Nickel Ore " Sluggish RKAB Approvals Drive Potential for Ore Price Hikes" Indonesian domestic nickel ore prices have risen significantly increase this week. For the first half of March, the Indonesian Nickel Ore Benchmark Price (HPM) was set at $17.329/dmt, an increase of 1.32%. However, according to SMM data, average premiums has increased for 1.4%, 1.5%, and 1.6% grade laterite nickel ore were reported at $35, $39, and $39.5/wmt, respectively, with 1.6% grade reaching a delivered price of $65.6–$74.6/wmt. This strengthening of premiums reflects both the release of restocking demand from smelters and pessimistic expectations regarding RKAB quota reductions. Simultaneously, the delivery price for 1.2% grade limonite has edged up to $24–$26/wmt. Pyrometallurgical Ore: From a supply and demand perspective, Sulawesi is transitioning into the dry season; Konawe has reached optimal production levels, while Morowali is recovering from previous floods. However, Halmahera continues to be hampered by thunderstorms, resulting in high moisture content and dragging down mining efficiency. The market is facing a clear trend of declining ore grades. While some NPI smelters have begun accepting grades of 1.45% or lower, the supply of high-grade saprolite remains tight. As of mid-March, the ESDM has approved approximately 100 million tons of RKAB quotas. The remaining 160 to 170 million tons are expected to be processed by the end of March. However, due to the Eid al-Fitr (Lebaran) holidays (March 18–24), approval progress is expected to lag, exacerbating short-term supply tightness. Faced with resource uncertainty, some smelters have increased trade bonuses to secure raw materials. Transactions for low-grade saprolite are emerging at fixed prices lower than high-grade ores. Conversely, Limonite prices remain low due to a tailings dam landslide at a major MHP project, which has forced production lines to operate at low loads, hindering demand recovery. However, Limonite prices are expected to eventually follow Saprolite upward due to new project stockpiling and external island demand. Hydrometallurgical Ore Although the spot supply of hydrometallurgical ore is relatively sufficient, a tailings dam landslide at an MHP project in a certain industrial park has forced related production lines to operate at low loads, leading to a temporary weakness in demand. However, given the concerns over RKAB approval uncertainty, the stockpiling needs of newly commissioned projects, and the growing demand from outer islands, hydrometallurgical ore prices are expected to follow the trend of pyrometallurgical ore and remain elevated. On March 3, 2026, Tri Winarno, Director General of Mineral and Coal, clarified that rumors of a "25%–30% universal increase in RKAB quotas" are false. Quota supplements will be based on individualized assessments of production capacity and compliance, with the approval process not expected to start until the second half of 2026. Market Outlook: Due to the overall delay in RKAB approvals, nickel ore prices in April are expected to remain resilient with a strong "easy to rise, hard to fall" trend. Nickel Pig Iron "NPI Prices See Periodic Retracement as Tug-of-War Intensifies Between Cost Support and Downstream Pressure​​​​​​​" The average price of SMM 10-12% NPI average price rose by RMB 0.3 per nickel unit week-on-week to RMB 1090.2 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index decreased by USD 0.65 per nickel unit to an average of USD 138.28 per nickel unit. This week, following consecutive price drops in stainless steel finished products and LME/SHFE nickel, the High-Grade NPI market experienced panic selling and low-price liquidation, entering a phase of periodic decline. From the supply side, With ore prices remaining elevated, smelter production costs continue to rise. However, triggered by the sharp decline in futures markets, some traders began offloading arbitrage stocks at low prices, leading to a general softening of upstream quotes.From the demand side, Weighed down by falling stainless steel prices and the influx of low-priced spot goods, most steel mills have lowered their bid intentions, exerting downward pressure on NPI prices. Overall, while cost support for smelters remains, downstream suppression is evident. The combination of futures-driven market sentiment and loosening upstream quotes has led to a periodic retracement in High-Grade NPI Overall outlook, market transactions will remain under pressure in the short term as the cost-tug-of-war between upstream and downstream continues. However, the downward room for NPI prices is expected to be limited.

