[SMM Analysis]Weak Supply-Demand Pattern; Secondary Aluminum Prices Were Expected to Come Under Pressure and Pull Back in April

Overall, cost support remained strong, supply tightened while demand stayed stable. As tender prices became clear, aluminum fluoride prices were generally raised by around 800 yuan/mt in line with the guidance. Going forward, close attention should be paid to dynamic changes in raw material costs and adjustments in downstream procurement pace.

On April 2, 2026, the White House ushered US steel trade policy into "Version 2.0." This strategic shift goes beyond simple tariff hikes. It uses full-value taxation and melt-and-pour traceability to block low-end imported raw materials, while applying structural tariff reductions to finished products to ease manufacturing inflation. Ultimately, this two-pronged approach aims to forcibly bring the global supply chain back to domestic US steel production.

[SMM Chrome Weekly Review: Weak Demand Performance, Market Remained in the Doldrums] News on April 3, 2026: The ferrochrome and chrome ore markets saw limited fluctuations...

This week, stainless steel spot prices fell slightly more than production costs, further worsening the inversion between stainless steel mill prices and costs. Taking 304 cold-rolled products as an example, based on raw material prices on the day, the full cost profit margin was -1.19% this week; calculated based on raw material inventory costs, the margin was -0.55%. Nickel-series raw material costs, high-grade NPI prices remained in the doldrums this week. Although nickel ore prices are currently holding firm and NPI traders are broadly bullish, SHFE nickel futures have been weak recently, while downstream stainless steel prices have struggled to rise. Stainless steel mills themselves are under heavy cost pressure and have shown low acceptance of high-priced raw materials, resulting in sparse market transactions recently; affected by this, high-grade NPI traders have faced considerable transaction pressure, and the price center edged lower slightly. As of this Friday, high-grade NPI with a grade of 10-12% fell by 2 yuan per nickel unit to 1,081.5 yuan/nickel unit. Stainless steel scrap market, stainless steel scrap prices were stable this week, and the decline in finished stainless steel prices did not transmit to the steel scrap market, while prices of substitute furnace charge also remained stable. Tightness in tax invoices eased, the economic advantage of steel scrap became more evident, and high stainless steel mill production schedules drove higher consumption, lifting market transactions and easing inventory pressure. However, finished product prices struggled to rise, limiting upside room for steel scrap prices, which are expected to remain stable in the short term. As of this Friday, the price of 304 off-cuts in Shanghai rose by 100 yuan/mt, with the latest quote at around 10,150 yuan/mt. Chrome-series raw material costs, high-carbon ferrochrome prices dropped back slightly this week. Although some ferrochrome producers recently reported maintenance and production cuts, and stainless steel production schedules for April remained high, leaving retail spot supply in the ferrochrome market relatively tight, stainless steel mills had built relatively ample ferrochrome raw material inventories earlier. Meanwhile, high port inventories of chrome ore recently caused some loosening in chrome ore spot prices. In addition, ferrochrome capacity has already reached a high level, the rainy season in south China is approaching, and ferrochrome producers outside China are resuming production. With ferrochrome producers lacking confidence in the outlook, ferrochrome prices still faced some downward pressure. As of this Friday, high-carbon ferrochrome prices in Inner Mongolia fell 25 yuan/mt (50% metal content) WoW to 8,625 yuan/mt (50% metal content).

[[Weekly Review of Aluminum Scrap and Secondary Aluminum]]Secondary Aluminum Market Consolidated at High Levels, Intensifying the Tug-of-War Between Cost Support and Weak Demand

Iron phosphate negotiations in April were deadlocked, with offers hitting 13,000 yuan/mt. The price surge appeared raw-material driven, but in fact reflected pricing power shifting upstream after a reversal in supply-demand fundamentals. Downstream buyers cited “cost increases” to push back, yet conveniently forgot the upstream losses quietly absorbed over the past three years. This was never about simple cost pass-through—it was a restructuring of profit distribution across the chain.

