According to customs data, China imported 6,835 tonnes of lithium hydroxide in March 2026, up 66% month-on-month and double year-on-year. Of this, 2,927 tonnes came from Indonesia, accounting for about 48% of total imports, while approximately another 40% came from Australia and South Korea. During the same period, China exported 3,143 tonnes of lithium hydroxide, up 20% month-on-month but down 26% year-on-year. In terms of exports, 2,059 tonnes went to South Korea and 278 tonnes to Japan. Since 2025, the combined effect of diverging domestic and overseas demand and continued overseas supply of lithium salts has caused excess lithium hydroxide to flow one‑directionally into the Chinese market. From the fourth quarter of 2025, domestic imports of lithium hydroxide remained at persistently high levels, while exports continued to weaken. Entering the first quarter of 2026, total imports exceeded 16,000 tonnes, while total exports were less than 8,000 tonnes, resulting in net imports of more than 8,000 tonnes — a complete reversal of the trade pattern characterised by "shrinking exports and surging imports". In terms of major import sources, Japan, South Korea, Australia and Indonesia accounted for a significant share. The key reason is that both domestic demand and prices are more favourable than overseas markets: In the third quarter of 2025, driven by expectations of subsidy policy reduction in 2026 and bullish sentiment on raw material prices, demand for ternary cathode materials remained strong in the fourth quarter. While overseas lithium hydroxide production lines maintained relatively stable output, downstream demand fell short of expectations, leading to rising inventory pressure among overseas holders – who had a strong incentive to destock towards the end of the year. Price increases for lithium hydroxide overseas lagged behind those in China, creating a profitable import arbitrage window. Coupled with the anticipated launch of lithium hydroxide futures in 2026, the number of trading participants involved in lithium hydroxide imports increased significantly. Given the long negotiation cycles and relatively stable supply channels with overseas suppliers, lithium hydroxide from Japan, South Korea and Australia has continued to flow into China. However, it is worth noting that although the continuous increase in import volumes has made lithium hydroxide more readily available for trading in China from Q4 2025 to Q1 2026, the quality of the lithium hydroxide flowing into the country is uneven due to the relatively customized production requirements of ternary cathode materials. As a result, there is a certain lag before it actually reaches material manufacturers. Looking ahead, as long‑term orders are steadily delivered, import volumes are expected to remain relatively high, while the potential for export growth is likely to remain limited.

According to the World Bank’s April 2026 Commodity Markets Outlook, global refined nickel production is expected to increase modestly in 2026 and 2027 as new processing capacity comes online in Indonesia. However, the report warned that tighter upstream ore availability is likely to constrain capacity utilization. This suggests future growth in Indonesia’s nickel supply may depend increasingly on ore availability rather than nominal processing capacity alone.

According to the World Bank’s April 2026 Commodity Markets Outlook, nickel prices are projected to rise 12% year on year in 2026 and a further 3% in 2027, as global consumption growth is expected to outpace supply expansion. The report said that although new nickel processing capacity will continue to come online in Indonesia, tighter upstream ore availability is likely to constrain utilization rates and keep the market tight. It also noted that further disruptions to sulfur exports from Middle East producers could become an additional upside risk for nickel prices.

According to customs data, China's aluminum foil (tariff codes 76071110, 76071120, 76071190, 76071900, 76072000) total exports in March 2026 reached 103,500 mt, up 10% MoM but down 13% YoY. The share of exports to the UAE plunged from 6.8% in January-February to 2.5% in March, with the Middle East trade chain nearly severed.

[SMM Nickel Brief] The average price of SMM 10-12% high-grade NPI rose 26.9 yuan/nickel unit WoW to 1,120 yuan/nickel unit (ex-factory, tax included), while the average Indonesian NPI FOB index price rose 3.14 $/nickel unit WoW to 143.2 $/nickel unit. The high-grade NPI market first declined and then rebounded this week. Sentiment was weak at the beginning of the week, but as Indonesian policies tightened and nickel prices rose, bullish expectations strengthened and the price center gradually shifted upward.

