On April 2, 2026, the White House ushered US steel trade policy into "Version 2.0." This strategic shift goes beyond simple tariff hikes. It uses full-value taxation and melt-and-pour traceability to block low-end imported raw materials, while applying structural tariff reductions to finished products to ease manufacturing inflation. Ultimately, this two-pronged approach aims to forcibly bring the global supply chain back to domestic US steel production.

The gold price set a technical signal last week while providing fresh fuel for the debate over its future direction.

The Thai Ministry of Industry recently intercepted 714 illegal waste containers at Laem Chabang Port and initiated repatriation procedures, while simultaneously shutting down over 100 non-compliant and high-pollution dismantling plants in Q1 2026. Since the global supply chain restructuring in 2025, Thailand has emerged as a critical hub with an annual copper scrap export volume of 332,000 physical tonnes. Should Thailand’s environmental oversight remain under high-pressure, the market widely expects the Asian copper scrap supply side to face increasing tightness.

Since the beginning of this year, the spot treatment charge market for copper concentrates has shown an unprecedented and severe downward trend. The SMM Copper Concentrate Spot Index has fallen from -45 USD/dmt at the start of the year to near -70 USD/dmt, with the speed and magnitude of the decline being historically rare. A negative treatment charge means that when smelters purchase copper concentrates, they not only fail to receive traditional processing income from miners but instead must pay the sellers. Based on the current TC of -70 USD/dmt, the actual cost smelters pay sellers in the copper smelting process is equivalent to a TC of 70 USD, or further converted to a TC+RC of approximately 112 USD. This extreme price signal has quickly drawn high market attention to smelter profitability and even sparked concerns about the sustainability of domestic copper smelting production. Despite treatment charges falling to historic lows, copper cathode production by Chinese smelters remains at high levels, currently around 1.2 million tons per month. This phenomenon of "producing more while losing more" appears, on the surface, to contradict market logic, but actually reflects smelters' passive choices and structural supporting factors in the current complex environment. Historically, extreme treatment charge scenarios are not unprecedented. In past industry downturns, smelters often relied on one or several factors—exchange rate fluctuations, rising sulfuric acid prices, or treatment charges themselves—to barely maintain cash flow balance. In the current cycle, the sharp rise in sulfuric acid prices has become a key variable supporting smelter survival. Currently, the ex-factory prices of smelter acid sold by domestic copper smelters generally range from 800 to 1,600 yuan per ton. The latest SMM Copper Smelting Acid Index stands at 1,235.5 yuan/ton. As a crucial byproduct of copper smelting, sulfuric acid price fluctuations significantly impact smelters' comprehensive earnings. Typically, smelters produce approximately one ton of sulfuric acid for every dry metric ton of copper concentrate processed. Based on the current sulfuric acid price of 1,235.5 yuan/ton, after deducting value-added tax (at a 13% rate) and converting to US dollars (using an exchange rate of 6.9), each ton of sulfuric acid can contribute about 158 USD in revenue for the smelter, equivalent to an additional 158 USD per dry metric ton of copper concentrate. If further converted to the TC+RC metric, this amounts to about 99 USD. Thus, the rise in sulfuric acid prices has significantly offset the loss pressure from negative copper concentrate treatment charges, with some more efficient smelters even achieving marginal profitability. It is precisely this "stabilizer" role of sulfuric acid that allows smelters to maintain high operating rates under extreme treatment charge conditions. However, the support of sulfuric acid for smelting profits is not unlimited, as its price trend is itself influenced by more complex international geopolitical factors. The recent sharp escalation of the Middle East situation has brought significant uncertainty to the global sulfuric acid and sulfur supply chain. Since the joint US-Israeli military strike against Iran on February 28, 2026, the Strait of Hormuz, the world's most critical energy transport route, has rapidly fallen into a severe transit crisis. After taking office, Iran's new Supreme Leader, Mojtaba Khamenei, immediately declared that the strait would remain closed as a strategic lever against the US-Israeli alliance and suggested that neighboring countries close US military bases. The Islamic