[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. The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders. The above rights are strictly protected by relevant laws and regulations of the People's Republic of China, such as the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as applicable international treaties. Without prior written authorization from SMM, no institution or individual may: 1. Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating); 2. Disclose the content of this report to any third party; 3. License or authorize any third party to use the content of this report; 4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses. Data Source Statement: (Except for publicly available information, other data in this report are derived from publicly available information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, brokerage reports, data from the National Bureau of Statistics, customs import and export data, various data published by major associations and institutions, etc.), market exchanges, and comprehensive analysis and reasonable inferences made by the research team based on SMM's internal database models. This information is for reference only and does not constitute decision-making advice. SMM reserves the final interpretation right of the terms in this statement and the right to adjust and modify the content of the statement according to actual circumstances.

This week, the weekly operating rate of leading downstream aluminum processing enterprises in China rebounded 1.1 percentage points MoM to 64%.

[SMM Hot Topic] Estimated “Cliff-Like” Drop in China’s Steel Exports—A Ramadan Pattern or a War Shock? As mentioned above, [Persian Gulf Shutdown? The Impact of the U.S.-Iran Conflict on Global Steel Trade] amid the US–Iran conflict, global steel trade was shaken and reshaped. Another topic that has recently been widely discussed in the market is: what impact will this war have on China’s total export volume? Before going into detail, it is important to remind everyone that the current focus has largely remained on geopolitical conflict, while often overlooking that this period coincides with Ramadan, a seasonal trough. Therefore, to quantify the war’s actual impact more accurately, SMM conducted corresponding “dehydration” adjustments based on ferrous panoramic shipping data. Most Direct Impact: A Deep Shortfall on the Shipping Side Data Source:SMM Ferrous Metal Shipping According to the table above, in the absence of war, during Ramadan 2025, China’s average weekly shipments to Gulf countries were about 327,000 mt, while the average weekly shipments in the month after Ramadan ended were 450,400 mt. Therefore, keeping average weekly shipments at around 300,000 mt during Ramadan is considered a “normal contraction” level. By further comparing the same-period data for 2026 and 2025, we can precisely calculate the quantified impact caused by the war. As of the latest date, in the first 20 days of Ramadan, China exported and shipped only 5,000 mt, with a weekly average of only 1,750 mt. Estimation logic: If there were no war, based on a neutral assessment using the 2025 Ramadan benchmark, total shipments in the first 20 days should have been about 930,000 mt; therefore, the war resulted in shipment losses of about 925,000 mt. Therefore, we can conclude that the more than 99% plunge on the shipping side was most likely caused by the war (route blockades, shipowners’ risk aversion), and the Ramadan factor is almost negligible in the face of such a massive decline. Delayed Effects on the Arrival Side Data Source: SMM Ferrous Metal Shipping In addition to the impact on the shipping side, SMM ’s ferrous panoramic shipping data also showed that after operations were suspended at multiple ports, a combination of factors—such as vessels being unable to berth and unload—led to a decline in the total volume of steel arriving at ports. As of the latest date, average weekly arrivals were about 220,200 mt, down by roughly 82,000 mt/week from 302,200 mt over the same period last year. Estimation logic: assuming no war impact and using a neutral assessment based on the 2025 Ramadan benchmark, cumulative arrivals in the first 20 days should have been about 863,400 mt, implying a cumulative shortfall of about 234,000 mt. Cause breakdown: it is expected that the decline on the arrivals side was not as pronounced as that on the shipments side, because among these 12 arriving vessels, most carried orders that had already been dispatched before the full outbreak of the war or in the early stage of the situation (Jan 25–Feb 25). Therefore, this 234,000 mt gap was mainly due to war-driven route detours (delays) and partial port shutdowns. Data Source: SMM Ferrous Metal Shipping In summary, based on the data, we can conclude that Ramadan was merely the “backdrop,” while the war was the “main cause.” If the impact were only from Ramadan, we should still have had about 300,000 mt of steel shipped to the Gulf each week. The reality, however, is that since Feb 18, our average weekly shipments have plunged to less than 2,000 mt. This means that, within the currently observed gap, shipment losses of more than 900,000 mt were entirely caused by war-related order stagnation or shipping lane disruptions. The 27% decline currently seen on the arrivals side is only the beginning; the real “vacuum period” will fully emerge in late March, during the latter part of Ramadan. At present, a phased contraction in China’s total steel exports to the Middle East has become a foregone conclusion. Does this mean the strong momentum of China’s full-year exports will come to a halt here? According to SMM steel export take-order data, last week, the total orders taken by 31 exporters were about 765,000 mt, up 20.76% MoM. Among them, export orders for long products were about 437,000 mt, up 56.07% MoM; export orders for sheets & plates were about 328,000 mt, down 7.21% MoM. Against