[SMM Analysis] Stainless Steel Off-Season Demand Combined with Macro Turbulence: Prices and Costs Pulled Back in Tandem, Narrowing Steel Mill Profits This week, stainless steel prices and production costs pulled back in tandem, slightly narrowing steel mill profit margins. Using 304 cold-rolled coil as the calculation benchmark, the profit margin based on current raw material costs was 2.23%, while the profit margin based on inventory raw material costs was 1.31%. On the nickel-based raw material cost side, high-grade NPI prices continued to pull back this week. Dragged down by the decline in SHFE nickel prices during the week, coupled with the heightened cost advantage of stainless steel scrap, expected production schedules at stainless steel mills dropped, reinforcing a strong desire to bargain down prices. High-priced transactions encountered resistance, keeping high-grade NPI prices in the doldrums. As of this Friday, mainstream 10%-12% grade high-grade NPI rose by 0.5 yuan per nickel unit, closing at 1,144 yuan per nickel unit. In the stainless steel scrap market, prices remained largely stable this week. The pullback in high-grade NPI prices caused the raw material side to weaken, making it difficult to drive prices upward. However, a rebound in stainless steel futures and limited declines in finished product spot prices provided a counterbalancing force that supported prices. The industry has now entered the off-season for consumption, with steel mill production schedules and profits both sliding. Combined with rising uncertainty in the macro environment, bearish risks are gradually accumulating, and prices are expected to face downward pressure going forward. As of this Friday, mainstream 304 off-cuts in the Shanghai region gained 100 yuan/mt, with the latest quotation at approximately 10,450 yuan/mt. On the chrome-based raw material cost side, high-carbon ferrochrome prices edged down this week. Chrome ore port inventories remained at historically high levels, and prices gradually pulled back, weakening the cost support for high-carbon ferrochrome. Additionally, ferrochrome producers still had profit margins at present, and production declines……

[SMM Stainless Steel Daily Review] SS Futures Pullback Transmitted to Spot Market, Wait-and-See Sentiment Intensified and Stainless Steel Prices Pulled Back SMM, June 4 — SS futures trended lower and pulled back. Dragged down by declining SHFE nickel prices, SS futures pulled back in tandem, operating overall below the 15,000 yuan/mt level. As of the morning close, the most-traded SS contract was quoted at 14,745 yuan/mt. Spot market side, affected by the decline in SS futures, wait-and-see sentiment among downstream end-users of spot stainless steel heated up notably, with inquiries and transaction activity in the spot market weakening further, and trader offers adjusted downward accordingly. The most-traded SS contract fell and pulled back. At 10:15 AM, SS2607 was quoted at 14,770 yuan/mt, down 245 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area were in the range of 400-900 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi remained flat; for cold-rolled trimmed-edge 304/2B coil, the average price fell 50 yuan/mt in both Wuxi and Foshan; cold-rolled 316L/2B coil prices in Wuxi remained flat; for hot-rolled 316L/NO.1 coil, Wuxi quotes rose 50 yuan/mt; cold-rolled 430/2B coil in both Wuxi and Foshan held steady. This week, the stainless steel market saw futures edging up slightly while spot prices moved sideways and stabilized. The futures-spot linkage remained weak, and the market officially entered the traditional consumption off-season, with the tug-of-war between longs and shorts on fundamentals intensifying. Traders had weak confidence in the market outlook with strong wait-and-see sentiment, but the slight recovery in futures stabilized market activity. Combined with steel mills' agents selling at stable prices and downstream...

