In January 2026, the European Union and India reached a historic Free Trade Agreement (FTA), with the elimination of steel tariffs of up to 22% becoming a major market focus. However, clearing the policy fog of "bilateral exemptions" and analyzing actual export and carbon emission data reveals that the steel industry faces a highly asymmetric trade reshaping. This seemingly fair reduction is actually Europe trading a "capped" ticket for India's "uncapped" massive incremental market.

SMM Nickel News, March 4: Macro and Market Updates: (1) Trump: After the 15% tariff deadline, we will gradually announce tariffs for different countries; we will raise tariff agreements for certain countries. (2) US Fed—① Kashkari: With the clouds of war looming, we originally expected one interest rate cut in 2026, but now it is uncertain. ② Williams: The US Fed will have to consider the spillover effects of the Iran issue on foreign markets and trading partners. He still believed rates were slightly above the neutral rate. Spot Market: On March 4, SMM #1 refined nickel prices rose 450 yuan/mt from the previous trading day. For spot premiums, the average for Jinchuan #1 refined nickel was 6,900 yuan/mt, down 50 yuan/mt from the previous trading day; the range for domestically mainstream brands of electrodeposited nickel was -300-400 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2605) fluctuated and strengthened in early trading, and closed at 137,410 yuan/mt, up 0.12%. After a consecutive pullback, nickel prices showed initial signs of stabilizing. News that Indonesia may additionally supplement quotas weakened the earlier supply tightens narrative, but cost support remained solid. In the short term, the most-traded SHFE nickel contract was expected to fluctuate around 140,000 yuan/mt.

[SMM Daily Review: Back-and-Forth Negotiations Between Upstream and Downstream Continued; Tight Supply of High Nickel Unit Cargoes Sustained Premiums] News on March 5: The upstream sentiment factor for SMM high-grade NPI was 2.88, up 0.01 MoM, while the downstream sentiment factor for high-grade NPI was 1.37, up 0.05 MoM.

[Domestic Iron Ore Brief Commentary: Iron Ore Concentrates Prices in the Tangshan Area May Remain in the Doldrums and Fluctuate] At the beginning of the week, iron ore concentrates prices in the Tangshan area were relatively stable, with the delivery-to-factory price, tax included, for 66-grade dry-basis iron ore concentrates at 960-970 yuan/mt; mines and beneficiation plants in the area are currently operating normally as expected. During the Two Sessions, no relevant explosives restriction notices were received locally, but overall iron ore concentrates supply remains tight, providing some support to prices. Demand side, some steel mills are currently undergoing maintenance.

As of March 3, the operating rate of 50 electric-furnace steel mills nationwide that mainly produce construction steel was 10.76%, up 10.76% MoM from the previous period; the capacity utilization rate was 6.88%, up 6.88% MoM from the previous period; the daily average production of construction steel was 15,300 mt, up 15,300 mt MoM. During the survey period (February 24–March 3), domestic spot construction steel prices fluctuated this week. After the holiday, downstream end-users had not fully resumed work, and purchases were mostly small, rigid demand. Overall market trading sentiment was subdued, and many regional markets showed a pattern of quoted prices but little to no transactions. Domestic electric-furnace steel mills’ production resumptions continued to advance. Within this week, 11 electric-furnace enterprises resumed production in succession, driving a rapid rebound in the overall operating rate of electric furnaces, and construction steel production posted a notable increase MoM. Looking ahead, most electric-furnace steel mills were set to implement production resumption plans in a concentrated manner next week. As a result, the domestic electric-furnace operating rate was expected to see a sharp rebound, and supply on the construction steel side was set to expand further.

