[SMM Aluminum Price Weekly Review: Geopolitical Disruptions Dominate, and the Pattern of Elevated Aluminum Prices Continues]

[SHFE Aluminum Night Session Closed Higher, with Geopolitics and Fundamentals Jointly Supporting Aluminum Prices] Overall, the geopolitical situation in the Middle East remained the core factor affecting the global aluminum market. A series of production cuts and damage incidents at Middle Eastern aluminum plants is expected to provide strong upward momentum for aluminum prices in and outside China, together with support from expectations of the gradual release of peak-season demand in China. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.

According to SMM data, the week of March 23–27, 2026 marked the final stretch of China’s traditional peak-demand season known as “Golden March.” During the week, the most-active stainless steel futures contract ( SS2605 ) posted a firmer, rangebound rebound as weak fundamentals clashed with renewed macro support. By the close on March 27 , the contract had risen to RMB 14,355/mt (about USD 2,076/mt) , up RMB 205/mt (about USD 29.65/mt) from RMB 14,150/mt (about USD 2,047/mt) a week earlier. The week’s defining feature was a sharp contrast between weak spot fundamentals and resilient market expectations. Physical demand remained mediocre, and social inventories moved back into accumulation. Even so, stainless futures found strong support from easing concerns over the Middle East, policy-related uncertainty in Indonesia’s nickel sector, and liquidity support from China’s central bank. As a result, prices managed to hold the lower end of the recent trading range and rebound from there. Macro backdrop: easing geopolitical stress, but rates remain a headwind At the macro level, both overseas and China-related developments saw important shifts. In the Middle East, the nearly month-long Strait of Hormuz crisis showed signs of easing after Iran’s mission to the United Nations said that non-hostile vessels could still pass safely through the strait in coordination with Iranian authorities. That helped cool fears of a major energy supply disruption. However, the inflation fallout from the earlier oil price spike has already shown up in global rates markets. US Treasury yields remained elevated, further reducing room for aggressive Fed easing expectations. In China, the central bank conducted a RMB 500 billion one-year MLF operation , equivalent to about USD 72.32 billion , helping keep liquidity conditions reasonably ample. While this was largely a routine move, it did help ease some of the valuation pressure created by a high global interest-rate environment and offered a degree of support to the market floor. Fundamentals: destocking stalls as inventories edge higher again On the fundamentals side, the destocking trend came to an abrupt halt, and “Golden March” ended on a disappointing note. The latest SMM data showed that social inventories failed to extend the declines seen over the previous two weeks and instead edged up to 982,000 mt , from 979,300 mt the week before, an increase of 2,700 mt . That renewed inventory build hit a sensitive spot for the market. In the spot market, downstream buyers continued to replenish only as needed, with very little appetite for stocking up. Throughout March, trading activity never showed the kind of momentum normally associated with a true seasonal demand peak. At the same time, mills have maintained relatively high production schedules, creating a mismatch between concentrated arrivals and lukewarm demand. As a result, inventory digestion is becoming more difficult rather than less, placing a clear cap on further upside in both futures and spot prices. Cost support stays firm as Indonesia policy rumors stir the market The cost side remained notably resilient, with fresh policy speculation adding another layer of support. As of March 27 , high-grade NPI was quoted at RMB 1,083.5 per nickel unit (about USD 156.71 per nickel unit) , while high-carbon ferrochrome held firm at RMB 8,650 per 50-basis mt (about USD 1,251.07 per 50-basis mt) . Although weak spot fundamentals still left mills inclined to push back against expensive raw materials, the market was unsettled this week by reports and rumors surrounding possible Indonesian export taxes and windfall taxes on nickel products. That policy uncertainty quickly revived bullish sentiment and helped upstream prices stabilize even as the market faced correction pressure. With raw material costs remaining elevated, downside room in stainless steel futures continued to look limited. Outlook: macro support sets the floor, weak demand caps the upside Overall, this week’s market was a clear example of macro support defining the downside floor while weak fundamentals capped the upside. “Golden March” ended without delivering the demand strength many had hoped for, and the return to inventory accumulation undermined the bullish case from a fundamental perspective. Even so, the combined effect of China’s RMB 500 billion MLF injection, easing Middle East tensions, and Indonesian tax-related speculation helped prevent a breakdown and instead allowed prices to rebound. Looking ahead, the market is now moving into the “Silver April” period. With inventories still high and mill output still elevated, there is little in the current fundamentals to support a strong one-way rally. At the same time, cost support remains firm enough to make a deep decline difficult. In the near term, the most-active stainless steel futures contract is expected to remain in a broad trading range. Market participants should pay close attention to whether Indonesian policy measures are formally implemented and how quickly spot inventories are absorbed after the holiday period. For now, chasing prices higher aggressively still looks risky. Written by: Bruce Chew | bruce.chew@smm.cn +601167087088

