Next Monday, markets outside China will be closed for one day on April 6 for the Easter holiday, including the LME and other exchanges. Meanwhile, China will also be in the Qingming Festival holiday, with the SHFE and other exchanges likewise closed. In terms of macroeconomic data, key releases include China’s March CPI YoY and the US March non-seasonally adjusted CPI YoY, while the US Fed will also release the minutes of its monetary policy meeting. LME lead, geopolitical tensions outside China have repeatedly resurfaced and the situation remained relatively severe, with the impact on energy, shipping, and other areas continuing. China’s lead ingot import window had remained open for a long time, attracting overseas lead ingot inflows into the Chinese market and reducing spot lead circulation in Southeast Asia and other markets. Especially during periods of rising LME lead, LME Cash-3M contango further narrowed WoW to -$20.77/mt, which will support lead prices to hold up well. LME lead is expected to trade at $1,890-1,965/mt next week. SHFE lead, lead ingot supply is expected to increase in April, but the consumption side is facing the traditional off-season. Coupled with the Qingming Festival holiday, when downstream enterprises will be on holiday, the risk of post-holiday lead ingot inventory buildup will rise, which will weigh on the upward momentum of lead prices. In addition, delivery of the SHFE lead 2604 contract will come onto the agenda after the holiday, and attention should be paid to changes in plant warehouse lead ingot inventory into visible inventory, with caution against lead prices retreating after rapid rise. The most-traded SHFE lead contract is expected to trade at 16,500-16,900 yuan/mt next week. Spot price forecast: 16,350-16,700 yuan/mt. During the Qingming Festival holiday, many downstream enterprises plan to take time off, leading to a temporary absence of lead consumption. Together with the approaching traditional off-season, downstream enterprises will maintain purchase as needed. On the supply side, production at primary lead and secondary lead enterprises will rise steadily, while imported lead continues to flow into China, making it possible for spot discounts for lead to widen.

[SMM Stainless Steel Daily Review] SS Futures Fluctuated Upward, Spot Stainless Steel Trading Sluggish Ahead of Qingming Festival SMM News on April 3: SS futures showed an upward fluctuation trend. SHFE nickel drove SS futures to stop falling and strengthen, closing at 14,235 yuan/mt as of the midday close. Spot market, although SS futures stopped falling and rebounded, the overall gains were limited, providing no obvious boost to the spot market; coupled with the approaching Qingming Festival holiday, overall market trading sentiment was sluggish, and traders' quotes were largely stable. The most-traded SS futures contract stopped falling and strengthened. At 10:15 a.m., SS2605 was quoted at 14,150 yuan/mt, up 40 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 270-470 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi was unchanged; for cold-rolled burr-edge 304/2B coils, the average price in Wuxi was unchanged, and the average price in Foshan was largely stable; cold-rolled 316L/2B coils in Wuxi were unchanged; for hot-rolled 316L/NO.1 coils, Wuxi quotes were unchanged; cold-rolled 430/2B coils in both Wuxi and Foshan were largely stable. The stainless steel market is currently in the traditional peak consumption season of "Golden March and Silver April," and the fundamental downstream demand improved compared with the previous period. End-user procurement continued at a pace based on rigid demand, and overall trading volume was sufficient to support the market's basic vitality. However, affected by macro news disruptions and fluctuations in futures, downstream end-user clients still maintained a wait-and-see sentiment, showing no willingness to stockpile, and transactions fluctuated with changes in the news flow. Futures, the Iran geopolitical conflict is difficult to resolve in the short term, and uncertainty in macro news continues to cause disruptions...

[SMM Nickel Flash] Iran and Oman to Jointly Manage the Strait of Hormuz Iran and Oman have drafted an agreement to jointly manage shipping through the Strait of Hormuz, according to Iran's Deputy Foreign Minister Gharibabadi. He stated the requirements are not restrictions but aim to facilitate navigation, ensure safety, and provide better services. Even in peacetime, vessel traffic should be under the supervision of the two coastal states. Iran is also studying the imposition of transit fees, though specific amounts have not yet been determined.

