[How Should Zinc Consumption Be Viewed Against the Backdrop of Geopolitical Conflicts?] Q1 2026 had passed, and the overall recovery in post-holiday consumption was somewhat delayed. How would consumption perform going forward?

Policy & Trends: India has exempted three types of stainless steel flat products from BIS certification until Sep 2026, easing import barriers. Japan’s Metal One fully acquired Thailand’s PSCTH to boost high-end exports. In Taiwan, China, traders tentatively raised 304 prices by NT$2,000/ton following mill hikes, though holiday trading remains quiet. Market Drivers: 304 spot prices hold at 14,350–14,400 RMB/ton, with Indonesia FOB at $2,082.5/ton. While Middle East tensions keep logistics and fuel surcharges high, providing a strong price floor, weak downstream demand is keeping the market in a narrow range-bound pattern for now.

[SMM Magnesium Weekly Review: Tight Supply and Recovering Demand Drove Magnesium Prices Steadily Higher This Week, Breaking 17,500] This week, China's magnesium industry chain as a whole held up well. On the raw material side, the dolomite market remained stable. Part of the suspended output in core production areas was supplemented by supply from surrounding regions, while stable operating rates at downstream primary magnesium smelting plants supported demand and the supply-demand balance. Affected by rising crude oil prices, subsequent delivered prices may rise slightly. The magnesium ingot market stayed firm, and both production and sales in major producing areas were strong. Geopolitical disruptions pushed up energy expectations, prompting producers to hold back sales and tightening supply. Rigid downstream demand, export order lock-ins, and a boost from industry conferences jointly drove magnesium prices higher. Offshore quotations were adjusted in line with ex-factory prices, and although bidding-based shipment prices were low at the beginning of the week, they rebounded later, while new orders declined. Magnesium powder remained firm, supported by higher magnesium ingot prices, while increased operating rates at magnesium plants ensured supply and both domestic and overseas demand recovered. The magnesium alloy market also stayed strong, with stable operating rates at top-tier enterprises, new capacity coming on stream, and downstream end-use demand being released, supported by ample orders and a supply-demand balance.

[SMM Steel] Vietnam's domestic coated steel and pipe market is entering a sharp upward price cycle in early April 2026. Major players including Vnsteel Thang Long and Nam Kim Steel have announced significant price hikes ranging from 300,000 to 600,000 VND/mt. This trend is primarily driven by Hoa Phat increasing its Hot Rolled Coil (HRC) prices by 900,000 VND/mt, alongside rising logistics and operational costs. The Ministry of Construction has since intervened, requesting local authorities to monitor prices and prevent speculation to stabilize the construction sector.

Global scrap metal prices experienced a predominantly upward trend in mid-March 2026, with the most significant increases recorded in Turkey and the United States. In Turkey, HMS 1&2 80:20 scrap prices rose by 3.9% between late February and late March, reaching $388.3 per tonne, the highest level since mid-2024. The price surge is primarily driven by a domestic supply shortage and rising freight rates linked to Middle East instability, forcing electric arc furnace operators to absorb higher costs as high-grade alternatives like Asian billets become increasingly scarce.

In Q1 2026, China’s aluminum semis exports showed a pronounced pattern of product-category divergence amid the interplay of three factors: the long-term impact of the cancellation of export tax rebates in December 2024, the divergence in demand structures outside China, and the sudden outbreak of geopolitical conflict in the Strait of Hormuz.....

[SMM Steel] On March 31, 2026, the German government approved its Climate Protection Program 2026, allocating €2.9 billion to accelerate industrial electrification and carbon neutrality by 2045. While the German Steel Industry Association (WV Stahl) welcomed the plan’s focus on low-carbon lead markets, it warned of a lack of concrete support for rail infrastructure, which is vital for green logistics. The association also urged the inclusion of "Made in Europe" criteria to protect local industrial competitiveness and ensure public subsidies benefit domestic manufacturing.