[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 Nickel, March 20: Macro and Market News: (1) The Party Committee of the People's Bank of China held an enlarged meeting on March 18, which stated that it would continue to effectively implement a moderately accommodative monetary policy, firmly safeguard the stable operation of financial markets such as equities, bonds, and foreign exchange, and advance legislative formulation and amendments including the People's Bank of China Law and the Financial Stability Law. (2) The interest rate futures market priced in only 5.5 basis points of US Fed interest rate cuts this year, and bets on rate hikes began to emerge. Spot Market: On March 20, the SMM price of #1 refined nickel rose by 3,000 yuan/mt from the previous trading day. In terms of spot premiums, the average price of Jinchuan #1 refined nickel was 6,550 yuan/mt, down 200 yuan/mt from the previous trading day, while the mainstream China electrodeposited nickel brands were quoted at -300-400 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2605) staged a sharp rebound, closing the morning session at 134,780 yuan/mt, up 1.50. Yesterday, nickel prices once fell below the 130,000 yuan mark, as trades on expectations of a global economic recession triggered by escalating geopolitical conflict in the Middle East put the metals complex under pressure overall. Nickel prices then took the lead in rebounding sharply, recovering to around 135,000 yuan/mt in the morning session. Short term, sentiment from the macro perspective may continue to dominate the market, and nickel prices may maintain wide swings.

Recently, Joint Circular No. 00156 of the Ministry of Finance and the Ministry of Mines of the DRC / Cabinet of the Ministry of Mines / 2026 and Cabinet of the Ministry of Finance / 2026, concerning regulatory measures to standardize control over deviations in the detection of refined cobalt content in exported cobalt hydroxide under the quota system framework of the Authority for the Regulation and Control of Strategic Mineral Substances’ Markets in the DRC, is translated as follows: The English translation of the above text is:

According to the central bank’s announcement on its open market outright reverse repo tender, on March 16, 2026, the People’s Bank of China will conduct 500 billion yuan of outright reverse repo operations with a tenor of six months (182 days) through a fixed-quantity, interest-rate tender and multiple-price allotment method.

The central bank’s February financial statistics report showed that at end-February, the balance of broad money (M2) stood at 349.22 trillion yuan, up 9% YoY; aggregate social financing increased by a cumulative 9.6 trillion yuan in the first two months, 316.2 billion yuan more than in the same period last year; new yuan loans totaled 5.61 trillion yuan in the first two months; the balance of domestic and foreign currency deposits stood at 345.72 trillion yuan, up 8.8% YoY; and at month-end, the balance of yuan deposits stood at 337.94 trillion yuan, up 8.7% YoY.

SMM Nickel News, March 16: Macro and Market News: (1) The financial statistics report for February released by the central bank showed that at month-end February, broad money (M2) balance stood at 349.22 trillion yuan, up 9% YoY; cumulative aggregate social financing for the first two months was 9.6 trillion yuan, 316.2 billion yuan more than the same period last year; new RMB loans in the first two months increased by 5.61 trillion yuan; the balance of domestic and foreign currency deposits was 345.72 trillion yuan, up 8.8% YoY; and the month-end RMB deposit balance was 337.94 trillion yuan, up 8.7% YoY. (2) The central bank said in its tender announcement for open-market outright reverse repo operations that on March 16, 2026, the People's Bank of China will conduct 500 billion yuan of outright reverse repo operations through a fixed-quantity, interest-rate bidding, and multiple-price allocation method, with a tenor of six months (182 days). Spot Market: On March 16, the SMM #1 refined nickel price fell by 2,650 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 6,700 yuan/mt, up 50 yuan/mt from the previous trading day; China mainstream branded electrodeposited nickel was at -300-400 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2605) fell sharply intraday and closed the morning session at 135,990 yuan/mt, down 1.83%. Tensions in the Middle East pushed up oil prices, intensifying inflation concerns. The market expects the US Fed may slow the pace of interest rate cuts, while the US dollar continued to strengthen, creating clear pressure on nickel prices. Despite significant macro pressure, the industry-level support logic has not changed, and market concerns over tightening supply of nickel intermediate products remain. Short term, the most-traded SHFE nickel contract is expected to move sideways in the 135,000-145,000 yuan/mt range.

[Central Bank to Conduct 500 Billion Yuan in Outright Reverse Repo Operations Today] The People's Bank of China announced that it would conduct 500 billion yuan in six-month (182-day) outright reverse repo operations today (March 16) through fixed-quantity, interest-rate tendering and multiple-price bidding. As 600 billion yuan of six-month outright reverse repo operations mature in March, this operation meant the central bank rolled over 100 billion yuan less in six-month outright reverse repo operations for the month.