In March, China’s composite PMI for aluminum processing registered 65.6%, rebounding strongly above the 50 mark.

This week, the weekly operating rate of leading downstream aluminum processing enterprises in China rebounded 1.1 percentage points MoM to 64%.

This week, ferrous metals fluctuated at highs, with raw material ore and coking products outperforming steel. Against the backdrop of the escalating conflict in the Middle East, ore and coking products held up well, supported by higher shipping costs and transmission from coal and coke as energy substitutes. In the second half of the week, supply and demand data for hot-rolled coil and rebar were released. The increase in rebar inventory slowed markedly; however, hot-rolled coil demand was lower than the same period last year, and the pace of post-holiday recovery was relatively slow, leaving steel as a whole with limited upward momentum, while futures retreated after rapid rise. In the spot market, trading in the Chinese market was average this week.....

[Weekly Operating Rates in the Aluminum Processing Industry: China's Aluminum Processing Sector Sees Modest Growth Amid Peak Season Demand] This week, the weekly operating rate of leading downstream aluminum processing enterprises in China edged up 1 percentage point WoW to 62.9%.

[SMM Weekly Survey of the Aluminum Downstream Sector: Downstream Aluminum Operating Rate Continued to Rebound to 61.9%, with High Prices Suppressing the Peak "Golden March" Season] This week, the weekly operating rate of leading downstream aluminum processing enterprises in China rose 2.4 percentage points MoM to 61.9%, overall extending the post-holiday recovery trend, with all segments rebounding MoM, and the industry as a whole entering a normal production pace.

According to SMM’s latest tracking, the total planned volume of cold-rolled commercial products for this month across 31 mainstream cold-rolled coil steel mills was 4.073 million mt, up 257,500 mt from last month’s actual production of cold-rolled commercial products, an increase of 6.7%.