Revolutionary Guard Corps subsequently explicitly announced a ban on any vessels associated with the US or Israel from passing through the Strait of Hormuz, warning of severe consequences for unauthorized passage. The Strait of Hormuz is a critical chokepoint for global sulfur transport. Statistics show that before the conflict, over 100 ships passed through the strait daily. However, after the conflict erupted, transit traffic plummeted by over 90%, with extreme cases of no ships passing for an entire day, leaving over 3,000 vessels stranded in nearby waters. This effective blockade has not only directly impacted the crude oil market—with Brent crude futures rising over 50% within a month to exceed 114 USD per barrel—but has also severely disrupted the global supply chain for sulfur and sulfuric acid. War risks have caused shipping insurance costs to soar to over 20% of the cargo value, further increasing logistics costs and plunging global sulfur supply into a logistical crisis. Although Iran claims to allow passage for vessels from "non-hostile" countries, requiring them to obtain prior permission, actual transit volumes remain extremely low, far below global trade demand. Simultaneously, the Houthi armed group in Yemen has announced its involvement, posing new security threats to the Red Sea-Suez route. The compounding pressure on the two major shipping chokepoints of the Strait of Hormuz and the Red Sea is posing a systemic challenge to the global supply chains for energy and chemical raw materials. As the primary raw material for sulfuric acid production, the disruption in sulfur supply directly drives international and domestic sulfuric acid prices progressively higher. Given the current situation, geopolitical conflicts show no signs of easing in the short term, implying further room for sulfuric acid price increases. The continued rise in sulfuric acid prices will have a dual impact on the domestic copper smelting industry. On the one hand, increased sulfuric acid revenue will continue to provide crucial profit supplementation for smelters, enabling them to maintain production even at lower TC levels and potentially further depressing spot copper concentrate treatment charges. On the other hand, this surge in sulfuric acid prices, driven by geopolitical conflict, also makes smelter profitability highly dependent on external unstable factors, rendering the industry's overall risk resilience increasingly fragile. Notably, the extreme treatment charge environment has begun to have a tangible impact on the global layout of copper smelting capacity. Mitsubishi Materials of Japan recently announced its plan to cease operations at its Onahama copper smelter by the end of March 2027. The smelter has a crude and refined capacity of 230,000 tons, and the main reason for the closure is precisely the intensified competition in the global copper smelting industry, leading to a sharp deterioration in copper concentrate TC/RC and persistent pressure on business prospects. This decision sends a clear signal: against the backdrop of continuously bottoming treatment charges and industry profits highly dependent on byproducts and external environments, some high-cost smelting capacity or those lacking comprehensive recovery capabilities are facing pressure to exit the market. In summary, China's copper smelting industry is currently at a highly unusual cyclical juncture. On one hand, smelters, benefiting from high sulfuric acid prices, have temporarily weathered the impact of negative treatment charges, maintaining high output. On the other hand, sulfuric acid prices themselves are heavily dependent on geopolitical situations, and external variables like the Strait of Hormuz blockade introduce significant uncertainty into the sustainability of smelting profits. If tensions in the Middle East persist, sulfuric acid prices may continue to rise, leaving room for TC to fall further, potentially enhancing smelters' tolerance for extreme treatment charges in phases. However, if geopolitical tensions ease, sulfur supply chains recover, and sulfuric acid prices retreat from their highs, smelters would face the risk of a "double blow" from both low treatment charges and reduced byproduct revenue, potentially heralding a genuine phase of capacity reduction and deep adjustment for the industry. Therefore, the current apparent "resilience" of the copper smelting industry is essentially built upon a fragile balance between geopolitical factors and the byproduct market. For market participants, besides monitoring TC trends, it is crucial to closely track changes in sulfuric acid prices and the underlying geopolitical factors to make more accurate judgments regarding the production sustainability and profitability prospects of the smelting industry.