On March 31, 2026, the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing released China’s PMI. In response, Huo Lihui, Chief Statistician of the Service Industry Survey Center of the National Bureau of Statistics, provided an interpretation. In March, the manufacturing PMI, the non-manufacturing business activity index, and the composite PMI output index all returned to expansion territory, registering 50.4%, 50.1%, and 50.5%, respectively, up 1.4, 0.6, and 1 percentage points MoM, indicating a rebound in the level of economic prosperity in China. China PMI Performance in March 2026 I. Performance of China’s Manufacturing PMI In March, the manufacturing PMI stood at 50.4%, up 1.4 percentage points MoM and above the threshold, indicating a rebound in the prosperity level of the manufacturing sector. By enterprise size, the PMI of large enterprises was 51.6%, up 0.1 percentage points MoM and above the threshold; the PMI of medium-sized and small enterprises was 49.0% and 49.3%, respectively, up 1.5 and 4.5 percentage points MoM, but still below the threshold. By sub-index, among the five sub-indices comprising the manufacturing PMI, the production index and the new orders index were both above the threshold, while the raw material inventory index, the employment index, and the supplier delivery time index were all below the threshold. The production index was 51.4%, up 1.8 percentage points MoM, indicating faster manufacturing production activity. The new orders index was 51.6%, up 3.0 percentage points MoM, indicating a marked improvement in the prosperity level of market demand in the manufacturing sector. The raw material inventory index was 47.7%, up 0.2 percentage points MoM, indicating that the decline in inventories of major raw materials in the manufacturing sector narrowed somewhat. The employment index was 48.6%, up 0.6 percentage points MoM, indicating a rebound in the employment climate of manufacturing enterprises. The supplier delivery time index was 49.5%, up 0.4 percentage points MoM and below the threshold, indicating that delivery times of raw material suppliers in the manufacturing sector lengthened compared with the previous month. II. Performance of China’s Non-Manufacturing PMI In March, the non-manufacturing business activity index was 50.1%, up 0.6 percentage points MoM and above the threshold, indicating some improvement in the prosperity level of the non-manufacturing sector. By industry, the business activity index of the construction sector was 49.3%, up 1.1 percentage points MoM; the business activity index of the services sector was 50.2%, up 0.5 percentage points MoM. From the perspective of the services sector, the business activity index for industries such as railway transportation, telecommunications, radio, television and satellite transmission services, monetary and financial services, and insurance all remained in the relatively high expansion territory above 55.0%; the business activity index for industries such as retail, accommodation, catering, and real estate all stayed below the critical point. The new orders index was 45.0%, down 0.2 percentage points from the previous month, indicating that market demand in the non-manufacturing sector pulled back somewhat. By industry, the new orders index for construction was 43.5%, up 1.3 percentage points from the previous month; the new orders index for services was 45.3%, down 0.4 percentage points from the previous month. The input price index was 52.3%, up 1.4 percentage points from the previous month, indicating that the overall price level of inputs used in the operating activities of non-manufacturing enterprises continued to rise. By industry, the input price index for construction was 52.7%, up 3.6 percentage points from the previous month; the input price index for services was 52.2%, up 1.0 percentage points from the previous month. The selling price index was 49.9%, up 1.1 percentage points from the previous month, but still below the critical point, indicating that the decline in the overall selling price level in the non-manufacturing sector narrowed. By industry, the selling price index for construction was 49.3%, up 1.7 percentage points from the previous month; the selling price index for services was 50.0%, up 1.0 percentage points from the previous month. The employment index was 45.2%, down 0.8 percentage points from the previous month, indicating that employment conditions among non-manufacturing enterprises pulled back. By industry, the employment index for construction was 39.1%, down 3.4 percentage points from the previous month; the employment index for services was 46.2%, down 0.4 percentage points from the previous month. The business activity expectations index was 54.2%, down 0.8 percentage points from the previous month, but still above the critical point, indicating that non-manufacturing enterprises remained optimistic about market development. By industry, the business activity expectations index for construction was 50.5%, down 0.4 percentage points from the previous month; the business activity expectations index for services was 54.8%, down 1.0 percentage points from the previous month. III. Performance of China’s Composite PMI Output Index In March, the composite PMI output index was 50.5%, up 1.0 percentage points from the previous month and above the critical point, indicating that the overall business activity level of production and operations among enterprises in China improved. China’s PMI Returned to Expansion Territory in March — Huo Lihui, Chief Statistician of the Service Industry Survey Center of the National Bureau of Statistics, Interprets China’s PMI for March 2026 On March 31, 2026, the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing released China’s PMI. In this regard, Huo Lihui, Chief Statistician of the Service Survey Center of the National Bureau of Statistics, provided an interpretation. In March, the manufacturing PMI, the non-manufacturing business activity index, and the composite PMI output index all returned to expansion territory, coming in at 50.4%, 50.1%, and 50.5%, respectively, up 1.4, 0.6, and 1.0 percentage