This week, stainless steel spot prices and production costs both strengthened, with stainless steel mill smelting profits further expanding. Taking 304 cold-rolled products as an example, calculated based on same-day raw material prices, the full cost profit margin reached 3.15% this week; if calculated based on inventory raw material costs, the profit margin was 5.41%. Nickel-based raw material costs: high-grade NPI prices rose sharply this week. Affected by geopolitical conflicts in the Middle East, sulfur supply tightened, driving SHFE nickel prices up significantly; combined with news related to Indonesian nickel ore, bullish expectations for high-grade NPI prices further strengthened. Recently, stainless steel mills have returned to profitability, increasing their acceptance of high-priced raw materials and enhancing procurement enthusiasm, pushing high-grade NPI prices up sharply within the week. As of this Friday, mainstream 10-12% grade high-grade NPI rose 38 yuan per nickel unit to 1,135 yuan/nickel unit. Stainless steel scrap market: stainless steel scrap prices further strengthened this week. SS futures surged, driven by SHFE nickel's spike triggered by geopolitical conflicts; this transmitted to the spot market, with stainless steel and alternative raw material high-grade NPI rising in tandem, boosting bullish sentiment. The rapid rise in high-grade NPI prices further highlighted the cost-effectiveness advantage of stainless steel scrap. Despite ongoing tax invoice issues, steel mills' preference for using scrap remained unchanged; combined with profit recovery and production schedules staying high, procurement demand was robust, providing strong price support. The overall pattern was "futures leading, raw materials moving in tandem, demand supporting," with tax invoice issues not significantly constraining the uptrend. Stainless steel scrap prices are expected to hold up well in the near term. As of this Friday, mainstream 304 off-cuts prices in Shanghai rose 200 yuan/mt, with the latest quote at approximately 10,600 yuan/mt. Chromium-based raw material costs: high-carbon ferrochrome prices remained generally stable this week. During the week, Tsingshan announced its May steel mill tender price for high-carbon ferrochrome, up 100 yuan/mt (50% metal content) MoM, further boosting ferrochrome market confidence; additionally, with stainless steel prices continuing to rise recently and production schedule expectations staying high, ferrochrome demand was unlikely to pull back significantly. However, ferrochrome production schedules remained at high levels, recent retail market transactions were sluggish, and market entities mostly adopted a cautious wait-and-see attitude, keeping prices relatively stable. As of this Friday, mainstream high-carbon ferrochrome prices in Inner Mongolia held steady WoW at 8,475 yuan/mt (50% metal content).

[SMM Stainless Steel Daily Review] SS Futures Fell and Pulled Back, Spot Market Under Pressure SMM News, April 2: SS futures fell and pulled back. US ADP employment data showed elevated inflation levels, while geopolitical conflicts still showed no clear signs of easing in the short term. SS futures came under pressure and declined at the open, closing at 14,110 yuan/mt by the midday close. In the spot market, affected by the continued decline in futures, confidence in the spot market was clearly hit, wait-and-see sentiment among downstream end-users intensified, and inquiry and transaction activity further weakened. Meanwhile, with increased arrivals from steel mills at month-end and accumulating stainless steel social inventory, some traders showed stronger willingness to sell and slightly lowered quotations in an attempt to stimulate transactions. The most-traded SS futures contract remained in the doldrums. At 10:15 a.m., SS2605 was quoted at 14,110 yuan/mt, down 165 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 310-510 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was unchanged; for cold-rolled trimmed 304/2B coil, the average price in Wuxi fell by 50 yuan/mt, while the average price in Foshan held steady; cold-rolled 316L/2B coil in Wuxi was unchanged; hot-rolled 316L/NO.1 coil in Wuxi was quoted flat; and cold-rolled 430/2B coil in both Wuxi and Foshan remained stable. At present, the stainless steel market has entered the traditional peak consumption season. Transactions among downstream end-users remained steady, but market sentiment turned cautious. End-user enterprises lacked willingness to stockpile, with procurement mainly driven by restocking based on immediate needs. The brisk transaction pattern typically seen in the peak season had yet to emerge, and overall demand remained stable and neutral. Futures...

[SMM Stainless Steel Daily Review] SS Futures Moved Sideways, with Cost Support Keeping Spot Stainless Steel Largely Stable SMM News on April 1: SS futures fluctuated. Stainless steel futures rose first and then fell, with a relatively small intraday change, closing at 14,180 yuan/mt by the midday close. In the spot market, SS futures fluctuated, while prices of various furnace charge materials remained relatively firm, supporting stainless steel prices. Market quotations were largely stable, with limited room to rise or fall. Although downstream end-users mainly made just-in-time procurement, current market inventory pressure was not high, and prices were still expected to remain relatively stable in the short term. The most-traded SS futures contract fluctuated. At 10:15 a.m., SS2605 was quoted at 14,275 yuan/mt, up 75 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 195-395 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 prices in both Wuxi and Foshan were stable; cold-rolled 316L/2B coils in Wuxi were unchanged; hot-rolled 316L/NO.1 coils in Wuxi were quoted flat; and cold-rolled 430/2B coils in both Wuxi and Foshan remained stable. The stainless steel market has now entered the traditional peak consumption season. Transactions from downstream end-users remained steady, but market sentiment turned cautious. End-user enterprises lacked willingness to stockpile, with procurement mainly driven by restocking based on demand, and the brisk trading pattern typically seen in the peak season had yet to emerge. Overall demand remained steady and neutral. Futures side, repeated disruptions from the Iran geopolitical conflict made it difficult for the short-term impact on SS futures to be fully eliminated; however, recently...