[SMM Aluminum Flash News] Recently, the vessel "Furui," loaded with prebaked anode cargo, successfully departed from the bulk cargo terminal of the Binzhou Port Area of Bohai Bay Port, Shandong Port, marking the successful addition of a new high-value-added cargo category to Binzhou Port's bulk and breakbulk business. The launch of this new cargo category was an important achievement in the deepening strategic cooperation between Binzhou Port and Sunstone Global Supply Chain, and also a key step for the port to break through its traditional cargo source structure and optimize its business layout, which is of great significance for enhancing the port's comprehensive service capabilities and strengthening its competitiveness in the regional market.

According to CMOC’s official WeChat account: On March 27, CMOC released its 2025 annual results report, which showed that the company’s operating revenue reached 206.684 billion yuan, standing firmly above the 200 billion yuan mark for the second consecutive year; net profit attributable to shareholders came in at 20.339 billion yuan, up 50.30% YoY and setting a new record for the fifth consecutive year; net operating cash flow reached the second-highest level in its history at 20.843 billion yuan; and total assets exceeded 200 billion yuan for the first time, reaching 200.932 billion yuan, up 18.03% YoY. In particular, in Q4, the company recorded operating revenue of 61.198 billion yuan, net profit attributable to shareholders of 6.059 billion yuan, and copper production of nearly 200,000 mt, all setting record highs for a single quarter. In 2025, with organisational upgrading as its main focus, the company built a “specialised, internationalised, and younger” team, refined its operations, and, together with rising prices for major products and strong production and sales, pushed its performance to a new peak. Specifically— Operating quality continued to improve. Revenue from the mining segment reached 77.713 billion yuan, accounting for 38% of total operating revenue, with the “mining” share up about 7 percentage points from 2024. Among this, revenue from copper products was 55.096 billion yuan, accounting for 27% of total operating revenue and 71% of mining-segment revenue. Both “copper” share indicators increased by about 7 percentage points YoY. This was attributable to the continued debottlenecking of two world-class copper mines, TFM and KFM, based on their existing six production lines. During the reporting period, the company’s copper production reached 741,100 mt, setting another record high and consolidating its position among the world’s top 10 copper producers. Based on the midpoint of production guidance, the completion rate was 118%, while maintaining double-digit growth of 13.99% YoY. Sales were 730,200 mt, up 5.90% YoY. Together with higher prices, copper revenue increased 31.63% YoY. Production of other products also exceeded expectations: niobium production hit a record high of 10,348 mt, with a completion rate of 103%; phosphate fertiliser production was 1.2135 million mt, with a completion rate of 106%; cobalt production was 117,500 mt, with a completion rate of 107%; molybdenum production was 13,906 mt, with a completion rate of 103%; and tungsten production was 7,114 mt, with a completion rate of 102%. In addition, the company recorded physical trading volume of 4.71 million mt, with a completion rate of 111%; IXM’s gross margin under IFRS was 2.11%, a recent high. The results of “cost reduction and efficiency improvement” became even more evident. Full-year operating costs were 157.229 billion yuan, down 11.56% YoY. In 2025, mining areas worldwide focused on key words such as innovation, technological transformation, and process optimisation, putting the concept of “refined operations” into practice. In Q4, TFM’s overall copper beneficiation and smelting recovery rate, equipment operating rate, and raw ore throughput all exceeded the calendar schedule; KFM established an ore characteristics database and ore blending model, lifting grinding efficiency by more than 30% YoY; at CMOC Brazil’s niobium segment, the recovery rates of two beneficiation plants rose by about 2 percentage points from the previous year, setting record highs; in China, recovery rates at Shangfanggou molybdenum and Sandaozhuang molybdenum and tungsten increased by 3.24 and 2.65, and 3.17 percentage points YoY, respectively, also reaching record highs. Centered on “multiple products, multiple countries, and multiple stages,” the company built a “copper + gold” dual-pole structure in 2025, adding gold resources last year. Together with the greenfield gold mine in Ecuador and four operating gold mines in Brazil, the company will have gold production capacity of 20 mt in South America by 2029. The Ecuador gold mine is expected to start production in 2029, with land acquisition and power supply assurance advancing rapidly; the Brazil gold mines achieved output above target in the first two months, and are