[SMM Analysis]Return to Work Drove a Sharp Rise in the Operating Rate of Secondary Aluminum Producers in March, Expected to Decline in April

[SMMS Morning Meeting Summary: Last Week the Tin Market Showed a Pattern of Wide Swings at High Levels with Strong Macro Disturbances]

[SMM Tin Morning Brief: SHFE Tin's Most-Traded Contract Fluctuates at Highs During Night Session Spot Market Transactions Remain Sluggish]

This week, stainless steel spot prices strengthened, while production costs also rose, further expanding steel mills' profit margins. Taking 304 cold-rolled products as an example, based on the current raw material prices, the full cost profit margin reached 0.15% this week; if calculated using the raw material inventory cost, it reached 1.74%. On the cost side for nickel-based raw materials, news regarding Indonesian nickel ore continued to develop this week, pushing high-grade NPI prices further up. NPI producers are already in a loss-making position, showing strong willingness to hold prices firm. Coupled with expectations of increased stainless steel production in March boosting demand for high-grade NPI, although mainstream stainless steel mills have not yet seen representative transaction prices, market confidence remains strong. As of Friday this week, the price for high-grade NPI with 10-12% grade rose 33.5 yuan per mtu, closing at 1,085 yuan/mtu. In the stainless steel scrap market, prices remained generally stable this week. Market recovery was slow in the first week after the holiday, as some scrap yards and downstream enterprises had not fully resumed work. The slow return to work led to insufficient trading activity and weak transactions. While futures prices fluctuated higher, boosted by Indonesian policy news, leading to a significant rise in high-grade NPI prices, stainless steel scrap prices did not fluctuate synchronously due to the lag in recovery. The advantage of stainless steel scrap relative to high-grade NPI further expanded, providing support for its price. With increased steel mill production schedules in March and the approach of the peak season "Golden March, Silver April", downstream demand is expected to be released, and procurement demand will increase. As of Friday this week, the price for 304 off-cuts in Shanghai remained stable, with the latest offer around 9,650 yuan/mt. Regarding the cost side for chromium-based raw materials, high-carbon ferrochrome prices continued their stable trend this week. In the first week after the Chinese New Year holiday, the market gradually recovered, but overall transactions remained relatively sluggish, with retail prices holding steady. During the week, Tsingshan Group announced its March high-carbon ferrochrome tender price, which was unchanged from the previous month at 8,245 yuan/mt (50% metal content). However, with the approaching peak demand season "Golden March, Silver April", expectations of a significant increase in stainless steel production schedules in March, and recent rises in stainless steel prices, market expectations for increased ferrochrome demand have grown, and a sentiment for price exploration has emerged in the ferrochrome market. As of Friday this week, high-carbon ferrochrome prices in Inner Mongolia were flat WoW, closing at 8,550 yuan/mt (50% metal content).

SMM Morning Meeting Minutes: LME copper opened at $13,317/mt overnight, fluctuated rangebound after opening, then touched a low of $13,168/mt, and subsequently the center rose to touch a high of $13,348/mt, finally closing at $13,259/mt, down 0.68%. Trading volume reached 18,000 lots, a decrease of 809 lots from the previous trading day; open interest reached 316,000 lots, a decrease of 4,795 lots from the previous trading day, overall mainly showing bulls reducing positions. The most-traded SHFE copper contract opened at 102,670 yuan/mt overnight, fluctuated downward after opening, then touched a low of 101,780 yuan/mt, and subsequently the center rose to touch a high of 102,880 yuan/mt, finally closing at 102,550 yuan/mt, down 0.15%. Trading volume reached 55,000 lots, a decrease of 51,000 lots from the previous trading day; open interest reached 186,000 lots, an increase of 1,437 lots from the previous trading day, overall mainly showing bears increasing positions.