[SMM Stainless Steel Daily Review] SS Futures Fluctuate Rangebound; Bullish Sentiment for Spot Stainless Steel Set Back SMM News on March 4: SS futures showed a fluctuate upward trend, overall fluctuating rangebound with limited upside momentum, and closed at 14,205 yuan/mt before noon. In the spot market, affected by factors including weakening momentum for further upside in SS futures, unchanged guidance prices from major mainstream stainless steel mills yesterday, a sharp increase in expected stainless steel production schedules within the month, and the buildup of social inventory, bullish sentiment was set back and quotes loosened. The most-traded SS futures contract fluctuated downward. At 10:30 a.m., SS2604 was quoted at 14,245 yuan/mt, up 80 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 275-475 yuan/mt range. In the spot market, Wuxi cold-rolled 201/2B coils were generally stable; for cold-rolled trimmed-edge 304/2B coils, the average price in Wuxi was stable while the average price in Foshan fell by 50 yuan/mt; cold-rolled 316L/2B coils in Wuxi were stable; for hot-rolled 316L/NO.1 coils, Wuxi quotes rose by 100 yuan/mt; cold-rolled 430/2B coils in both Wuxi and Foshan were stable. The stainless steel market is gradually recovering, and SS futures strengthened and moved higher. Driven by warming expectations for the traditional peak consumption season of “Golden March and Silver April” and the continued fermentation of news on Indonesian nickel ore, market participants’ bullish sentiment was strong. However, the recovery pace on the spot side was slow. Some traders and downstream end-users have not yet resumed operations, market trading activity has not fully recovered, and only a small number of rigid-demand orders were concluded during the week, presenting a clear pattern of “strong futures, weak spot.” On the inventory side, ...

As of now, the FOB price of Indonesian MHP nickel was $15,549/mt Ni, and the FOB price of Indonesian MHP cobalt was $49,819/mt Co. MHP payables (against the SMM battery-grade nickel sulphate index) were 85-86, and the MHP cobalt element payable indicator (against SMM refined cobalt (Rotterdam warehouse)) was 91. The FOB price of Indonesian high-grade nickel matte was $15,910/mt Ni.

[SMM Lead Morning Meeting Minutes: Bullish and Bearish Factors Coexisted in Domestic and Overseas Markets; Lead Prices Were Expected to Remain Consolidated] US Treasury Secretary Bessent: A 15% global tariff might be implemented this week, pledged to safeguard the Persian Gulf, and hinted that more measures were forthcoming. Recently, lead-acid battery enterprises in the domestic market basically resumed production, and the overall operating rate in March rebounded sharply from February…

[SMM Daily Chrome Review: Ore-Side Uptrend Continued, with Cost Support for Ferrochrome] News on March 4, 2026: The ex-factory price of high-carbon ferrochrome in Inner Mongolia was flat MoM from the previous trading day…