[SMM Stainless Steel Daily Review] Indonesian Export Taxation Failed to Halt the SS Downtrend; Spot Stainless Steel Remained Stable, with Transactions Mainly Driven by Rigid Demand SMM News, March 31: SS futures continued to decline and pull back. Although news emerged about export taxation on Indonesian nickel products, dragged down by weaker SHFE nickel today, SS futures also fell in tandem, closing at 14,145 yuan/mt by the midday close. In the spot market, despite the decline in SS futures, the spot stainless steel market remained stable overall. Most traders kept quotes unchanged, while downstream end-users mainly maintained steady procurement based on rigid demand. The most-traded SS futures contract fluctuated. At 10:15 a.m., SS2605 was quoted at 14,365 yuan/mt, down 165 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 trim-edge 304/2B coils, the average prices in both Wuxi and Foshan held steady; cold-rolled 316L/2B coils in Wuxi were unchanged; hot-rolled 316L/NO.1 coils in Wuxi were quoted flat; and cold-rolled 430/2B coils in both Wuxi and Foshan remained stable. The stainless steel market had entered the traditional peak consumption season. Transactions among downstream end-users remained stable, but market sentiment turned cautious. End-user enterprises lacked willingness to stockpile, and procurement was mainly driven by restocking as needed. The brisk trading pattern typically seen in the peak season had not emerged, and overall demand remained stable and neutral. Futures side, repeated disruptions from the Iran geopolitical conflict made its short-term impact on SS futures difficult to fully eliminate; however, recently, due to the conflict...

[SMM Stainless Steel Daily Review] Macro Uncertainty Coupled With Just-in-Time Demand Support Kept Stainless Steel Spot and Futures Fluctuating SMM News, March 30: SS futures maintained a fluctuating trend. As macro news continued to cause disruptions, the market struggled to find a clear direction, making it difficult to change the fluctuating pattern in futures. As of the midday close, prices stood at 14,360 yuan/mt. In the spot market, spot stainless steel transactions were mostly driven by just-in-time demand, with limited fluctuations in market quotations, and traders generally adopted a strategy of holding prices steady for shipments. Although current stainless steel prices still had some cost support, heavy macro uncertainty fostered strong wait-and-see sentiment in the market; to avoid price fluctuations, downstream players mostly made just-in-time procurement. Despite solid underlying just-in-time demand during the peak season, fundamental factors such as supply and demand and costs were still unlikely to dominate stainless steel price trends in the short term. The most-traded SS futures contract maintained a fluctuating trend. At 10:15 a.m., SS2605 was quoted at 14,365 yuan/mt, up 10 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 105-305 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was unchanged; for cold-rolled trim-edge 304/2B coil, the average price in Wuxi fell by 50 yuan/mt, while the average price in Foshan held steady; cold-rolled 316L/2B coil in Wuxi was unchanged; for hot-rolled 316L/NO.1 coil, Wuxi quotations were unchanged; cold-rolled 430/2B coil in both Wuxi and Foshan held steady. The stainless steel market has now entered the traditional peak consumption season. Downstream end-user transactions remained stable, but market sentiment turned cautious, with end-user enterprises showing little willingness to stockpile, and purchases were mostly made through restocking as needed...