[SMM Stainless Steel Daily Review] SS Futures Moved Sideways, with Cost Support Keeping Spot Stainless Steel Largely Stable SMM News on April 1: SS futures fluctuated. Stainless steel futures rose first and then fell, with a relatively small intraday change, closing at 14,180 yuan/mt by the midday close. In the spot market, SS futures fluctuated, while prices of various furnace charge materials remained relatively firm, supporting stainless steel prices. Market quotations were largely stable, with limited room to rise or fall. Although downstream end-users mainly made just-in-time procurement, current market inventory pressure was not high, and prices were still expected to remain relatively stable in the short term. The most-traded SS futures contract fluctuated. At 10:15 a.m., SS2605 was quoted at 14,275 yuan/mt, up 75 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 195-395 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi was unchanged; for cold-rolled burr-edge 304/2B coils, the average prices in both Wuxi and Foshan were stable; cold-rolled 316L/2B coils in Wuxi were unchanged; hot-rolled 316L/NO.1 coils in Wuxi were quoted flat; and cold-rolled 430/2B coils in both Wuxi and Foshan remained stable. The stainless steel market has now entered the traditional peak consumption season. Transactions from downstream end-users remained steady, but market sentiment turned cautious. End-user enterprises lacked willingness to stockpile, with procurement mainly driven by restocking based on demand, and the brisk trading pattern typically seen in the peak season had yet to emerge. Overall demand remained steady and neutral. Futures side, repeated disruptions from the Iran geopolitical conflict made it difficult for the short-term impact on SS futures to be fully eliminated; however, recently...

[SMM Operating Rate of Steel Mills Using Externally Purchased Billets] According to the SMM survey, as of March 31, the operating rate of steel mills using externally purchased billets mainly producing construction steel stood at 27.39%, up 27.39 percentage points MoM from February and up 5.25 percentage points YoY. National construction steel prices fluctuated downward in March. Rebar prices reached 3,167 yuan/mt on March 23, the highest price of the month, and 3,131 yuan/mt on March 4, the lowest price of the month. After the Lantern Festival, downstream construction sites gradually resumed work, market demand gradually improved, and end-users' just-in-time procurement increased slightly. Cost side, affected by multiple macro factors, the coal market as a whole showed a pattern of being more likely to rise than fall. At some coal mines in producing areas, production release was hindered by factors such as working face replacements, leading to a slight contraction in supply, while downstream procurement demand remained robust. Auction transaction premiums were obvious, further supporting stronger coal prices. As cost pressure was passed on, coke enterprises showed a strong willingness to hold prices firm, and expectations for a new round of coke price increases to be implemented heated up, which will likely be gradually realized in the near term. Raw material prices are expected to fluctuate upward in the short term, and cost support for steel remained in place. Supply side, blast furnace steel mills currently maintained a stable production pace, with production remaining relatively steady; EAF steel mills resumed production in an orderly manner as planned, and the capacity utilization rate continued to rebound. As of March 24, the operating rate of 50 electric furnace steel mills nationwide mainly producing construction steel was 40.42%, up 1.78% from the previous period. Billet-rolling mills also gradually resumed work after the Lantern Festival, and the operating rate of steel mills using externally purchased billets was 27.39% this month, up 27.39% MoM, driving a rapid increase in overall market supply. Demand side, downstream construction sites were gradually resuming work, and market demand increased somewhat. However, dragged down by end-user steel consumption volumes and tight cash flow at end-user enterprises, the market remained cautious about the outlook. Downstream construction sites and traders mainly purchased as needed, and the strength of demand recovery was weaker than in the same period in previous years. Overall, after the Lantern Festival, both supply and demand increased, and the supply-demand imbalance was not yet prominent. As temperatures gradually recover and terminal construction conditions improve, the rebar supply-demand pattern is expected to improve mildly, and inventory is likely to continue declining. However, constrained by funding conditions, the room for incremental demand should not be viewed overly optimistically. Therefore, the increase in the operating rate of billet-processing enterprises in April is expected to be limited, and the room for overall supply growth is relatively small.

As of March 31, the operating rate of 50 electric furnace steel mills nationwide mainly producing construction materials was 41.42%, up 1% WoW from the previous period; the capacity utilization rate was 42.6%, up 0.86% WoW; and daily average production of construction materials was 94,900 mt, up 1,900 mt WoW. During the survey period (March 24–March 31), the operating rate of electric furnace mills nationwide still maintained a slight rebound this week. At present, the profitability of construction materials production at most electric furnace mills was near the break-even line. Among them, profitability in Central China improved slightly, mainly because some electric furnace mills ensured production profitability by adjusting product specifications and markup strategies. Overall, cost pressure on electric furnace mills remained in place. If finished steel prices continued to remain in the doldrums, production enthusiasm among electric furnace enterprises would gradually weaken, and the overall pace of capacity release might tend to slow, making a large-scale production increase less likely.