points from the previous month, indicating a rebound in the overall economic prosperity level in China. I. The Manufacturing PMI Rose to Expansion Territory In March, as enterprises accelerated the resumption of work and production after the Chinese New Year and market activity increased, the manufacturing PMI came in at 50.4%, returning to expansion territory. (I) Production and demand expanded simultaneously. The production index and the new orders index stood at 51.4% and 51.6%, respectively, up 1.8 and 3.0 percentage points from the previous month, and both rose into expansion territory. Manufacturing enterprises stepped up production activities, and market demand improved markedly. By industry, the production index and new orders index for such industries as agricultural and sideline food processing, non-ferrous metal smelting and rolling processing were both above 55.0%, and production and demand in related enterprises were released relatively quickly; the two indices for such industries as textile and apparel, chemical fibers, and rubber and plastic products remained below the critical point, with relatively weak market activity. Driven by the recovery in production and demand, enterprises’ purchase willingness strengthened, and the purchasing volume index was 50.9%, up 2.7 percentage points from the previous month. (II) The PMI of large, medium-sized, and small enterprises all rebounded. The PMI of large enterprises was 51.6%, up 0.1 percentage points from the previous month, with the prosperity level rising steadily; the PMI of medium-sized and small enterprises was 49.0% and 49.3%, respectively, up 1.5 and 4.5 percentage points from the previous month, with the prosperity level improving significantly. (III) The three key industries expanded relatively quickly. The PMI of high-tech manufacturing was 52.1%, up 0.6 percentage points from the previous month, and remained above the critical point for 14 consecutive months, indicating continued positive development momentum in the industry; the PMI of equipment manufacturing and the consumer goods industry was 51.5% and 50.8%, respectively, up 1.7 and 2.0 percentage points from the previous month, and both rose to expansion territory; the PMI of high energy-consuming industries was 48.9%, up 1.1 percentage points from the previous month, with the prosperity level showing some rebound. (IV) Price indices rebounded significantly. Affected by factors such as the continued rise in prices of some bulk commodities in the recent period and the acceleration of enterprise procurement activities, the purchase price index of major raw materials and the ex-factory price index stood at 63.9% and 55.4%, respectively, up 9.1 and 4.8 percentage points from the previous month, and the overall price level in the manufacturing market rebounded markedly. By industry, the two price indices for such industries as petroleum, coal and other fuel processing, and chemical raw materials and chemical products were both above 70.0%, and the overall level of purchase and sales prices in related industries rose significantly. (5) Market expectations remained stable with a slight increase. The index of expectations for production and business activities was 53.4%, up 0.2 percentage points MoM, indicating that manufacturing enterprises became somewhat more confident about near-term market developments. By industry, the index of expectations for production and business activities in sectors such as special-purpose equipment, automobiles, railway, shipbuilding, aerospace equipment, and other industries remained in a relatively high expansion range above 56.0%, and the related enterprises were more optimistic about future industry development. The survey results also showed that, affected by factors such as the current geopolitical conflicts in the Middle East, prices of related raw materials such as petroleum and chemicals rose sharply. Coupled with higher logistics freight rates, the proportion of enterprises reporting high raw material costs and high logistics costs both increased MoM this month. II. The Non-Manufacturing Business Activity Index Rebounded In March, the non-manufacturing business activity index was 50.1%, up 0.6 percentage points MoM, indicating an improvement in the prosperity level of the non-manufacturing sector. (1) The service sector business activity index rose above the threshold. The service sector business activity index was 50.2%, up 0.5 percentage points MoM. By industry, the business activity indexes for railway transportation, telecommunications, broadcasting, television and satellite transmission services, monetary and financial services, and insurance all remained in a relatively high expansion range above 55.0%, with total business volume growing relatively fast; after Chinese New Year, the business activity indexes for retail, accommodation, catering, and other industries related to residents' travel and consumption fell below the threshold, and market activity weakened somewhat. In terms of market expectations, the service sector business activity expectations index was 54.8%, continuing to remain at a relatively high level, indicating that service sector enterprises remained optimistic about near-term market developments. (2) The construction sector business activity index improved. As construction projects across various regions gradually resumed work after the holiday, the construction sector business activity index was 49.3%, up 1.1 percentage points MoM. In terms of market expectations, the construction sector business activity expectations index was 50.5%, above the threshold, indicating that construction enterprises remained confident about future industry development. III. The Composite PMI Output Index Rose Above the Threshold In March, the composite PMI output index was 50.5%, up 1.0 percentage points MoM, indicating that the overall level of production and business activity across China's enterprises continued to improve. The manufacturing production index and the non-manufacturing business activity index, which together constitute the composite PMI output index, were 51.4% and 50.1%, respectively.