the backdrop of rising export prices, this growth did not stem from a broad-based global economic recovery, but from forced shifts in trade flows driven by geopolitical conflicts. On the one hand, instability in Iran diverted Southeast Asian orders to China, driving a boom in steel billet exports; on the other hand, conflict in the Middle East pushed up shipping costs, and the surge in fuel prices directly caused physical disruptions along the trade chain. Even if there is overseas demand, the sharp rise in freight rates also weakened the pricing advantage of Chinese steel products. SMM Steel Export Orders Taken - 31 Companies (10kt) Data Source:SMM Weekly Steel Export Report Therefore, although the reduction in exports to the Middle East has already been confirmed by the data, assessing its impact on China’s total exports for the full year still needs to be based on a “global rebalancing” perspective: is the “gap” created after demand in Gulf countries is constrained being converted into “incremental volume” in other markets? What is the actual absorption capacity of these emerging incremental markets? Can they offset the monthly shipping loss of 900,000 mt from the Middle East? Please continue to follow SMM Steel Industry Research; we will regularly update global shipping developments… 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. The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders. The above rights are strictly protected by relevant laws and regulations of the People's Republic of China, such as the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as applicable international treaties. Without prior written authorization from SMM, no institution or individual may: 1. Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating); 2. Disclose the content of this report to any third party; 3. License or authorize any third party to use the content of this report; 4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses. Data Source Statement: (Except for publicly available information, other data in this report are derived from publicly available information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, brokerage reports, data from the National Bureau of Statistics, customs import and export data, various data published by major associations and institutions, etc.), market exchanges, and comprehensive analysis and reasonable inferences made by the research team based on SMM's internal database models. This information is for reference only and does not constitute decision-making advice. SMM reserves the final interpretation right of the terms in this statement and the right to adjust and modify the content of the statement according to actual circumstances.

[SMM Analysis] Holiday Stability in Overseas Prices, Divergent Trading Performance HRC prices in Thailand and Malaysia mostly held steady. As the holidays largely coincided with those in the domestic market and shipments were affected by the Chinese New Year, overall transaction activity remained relatively weak. The galvanizing market in Thailand performed moderately, but due to low-priced resources capturing market share, downstream shipments were somewhat impacted, leaving limited room for price increases. Influenced by factors such as Ramadan, HRC trading in Indonesia also trended toward mediocrity, while overseas export offers remained stable amid a wait-and-see stance. However, supported by government policies promoting increased use of domestically produced steel in the local shipbuilding industry, medium and long-term demand for sheets & plates in Indonesia is expected to remain relatively optimistic.The Black Sea market recently exhibited overall calm, with FOB offers for HRC exports pulling back slightly compared to pre-holiday levels. Although some routine transactions were concluded, overall market activity remained sluggish. Despite tight spot supply in the domestic Indian HRC market, it remains range-bound due to weak overall procurement demand, lacking momentum for price increases. Turkish HRC export offers have seen slight increases, following the price hike trend among European producers. European and US markets face strong policy and cost disruptions: although the US Supreme Court overturned some previously imposed tariffs by the president, the subsequent announcement of new global tariffs of up to 15% has sharply heightened market risk aversion. In European markets such as Italy, steel mills are leading ex-factory price increases against a backdrop of tight spot supply. 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. The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders. The above rights are strictly protected by relevant laws and regulations of the People's Republic of China, such as the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as applicable international treaties. Without prior written authorization from SMM, no institution or individual may: 1. Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating); 2. Disclose the content of this report to any third party; 3. License or authorize any third party to use the content of this report; 4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses. Data Source Statement: (Except for publicly available information, other data in this report are derived from publicly available information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, brokerage reports, data from the National Bureau of Statistics, customs import and export data, various data published by major associations and institutions, etc.), market exchanges, and comprehensive analysis and reasonable inferences made by the research team based on SMM's internal database models. This information is for reference only and does not constitute decision-making advice. SMM reserves the final interpretation right of the terms in this statement and the right to adjust and modify the content of the statement according to actual circumstances.