Nickel prices continued to rise sharply this week, with the market narrative shifting from last week's "fluctuating at highs after policy materialization" to "full fermentation of substantive supply-side shocks." Indonesia's Weda Bay nickel mine announced a May production halt for maintenance due to exhausted RKAB quotas, Huayou Cobalt's subsidiary Huafei Nickel & Cobalt announced partial production line shutdowns from May 1 due to sulfur shortages, and the continued blockade of the Strait of Hormuz in the Middle East deepened the sulfur supply crisis. The three supply-side shocks combined to push nickel price centers sharply higher. The most-traded SHFE nickel contract broke through the 150,000 yuan/mt mark this week, while LME nickel briefly surpassed $19,500/mt intraday. Spot market, SMM #1 refined nickel averaged 150,000 yuan/mt this week, up 5,000 yuan/mt WoW. Spot premiums remained low as futures surged rapidly, with Jinchuan nickel premiums declining to 1,300 yuan/mt. Domestic mainstream electrodeposited nickel maintained significant discounts, further highlighting the structural feature of "strong futures, weak spot" in supply-demand fundamentals. On the macro front, US-Iran negotiations reached a complete impasse this week, with expectations of prolonged geopolitical risks rising. The two sides diverged sharply on the Strait of Hormuz issue: Trump claimed Iran was "on the verge of collapse and requesting the strait be opened," demanding Iran hand over all enriched uranium; Iran emphasized its "absolute control" over the strait and demanded transit fees from passing vessels. Fed Chairman nominee Warsh explicitly refused to commit to interest rate cuts at last week's hearing, and the market continued to digest this stance this week — CME Fed Watch showed a 99% probability of rates remaining unchanged in April and only about 3% probability of a cumulative 25bp cut by June, with monetary easing expectations virtually disappearing. Inventory, Shanghai Bonded Zone inventory was approximately 1,700 mt this week, flat WoW. China's social inventory was approximately 101,000 mt, with an inventory buildup of approximately 3,200 mt WoW. Looking ahead, although persistently high domestic inventory continued to pressure prices, Indonesia's Q2 triple shock of "ore tightening + sulfur supply disruption + MHP production cuts" is accelerating from expectations toward reality. After the Labour Day holiday, the most-traded SHFE nickel contract is expected to trade in the range of 145,000-155,000 yuan/mt.

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 Daily Comment: Supply and Demand Resonate on Both Sides, NPI Prices Continue to Rise] On April 30, SMM high-grade NPI upstream sentiment factor was 3.58, up 0.04 MoM, and the high-grade NPI downstream sentiment factor was 2.6, flat MoM.

Cost Support Strengthened, Nickel Sulphate Prices Rose As of this Thursday, SMM battery-grade nickel sulphate average prices rose WoW. Demand side, with Labour Day holiday approaching, some producers recently stockpiled ahead of the holiday. Combined with recovering production schedule expectations for May at some enterprises, acceptance of nickel salt prices increased. Supply side, as nickel prices, MHP payables, and auxiliary material prices all moved up this week, driving a significant rise in spot costs for some producers, nickel salt quoted prices rose accordingly. Looking ahead, recently Inventory, upstream nickel salt smelter inventory index slightly rose from 5.5 days to 5.6 days this week, downstream precursor plant inventory index stayed at 11 days, and integrated enterprise inventory index declined from 7.3 days to 6.8 days. Buy-sell strength, upstream nickel salt smelter Willingness to Sell Sentiment Factor rose from 1.9 to 2 this week, downstream precursor plant procurement sentiment factor stayed at 2.9, and integrated enterprise sentiment factor stayed at 2.6. (Historical data available via database query) Nickel Prices Rose Sharply, Nickel Sulphate Costs Increased Cost side, MHP raw material market circulation was tight. Affected by sulphur shortages and HPM revisions, MHP transaction coefficients stayed high this week, with quoted coefficients further rising. Nickel prices, stimulated by news of intermediate product production halts in Indonesia, rose further this week. Overall for the week, nickel prices basically rose WoW, MHP payables held steady, driving nickel salt production spot costs up WoW.

According to SMM statistics, total aluminum production outside China declined 10.2% YoY in April 2026, with daily average production down 10.0% MoM, mainly due to the further impact of production cuts at Middle Eastern smelters. In May 2026, production resumptions at US and Icelandic smelters and production ramp-up at new Indonesian projects are expected to drive a MoM increase in daily average production. However, as the total volume is expected to fall short of the scale of Middle Eastern production cuts, aluminum production outside China is expected to maintain negative YoY growth.