Nickel Ore "Tight Supply-Demand Balance Drives Premiums; Government Clarifies RKAB Mechanism " Indonesian domestic nickel ore prices have risen significantly increase this week. For the first half of March, the Indonesian Nickel Ore Benchmark Price (HPM) was set at $17.104/dmt, a month-on-month decrease of 3.21%. However, according to SMM data, average premiums has increased for 1.4%, 1.5%, and 1.6% grade laterite nickel ore were reported at $34, $38, and $38.5/wmt, respectively, with 1.6% grade reaching a delivered price of $65.2–$72.2/wmt. This strengthening of premiums reflects both the release of restocking demand from smelters and pessimistic expectations regarding RKAB quota reductions. Simultaneously, the delivery price for 1.2% grade limonite has edged up to $24–$26/wmt. Pyrometallurgical Ore: From a fundamental perspective, as of March 6, Sulawesi and Halmahera are in a volatile transition at the tail end of the rainy season, where intermittent heavy rainfall continues to obstruct mining logistics. Morowali is currently overcast with high humidity (94%), and while immediate rain is light, a heavy precipitation system is expected around March 13 with up to 48mm of rain; Konawe remains cloudy with daily thundershowers. Halmahera also faces a high-precipitation weekend with a 65% chance of thunderstorms on March 7-8. Despite BMKG's forecast of an early dry season in April, saturated soil and local wind gusts currently prevent these regions from reaching full mining and loading capacity. Under the dual pressure of scarce tradable supply and RKAB uncertainty, some NPI smelters have been forced to ramp up procurement to secure raw materials. Hydrometallurgical Ore While spot supply of limonite is relatively sufficient, a tailings dam landslide at an MHP project has forced related production lines to operate at low utilization, causing temporary demand weakness. However, due to concerns over RKAB approvals, stockpiling for new projects, and growing demand from outer islands, limonite prices are expected to shadow saprolite prices and remain high. On the policy side, Director General Tri Winarno of the ESDM clarified on March 3, 2026, that any RKAB increases will be based on individual company assessments of capacity and compliance rather than a universal percentage hike, with the approval process slated for the second half of 2026. The government emphasized that this is a routine regulatory procedure to optimize resources, not a reactive measure against the previously set annual production cap of 260–270 million tons. Nickel Pig Iron " Strong Cost Support Drives High-Grade NPI Prices Upward " The average price of SMM 10-12% NPI average price rose by RMB 21.1 per nickel unit week-on-week to RMB 1092.6 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index increased by USD 2.22 per nickel unit to an average of USD 138.54 per nickel unit. This rally is primarily fueled by a "scarcity of high-nickel-content units" and firm offers from smelters facing intense cost pressure from rising ore prices. While downstream stainless steel mills remain reluctant to accept these peak prices due to limited gains in finished products, the overall market remains supported by tight tradable supply and the post-holiday resumption of production. The surge in nickel ore costs has significantly squeezed smelter margins, with many producers now facing contracting profits as NPI price growth lags behind feedstock inflation. Looking ahead, it is expected that NPI prices to maintain their upward momentum as raw material costs remain "easy to rise but hard to fall" and seasonal demand begins to recover.