Philippines Market: Seasonal Downturn and Supply Constraints During the Chinese New Year holiday, nickel ore trading activity in the Philippines remained sluggish, with trading volume being scarce. This stagnation was primarily due to Chinese buyers being away during the holiday. Supply side, shipments are still concentrated in the northern regions, while shipments from Surigao and other southern areas remain at low levels. Although port inventory in China dropped slightly, smelter demand for Philippine ore remained weak during the holiday. This weak demand is attributed to the persistently high prices of Philippine nickel ore and the fact that many smelters built up sufficient inventory by the end of last year. Furthermore, the ongoing rainy season, which started in December, continues to impose supply constraints, providing steady upward pressure on prices. These high prices are further supported by increased market uncertainty regarding domestic supply from Indonesia in the coming months. Indonesia Market: Policy Uncertainty and RKAB Quota Constraints In the Indonesian market, participants remain in a "wait-and-see" mode, awaiting the full implementation of RKAB (mining quota) approvals. While several major miners have received approvals, many mines face quotas that are significantly reduced YoY. This trend supports the possibility that the government will enforce a stricter annual RKAB system in the short term, capping the national annual quota at approximately 260 million to 270 million wmt. As a result, many smelters now face urgent ore shortages, with only a few enterprises having sufficient inventory to sustain long-term operations. Although the domestic trade benchmark price (HPM) dropped slightly by 0.58% to $17,670/mt Ni in the second half of February due to the holiday impact, considering that the current rainy season in Indonesia persists in some regions, the approaching Ramadan will further limit production efficiency, and government approval uncertainties continue to block supply increases, the market generally expects that RKAB approval obstacles will be difficult to resolve in the short term. Intertwined with these multiple bullish factors, domestic Indonesian nickel ore prices and premiums are likely to show an upward trend.

【SMM Morning Brief Nickel 2.24】During the 2026 Chinese New Year holiday (February 15 to February 23), the domestic SHFE nickel market was closed, while LME nickel prices showed a rebound. The nickel sulphate market was relatively quiet during the holiday, with purchasing and sales activities largely halted. On the production side, some producers maintained operations, while others suspended production for maintenance.

[SMM Analysis: Tin Ore Imports Remained Low in April, with Persistent Supply Pressure on the Domestic Smelting Side] In April, domestic tin ore imports stood at 9,800 mt (equivalent to approximately 4,336 mt in metal content), up 18.48% MoM and down 4.22% YoY, representing an increase of 519 mt in metal content compared to March (which was equivalent to 3,817 mt in metal content). The cumulative imports from January to April reached 367,000 mt, down 47.98% YoY. In April, domestic tin ingot imports amounted to 1,128 mt, down 46.31% MoM and up 53.68% YoY. The cumulative imports from January to April totaled 7,432 mt, up 12.16% YoY...