expected to produce 6-8 mt of gold this year. Targeting copper production of 800,000-1 million mt in 2028, the company is building Phase II of the KFM project, which is expected to add annual copper capacity of 100,000 mt after coming into operation in 2027; TFM identified resource potential in relevant deposits, and preliminary preparations for Phase III construction are accelerating. In addition, the company completed the issuance of a $1.2 billion one-year zero-coupon convertible bond, broadening financing channels to support the implementation of its strategy. Alongside earnings growth, the company consistently practiced high-standard ESG principles. During the reporting period, ESG governance was further improved and digitalisation advanced; environmental performance led globally: the carbon emission intensity of its copper products was lower than that of 70% of mining companies worldwide, while the shares of renewable energy and water recycling increased further from 2024 to 38% and 89%, respectively; total global economic contribution reached 182.42 billion yuan, and global community investment was 488 million yuan. 2026 is a critical year for the company to fully implement its new development strategy and deepen platform-based operations and refined management. The company will further build a platform-based organisation: with the global supply chain centre as the pioneer, it will enhance synergies and cost competitiveness; relying on the “622” model, supplemented by multinational mine management experience and standardised business processes, it will improve its global control system. Centered on the “copper-gold dual poles,” the company will further transform its resource advantages into capacity and production advantages, while continuing to seek high-quality targets. With the goal of becoming a “globally leading, distinctive world-class mining company,” the company will continue to forge ahead in the mining industry.

Saudi Finance Minister, Mohammed Al-Jadaan, has cautioned that recent global supply chain disruptions are now exceeding the impact seen after the COVID-19 pandemic. He noted that ongoing geopolitical tensions could have wider economic consequences if they continue for an extended period of time. He pointed out that while oil markets often draw the most attention, the pressure is becoming more visible across key industrial sectors such as refined products, fertilisers, steel, aluminium and petrochemicals.

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.

【SMM Scrap Aluminium Market Analysis】Navigating the Choke Point: How Middle Eastern Geopolitics are Rewiring Global Aluminum Scrap Flows I. Introduction: The Macroeconomic Catalyst The global secondary aluminum market is currently navigating a severe logistical gauntlet. While physical smelting and processing facilities across the Middle East are facing their own localized pressures, the maritime arteries connecting the region to the rest of the world are fundamentally compromised. With vessel traffic heavily restricted through traditional waterways like the Red Sea, carriers are executing widespread, mandatory rerouting around the Cape of Good Hope. This geographical detour has introduced hard, quantifiable friction into global trade flows. Transit times from Europe and the Middle East to major Asian main ports have stretched by an additional 12 to 14 days. Consequently, freight costs per container have also reported increases by up to 60-70%. Beyond the immediate ticket price of shipping, this delay translates to millions of dollars in working capital abruptly tied up in floating inventory, severely squeezing liquidity for global traders. To understand the future of secondary aluminum pricing and availability, the market must look at how this disruption cascades across the supply chain. The logistical fallout has created a massive supply shock that is permanently altering working capital dynamics and regional pricing. This structural shift can be traced from Western supply hubs, through the starved processing centers in Southeast Asia, and ultimately to the end-user markets in China and Other Asia, where tightened margins are reshaping the landscape of global scrap procurement. II. The Middle East: The Epicenter of the Bottleneck The Middle East serves as a critical reservoir of scrap aluminum, and current export metrics underscore the massive scale of the material caught in this logistical bottleneck. The United Arab Emirates and Saudi Arabia stand as the undisputed dominant suppliers in the region. Recent mirrored customs data shows the UAE exporting upwards of 309,000 metric tons (MT) in 2025, while Saudi Arabia commands a similar volume, exporting over 277,000 MT in 2024 and up to 260,000 MT by October 2025. Historically, a massive majority of this tonnage has been earmarked for Asian buyers, flowing seamlessly through previously unencumbered maritime routes. India and Korea respectively have been the top 2 export destinations for both the UAE and Saudi