According to SMM data, during the first week of the traditional "Golden March" peak season (March 2 - March 6, 2026), the most-traded stainless steel futures contract (SS2604) exhibited a strong, high-level oscillating trend. This was driven by the resonance of international geopolitical storms and the tone set by China's macroeconomic policies. By the close at 10:15 on March 6, the contract traded higher at 14,235 yuan/mt (approx. $2,063/mt), up 85 yuan/mt (approx. $12/mt) (+0.60%) from last Friday's close of 14,150 yuan/mt (approx. $2,051/mt). The market this week was characterized by "strong expectations but weak reality." A sudden global supply chain crisis and firm raw material costs provided a solid floor for market valuations. However, high spot inventories and the looming pressure of resumed production kept prices cautious when attempting upward breakouts. Macro-Economy: A "Super Macro Week" Defined by Geopolitics and Policy Support On the macroeconomic front, this was undeniably a "super macro week" with exceptionally strong signals from China and the global market. Internationally, a geopolitical "black swan" emerged as Iran claimed the Strait of Hormuz was closed and threatened to strike passing vessels. This extreme event immediately sparked fears of a global supply chain crisis and surging energy expectations. U.S. Federal Reserve officials subsequently voiced concerns over the war's spillover effects and a potential rebound in inflation, significantly cooling expectations for interest rate cuts. However, in the commodities market, trades driven by "inflation hedging" and "supply chain disruptions" boosted the overall premium of the base metals sector. In China, the government work report delivered at the "Two Sessions" set the 2026 economic growth target at 4.5%-5%. It explicitly proposed utilizing capacity regulations and standard-setting to deeply rectify "involutionary" (cut-throat) competition. This policy direction provides strong expectation-driven support for supply-side optimization in traditional Chinese manufacturing. Fundamentals: Inventories Near Peak, Clash of Supply and Demand Imminent Fundamentally, social inventories are showing early signs of peaking, though the market will soon face the test of surging supply. The latest SMM data shows social inventories at 1.0164 million mt this week, a marginal increase of just 300 mt from last week's 1.0161 million mt. The seasonal inventory accumulation around the Spring Festival fully aligns with industry patterns and remains within market expectations. Traders have not resorted to panic selling, keeping short-term inventory pressure manageable. However, a shift is brewing on the supply side. The output reduction caused by concentrated maintenance at Chinese steel mills in February is nearing its end. As mills enter a concentrated resumption phase in March, scheduled production is expected to rise sharply. This surge in supply will clash head-on with recovering demand during the "Golden March and Silver April" period, leading to a phased reshaping of the market's supply-demand dynamics. Costs: Robust Upward Resilience Sets a Solid Floor On the cost side, raw materials continued to show robust upward resilience, establishing a solid baseline for futures prices. Driven by the ongoing fallout from Indonesian nickel ore quotas and premium news, raw material prices rose across the board this week. As of March 6, high-grade nickel pig iron (NPI) quotes climbed to 1,088 yuan/mtu (approx. $158/mtu), and high-carbon ferrochrome prices were adjusted upwards to 8,600 yuan/50 mt (approx. $1,246/50 mt). Although mainstream steel mills currently show low acceptance of high NPI prices and remain cautious in procurement—resulting in sparse actual market transactions—the raw material sector has minimal room to yield on price, dominated by expectations of tight ore supply and bullish sentiment. The steady climb in spot costs has effectively capped the downside risk for stainless steel prices. Outlook and Strategy In conclusion, the stainless steel market this week sought a balance amid the fierce tug-of-war between "geopolitical premiums + cost support" and "million-ton inventories + production resumption expectations." The macroeconomic shifts triggered by the Strait of Hormuz crisis, coupled with China's "Two Sessions" mandate to curb cut-throat competition, have injected immense confidence into the bulls regarding macro sentiment. Looking ahead to next week, the market will deeply enter the reality-check phase of the "Golden March" peak season. The core focus will shift to the actual implementation of steel mill resumptions in March and the pace at which downstream end-users digest substantial orders. In the short term, futures prices are expected to maintain wide fluctuations at high levels, underpinned by the cost line. Industry clients are advised to closely monitor geopolitical developments and the pace of spot inventory destocking, while rationally utilizing futures tools to lock in production margins.