In 2025, driven by supply contraction and multiple demand growth , the global sulfur market saw supply-demand mismatch throughout the year, with prices rising sharply to new highs in recent years. Entering 2026, sulfur’s byproduct nature will constrain supply; Russia’s supply recovery will be slow; the Middle East will centrally control prices; the resonance of rigid demand from spring plowing and new energy “scrambling for sulfur,” together with heightened shipping risks in the Strait of Hormuz, will drive the global sulfur market to continue in a tight balance, keep the price center at elevated levels, and further reshape the regional supply-demand pattern. 2025 Review: Widening Supply-Demand Gap, Sharp Price Increase (I) Supply Side: Pronounced Rigid Contraction, Intensified Regional Supply Divergence According to the SMM survey, current global sulfur capacity is approximately 85 million mt. The entire industry is operating at close to full capacity, but incremental growth is limited, with annual production at around 80 million mt. As the core of global sulphur supply (with total Middle East production accounting for over 30% of the global total), some resources are prioritised for local markets and emerging markets such as Indonesia (long-term contracts first + high-price diversion). Resources exported to traditional demand countries have been heavily diverted, exacerbating tightness in resource circulation. Meanwhile, Russia, as a core global sulphur producer, has shifted from a net exporter to a net importer due to the Russia-Ukraine war. Coupled with shipping disruptions, geopolitical disturbances, and capacity release falling short of expectations, globally circulating resources remain persistently tight, driving sulphur prices higher. (II) Demand Side: Stable Traditional Rigid Demand +Growth in Emerging New Energy, with a Significant Increase in Total Volume In 2025, global sulfur demand presented a dual-engine pattern of “traditional rigid demand providing a floor, and emerging demand surging”: agriculture remained the largest consumption mainstay, with phosphate fertiliser production at its core forming a solid base of demand; traditional chemical demand such as titanium dioxide and caprolactam grew steadily; the new energy track saw explosive growth , becoming the core engine boosting incremental sulfur consumption. Together, these three sectors drove total sulfur demand to keep rising, in stark contrast to the rigid contraction on the supply side caused by its oil-and-gas associated nature. Compared with previous years, the most notable change in the global sulfur market in 2025 was the explosive growth in new energy demand, which had become the central driver of incremental demand. Sulfur consumption in the new energy sector was highly concentrated in two major tracks—LFP and mixed hydroxide precipitate (MHP)—and formed a clear global regional division of labor: LFP production was highly concentrated in China, while MHP was focused in Indonesia; the two production hubs jointly dominated sulfur demand for new energy. Against the backdrop of an accelerating global green energy transition, China’s NEV and energy storage industries have continued to expand. Leveraging core strengths of high safety, long cycle life, and significant cost advantages, LFP has become the preferred cathode material for large-scale energy storage and NEVs, boosting the continued expansion of domestic capacity. According to the SMM database, global LFP production reached 3.77 million mt in 2025, of which China accounted for 3.75 million mt , representing more than 99%, corresponding to a boost in total sulfur demand of over 3 million mt . Meanwhile, relying on world-class laterite nickel ore resource endowments, Indonesia has vigorously developed HPAL hydrometallurgy, converting low-grade nickel ore into high value-added battery-grade nickel raw materials (MHP). By extending the industry chain and enhancing product value-added, it has become deeply embedded in the global power battery supply chain. According to the SMM database, Indonesia’s MHP production reached 443,900 mt Ni in 2025 , directly boosting sulfur consumption by over 5 million mt; and after planned capacity comes on stream in 2026, Indonesia’s share of global MHP capacity will further rise from 67% to 77% , becoming the most explosive source of incremental sulfur demand globally and a key variable reshaping global sulfur trade flows. Outlook for 2026: The Supply-Demand Gap Further Widens, and Prices Hover at Highs In 2026, the global sulfur market further maintained a tight balance, with supply growth failing to keep pace with demand growth and the supply-demand gap widening further, becoming the core factor supporting prices fluctuating at highs. （I）Supply Side: Limited Growth, Constrained by Multiple Factors As a by-product of oil and gas extraction and refining, sulfur’s supply capability is highly dependent on the level of activity in global crude oil and natural gas production, while also being directly affected by geopolitical conditions, the smoothness of international shipping, and changes in trade policies. Disruptions at any stage