In March, China’s composite PMI for aluminum processing registered 65.6%, rebounding strongly above the 50 mark.

[SMM Analysis] Steel Export Review: Geopolitical Conflicts Trigger the Reshaping of the Export Landscape In terms of steel billet exports , the main target market in the first two months remained Indonesia. Part of the cargoes was imported by Chinese-funded or joint-venture rolling mills in Indonesia for further processing and use, thereby avoiding Southeast Asia’s import tariffs on finished steel products, while another part was supplied directly to local projects under construction. Meanwhile, Southeast Asia, Africa, and South America formed a solid base of exports. In particular, on the African side, Djibouti, as a core transshipment hub, had been handling a large volume of circulating resources. Turkey, meanwhile, saw a wave of concentrated external purchases due to delays in steel scrap vessel schedules and spot-futures price spread arbitrage. In terms of bar exports , the share to Hong Kong, China declined somewhat from the end of last year, while exports to Singapore overtook it. The main reason was that procurement in Singapore was rigidly driven by local public housing renewal and public infrastructure projects, such as the Greater Southern Waterfront, according to construction periods, with actual end-user consumption remaining relatively stable; whereas Hong Kong, China, as a capital and logistics transshipment hub, saw some earlier speculative re-export orders constrained by offshore exchange-rate fluctuations at the beginning of the year and funding borrowing costs. Traders proactively reduced some speculative exposure for financial risk hedging purposes, which led to a decline in transshipment procurement volume. Looking ahead to March , with the full blockade of the Strait of Hormuz, Iran’s semi-finished products export channels were effectively cut off. Chinese steel billet is expected to absorb these additional export orders arising from geopolitical conflict, and traders and steel mills will also accelerate shipments to markets outside China such as Southeast Asia to gain a larger replacement share. Therefore, total steel billet exports still have room to rise. By contrast, Chinese bar exports mainly rely on short-haul regional shipping routes into the inland areas within Asia, and were subject to extremely limited direct impact from the disruption of long-haul Middle East logistics. Therefore, March shipments are expected to remain stable, supported by rigid-demand restocking within the region. Source: SMM, General Administration of Customs Unlike the strong performance of billets, sheets & plates exports in the first two months were unsatisfactory. The cumulative exports of both cold galvanized and hot-rolled products in January and February declined YoY , with the drop in hot-rolled products being more pronounced. However, it should be noted that before the full suspension of navigation through the Strait of Hormuz at the end of February, logistics channels to the Middle East remained open, which secured a critical delivery window for sheets & plates. Therefore, in terms of HRC exports , Saudi Arabia still firmly ranked first among export destinations with a volume of 348,000 mt , mainly because its large-scale non-oil infrastructure and manufacturing projects in China were still in an intensive construction phase, with strong end-user steel demand, which also prompted local buyers to lock in relatively lower-priced Chinese HRC ahead of shipping disruptions, thereby maintaining its leading position. Pakistan (230,000 mt ), by contrast, saw this mainly due to bottlenecks in domestic supply, creating phased concentrated restocking demand, and according to the SMM survey, most purchases were made by downstream pipe factories. From the perspective of cold galvanized exports , the Southeast Asian market was currently in a stage of rapid development, and macroeconomic expansion had created a huge gap in flat steel products. Thailand in particular (304,000 mt ) was in a concentrated raw material stocking cycle for local downstream auto manufacturers at the beginning of this year, so just-in-time procurement by multiple physical manufacturers directly pushed up local imports. Looking ahead to March , under the dual impact of the Strait of Hormuz blockade and the Ramadan effect, sheets & plates exports to the Middle East core region are expected to face a sharp contraction. SMM shipping data showed that steel arrivals had already declined by more than 900,000 mt. However, under the pressure of elevated destocking in China, this portion of blocked exports is expected to be redirected to Southeast Asia and other alternative markets with “rigid manufacturing demand” for redistribution, thereby offsetting shipment reductions caused by localized logistics disruptions. Therefore, there is no need for excessive concern over total sheets & plates exports in March Source: SMM, General Administration of Customs 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. 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