Stainless Steel Daily Review: SS Futures Largely Stable, Spot Market Cautiously Watchful SMM, February 27 – SS futures traded steadily. The upward momentum in SS futures driven by news has largely subsided, with prices holding largely stable during the session. By the pre-noon close, the most-traded contract was quoted at 14,095 yuan/mt. In the spot market, SS futures remained temporarily steady. Although market participants maintained a bullish sentiment, downstream buyers were still partially on holiday, leading to weak purchasing interest. Coupled with consecutive price increases after the holiday, cautious sentiment strengthened, and prices held largely stable during the day. The most-traded SS futures contract strengthened and edged higher. At 10:30 a.m., the most-traded SS2604 contract was quoted at 14,150 yuan/mt, down 165 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B were in the range of 320-520 yuan/mt. In the spot market, cold-rolled 201/2B coils in Wuxi held largely stable; cold-rolled mill-edge 304/2B coils in Wuxi and Foshan held largely stable; cold-rolled 316L/2B coils in Wuxi rose 125 yuan/mt; hot-rolled 316L/NO.1 coils in Wuxi increased 200 yuan/mt; cold-rolled 430/2B coils in both Wuxi and Foshan held largely stable. This week marked the first week after the Chinese New Year holiday, with the stainless steel market gradually recovering. SS futures strengthened and edged higher, driven by rising expectations for the traditional peak consumption season of "Golden March, Silver April" and ongoing developments related to Indonesian nickel ore. Market participants exhibited strong bullish sentiment. However, the recovery pace in the spot market remained slow, as some traders and downstream end-users had not yet resumed operations. Market trading activity had not fully recovered, with only limited rigid demand orders observed during the week...

Market Overview According to SMM data, during the first trading week following the Lunar New Year holiday (February 24 – February 27, 2026), the dominant stainless steel contract (SS2604) opened high and maintained a strong trend, driven by significantly rising raw material costs. By the close on February 27, the contract price had climbed to 14,150 CNY/mt ($2,065.69/mt) , an increase of 385 CNY/mt ($56.20/mt) or +2.80% compared to the pre-holiday closing price of 13,765 CNY/mt ($2,009.49/mt) . In the early post-holiday period, the market's upward logic was primarily dominated by rising costs on the supply side. However, as the price center shifted upward rapidly, the substantial accumulation of social inventory during the holiday formed a tangible suppression on the upside potential. Consequently, futures prices maintained a fluctuating struggle within the 14,100–14,200 CNY ($2,058.39–$2,072.99) range. Macroeconomic Analysis From a macro perspective, the market is navigating an interplay between reasonably ample domestic liquidity and uncertainties regarding overseas trade policies. Domestic: On February 25, the central bank conducted a 600 billion CNY ($87.59 billion) one-year Medium-term Lending Facility (MLF) operation. This continued to maintain ample liquidity in the banking system, providing macro support for the traditional "Golden March and Silver April" peak consumption season and stabilizing market expectations. Overseas: The U.S. Trade Representative stated they would continue to advance the Section 301 investigation regarding the Phase One trade agreement, with proposals to raise "global import tariff" rates from 10% to 15% or higher. Potential tariff changes have intensified uncertainty in the external macro environment, which may have a negative impact on future export expectations for stainless steel and related end-products. Fundamentals: Inventory & Demand Fundamentally, the post-holiday market faces the reality of a massive inventory buildup while end-user demand is still in a recovery phase. Inventory: Latest SMM data shows that, due to the long Spring Festival holiday, social inventory significantly increased to 1.0161 million tons this week. This is an increase of 121,600 tons compared to the pre-holiday level of 894,500 tons , breaching the one-million-ton mark. Spot Transactions: The market is currently in a gradual restart phase. Downstream processing factories have not yet fully resumed work, and current spot circulation is mostly concentrated on resource allocation between traders. The end-market's actual ability to digest current high-priced resources remains to be verified after enterprises fully resume work next week. Sentiment: In the short term, high inventory levels pose significant pressure on prices. However, supported by expectations for the "Golden March and Silver April" peak season, holders' sentiment remains temporarily stable, with no large-scale sell-offs observed. Cost Analysis The significant strengthening of the cost side was the core driver for the high market opening