Arabia since 2020, with both Asian destinations encompassing a total of 81% for Saudi Arabia’s (2020-2024) and 74% for the UAE’s (2020-2025) total exports of scrap aluminum. Mid-tier exporters further supplement this outward flow. Nations such as Israel (exporting roughly 88,000 to 95,000 MT annually) and Kuwait (over 41,000 to 44,000 MT), alongside consistent volumes from Jordan, Bahrain, and Iran, collectively push significant supplementary tonnage into the global market. Similar to Saudi Arabia and the UAE’s situation, South Asia and South Korea remains the most affected: between the years 2020 to 2025, India, Pakistan and South Korea import 60% of the Middle Eastern mid-tier exporters’ scrap aluminum. However, getting this material onto the water, especially through the Strait of Hormuz has become increasingly complex, expensive and operationally untenable. In response to the waterway risks, localized workarounds are emerging: suppliers are increasingly bypassing traditional choke points by trucking upstream material overland to alternative, safer ports before loading it onto eastbound vessels. Meanwhile, traditional transit bridges are feeling the strain. Typical scrap flows rely on the Red Sea in the Middle East to ship scrap between Europe and Asia, and this traditional trade route is feeling the strain from the current war in the Middle East. Although the Houthis in Yemen have not enforced shipment closures through the Red Sea, the threat of them doing so in extension of Iran’s closure of the Straits of Hormuz is enough to force certain companies and insurance policies off of Middle Eastern shipment routes, and to reroute around Africa and the Cape of Good Hope. This leads to partial extensions of freight times for up to 12-14 days, and some 60% to 70% surge in per container shipment costs between Europe and Asia. The extended transit time is not just a scheduling issue; it translates to millions of dollars in working capital abruptly tied up in floating inventory. As outward flows from the Middle East and Europe slow down under these compounding pressures, the knock-on effect creates an immediate feedstock starvation for the processing hubs waiting further East. III. Asia: The Primary Impact Zone While the logistical friction originates in the West, the financial and operational shockwaves are most acutely felt in the "Other Asia" region, specifically within the Indian and South Korean markets. These nations serve as the primary off-takers for Middle Eastern scrap, and the sudden disruption to their traditional supply lines has triggered a rapid repricing of the market. India: Demand Absorbing the Freight Shock India represents the most immediate example of a market forced to reconcile surging logistics costs with robust domestic demand. As a direct result of the freight spike and logistical difficulties, CIF India prices for key imported grades from Europe like Tense and Taint/Tabor have seen approximately $50 USD per metric ton price hikes over the past week. Critically, this cost burden is not being borne by the sellers alone. Analysis of the current buyer/seller split suggests that recent increases in Indian domestic demand for scrap are providing significant upward pressure on prices. This has allowed a portion of the inflated freight costs to be absorbed by Indian buyers who are prioritizing material security over margin preservation. However, this absorption is not infinite; the $50 USD spike is beginning to significantly tighten margins for local secondary producers, raising concerns about how long this price elasticity can be maintained if transit delays persist. Korea and Japan: Strategic Stockpiling and Regional Procurement In East Asia, the response to the Middle Eastern bottleneck has been characterized by strategic stockpiling and a pivot toward Southeast Asian (SEA) supply. As both Japan and South Korea commonly purchase scrap and secondary products (like ADC12) from the Middle Eastern region, there is a sudden need to replace material sources that have been disrupted directly by the US/Israel-Iran conflict. Primary market intelligence from Southeast and East Asia has seen Japanese (and to a smaller extent, Korean and Indian) players engaging in large-scale procurement of secondary products from Southeast Asia at significant prices. SMM’s data reveals that over the first and second weeks of the Middle Eastern conflict, ADC12 CIF Japan prices have seen significant rises, reaching highs at 3350-60 USD/mt between the 11 th to 17 th of March 2026. This coincides with large amounts of stock clearance and/or signing of procurement deals that extend up till mid-April to early-May. These purchases are occurring at high price points, driven by robust Japanese demand that is effectively outbidding local processors. This "procurement blitz" is rapidly depleting regional liquidity, leaving Southeast Asian hubs starved of the very feedstock they traditionally rely on to serve their own domestic industries. Thailand local ADC12 