[SMM Analysis] Persian Gulf Shutdown? The Impact of the U.S.-Iran Conflict on Global Steel Trade On February 28, 2026, the conflict between the United States and Iran escalated into a full-scale outbreak, causing a sudden spike in Middle Eastern geopolitical tensions. As a global chokepoint for energy and bulk commodity maritime transport, the Strait of Hormuz has seen shipping disrupted and routes tightened, directly impacting the nerves of the global supply chain. This "Golden Waterway" is not only a lifeline for oil but also a critical strategic corridor for the global steel import and export trade . Once passage is restricted, it will deliver a comprehensive shock to the international steel trade landscape. Amidst the turmoil of war, what disruptions and restructuring will the global steel trade face? SMM's latest research provides an in-depth analysis. In the short term, the U.S.-Iran conflict poses a risk of stalling steel imports and exports in the Persian Gulf region, putting pressure on China's steel exports. Multiple disruptions along Gulf shipping routes have caused significant delays in exporters' orders. According to SMM research, the current Middle East situation has disrupted multiple ports in the Gulf region. Bahrain has suspended port activities, including pilotage services. Jebel Ali Port has halted all operations due to a fire caused by intercepting airstrike debris. Qatar's Ras Laffan and Messaid ports remain operational but with reduced traffic, GPS signal interference, and the government closure of its airspace. Similarly, new orders and shipments for Chinese exporters have also been significantly hindered. Data Source:SMM Impact Assessment of Core Ports within the Strait of Hormuz Should a physical blockade occur at this strategic chokepoint, the five most directly affected key inner-bay ports experiencing “instant logistics paralysis” would be: Port of Bandar Abbas, Port of Khomeini, Port of Jebel Ali, Port of Khalifa, and King Abdullah Port. Simultaneously, a Strait blockade would threaten to disrupt approximately 10% of global seaborne steel trade (primarily semi-finished products and specialty ores) . Iran's production of direct reduced iron (DRI) also holds significant weight in global supply; any disruption could drive up costs for electric arc furnace steelmaking in the Middle East. Data Source: SMM Ferrous Metal Shipping After the blockade, will goods become completely impossible to transport? While maritime routes will indeed come to a near standstill, the flow of goods won't cease entirely. It will simply become extremely costly, slow, and require complex overland transshipment. For instance, strategic alternative ports outside the strait include Sohar Port, Chabahar Port, and Gwadar Port. Data Source: Compiled by SMM based on publicly available information Trade Chokehold Triggered by Insurance Withdrawals Equally severe as the strait blockade is the withdrawal of war risk insurance. Marine insurers Skuld and Gard have announced they will cancel war risk coverage due to escalating tensions in the Middle East. Local feedback from the UAE indicates most insurers refuse to underwrite war risk insurance for the Red Sea. This means traders must bear multiple uncontrollable factors and assume all consequences, which will significantly impact new orders. Summary: The Hormuz Crisis's “Hedging Effect” on China's Steel Market Leads to Short-Term Export Pressure Short-Term Negative Impact (Suppression of Demand and Logistics): The sudden halt in Gulf shipping routes will cause China's total exports to Middle Eastern countries like Saudi Arabia and the UAE to plummet dramatically. Export disruptions may even force resources to flow back into the domestic market, intensifying supply pressure and exerting downward pressure on steel prices. Data Source: SMM, GACC Mid-term outlook: As a major steel supplier, Iran's halted exports will trigger tightening supply of steel billets in Southeast and South Asia. From Construction to Industry: Iran's Steel Export Structure Transformation and the Peak Era Dominated by “Billet” According to data released by the Iranian Steel Producers Association (ISPA), 2025 marked the “peak era” for Iran's steel exports, with its export structure exhibiting an extremely aggressive trend: ① Absolute Dominance of Semi-Finished Products: From March to December 2025, Iran's billet exports reached 4.58 million tons (+37.7% YoY), while slab exports hit 1.54 million tons (+44.6% YoY). This confirms the earlier observation that the current strait blockade will trigger significant “slab panic” among downstream steel mills in Southeast Asia and the Middle East. ② Structural Leap in Flat Products: Finished flat product exports surged from 307,000 tons in the same period last year to 1.03 million tons. Notably, the significant increase in hot-rolled coil (867,000 tons) and coated steel (up 76.7% YoY) indicates Iran's gradual transition from a “construction steel supplier” to an “industrial raw material supplier.” ③ Weakness and contraction in long products: In contrast, exports of finished long products (rebar, wire rod) declined by 9.9%, while structural steel exports plummeted by 27.7%. This trend of “reducing long products while increasing flat products” has, against the backdrop of stalled infrastructure projects, actually heightened the risk of inventory buildup for finished goods. Data Source: ISPA Mid-term positive factors: Cost and substitution support Iran's steel export shortfall of nearly 11 million tons will trigger regional supply tightness, forcing some Southeast Asian and South Asian buyers to shift procurement to China, creating “substitution-driven incremental demand.” Simultaneously, rising crude oil prices may push up costs across the entire industrial chain, providing bottom-up support for steel prices. Although logistics disruptions and project suspensions will suppress export performance in the short term, the reshuffling of the global supply landscape is expected to partially offset the negative impact. Chinese steel may play a key role in filling the global gap. Long-term outlook: Iran's ceasefire may temporarily impact the global steel market Hoarding effect under blockade: Iran's sharply rising mill and port inventory pressures According to the latest global steel statistics report released by the World Steel Association (WSA), Iran's cumulative crude steel production reached 31.8 million tons in 2025, marking a year-on-year increase of approximately 1.4% compared to 2024 and solidifying its position as the world's tenth-largest steel producer. In December 2025, Iran's monthly crude steel output hit 3 million tons, a significant year-on-year increase of 16.2%. This indicates that Iranian steel mills were operating at peak capacity just before the conflict erupted. In January 2026, its crude steel output reached approximately 2.6 million tons, marking a 15.1% year-on-year increase. Against the backdrop of a 6.5% year-on-year decline in global crude steel production during January, Iran demonstrated an “independent trend.” According to SMM research, the high production levels from earlier periods have led to severe inventory backlogs at domestic steel mills. The logistics blockade that began in late February prevented the full shipment of steel produced during this high-output phase out of the Persian Gulf. Consequently, ports and mill warehouses are now stockpiling large quantities of slabs and billets originally intended for export. Once the situation eases, this “low-priced inventory” could flood the market at dumping prices. However, considering Iran's post-ceasefire reconstruction needs and the actual release of these supplies, SMM will continue to monitor developments closely. Copyright and Intellectual Property Statement: This report is independently created or compiled by SMM Information & Technology Co., Ltd. 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