[SMM Stainless Steel Daily Review] Geopolitical Disruptions Coupled With Cost Support Kept Spot Stainless Steel Stable SMM News on March 27: SS futures stopped falling and rebounded. Uncertainty remained high around news related to geopolitical conflicts, and futures were still likely to maintain a fluctuating trend. As of the midday close, the quote stood at 14,395 yuan/mt. In the spot market, affected by fluctuations in SS futures, downstream transaction demand for rigid needs had been largely released at the beginning of the week. At present, the arbitrage window in futures had closed, and spot stainless steel transactions pulled back accordingly. Stainless steel mills were currently operating at losses, and with cost support, mills still showed a strong willingness to hold prices firm, while spot prices mostly remained stable. The most-traded SS futures contract stopped falling and rebounded. At 10:15 a.m., SS2605 was quoted at 14,355 yuan/mt, down 85 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 165-365 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was unchanged; for cold-rolled trim-edge 304/2B coil, the average price in Wuxi fell by 50 yuan/mt, and the average price in Foshan also fell by 50 yuan/mt; cold-rolled 316L/2B coil in Wuxi was unchanged; for hot-rolled 316L/NO.1 coil, the Wuxi quote was unchanged; cold-rolled 430/2B coil in both Wuxi and Foshan remained stable. The stainless steel market had now entered the traditional peak consumption season. Downstream end-user transactions remained steady, but market sentiment turned cautious. End-users lacked willingness to stockpile, and procurement was still mainly driven by restocking based on immediate needs. The brisk trading pattern typical of the peak season had not emerged, and overall demand remained stable and neutral. Futures...

Recent volatility in the Indonesian commodities sector has been driven by mixed signals regarding new fiscal policies. Market participants are currently evaluating the implications of two distinct regulatory mechanisms: a broader windfall tax on bulk commodities like coal, nickel, and a targeted export duty. The conflation of these two policies has generated significant market uncertainty, culminating in a sharp spike in global nickel prices this week. To understand the current market anxiety, which culminated in a sharp spike in global nickel prices this week, it is essential to unpack the timeline of these policy discussions, differentiate the fiscal mechanisms at play, and assess the likelihood of their implementation. Background: From Broad Windfall Deliberations to Targeted Export Tariffs The narrative surrounding new commodity taxes in Indonesia did not emerge overnight; rather, it has evolved through distinct phases of policy signaling. The current policy discourse has evolved in phases. Initial discussions, highlighted by statements from Coordinating Minister for Economic Affairs Airlangga Hartarto on Mar 13, 2026, focused on the potential implementation of a windfall tax. This broader fiscal measure was aimed at capturing excess margins from exporters of coal, palm oil, and base metals, such as nickel, gold, and copper during periods of elevated global prices, functioning primarily as a macroeconomic revenue-generation tool. However, the conversation shifted dramatically on March 25, 2026. According to Bloomberg, news broke that Indonesia’s President had officially approved an export tax specifically targeting coal and nickel. This headline acted as an immediate catalyst, sending LME and SHFE nickel prices spiking. The confusion currently gripping the market stems from the conflation of these two distinct policy trajectories: the older, revenue-focused windfall tax concept championed by economic ministers, and the newly approved, strategically focused nickel export tax aimed at forcing further downstream industrialization. Analysis & Understanding: The Precedent of the "Windfall Tax" To accurately gauge the impact of these rumors, it is critical to understand that the concept of a "windfall tax" is not entirely unprecedented in Indonesia's regulatory framework, particularly for bulk commodities. There has actually been a windfall tax structure in place previously, though often masked under the nomenclature of progressive royalties and non-tax state revenues (PNBP). For the coal sector, the government already utilizes a tiered royalty system pegged to the Harga Batubara Acuan (HBA) benchmark. As coal prices escalate into higher brackets, the royalty percentage automatically increases, effectively acting as a windfall capture mechanism. Similarly before, the nickel sector utilizes the Domestic Benchmark Price (HPM) and associated royalty structures to adjust to global price rallies. It is crucial to note that the government has previously experimented with specific windfall profit provisions for downstream products, though the regulatory stance has recently hardened. For instance, under Government Regulation (GR) No. 26/2022, a unique windfall profit incentive was applied to nickel matte: when prices exceeded $21,000 per ton, the royalty rate was actually reduced from the standard 2% to 1%. (Old Version) However, this accommodating policy was explicitly abolished under the recent GR No. 19/2025. The removal of this incentive underscores a definitive shift toward more aggressive state revenue capture. Consequently, the recent "windfall tax" rumors primarily concern further tightening these existing brackets or introducing a supplementary surcharge on operating margins above a specific baseline. (New Version) Conversely, the newly approved nickel export tax serves a different primary function. Therefore, it is completely different than the concept of windfall tax. Rather than merely earning from peak profits, an export duty on semi-processed nickel (like NPI, MHP, FeNi, and Nickel Matte) is a structural tool designed to penalize the export of lower-value products. It is the natural continuation of Indonesia’s downstreaming ( hilirisasi ) agenda, intended to force producers to build stainless steel and EV battery precursor plants domestically in Indonesia, rather than shipping intermediate goods to other countries. While a windfall tax fluctuates with market prices, an export tax acts as a permanent structural cost added to the global supply chain. Conclusion: Imminent Implementation Amidst Ongoing Deliberations Despite definitive headlines regarding executive approval and the targeted April 1, 2026 implementation date, the exact implementation details are currently under review by the relevant ministries. Currently, specific details, including exactly how the proposed 5%, 8%, and 11% tiers might translate from coal to specific nickel material classifications (e.g., NPI, MHP, and high-grade matte), must be urgently finalized ahead of the April deadline. The Ministry of Energy and Mineral Resources (ESDM), the Ministry of Finance, and the Coordinating Ministry for Maritime and Investment Affairs are working to balance state revenue optimization with the need to maintain the global cost-competitiveness of domestic smelters. This deliberative phase should not be interpreted as a policy reversal. According to SMM's understanding and industry checks, the implementation of these fiscal measures is highly probable. While the exact rollout of tariffs may be structured to mitigate immediate operational shocks to the domestic smelting sector, the fundamental policy direction indicates that the era of tariff-free exports for intermediate nickel products might decisively coming to an end.