this week. Driven by news of tighter Indonesian nickel ore quotas and fluctuating rises in nickel prices post-holiday, there is a strong willingness to support prices on the raw material side. High-grade Nickel Pig Iron (NPI): As of February 27, quotes were raised significantly, rising by 33.5 CNY ($4.89) in a single week to 1,085 CNY/nickel point ($158.39/nickel point) . High Carbon Ferrochrome: Prices remained temporarily stable at 8,550 CNY/50 basis tons ($1,248.18/50 basis tons) . The expectation of tight ore supply materialized quickly after the holiday, substantially raising the immediate production costs for steel mills. The upward shift in the cost center effectively limited the room for market correction and forced a passive, steady rise in the center of spot transaction prices. Outlook & Strategy Overall, the stainless steel market in the first week after the holiday presented a tug-of-war pattern: "Strong Expectations & High Costs" vs. "Weak Reality & High Inventory." While the sharp rise in NPI prices established a tone for a strong fluctuating market, the social inventory exceeding one million tons—coupled with end-user demand that has yet to kick in—constrained further upside potential. Looking ahead to next week, the market trading logic will gradually shift from "sentiment-driven" to "fundamental verification." Short-term: Futures prices are expected to maintain a strong fluctuation at high levels. Medium-to-long-term: The trend will depend on the actual realization of demand during the "Golden March and Silver April" peak season after downstream sectors fully resume work. Industrial clients are advised to closely monitor the inventory inflection point (destocking) and actual spot transaction conditions next week. Carefully assess the risks of chasing highs and reasonably utilize hedging tools to manage exposure.

On February 27, the SMM battery-grade nickel sulphate index price was 31,795 yuan/mt, with the quotation range for battery-grade nickel sulphate at 31,570-32,800 yuan/mt, and the average price slightly decreased compared to the previous day.

[SMM Daily Review: Smelter Maintenance Sparks Shortage Expectations, High-Grade NPI Quotation Activity Increases] February 25 (SMM) - The average price of SMM 10-12% high-grade NPI was 1,070 yuan/mtu (ex-factory, tax included), up 16.5 yuan/mtu MoM from the previous trading day.

On February 24, the SMM battery-grade nickel sulphate index price was 31,602 yuan/mt, with the quotation range for battery-grade nickel sulphate at 31,400-32,500 yuan/mt, and the average price remained unchanged from the previous day.

The champagne corks in Brussels may have popped too soon. On January 14, 2026, the European Commission released a soaring press statement celebrating the official entry of the Carbon Border Adjustment Mechanism (CBAM) into its "Definitive Regime." In the official narrative, this was a triumph of digitalization: over 10,000 customs declarations verified in real-time, with the system running as smooth as silk. However, if we shift the lens from the desks of Brussels to the customs brokers in Hamburg, the steel traders in Rotterdam, and the customs officials currently drowning in paperwork across the continent, a starkly different picture emerges. What we are witnessing is a carefully whitewashed administrative "cardiac arrest." Forensic-level investigation into the first seven weeks of 2026 reveals that the landing of CBAM is far from the glitz claimed by officials. On the contrary, plagued by suspected low-level data errors, catastrophic approval backlogs, and teetering temporary patches, the mechanism is currently mired in a dual crisis of legality and operations. I. The Absurd "Default Values": When Taiwan’s Stainless Steel "Became" Indonesian Coal If one were to find a single representative footnote for this chaos, the "Default Value Controversy" would be the undisputed choice. For importers unable to obtain precise carbon emission data from upstream factories, the EU’s official "default values" are a lifeline. This was supposed to be a baseline derived from rigorous scientific calculation. Yet, in the 2,400-page document released on December 31, 2025, mere hours before the new rules took effect, industry experts witnessed a jaw-dropping scene. This is not merely a margin of error; it looks more like a metallurgical farce. Industry bodies have pointed out that when the Directorate-General for Taxation and Customs Union (DG TAXUD) established the carbon emission default values for stainless steel from the Taiwan region, the data tables contained suspected structural errors, bearing traces of a "copy-paste" job from Indonesian data structures. The consequence? In the physical world, processing a steel slab into a precision tube requires significant electricity, meaning the finished product should logically have higher emissions than the semi-finished one. Yet, in the table published by the EU, industry