According to a May 26 announcement from Ivanhoe Mines: Kolwezi, Democratic Republic of the Congo (DRC) – Following the initial announcement on May 20, 2025, regarding the suspension of underground mining operations at the Kakula Mine in the Democratic Republic of the Congo, Robert Friedland, Executive Co-Chairman of Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF), Weibao Hao, Co-Chairman, and Marna Cloete, President and Chief Executive Officer, issued a statement on May 26 regarding the latest operational updates at the Kamoa-Kakula Mine. Senior management of Ivanhoe Mines, along with a team of world-class geotechnical experts, continues to conduct a comprehensive mine investigation to understand the causes and impacts of the seismic activity. In the past few days, intermittent seismic activity has persisted in the Kakula underground mine. In light of the recent seismic events, underground operations were suspended again on Saturday, May 25, 2025. All employees have been safely evacuated to the surface, and mobile equipment has been removed from underground work areas. The company has always prioritized the safety of its employees and contractors, and to date, there have been no lost-time injuries. Preliminary indications suggest that seismic activity at Kakula may continue for several weeks, which will affect underground access operations and extend the suspension of underground mining at Kakula. Due to the impact on underground pumping and power infrastructure, there has been a significant increase in water inflow at the Kakula underground mine. With the support of Ivanhoe Mines and Zijin Mining, Kamoa Copper is developing a detailed dewatering plan, including the procurement of new pumping equipment to enhance pumping capacity from the surface. Ivanhoe thanks its Chinese partners, Zijin Mining and CITIC Metal, for their significant assistance in procuring pumping equipment. Marna Cloete, President and Chief Executive Officer of Ivanhoe Mines, commented, "I would like to express my deep gratitude to our dedicated employees who have continued to work under challenging conditions during the recent seismic events, demonstrating remarkable resilience and dedication. The safety of our employees is our top priority, and achieving zero injuries in such a severe environment is a testament to the professionalism and focus of every employee at Kamoa Copper." "During the suspension of underground mining operations at the Kakula Mine, we are focusing our efforts on maintaining pumping and water management facilities, including expediting the procurement of relevant equipment for surface dewatering. We are working around the clock with world-leading geotechnical experts to investigate the causes of the issues we are facing and develop solutions." "We are making every effort to retain significant flexibility to sustain operations at the Kakula beneficiation plant through surface ore stockpiling or to redeploy Kakula employees and equipment to the unaffected and ongoing operations at the Kamoa Mine." Robert Friedland, founder and Co-Executive Chairman of Ivanhoe Mines, added, "We will draw wisdom and experience from the events of the past week. Ivanhoe Mines and our partner, Zijin Mining, are jointly operating this complex, high-grade, and previously unheard-of sediment-hosted copper deposit. This incident will provide us with valuable insights into geotechnical engineering and the maintenance of critical pumping facilities, enabling us to avoid similar impacts in the future and safely resume mining operations at Kakula... These lessons will comprehensively guide our work at Kamoa and Western Foreland." "I remind readers that SpaceX, which currently undertakes approximately 90% of humanity's space launch missions, did not achieve its current success overnight. Every setback has brought new knowledge to their team, leading to greater achievements. Therefore, we are approaching the operation of Kamoa-Kakula with the same mindset. Together, we plan to resume operations and production, making them safer and more robust than ever before." As some underground areas have been confirmed safe, personnel can return to work. The primary tasks are to inspect, repair, and restart the pump stations and associated pipelines, as well as the substation and related cables. Repair work continues in the shallow western section of the Kakula mine, where the drainage flow rate is 1,000 liters per second. The engineering team at Kamoa Copper is focusing on restoring the drainage capacity, aiming to exceed 3,000 liters per second, which will be sufficient to maintain stable groundwater levels in the area. Meanwhile, the management team is planning to install permanent, large-power pumping systems that can be operated from the surface in all mining areas. The surface infrastructure at Kakula, including the Phase 1 and Phase 2 beneficiation plants and the one-step copper smelter, remains completely unaffected. The Phase 1 and Phase 2 beneficiation plants are currently processing ore from surface stockpiles. Mining activities at the Kamoa underground mine and the adjacent Phase 3 beneficiation plant continue to operate normally and remain unaffected. The 2025 production and cost guidance for Kamoa-Kakula, as well as the capacity ramp-up plan for the one-step copper smelter, have been temporarily withdrawn pending re-evaluation. Ivanhoe Mines will provide further updates as more information becomes available. Ivanhoe Mines and Zijin Mining continue to maintain a strong and resilient partnership at the joint venture level, jointly committed to restoring safe production at Kakula as soon as possible.