This week, stainless steel spot prices and production costs pulled back in tandem, though the inversion between steel mill costs and prices worsened slightly. Taking 304 cold-rolled products as an example, based on same-day raw material prices, the full cost profit margin was -1.36% this week; calculated on raw material inventory costs, it reached 1.22%. Nickel-series raw material costs, high-grade NPI prices stopped rising and turned downward this week. Stainless steel mills remained mired in the dilemma of inverted costs and prices, showing low willingness to accept high-priced high-grade NPI and a clear tendency to push for lower prices; coupled with lower SHFE nickel prices, traders offered discounts to drive shipments, pushing high-grade NPI prices lower. However, nickel ore prices remained firm, stainless steel production schedules stayed high, and although SHFE nickel weakened temporarily, it has recently rebounded, and is expected to see no deep decline going forward. As of this Friday, high-grade NPI with a grade of 10-12% fell by 10.5 yuan per nickel unit to 1,084 yuan/nickel unit. Stainless steel scrap market, prices fell this week, jointly driven by bearish macro sentiment, weak futures performance, and pressure on both supply and demand. Geopolitical conflicts and hawkish remarks from the US Fed weighed on futures, dragging finished steel prices lower; weaker prices for substitute raw materials such as ferronickel and ferrochrome eroded support for stainless steel scrap; in addition, elevated yard inventory and tight tax invoice supply slowed the procurement pace of steel mills. Although stainless steel scrap still retained its economic advantage, this was insufficient to reverse the broader downtrend. In the short term, the market showed a pattern of “futures drag, weaker raw materials, and supply and demand under pressure,” and prices are expected to remain in the doldrums. As of this Friday, 304 off-cuts in Shanghai fell by 200 yuan/mt, with the latest quotation at about 10,050 yuan/mt. Chrome-series raw material costs, high-carbon ferrochrome prices remained stable this week. Although chrome ore futures prices in the overseas market were steady, major stainless steel mills announced their April steel mill tender price for high-carbon ferrochrome during the week, up 150 yuan/mt (50% metal content) MoM. This increase was below market expectations and current retail quotations, and under pressure from the steel mill tender price, high-carbon ferrochrome was unlikely to rise in the short term. As of this Friday, high-carbon ferrochrome prices in Inner Mongolia were unchanged from last week at 8,650 yuan/mt (50% metal content).