I. Review of SHFE Aluminum Price Trends in Q1 2026 (by Stage) January: The market’s core trading logic deviated from fundamentals and centered on macro expectations for US Fed interest rate cuts Fundamentals: Chinese New Year off-season + demand vacuum + inventory buildup Aluminum prices continued to climb and hit a record high for the period, while downstream profit margins came under pressure, leading to weaker demand for primary aluminum. Repeated environmental protection-driven production restrictions in some regions constrained demand for raw materials. Aluminum social inventory continued to accumulate. As of end-January, SMM aluminum ingot social inventory rose to 782,000 mt, a high for the same period in the past three years. Macro front: In January, the US Fed was in an interest rate cut cycle, and the US dollar weakened significantly. Large amounts of capital flowed into the commodities futures market, driving broad commodity prices higher; together with favorable support from China’s consumption stimulus policies, this jointly supported aluminum prices. February: The market’s core trading logic deviated from fundamentals and centered on macro expectations for the US Fed to keep interest rates unchanged Fundamentals: Aluminum prices were generally in the doldrums. Affected by the Chinese New Year holiday, procurement demand from China’s downstream processing enterprises dropped sharply, aluminum plants showed stronger willingness to cast ingots, and aluminum social inventory continued to accumulate. After the Chinese New Year holiday, SMM aluminum ingot social inventory rose to 1.108 million mt. Elevated inventory levels struggled to provide effective upward support for aluminum prices. Macro front: Cooling expectations for US Fed interest rate cuts pushed the US dollar index higher, and profit-taking outflows triggered a pullback in aluminum prices, further reinforcing their weak and rangebound trend. March: The market’s core trading logic repeatedly switched between supply-side disruptions in the Middle East and demand-side suppression. The tug-of-war between longs and shorts intensified, dominating aluminum prices in a volatile pattern of “surge - correction - rebound.” Supply side: I. Production cut events occurred frequently on the overseas supply side, and disruptions continued to intensify. Mozal entered maintenance status. Qatar Aluminium Smelter announced its decision to stop further production cuts and maintain a 60% operating rate. Aluminium Bahrain initiated shutdowns of Production Lines 1, 2, and 3 under controlled and safe conditions, and the market later heard that Line 4 might also face production cuts or suspension. EGA’s aluminum plant facilities suffered severe damage, and the extent of the damage was still under assessment. The market expected it to undergo large-scale production cuts or suspensions. Ongoing concerns over continued tightening on the overseas supply side became the core driver pushing aluminum prices higher in stages. II. As the Middle East conflict continued to escalate, shipping security in the Strait of Hormuz drew widespread market attention, further increasing uncertainty over global aluminum supply and continuously injecting a geopolitical risk premium into aluminum prices, supporting prices fluctuating at highs. Demand Side: 1. From a macro perspective, concerns over stagflation continued to intensify, risk-off market sentiment picked up, dragging aluminum prices into a pullback and limiting upside room. 2. Hidden concerns on the demand side outside China became more prominent. Some downstream processing enterprises were constrained by multiple factors, triggering market concerns over weak demand: 1) high aluminum prices significantly suppressed downstream purchase willingness, hindering demand release; 2) shortages of energy resources such as natural gas and oil put some processing enterprises under pressure to reduce or suspend production; 3) costs such as freight rates rose sharply, and together with higher smelting costs, further squeezed the profit margins of downstream enterprises, indirectly suppressing demand release. Source: SMM