prices have been observed to be lagging behind FOB prices by 100-200USD/mt, creating a supply starvation for local downstream needs. As of the 26 th of March, market intelligence has revealed a possible second wave of procurement from East Asian nations in Southeast Asia due to increasing worries over the extended war. Prices for ADC12 FOB Thailand and Malaysia deals have been stabilizing around the 3200-3230 USD/t mark as demand slowly creeps back up for both local and foreign demands. Thailand local and FOB ADC12 prices have just closed the gap to be roughly equal, and deals can be observed both within Thailand and exporting towards East and South Asian markets. IV. China: The Regional Exception While the rest of Asia grapples with supply starvation and skyrocketing premiums, China remains a notable outlier in the current crisis. Historically, China’s secondary aluminum sector has maintained a lower direct reliance on Middle Eastern scrap compared to its neighbors in South and East Asia, providing an initial layer of insulation. However, the primary reason for China’s relative stability is internal: a combination of sluggish domestic demand and historically high inventory levels. As of late March 2026, China’s social aluminum inventories have reached a five-year high, effectively acting as a massive buffer against global supply shocks. Furthermore, the LME-SHFE arbitrage window has remained largely unfavorable for primary imports, keeping Chinese buyers on the sidelines. On the secondary side, the lack of specificity and details regarding the reverse invoicing policy have generally led to the secondary aluminum market shifting towards a more passive stance. Downstream demand for secondary aluminum has pivoted towards immediate and small amounts of material to reduce risks associated with reverse invoicing, leading to weak demand within China. While higher global freight costs have increased the baseline cost for any incoming material, the lack of domestic "buy-side" pressure means that China has avoided the aggressive price spikes seen in India, Southeast Asia and Japan. For now, the Chinese market is a spectator to the volatility, characterized more by weak spot fundamentals and unclear policy than by the procurement panic gripping the rest of the continent. V. Strategic Outlook: The New Reality of Trade The current landscape suggests that the global aluminum scrap market is moving toward a "new normal" characterized by higher logistical floors and reduced liquidity. Increasing political and institutional instability in Iran and the wider Middle East creates ever-increasing tension and uncertainty for global trade through the Middle East. The transition from the Middle East to the Cape of Good Hope could possibly no longer be a temporary detour but a structural shift that traders must eventually consider as a safer alternative. In extension to the Middle Eastern conflict, the endurance of the "procurement blitz" in East Asia will serve as a bellwether for the long-term stability of scrap flows in Asia. If the inventory buffer in Southeast Asia remains depleted by aggressive Japanese and Korean bidding, the upward price pressure on Indian buyers will likely move from a temporary spike to a permanent baseline. Local downstream industries from Thailand and Malaysia might also find it hard in the medium-long term to cope with constantly spiking ADC12 prices and competition from East and South Asia. Ultimately, the traditional metrics of secondary aluminum pricing, such as the LME-SHFE spread or local collection rates, are being overshadowed by the premium on logistical certainty. As available aluminum scrap becomes increasingly scarce due to supply disruptions in the Middle East and increased costs for material from Europe, this creates price-side pressure for both producers and downstream industries across Asia. This leads to a zero-sum environment in which increasing costs are either burdened by buyers through increasing prices, heightened competition and larger local-export arbitrages that put pressure on local downstream industries, or burdened by producers and traders through shrinking margins and intense inter-producer competition. As the market adapts to this fragmented landscape, the value proposition of a successful trader is fundamentally shifting: it is no longer defined solely by the ability to source metal, but by the ability to guarantee its arrival through an increasingly volatile and high-risk global supply chain.

POSCO International said on Monday that it was accelerating efforts to build a stable global supply chain for heavy rare earths, a key component in EV motors, by establishing its first corporate venture capital (CVC) fund. The company said it had set up a 25 billion won (about $16 million) CVC fund in partnership with POSCO Venture Capital, marking its first such initiative. As the fund’s first deployment, the company will invest 8 billion won in a China rare earth separation and refining specialist enterprise.