[Worsening Supply Concerns and Gradual Demand Recovery Stabilize the Center of Aluminum Prices with Geopolitical Premiums ]Overall, the market's core focus in the period ahead is on whether key aluminum smelters in the Middle East will further expand production cuts. If the cuts continue to materialize, they will provide strong upward momentum for global aluminum prices, coupled with support from expectations of a gradual release of demand during China’s peak season. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.

[Silicon Metal Price Center Remained in the Doldrums]: This week, the silicon metal market stayed weak, with the transaction center for some silicon metal grades edging lower. As of April 2, SMM east China prices were oxygen-blown #553 silicon at 9,000-9,200 yuan/mt, down 100 yuan/mt WoW; 441# silicon at 9,300-9,400 yuan/mt, down 50 yuan/mt WoW; and 3303# silicon at 10,100-10,300 yuan/mt, down 100 yuan/mt WoW. In the futures market, the most-traded silicon metal contract remained weak, with the SI2605 contract closing at 8,300 yuan/mt on Thursday, down 435 yuan/mt WoW. Spot declines were narrower than futures prices, and the advantage in supplier shipments shifted from silicon enterprises to trading firms engaging in both spot and futures market. During the week, market prices were under pressure, while procurement volume from some downstream users and export traders increased, with transactions in some grades remaining moderate.

SMM News, Apr 2: In early trading, SHFE aluminum 2604 fluctuated upward, with its center moving higher than the previous day. Affected by elevated aluminum prices, shipping sentiment was stronger than buying sentiment, while end-user downstream purchase sentiment was weak and spot cargo circulation was relatively ample. Market transactions were mainly concentrated at discounts of 10 yuan/mt to the SMM A00 aluminum average price. Today, the east China market shipping sentiment index was 3.43, up 0.02 MoM; the purchasing sentiment index was 3.01, up 0.01 MoM. Aluminum futures prices remained elevated, but in the central China market, traders were overall more bullish than bearish. Although downstream orders were not enough to support excessive stockpiling, traders were relatively active in purchasing for hedging purposes. After the initial stage, shipments from sellers declined, while higher-bid purchasing increased, driving market quotes and transaction prices all the way up. Ultimately, actual transaction prices in the central China market ranged from a discount of 40 yuan/mt to the central China price to a premium of 10 yuan/mt over the central China price. Today, the central China market shipping sentiment index was 2.79, up 0.03 MoM; the purchasing sentiment index was 2.44, up 0.02 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 2,000 mt from the previous period today, with Guangdong as the main source of the inventory buildup. In the short term, aluminum ingot inventory continued its seasonal buildup after the Chinese New Year. Affected by bullish market sentiment, premiums are expected to maintain a narrowing trend.

SMM Nickel News, April 1: Macro and market news: (1) China and Pakistan proposed a five-point initiative on restoring peace and stability in the Gulf and Middle East region: first, immediately cease hostilities; second, launch peace talks as soon as possible; third, ensure the safety of non-military targets; fourth, ensure the security of shipping lanes; fifth, ensure that the UN Charter takes precedence. (2) Trump said the US would end the war against Iran within "two to three weeks" and may reach an agreement with Iran before then. Spot market: On April 1, the SMM price of #1 refined nickel rose by 200 yuan/mt from the previous trading day. Spot premiums, Jinchuan #1 refined nickel averaged 3,650 yuan/mt, down 100 yuan/mt from the previous trading day; China mainstream electrodeposited nickel brands were at -600-400 yuan/mt. Futures market: The most-traded SHFE nickel 2605 contract moved sideways in early trading and closed the morning session at 135,500 yuan/mt, down 0.1%. Supply side, tightening nickel ore has evolved into dual cost support from "ore + taxation," providing solid support for the bottom of nickel prices, but weak end-use demand and continued inventory accumulation still capped upside room for nickel prices. Nickel prices are expected to maintain fluctuating trend in the short term, with the core trading range of the most-traded SHFE nickel contract at 133,000-143,000 yuan/mt.

