensions. US Fed and major central banks likely to maintain current interest rates. Long-term gold outlook positive, seen as a hedge against risks.

[Geopolitical Tensions Combined With Deferred Interest Rate Cut Expectations Leave SHFE Aluminum Under Short-Term Pressure but Fluctuating at Highs] Against the backdrop of continued tightening LME liquidity, LME aluminum still has upward momentum, with strong support from prices outside China, and is expected to maintain a backwardation structure in the short term. China remains in a phase of high inventory coupled with weak fundamentals, and its upward momentum is significantly weaker than that outside China. Amid divergent domestic and external drivers, the SHFE/LME price ratio is expected to continue weakening, and aluminum prices are still expected to fluctuate at highs in the short term.