"Freight rates for the US route from the Far East to Los Angeles have doubled (WoW), and prices are changing daily," a freight forwarding executive in Qingdao told a Cailian Press reporter. Many ships operating on other routes have started to divert to the US route, driving up freight rates on other routes, including Mexico. A salesperson from a Shanghai freight forwarding company also revealed to a Cailian Press reporter today, "Cabins are also fully booked on the Middle East and Africa routes. I couldn't secure a cabin for a Middle East business deal even when booking 10 days in advance (compared to the departure date), and freight rates have increased by 10-20%. Just now, MSC also notified that there are no special-rate cabins available on the Mediterranean East route, and FAK rates will be implemented. These are all chain reactions following the cabin shortages and rate hikes on the US route." In terms of spot freight rates, there has indeed been a significant rebound in US route rates since May 12. Data provided by Jiyu Technology shows that for the Shanghai-Los Angeles route, as of the time of this report, Maersk's quote for the voyage departing on May 26 has reached $3,705/FEU, a 96% increase from the quote on May 12. For European routes, the current increase is relatively small. Taking the Shanghai-Rotterdam route as an example, as of this morning, OOCL's quote for the voyage departing on May 28 was $1,774/FEU, a 7.5% increase from the quote on May 12. For US express routes, as their freight rates are higher than those of regular ships, the changes in booking volumes are not as pronounced as those of regular ships. A Cailian Press reporter learned from sources close to Matson (MATX.US), a leading express shipping company, that the company's current booking situation is relatively stable, with no widespread cabin shortages. The company recently raised its freight rates by $1,500/FEU, adjusting prices back to normal levels before the tariff impact. "Currently, there is a clear upward trend in freight rates on the US route, and European routes may follow suit to some extent, but the increase is unlikely to match that of the US route. This is related to the significant differences in vessel configurations between the US and European routes. Additionally, a higher proportion of US route suspensions occurred earlier, with some vessels diverting to European routes. These vessels are now gradually being redeployed to the US route. It is expected that direct diversions from European to US routes may be relatively limited in the future, but there will still be some linkage effects in the market," Wu Jialu, head of the Industrial and Cyclical Group at CITIC Futures Research Institute, told a Cailian Press reporter. Wu Jialu further analyzed that cabin shortages in the Middle East may be due to (shippers') inherent demand preferences and the arrival of the peak season, combined with the current shipment of goods accumulated during the earlier Ramadan period. The tight capacity in Mexico and South America is due to a 20-30% reduction in capacity on the original US route, with shipping companies like ZIM partially redirecting vessels from South American routes to the US route. It is worth mentioning that KMTC has started to increase its operations on the US route, and the high freight rates on the US route will bring about spontaneous market adjustments. In addition, Wu Jialu believes that there may also be a certain degree of tightness in container {{supply}}. Despite the fact that shipping companies ordered a significant number of containers in 2021 and 2024 due to strong freight rates, it is still necessary to observe the duration and intensity of the current rush shipping in the US, and whether it will lead to port congestion, slower turnover, and a shortage of containers. At the same time, attention should also be paid to the impact if shipments fall short of expectations, as well as the risks of a supply surplus in the European route and cargo volumes falling short of expectations this year. However, liner companies remain cautious about their full-year earnings expectations for this year. Hapag-Lloyd stated in its recently released Q1 financial report that it maintains its unchanged outlook for the full year, expecting the group's EBITDA to be lower than that of 2024 amid a challenging market environment. Another official from a liner company also told a reporter from Cailian Press earlier that they maintain a cautiously optimistic attitude towards the container shipping market for the full year.

SMM Analysis: Tin Ingot Imports and Exports in March Showed a Divergence Characterized by a Temporary Rebound in Imports and a Slowing Growth in Exports. In March, domestic tin ore imports stood at 8,300 mt (equivalent to 3,817 mt in metal content), down 4.83% MoM and 63.98% YoY, an increase of 255 mt in metal content compared to February (equivalent to 3,562 mt in metal content). Cumulative imports from January to March totaled 269,000 mt, down 55.44% YoY. Domestic tin ingot imports in March were 2,101 mt, up 12.41% MoM and 146.6% YoY. Cumulative imports from January to March reached 6,304 mt, up 6.99% YoY.