China and Pakistan proposed a five-point initiative on restoring peace and stability in the Gulf and Middle East region: First, immediately cease hostilities; second, start peace talks as soon as possible; third, ensure the safety of non-military targets; fourth, ensure the security of shipping lanes; fifth, ensure that the UN Charter takes precedence.

The global aluminum market is currently characterized by a distinct divergence between overseas and domestic markets. Overseas markets have performed strongly amid supply-side disruptions, while the domestic market has also strengthened due to similar supply disturbances but remained relatively weak compared with the LME. Details on supply, demand, trade and market structure are as follows: I. Overseas Aluminum Market: Prominent Supply Tightness and Sustained Pressure on Inventories The core contradiction in overseas aluminum markets lies in supply contraction and low inventory levels, exacerbated by geopolitical conflicts, further intensifying supply tightness. In terms of LME inventory data, current inventories remain on a continuous downward trend, greatly weakening their supportive role in the market. Historically and recently, LME cancelled warrants peaked at 178,000 tonnes earlier, accounting for 39% of total inventory. As a result, the effectively available LME inventory has dropped to its lowest level since May 2025, further highlighting tight overseas supply. Supply contraction has widened the market deficit, with production cuts at two key projects—EGA and Alba—having a particularly significant impact.On March 28, EGA’s Al Taweelah smelter in the UAE and Alba’s plant in Bahrain were attacked, causing equipment damage and sharply raising risks of capacity disruptions. This came on top of earlier disruptions: March 15: Alba reduced output at three production lines due to shipping disruptions in the Strait of Hormuz; March 12: Qatar’s Qatalum smelter suspended 40% of capacity due to natural gas supply cuts. Overseas primary aluminum supply deficits are expected to continue widening. Meanwhile, high energy costs in Europe have also reduced local semi-fabricated aluminum output, further tightening supply. Supply tightness has directly driven a sharp rise in overseas spot premiums. Amid supply concerns from escalating Middle East geopolitical conflicts, the Q2 MJP premium rose by approximately USD 156.5/t to USD 351.5/t. Specifically, major regional premiums rose markedly at end-March: CIF South Korea: from USD 168/t (early March) to USD 292/t; CIF Thailand: from USD 183/t to USD 317/t; European Duty Unpaid: from USD 345/t to USD 400/t; US Midwest DDP: from 103.75 cents/lb to 105.5 cents/lb. This fully reflects that expectations of tight primary aluminum supply have enabled sellers to push up quotations. Downstream demand and purchasing patterns vary significantly across regions: South Korea: Phase-wise restocking completed; weak downstream restocking sentiment, limited demand support. Southeast Asia: Dominated by term contract execution with limited spot restocking; insufficient incremental buying momentum. Europe: Rising supply shortage concerns amid production cuts in Qatar and Bahrain; downstream restocking underway, relatively strong demand. United States: Low inventories entering a restocking cycle, providing moderate market support. II. Domestic Aluminum Market: High Inventory Pressure, Weak and Constrained Demand In contrast to strong overseas markets, the domestic aluminum market has strengthened amid supply disruptions but underperformed relative to the LME, characterized by high inventories and constrained demand. High domestic aluminum prices have continued to suppress downstream purchasing. Current buying is mainly order-based rigid demand, with low willingness for active restocking, providing limited upward support. Domestic inventory pressure has not eased effectively: primary aluminum inventories remain elevated, and inventory destocking has progressed slower than expected, likely prolonging the digestion period.High inventories and high prices form dual constraints. Although the domestic market has upward momentum, it is weaker than overseas. Domestic spot premiums are expected to remain under pressure and further widen in the short term.