will significantly impact the stability of global sulfur supply, the pace of price movements, and the distribution of trade flows. In 2026, the global sulfur supply side will exhibit operating characteristics of “ constrained growth and a diverging regional landscape .” According to the SMM survey, incremental global sulfur supply in 2026 was only about 2.6 million mt, including about 500,000 mt in China and about 2.1 million mt in the Middle East. According to the International Energy Agency (IEA), under the long-term trend of the global energy transition, global refining capacity and crude oil throughput are expected to enter a peak plateau around 2035 and then gradually pull back, which will fundamentally constrain the long-term growth potential of sulphur supply. According to the SMM survey, global crude oil demand growth in 2025 only remained at around 1%, with relatively weak growth momentum. As the core producing region for high-sulphur crude oil globally, the Middle East saw OPEC+ confirm a temporary pause in production increases in Q1 2026, further suppressing upstream supply elasticity. Meanwhile, Iran has long been subject to US sanctions, with crude oil production and exports continuously constrained. The most-traded refineries in Russia continued to come under impact, with both production stability and logistics channels significantly affected; sulphur output and export capacity were sharply constrained and are expected to be difficult to recover in H1 2026, further exacerbating the tight globalised sulphur supply landscape. In early 2026, geopolitical conflicts in the Middle East intensified, and shipping risks in the Strait of Hormuz rose markedly ; nearly 50% of global sulfur trade volumes passed through this corridor. Vessel detours, longer voyages, and a sharp rise in war-risk insurance premiums directly pushed up the landed cost of sulfur. In 2025, Middle East sulfur FOB prices climbed from about $170/mt at the beginning of the year to the latest level of about $520/mt , an increase of more than 200%. Meanwhile, continued turmoil in the Red Sea further extended shipping cycles and lifted overall import costs. Disrupted logistics and rising costs created dual pressure, reducing effective market circulation and slowing the pace of arrivals, becoming a key factor supporting sulfur prices fluctuate at highs. The natural gas sector brought marginal improvement to supply: according to the latest quarterly report released today by the International Energy Agency (IEA), global natural gas demand in 2025 was about 1.3% . As a substantial increase in LNG supply eased market fundamentals and drove strong demand growth in Asia, global demand growth in 2026 will accelerate to about 2% . New projects in the US, Canada, and Qatar will come on stream in succession, and LNG supply is expected to increase by 7%, i.e., 40 billion m³. With natural gas consumption rising steadily, sulfur production as a by-product of natural gas desulfurization will increase accordingly, providing some supplementation to overall supply. According to the SMM survey, global sulphur production growth slowed to 2.28% in 2025. In 2026, supply-side expansion will be limited, and supply growth will remain at a low level, with total annual supply expected to reach 82-83 million mt. (II)Demand Side: New Energy-Driven, with Continuous Structural Optimization Global sulphur demand in 2026 will sustain strong growth, with demand growth significantly outpacing supply growth . The key drivers are underpinned by rigid agricultural demand and a growth in incremental growth from new energy. According to the SMM survey, global phosphate fertiliser consumption will grow steadily at an annual rate of about 1.6%. As the largest downstream demand segment for sulphur, it provides a solid foundation for the overall market; demand in the chemical sector will also expand steadily at an annual rate of about 4%–6%. The most noteworthy incremental growth in 2026 will come from the concentrated ramp-up across the global new energy industry chain. According to the SMM database, newly built and commissioned LFP capacity in China in 2026 will exceed 2.5 million mt ; together with the release of existing capacity, the industry’s effective capacity is expected to surpass 9 million mt, driving a sharp increase in demand for high-purity sulphuric acid and sulphur. Meanwhile, Indonesia’s nickel hydrometallurgy projects are accelerating, adding about 400,000 mt Ni of new MHP capacity. Based on its sulphur intensity of as high as 11.7 mt, this will generate incremental sulphur demand on the order of 1 million mt, creating a global “competition for sulphur” alongside global phosphate fertiliser, traditional chemicals, and new energy materials, further exacerbating tight global sulphur supply. SMM has launched SMM CIF Indonesia Sulfur and Sulfur (Solid) price assessments for market reference. SMM CIF Indonesia Sulfur Definition:CIF Indonesian main ports; Quality: Sulfur 99.5% min, Particle; Price Origin: Indonesia. Sulfur (Solid) price Definition: Ex-works, China; Quality: Sulfur（S) 99.00% min，conforming to GB/T 2449-2006; Price Origin: China.