Today, the most-traded BC copper 2605 contract opened at 85,020 yuan/mt. Its center fluctuated upward and, after hitting a high of 84,940 yuan/mt, began to decline. Near the close, it touched a low of 84,260 yuan/mt and finally settled at 84,410 yuan/mt, down 0.09%. Open interest reached 6,279 lots, an increase of 157 lots from the previous trading day, while trading volume came in at 3,298 lots, a decrease of 1,106 lots from the previous trading day. On the macro front, a US Fed governor mentioned that interest rates could be cut gradually by 1 percentage point within a year, while Powell said energy shocks are usually short-lived and patience is warranted. After the remarks, the market priced in only about 3 basis points of rate cuts by year-end. Meanwhile, Iran’s parliament approved the imposition of strait transit fees, US-Iran talks continued, Trump threatened to strike Iran’s energy facilities if the talks collapsed, and Europe said Iran had armed the Houthis in the Red Sea conflict, though internal differences remained. The market was still trading these developments. Fundamentals, supply side, imported cargoes had continued to arrive recently, and overall spot circulation was relatively ample. Demand side, as a new monthly procurement cycle begins, the previously accumulated purchasing demand from downstream enterprises will be gradually released. The SHFE copper 2605 contract closed at 95,340 yuan/mt. Based on the BC copper 2605 contract price of 84,410 yuan/mt, its after-tax price was 95,383 yuan/mt. The price spread between the SHFE copper 2605 contract and BC copper was -43 yuan/mt. The spread remained inverted and narrowed somewhat from the previous day.

As of March 31, the most-traded SHFE zinc contract closed at 23,480 yuan/mt, up 1,230 yuan/mt for the month, with a decline of 4.98%. Zinc prices plunged in March, briefly climbing to a high of 24,955 yuan/mt at the beginning of the month and falling to a low of 22,350 yuan/mt in the middle of the month, with the overall price center moving down significantly. After zinc prices plunged in March, how will they move in April?

SMM Morning Meeting Summary: Overnight, LME copper opened at $12,223/mt. In early trading, it saw wide swings and climbed to $12,278/mt. Subsequently, the center of copper prices moved straight downward to a low of $12,153.5/mt, before fluctuating widely again and finally closing at $12,195/mt, up 0.44. Trading volume reached 15,300 lots, and open interest stood at 295,000 lots, down 454 lots from the previous trading day. Overnight, the most-traded SHFE copper 2605 contract opened at 96,100 yuan/mt and hit a high of 96,240 yuan/mt in early trading. Subsequently, the center of copper prices gradually moved lower to 95,210 yuan/mt, before fluctuating rangebound and finally closing at 95,350 yuan/mt, down 0.05. Trading volume reached 36,500 lots, and open interest stood at 183,000 lots, down 2,394 lots from the previous trading day, mainly due to bulls reducing positions.

From the perspective of Sprott’s experts, gold remains a central strategic building block for investors, even if the precious metal suffers in the short term from the rise in US Treasury yields.

Former Bank of Japan Governor Kuroda Haruhiko said that, under normal circumstances, the Bank of Japan would raise interest rates at its April monetary policy meeting.

This week, the macro market still repeatedly traded around the Middle East situation and expectations for the US Fed. At the beginning of the week, tensions among the US, Israel, and Iran eased slightly, the US dollar pulled back, and risk appetite recovered temporarily, allowing copper prices to stop falling and rebound at one point. However, Iran later denied progress in the relevant negotiations, geopolitical tensions tightened again, international oil prices rose sharply, and market concerns over supply disruptions in the Strait of Hormuz resurfaced, with safe-haven sentiment rebounding accordingly and weighing on copper prices. Market bets on major central banks cutting interest rates this year were pushed back significantly, and expectations for macro liquidity weakened at the margin. Overall, this week’s copper price logic still centered on the repeated tug-of-war among geopolitical risks, oil prices, the US dollar, and interest rate cut expectations. Before macro uncertainty eases materially, copper prices will likely remain in the doldrums with rangebound fluctuations in the short term. Fundamentally, the logic of ore supply tightness continued. On March 25, Mitsubishi Materials announced that it will cease part of the copper concentrates processing business at the Onahama smelter in 2027, and explicitly mentioned the sharp deterioration in TC/RCs and pressure on smelting profits, further confirming the current reality of tight copper concentrates supply and continued damage to profitability on the smelting side. Global exchange copper inventories remained high, but demand in China had already started, and the pace of destocking in China’s social inventory exceeded market expectations. Supported by the opening of the import window and domestic demand, inventories outside China showed signs of flowing back into China. Looking ahead to next week, the macro theme is expected to remain largely unchanged. If the Middle East situation does not ease substantially, elevated oil prices and a relatively strong US dollar will likely continue to weigh on copper prices, and short-term resistance will remain; however, ore supply tightness, worsening smelting profits, and domestic demand will still provide some support for copper prices. Therefore, copper prices are expected to continue to fluctuate rangebound within a narrow range next week, with LME copper expected at $12,000-12,500/mt and SHFE copper expected at 93,000-96,500 yuan/mt. In the spot market, as imported cargoes arrive one after another, the pace of domestic inventory destocking may slow down. Although inventories are still being drawn down, spot premiums are expected to find it difficult to rise sharply due to the relatively high inventory base. Spot prices against the SHFE copper front-month contract are expected at a discount of 120 yuan/mt to a discount of 20 yuan/mt.