players have flagged phenomena where "Taiwanese semi-finished stainless steel allegedly emits more than the finished product," vehemently questioning its rationality. In metallurgy, this is impossible; in a bureaucratic Excel sheet, it became legal reference. More fatally, Taiwan’s stainless steel industry relies primarily on Electric Arc Furnaces (EAF) and scrap recycling, resulting in a relatively low carbon footprint. In contrast, the Indonesian stainless steel industry is highly dependent on Nickel Pig Iron (NPI) and coal-fired power, yielding extremely high emissions. This suspected "slip of the hand" by the EU is akin to forcefully assigning the calorie count of a rich braised pork belly to a light garden salad. This has directly resulted in European buyers of Taiwanese stainless steel facing artificially inflated financial costs. II. A 27% Pass Rate: The 15,000-Strong Army Blocked at the Gate If data controversies are "soft tissue damage," the backlog in administrative approval is a fatal "compound fracture." The core rule of the CBAM definitive stage is simple: without "authorized declarant" status, you cannot import. This means every company wishing to ship a screw or an aluminum sheet into Europe must first secure an "entry ticket." The reality is brutal. According to the Commission’s official press release, by January 7, over 12,000 operators across the EU had submitted applications, with just over 4,100 approved (a pass rate of roughly 34%). However, industry estimates suggest that by late February, applications swelled to approximately 15,000, causing the pass rate to slide to around 27%. Where did the massive remainder go? They are stuck in the overwhelmed approval systems of National Competent Authorities (NCAs). In Germany, due to the deluge of applications, logistics giant DSV issued a public notice stating it could not support clients with CBAM authorization and registration, bluntly forcing thousands of SMEs to crash into the complex reporting system like headless flies. In France, the labyrinthine digital authentication process has turned the application into a maze only a hacker could navigate. To prevent European ports from paralysis, the EU was forced to administer a "painkiller": Customs Code Y238. This is a temporary "hall pass" allowing companies that applied before March 31 but have not yet been approved to keep goods moving for now. But make no mistake, this merely lengthens the fuse on the bomb. III. The Strategy of Silence and the Risk of "Retroactive Reckoning" Faced with industry skepticism, Brussels seems to have chosen the oldest PR strategy: silence. Although industry giants like the Gerber Group issued detailed technical warnings as early as January 9, pointing out the absurdity of the Taiwan/Indonesia data, the industry notes that as of late February, no official "Corrigendum" has been issued to legally revise the default values. The updated Excel version released on February 13 merely added a disclaimer: "information only." This rigid attitude transfers all risk to the enterprises. For companies currently relying on the Y238 temporary arrangement, the real danger is not "whether goods are released," but "whether they will be retroactively penalized." Competent authorities have publicly warned that if an authorization application is ultimately rejected, member states can, under Article 26 (2)/(2a) of the CBAM Regulation, retroactively penalize goods imported during the waiting period. Such fines can, in certain cases, reach 3 to 5 times the standard penalty. In other words, this is not a procedural flaw; it is a compliance risk that could land directly on cash flows and balance sheets. Conclusion: Who Pays the Price for Hubris? CBAM was supposed to be the crown jewel of the EU’s climate ambition, a lighthouse for global green trade. But the opening scene of 2026 makes it look more like an unfinished Tower of Babel. From the "data ghosts" haunting the industry to the severely backlogged approval channels, this "hard landing" exposes a chasm between regulatory ambition and administrative capability. For European importers, every day now is an exercise in navigating through fog. They are forced to calculate not just carbon emissions, but the cost of policy uncertainty. And for the European Commission, if it cannot step out of this arrogant "silence" and clarify these glaring operational controversies, what CBAM loses will be more than just data accuracy; it will be the trust of its global trading partners.

The fundamental challenge in the 304 stainless steel industrial chain is Instrument Asymmetry, a scenario where the dominant cost driver, Nickel Pig Iron (NPI), lacks a direct futures contract and forces participants to manage 75% of their risk using standardized proxies like pure nickel. This creates a lethal threat not from price volatility itself, but from the Basis Risk that occurs when physical assets and hedging tools decouple.