This week, ferrous metals retreated after a rapid rise. At the beginning of the week, the market said that Asia had shifted to coal-fired power generation due to a natural gas supply deficit, while Indonesia would increase coal production and impose export taxes. The rise in international coal prices was transmitted to China, and coking coal and coke led the gains in ferrous metals; mid-week, the Middle East situation remained volatile, and the U.S. and Iran held differing attitudes toward war, with ferrous metals consolidating at high levels; the pullback in the second half of the week was also mainly due to the weakening of the cost-side logic, as market rumors said long-term iron ore contract negotiations had been completed, expectations for tightening iron ore supply declined, and raw materials turned into the main driver of the pullback. In the spot market, speculative trading and end-user purchase sentiment improved in the first half of the week, while rigid demand remained dominant in the second half, and the spot-futures price spread widened somewhat......

SMM News, March 27: This week, quoted prices for scrap battery recycling diverged, at 9,250-9,450 yuan/mt. High-priced cargo collection squeezed traders' profits, while low-priced recycling saw limited volume growth; coupled with sluggish downstream consumption, relatively scarce retired resources, and end-users' reluctance to sell, this week's recycling volume was about half the normal level on a YoY basis. After Qingming Festival, more smelters were expected to resume production, supporting raw material demand, and attention should remain on lead prices as well as smelters' production, sales, and maintenance pace. > Subscribe to View Historical SMM Metal Spot Prices

[April China TCs Expected to Face Resistance to Further Gains, Pending the Conclusion of Follow-up Negotiations]: Weekly data showed that the average weekly SMM Zn50 domestic TC held flat at 1,550 yuan/mt in metal content, while the SMM imported zinc concentrates index fell $7.51/dmt MoM to -$2.28/dmt...

This week, the macro market still repeatedly traded around the Middle East situation and expectations for the US Fed. At the beginning of the week, tensions among the US, Israel, and Iran eased slightly, the US dollar pulled back, and risk appetite recovered temporarily, allowing copper prices to stop falling and rebound at one point. However, Iran later denied progress in the relevant negotiations, geopolitical tensions tightened again, international oil prices rose sharply, and market concerns over supply disruptions in the Strait of Hormuz resurfaced, with safe-haven sentiment rebounding accordingly and weighing on copper prices. Market bets on major central banks cutting interest rates this year were pushed back significantly, and expectations for macro liquidity weakened at the margin. Overall, this week’s copper price logic still centered on the repeated tug-of-war among geopolitical risks, oil prices, the US dollar, and interest rate cut expectations. Before macro uncertainty eases materially, copper prices will likely remain in the doldrums with rangebound fluctuations in the short term. Fundamentally, the logic of ore supply tightness continued. On March 25, Mitsubishi Materials announced that it will cease part of the copper concentrates processing business at the Onahama smelter in 2027, and explicitly mentioned the sharp deterioration in TC/RCs and pressure on smelting profits, further confirming the current reality of tight copper concentrates supply and continued damage to profitability on the smelting side. Global exchange copper inventories remained high, but demand in China had already started, and the pace of destocking in China’s social inventory exceeded market expectations. Supported by the opening of the import window and domestic demand, inventories outside China showed signs of flowing back into China. Looking ahead to next week, the macro theme is expected to remain largely unchanged. If the Middle East situation does not ease substantially, elevated oil prices and a relatively strong US dollar will likely continue to weigh on copper prices, and short-term resistance will remain; however, ore supply tightness, worsening smelting profits, and domestic demand will still provide some support for copper prices. Therefore, copper prices are expected to continue to fluctuate rangebound within a narrow range next week, with LME copper expected at $12,000-12,500/mt and SHFE copper expected at 93,000-96,500 yuan/mt. In the spot market, as imported cargoes arrive one after another, the pace of domestic inventory destocking may slow down. Although inventories are still being drawn down, spot premiums are expected to find it difficult to rise sharply due to the relatively high inventory base. Spot prices against the SHFE copper front-month contract are expected at a discount of 120 yuan/mt to a discount of 20 yuan/mt.

SMM News, March 27: Lead prices operated at low levels this week, and secondary lead smelters generally lowered their purchase prices for scrap batteries. Today’s average purchase prices were: waste e-bike battery at 9,775 yuan/mt, waste automotive lead-acid battery (white shell) at 9,875 yuan/mt, and waste automotive starter lead-acid battery (black shell) at 10,075 yuan/mt. Quotes in the recycling market diverged, with some traders raising prices to 9,450 yuan/mt to attract cargoes, squeezing profits, while others lowered prices to 9,250 yuan/mt, with recycling volume constrained. Affected by sluggish downstream consumption, relatively low retirements, weaker prices, and end-users holding back cargoes, recycling volume this week was half the normal level. After the Qingming Festival, the pace of smelter resumptions is expected to gradually accelerate, and demand for raw material procurement is likely to be released. In addition, with raw material inventories at some smelters still at low levels, this is expected to provide some support for scrap battery prices. Going forward, continued attention should be paid to lead price trends and developments in smelter production and maintenance. » Subscribe to View Historical SMM Metal Spot Prices

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.

At first glance, the market reaction to the outbreak of war following U.S. and Israeli strikes on Iran appeared deeply counterintuitive.

Coordinating Minister Airlangga Hartarto announced Thursday that Indonesia is evaluating a coal export tax following a meeting with President Prabowo Subianto. The tax aims to capture "windfall profits" from surging global energy prices to boost state revenue and offset fiscal pressure from rising domestic fuel costs. While specific rates are under review, Hartarto emphasized that a broader windfall tax remains an option if high commodity prices persist. Currently, as there is no official regulations being released for the specific export tax or windfall tax being implemented to commodities, SMM will continue to monitor with the update of the regulations.

[Overnight, LME Aluminum and SHFE Aluminum Edged Up Slightly, but Aluminum Prices Faced Short-Term Pressure at High Levels] Continued destocking in LME inventory provided bottom support for LME aluminum, but amid tightening fund liquidity and profit-taking by bulls, upward momentum remained insufficient, and the backwardation structure weakened somewhat. China’s social inventory rose to a high for the same period in nearly five years, and the inventory buildup cycle had yet to end, with high inventory and weak spot fundamentals jointly weighing on upward momentum. The divergence between domestic and overseas drivers continued, the SHFE/LME price ratio kept weakening, and prices were mainly under pressure in the short term.

[SMM Tungsten Daily Review: Slight Price Collapse in the Scrap Tungsten Market, Ore and Upstream Smelting Products Consolidated Sideways] SMM News, March 23 In the short term, prices across the tungsten industry chain still showed divergence between primary and recycled materials. China was currently in a transition period marked by tightening supply on the raw ore side and a rising utilization rate of recycled materials. Smelters still needed some time to adjust their restocking practices and complete the adaptation and transition from a long-term contract pricing model led by the ore side to a scrap tungsten market procurement model featuring higher-frequency transactions and greater sensitivity to sentiment.