The question now arises: why did this rally occur so suddenly, and will it continue in the future? To address this, *Jagran Business* spoke with Ajay Kedia, Director of Kedia Advisory. He outlined a strategy for investors based on four key points, which will determine whether the current rally is sustainable or if the market is likely to witness a decline once again.

On Tuesday, Eastern Time, Chicago Fed President Goolsbee warned that the energy shock stemming from the Middle East conflict is threatening the US Fed’s dual mandate, complicating its monetary policy outlook and potentially delaying interest rate cuts—echoing earlier remarks by Fed Governor Barr that inflation risks and oil prices support keeping rates unchanged for longer. Specifically, the energy price shock poses risks to both sides of the US Fed’s dual mandate, making the trade-off between controlling inflation and supporting economic growth more complex. “The new shock has undoubtedly disrupted the US Fed’s plans... and inflation was already uncomfortably high even before the shock occurred,” Goolsbee said bluntly. Goolsbee noted that central bank policymakers around the world lack clear historical experience to draw on in dealing with the current mix of geopolitical risks and inflationary pressures, and therefore “this is a bad situation for central banks.” Goolsbee stressed that the current path of interest rates at central banks around the world still depends heavily on how the conflict evolves, especially its impact on energy markets. As for the US Fed, he said he is not yet able to judge whether it will be able to cut interest rates again, because that outlook depends on the duration of the conflict and the extent to which rising oil prices affect overall inflation. “Only if inflation shows improvement can one realistically expect rates to fall this year,” he added, further reinforcing the US Fed’s data-dependent stance. The US Fed’s Internal Stance Is Turning More Cautious These remarks by Goolsbee were highly consistent with earlier comments by Fed Governor Michael Barr. Barr had previously also emphasized that, given that US inflation remains above target and elevated oil prices are further pushing up inflation, interest rates may need to remain unchanged “for some time.” In addition, Barr likewise pointed out that although the US labour market appears to be stabilizing, US Fed officials need to see clear evidence of sustained disinflation before considering interest rate cuts. Taken together, these comments highlight the US Fed’s increasingly cautious shift in stance. As geopolitical developments exert a growing influence on the US inflation outlook, the combination of persistent price pressures and external shocks has reinforced expectations that high inflation will last longer, while also creating uncertainty over the feasibility of further policy easing in the near term. For markets, the key point is that after the Russia-Ukraine shock several years ago, energy-driven inflation risks have now been firmly incorporated into the US Fed’s reaction function. As a result, US Fed rate expectations may remain sensitive not only to economic data, but also to developments in the Middle East conflict and their impact on oil prices.

Italy’s crude steel production increased by 8.1% month-on-month in February 2026, signaling a recovery in Southern European industrial activity. This rebound follows a period of stabilization and reflects improved demand from domestic manufacturing and construction sectors as energy price volatility subsides. The increase in output from Italian mills contributes to a moderately positive outlook for non-Chinese steel demand in 2026, which is projected to grow as interest rates decline and borrowing costs for major infrastructure projects soften globally.