Many Regions Launch Real Estate Promotions to Boost the "Spring Thaw" [SMM Steel Market Morning Brief]: Recently, many regions have introduced various activities in conjunction with favorable real estate policies to promote the "spring thaw" in the property market. According to the China Index Academy, in the short term, as the Chinese New Year holiday ends and residents gradually return to work and home-buying activities, the market's online contract signing volume is expected to see a certain rebound after the holiday. Taking the Shenzhen market as an example, the latest data released by the Shenzhen Real Estate Intermediary Association shows that 1,261 second-hand housing units (including self-service transactions) were recorded citywide last week, up 53% WoW. With industry practitioners gradually returning to work, the recent recording volume of second-hand housing has been steadily increasing, basically returning to pre-holiday levels. Some analysts also believe that this year's "spring thaw" is an important window period for restoring market confidence, but only through joint efforts from policies and all market participants can the "spring thaw" in the property market truly arrive, achieving sustainable and healthy market development.

Many Regions Launch Real Estate Promotions to Boost the "Spring Thaw" [SMM Steel Market Morning Brief]: Recently, many regions have introduced various activities in conjunction with favorable real estate policies to promote the "spring thaw" in the property market. According to the China Index Academy, in the short term, as the Chinese New Year holiday ends and residents gradually return to work and home-buying activities, the market's online signing volume is expected to see a certain rebound after the holiday. Taking the Shenzhen market as an example, the latest data released by the Shenzhen Real Estate Intermediary Association shows that 1,261 second-hand housing units (including self-service transactions) were recorded citywide last week, up 53% WoW. With industry practitioners gradually returning to work, the recent recorded volume of second-hand housing has been steadily increasing, basically returning to pre-holiday levels. Some analysts also believe that this year's "spring thaw" is an important window period for restoring market confidence, but only through joint efforts from policies and all market participants can the "spring thaw" in the property market truly arrive, achieving sustainable and healthy market development.

[Market Cautiously Observing: Non-Oriented Silicon Steel May Remain Stable After the Holiday] During the Chinese New Year holiday, the market was in a closed state, with traders typically resuming operations around the eighth or ninth day of the lunar calendar. Some end-user employees gradually returned to work after the ninth day, with production expected to commence after the Lantern Festival. Currently, inventories of non-oriented silicon steel remain relatively low across producers, trading channels, and downstream motor manufacturers, indicating a slight restocking demand for non-oriented silicon steel. In summary, the concentrated release of demand for non-oriented silicon steel in Q4 2024 poses a risk of overdrawn demand, which may affect procurement needs in Q1 2025. The market is cautiously observing, and non-oriented silicon steel may remain stable after the holiday.

SHFE Tin Prices Fluctuate Rangebound, Spot Market Transactions Halted [SMM Tin Morning Brief] On January 27, the latest "China Auto Dealers Inventory Alert Index Survey" (VIA) released by the China Automobile Dealers Association showed that the Vehicle Inventory Alert Index for Chinese auto dealers in January 2025 stood at 62.3%, up 2.4 percentage points YoY and 12.1 percentage points MoM. The inventory alert index remained above the 50 mark, indicating that the automotive circulation industry was in a sluggish zone. During yesterday's night session, SHFE tin prices exhibited a rangebound trend without significant volatility. In the futures market, the price of the most-traded SHFE tin contract stabilized at 248,000 yuan/mt. Due to downstream and end-user enterprises entering the Chinese New Year holiday, there were no tin ingot transactions in the spot market. It is expected that the spot market will gradually resume transactions after the holiday as downstream and end-user enterprises return to work.