The current global aluminum market showed a clear divergence between markets outside and inside China. LME remained strong amid supply-side disruptions, while the Chinese market also strengthened under supply disruptions, though its overall performance was still relatively weaker than LME. Details on supply and demand, trade flows, and market structure are as follows: I. Overseas Aluminum Market: Tight Supply Became More Pronounced, Inventory Remained Under Pressure The core issue in the overseas aluminum market centered on supply contraction and low inventory, compounded by disruptions from geopolitical conflicts, with the tight supply pattern continuing to intensify. Based on LME inventory data, current inventory remained on a sustained downward trend, and the support provided by inventory to the market weakened significantly. Historical and recent data showed that LME cancelled warrants previously peaked at 178,000 mt, accounting for as much as 39 of total inventory. As a result, LME's actually available effective inventory fell to the lowest level since May 2025, further highlighting the tight supply situation outside China. The contraction on the supply side further amplified the deficit in markets outside China, with the impact of production cuts at the two key projects, EGA and Alba, being particularly prominent. On March 28, EGA's Al Taweelah production site in the UAE and Alba's plant in Bahrain were both attacked, and equipment damage sharply increased the risk of capacity disruptions. In addition, Alba had already started production cuts on three lines on March 15 due to shipping disruptions in the Strait of Hormuz, while Qatar's Qatalum aluminum smelter shut 40 of its capacity on March 12 due to a natural gas supply interruption. Against this backdrop, the supply gap in overseas aluminum ingot is expected to continue widening. Meanwhile, high energy costs in Europe also led to production cuts and volume reductions in local fabricated products, further exacerbating supply tightness. Tight supply directly pushed premiums in overseas spot markets sharply higher. Affected by supply concerns triggered by the escalation of geopolitical conflict in the Middle East, the Q2 MJP price rose by about $156.5/mt to $351.5/mt. Specifically, by month-end, premiums in major regions all showed a significant upward trend: CIF South Korea premiums rose from $168/mt at the beginning of the month to $292/mt; CIF Thailand premiums rose from $183/mt to $317/mt; Europe duty-unpaid premiums rose from $345/mt to $400/mt; and US Midwest DDP premiums rose from 103.75¢/lb at the beginning of the month to 105.5¢/lb, fully reflecting that current expectations of tight overseas aluminum ingot supply pushed sellers to raise offers. From the perspective of downstream demand and procurement pace across overseas regions, clear divergence was evident: South Korea: phased restocking had already been completed earlier, and downstream purchase and restocking sentiment was currently weak, with demand providing limited support to the market; Southeast Asia: the market was currently focused on digesting inventories, with only partial spot order restocking demand, and overall momentum for new purchases was insufficient; Europe: affected by production cuts in Qatar and Bahrain's aluminum industries, market concerns over a supply deficit continued to intensify, and downstream players were gradually carrying out restocking purchases, with demand showing relatively strong performance; US: inventory was currently at a low level and was entering a restocking cycle, providing some support to the market. II. China’s Aluminum Market: Under Pressure from Inventory at High Levels, with Suppressed and Weak Demand In contrast to the strength of the LME, although China’s aluminum market was likewise supported by supply disruptions and showed an upward trend, its overall performance remained relatively weaker than the LME, with the core pattern characterized by “elevated inventory and suppressed demand.” On the price front, persistently high aluminum prices in China continued to restrain downstream purchasing demand. At present, the downstream procurement pace is mainly driven by order-based just-in-time procurement, while willingness to restock proactively remains subdued, making it difficult to form stronger demand support. China has not effectively eased inventory pressure—domestic aluminum ingot remains at inventory at high levels, and the pace of inventory drawdown was slower than expectations. Inventory drawdown is expected to take even longer going forward. Inventory at high levels and high aluminum prices have formed a dual constraint, leaving the Chinese market with upward momentum, but weaker than that of the LME. In the short term, spot premiums in China are expected to remain under pressure and widen further. Source: SMM