After a sharp decline on the first day after the holiday, SHFE nickel returned above 120,000 as shorts took profits and exited the market. Futures prices then steadily rebounded, gradually filling the previous gap. Indonesia has announced a new policy on nickel product royalties. What impact will this have on the nickel market? How should we view Indonesia's multiple policy adjustments this year? What is the current supply and demand situation for nickel? What factors in the fundamentals are worth paying attention to? After consecutive rebounds, does SHFE nickel still have room for further upside? Webstock Inc.'s [Institutional Diagnosis] section invites SHFE nickel futures experts to provide in-depth insights. [Institutional Diagnosis]: Indonesia has announced a new policy on nickel product royalties. What impact will this have on the nickel market? How should we view Indonesia's multiple policy adjustments this year? Gu Jing, Senior Analyst at Yide Futures Investment Consulting Department: The increase in tax rates for raw materials and smelting products directly raises production costs. Based on the HMA price of nickel at $15,534.62/mt in the second period of March 2025, the cost of nickel ore with a grade of 1.6%-2.0% will increase by $1.1-1.8/wmt. Assuming the rise in mining costs is fully passed on to smelting, coupled with the increase in smelting tax rates, the cost of NPI will rise by $420/mt (metal content), and the cost of nickel matte will increase by $411/mt (metal content). The cost of MHP using low-grade nickel ore remains unaffected. After nearly two years of surplus, nickel prices have been fluctuating at the bottom. As the world's largest supplier of nickel, Indonesia has recently introduced multiple policies aimed at helping nickel prices break out of the low valuation range, ensuring more rational use of nickel resources, and thereby increasing domestic tax revenue. Jiang Xinbin, Senior Metal Analyst at Zheshang Futures Research Center: Indonesia's nickel product royalty policy has recently been implemented. The core of this policy is to implement a progressive tax rate increase for products at various stages of the nickel industry chain. The new policy significantly raises the tax burden on nickel ore and its downstream products, directly lifting the cost center of the nickel industry chain and supporting nickel prices: based on the current HMA, the royalty for nickel ore has been increased from a fixed 10% to 14%, potentially driving NPI costs up by $180-200/mt. In 2025, Indonesia has frequently introduced policies, from the SIMBARA system and HMA price adjustments to the new royalty policy. Behind these moves is not only Indonesia's long-term strategy to enhance resource revenue and strengthen the voice of related industries but also a stopgap measure by the Indonesian government to cope with the huge costs of Prabowo's "flagship project." Xia Peng, Head of Nonferrous and New Energy Group at Chuangyuan Futures Research Institute: The Indonesian government's 2025 Government Regulation No. 19 is an update based on the 2022 Regulation No. 26, mainly increasing the cost of nickel ore usage, with the royalty levied only once during the industry chain process. The royalty rate for nickel ore with a grade below 1.5% remains at 2%, while the rate for ore above 1.5% has been increased from 10% to 14%-19% (with progressive increases based on different HMA nickel prices). The impact on nickel prices is mainly reflected in the upward shift in costs. As a resource-exporting country, the new Indonesian government, which took office last October, has adjusted its mineral policies primarily to alleviate fiscal pressure. [Institutional Diagnosis]: What is the current supply and demand situation for nickel? What factors in the fundamentals are worth paying attention to? Gu Jing, Senior Analyst at Yide Futures Investment Consulting Department: On the supply side, the rainy season in the main mining areas of the Philippines has ended, and ore output has seasonally rebounded, with a noticeable increase in ship departures, up YoY. The import of Philippine ore to Indonesia has significantly increased, easing the tight ore supply in the later period. Indonesian NPI smelting production remains high, while high-grade nickel matte production stays low due to tight high-grade ore supply, and MHP production remains high. Domestic refined nickel production also maintains a high schedule. On the demand side, the cumulative YoY decline in ternary power battery installations is significant, leading to reduced demand for high-grade nickel matte and MHP. The recent implementation of new battery standards has constrained end-use consumption, making it difficult to drive up intermediate product prices through downstream orders in the short term. In the stainless steel sector, both 200-series and 300-series production remain high, with nickel consumption maintaining a high growth rate of over 10%. However, stainless steel inventory pressure is expected to be significant in the later period. Overall, the nickel industry remains in a surplus. The recent implementation of Indonesia's tax policies has provided strong support for prices, and future attention should be paid to whether there will be any unexpected performance on the demand side. Jiang Xinbin, Senior Metal Analyst at Zheshang Futures Research Center: On the supply side, the hype around Indonesia's BNBP policy for nickel ore has subsided, and the imminent resumption of production by major nickel pig iron (NPI) producers continues to tighten supply in Indonesia, with high domestic trade premiums supporting ore prices. In terms of primary nickel, domestic smelters have low nickel ore inventories, and some companies are still in maintenance periods, keeping overall NPI production low. Indonesian NPI production remains high in April, and the pullback in nickel prices has driven the conversion of high-grade nickel matte back to NPI, likely extending the surplus. Recent MHP production cuts are expected to marginally tighten refined nickel supply. Overall, Indonesia's nickel supply remains relatively loose. On the demand side, stainless steel demand is recovering slowly, with a slow destocking pace, and traders are pessimistic about future orders, indicating a generally weak demand. Future supply-side attention should focus on the shipping pace of Philippine nickel ore and Indonesia's domestic nickel ore trade, while demand-side attention should be on stainless steel inventory and order dynamics. Xia Peng, Head of Nonferrous and New Energy Group at Chuangyuan Futures Research Institute: From a fundamental perspective, the current supply and demand situation in nickel smelting remains challenging. As of April 17, LME refined nickel inventory stood at 204,500 mt, the highest since September 2021. Last Friday, SMM reported domestic refined nickel social inventory at 43,300 mt, indicating no shortage of refined nickel, the trading target in the futures market. The main point of contention since the Chinese New Year has been the disruptions in Indonesian nickel ore supply. In 2024, Indonesia accounted for 60% of global primary nickel production, showing a high concentration. Moreover, MHP capacity in the smelting sector continues to expand, making nickel ore relatively scarce compared to smelting capacity. The anchor for futures pricing lies in the ore sector. Last year, the slow issuance of RKAB in Indonesia, combined with low smelter ore inventories, the rainy season, and the Indonesian Ramadan in March, created a short-term supply-demand mismatch, driving nickel ore prices and subsequently nickel prices slightly higher. As we approach May, seasonal recovery in nickel ore supply from Indonesia and the Philippines may slightly ease the tight ore supply, with a focus on nickel ore price changes. [Institutional Diagnosis]: After consecutive rebounds, does SHFE nickel still have room for further upside? Gu Jing, Senior Analyst at Yide Futures Investment Consulting Department: Currently, with the easing of macro sentiment, the LME market has fully recovered from the decline caused by reciprocal tariffs, and the market has already reacted to the adjustment of Indonesia's PNBP tax rates. The current surplus continues, with high inventory levels exerting downward pressure. We believe that further upside in the futures market will require further improvement in the supply and demand fundamentals. Jiang Xinbin, Senior Metal Analyst at Zheshang Futures Research Center: After the Qingming Festival, SHFE nickel prices rebounded from low levels, approaching the middle of the previous trading range. From a fundamental perspective, on the supply side, although the implementation of Indonesia's nickel product royalty policy has pushed the price center higher, the overall supply of primary nickel remains rigidly growing, with high inventory pressure for Class 1 nickel still present. On the demand side, stainless steel is significantly dragged down by weak end-use consumption in real estate and infrastructure, with cautious market procurement and pessimistic order expectations making it difficult to form strong support. Overall, the global nickel market remains in a supply-demand surplus, and SHFE nickel's upside room for continued rebound in the short term is limited, with sideways movement expected. Attention should be paid to changes in Indonesia's industrial policies and the macro environment. Xia Peng, Head of Nonferrous and New Energy Group at Chuangyuan Futures Research Institute: This year, we have been closely monitoring changes in Indonesia's mineral policies, particularly whether there will be adjustments to nickel ore quotas. Information from the Indonesian Nickel Association shows that the Indonesian government has allocated 298 million mt of nickel ore quotas for 2025, which is estimated to meet the nickel ore consumption for 2025 based on this year's smelting production. Global primary nickel supply and demand remain in surplus. However, since December last year, government officials have repeatedly stated in public that they plan to reduce this year's nickel ore quotas to stabilize nickel prices. If the quota is cut to 220 million mt as suggested by the Ministry of Energy and Mineral Resources officials at the end of February, the global primary nickel supply and demand will completely reverse this year, shifting from surplus to shortage. Over the past decade, the Indonesian government has adjusted its mineral policies multiple times, making it difficult to predict future policy directions. It is recommended to closely monitor changes in Indonesian nickel ore prices.