[SMM Zinc Morning Session Summary: Nonferrous Metals Mostly Decline, LME Zinc Center Shifts Lower] Overnight, the LME zinc contract opened at $3,416.5/mt. After opening, it fluctuated upward to a high of $3,449/mt, then traded with wide swings around the daily average. Approaching the session's close, LME zinc fell rapidly, touched a low of $3,356.5/mt, and maintained a fluctuating trend, finally closing down at $3,381.5/mt, a decrease of $36.5/mt, or 1.07%...

The International Energy Agency reported that last year's oil inventory increase reached the highest level since 2020. It has revised down the global oil demand forecast for 2026 from 105 million barrels per day to 104.9 million barrels per day.

SMM News on June 18: Metal Market: As of the daytime close, domestic market base metals generally rose, with SHFE aluminum leading the gains with a 1.35% increase. SHFE zinc rose by 0.85%, while SHFE lead fell by 0.68% and SHFE nickel by 0.42%. The remaining metals experienced minor fluctuations in their gains. The main alumina contract rose by 2.31%, recording two consecutive days of gains. The main casting aluminum contract rose by 0.95%. In addition, lithium carbonate rose by 0.1%, polysilicon fell by 2%, and silicon metal rose by 1.09%. The main European container shipping contract rose by 3.18%. In the ferrous metals series, iron ore fell by 0.5%, HRC rose by 0.32%. In the coking coal and coke sector, coking coal fell by 0.57%, while coke rose by 0.62%. In the overseas market, as of 15:02, overseas market base metals generally rose, with LME tin leading the gains with a 0.94% increase. LME zinc rose by 0.63%, and LME copper by 0.48%. The remaining metals experienced minor fluctuations in their gains. In precious metals, as of 15:02, COMEX gold fell by 0.13%, while COMEX silver rose by 0.39%, reaching a high of $37.405 per ounce during the session, a new high since March 2012. Domestically, SHFE gold fell by 0.21%, while SHFE silver rose by 2.35%. Notably, SHFE silver surged to a high of 9,075 yuan/kg during the session, a new all-time high since its listing. Market conditions as of 15:02 today 》Click to view SMM Market Dashboard Macro Front Domestic: [US exhibitors at the 3rd China International Supply Chain Expo increase by 15% compared to the previous edition] According to CCTV News, at the 2025 Lujiazui Forum, Pan Gongsheng, Governor of the People's Bank of China, announced eight major financial policies. The first is to establish a trade repository for the interbank market. This will involve high-frequency aggregation and systematic analysis of transaction data from various financial sub-markets, including interbank bonds, currencies, derivatives, gold, and bills, to serve financial institutions, macroeconomic regulation, and financial market supervision. The second is to establish an international operation center for the digital yuan. This will promote the international operation of the digital yuan and the development of financial market businesses, serving digital financial innovation. The third is to establish personal credit reporting agencies. These will provide diversified and differentiated personal credit reporting products for financial institutions, further improving the social credit reporting system. 》Click to view details [Li Yunze: Will jointly release an action plan with the Shanghai Municipal Government to support the construction of Shanghai as an international financial center] Today, at the 2025 Lujiazui Forum, Li Yunze, Director of the National Financial Regulatory Administration, stated that in recent years, the construction of Shanghai as an international financial center has achieved a series of new progress and breakthroughs. During the forum, the National Financial Regulatory Administration and the Shanghai Municipal Government will jointly release an action plan to support the construction of Shanghai as an international financial center, introducing a series of deployment measures. These include encouraging Shanghai to carry out innovative pilots in the fields of technology finance and cross-border finance, supporting eligible national banks to establish financial asset investment companies in Shanghai, and enhancing Shanghai's international reinsurance and shipping insurance underwriting capabilities and global service levels. (Cailian Press) [State Administration of Foreign Exchange to Implement a Package of Innovative Foreign Exchange Policies in Pilot Free Trade Zones] Zhu Hexin, Deputy Governor of the People's Bank of China and Director of the State Administration of Foreign Exchange, stated at the 2025 Lujiazui Forum that the State Administration of Foreign Exchange will implement a package of innovative foreign exchange policies in pilot free trade zones. These include 10 facilitation policies, such as optimizing settlement for new-type international trade and expanding the Qualified Foreign Limited Partner (QFLP) pilot program, actively supporting the strategy to enhance the pilot free trade zones. [National Mine Safety Administration: Public Consultation on the "Key R&D Catalog for Intelligent Mine Robots"] To thoroughly implement the "Guiding Opinions on Deeply Promoting Intelligent Mine Construction and Facilitating Mine Safety Development" issued by the National Mine Safety Administration and seven other departments, and to accelerate the construction of intelligent mines and the R&D and application of robots, the General Office of the National Mine Safety Administration, in collaboration with relevant departments, has drafted the "Key R&D Catalog for Intelligent Mine Robots (Draft for Public Consultation)", which is now open for public comments. ► On June 18, the central parity rate of the RMB in the interbank foreign exchange market was set at 7.1761 RMB per US dollar. US dollar: As of 15:02, the US dollar index fell by 0.25% to 98.57. The market generally expects the US Fed to remain on hold this time, but expectations for Fed easing in H2 have risen. Attention should be paid to the Fed's policy stance and forecasts for future economic trends early tomorrow morning. The market expects the Fed to maintain the benchmark interest rate within the range of 4.25%-4.50%. However, IG market analyst Tony Sycamore stated that risks from the Middle East conflict and the slowdown in global economic growth may prompt the Fed to cut interest rates by 25 basis points in July, earlier than the current market expectation of September. US retail sales in May recorded the largest decline since the beginning of the year, indicating that new tariffs have curbed consumer spending, particularly in the automotive sector. Data released by the US Department of Commerce on Tuesday showed that retail sales, unadjusted for inflation, fell by 0.9% MoM in May, following a revised decline of 0.1% in April. Retail sales excluding automobiles fell by 0.3%. Macro: Today, data such as the UK's May CPI YoY, UK's May core CPI YoY, UK's May retail price index YoY, Eurozone's May harmonized CPI YoY - unadjusted final value, Eurozone's May core harmonized CPI YoY - unadjusted final value, US's May preliminary monthly rate of building permits, US's May preliminary annualized total of building permits, US initial jobless claims for the week ending June 14, US continuing jobless claims for the week ending June 7, US May housing starts annualized monthly rate, and US May housing starts annualized total will be released. In addition, it is worth noting that the Bank of Canada will release the minutes of its monetary policy meeting; Bank of Canada Governor Macklem will deliver a speech on Canada's economic outlook, inflation trends, and interest rates; and the 2025 Lujiazui Forum will be held in Shanghai. Crude Oil: As of 15:02, both WTI and Brent crude oil prices fell by 0.2%. The Israel-Iran conflict has introduced new uncertainties into the global oil market. Additionally, analysts have stated that the market is primarily concerned about potential supply disruptions through the Strait of Hormuz, through which one-fifth of the world's seaborne oil passes. From the inventory perspective, according to the report released by the American Petroleum Institute (API) in the early morning, US crude oil inventories fell sharply by 10.133 million barrels in the week ending June 13. This decline not only far exceeded market expectations but also marked the largest weekly drop since the week ending August 25, 2023. Meanwhile, gasoline inventories decreased slightly by 202,000 barrels, while distillate fuel oil inventories increased by 318,000 barrels. Before the API data was released, analysts generally expected crude oil inventories to decline by about 1.8 million barrels, gasoline inventories to increase by about 600,000 barrels, and distillate fuel oil inventories to increase by about 400,000 barrels during the week. The API report reflects that with the arrival of the traditional peak summer oil consumption season, market demand for petroleum products is rebounding, and the significant decline in crude oil inventories suggests that the current destocking trend may continue for some time. Influenced by these positive factors, the price increases of domestic and overseas crude oil futures have expanded significantly. The International Energy Agency (IEA) released its monthly report for June, slightly lowering its demand forecast and significantly raising its supply growth projection. The IEA believes that the ongoing Israel-Iran conflict in the Middle East poses risks to the market but has not yet affected supply. If geopolitical risks do not spiral out of control, the surplus pressure will further increase. Specific data shows that the IEA has revised down its average oil demand growth forecast for 2025 to 720,000 barrels per day, from a previous estimate of 740,000 barrels per day, and for 2026 to 740,000 barrels per day, from a previous estimate of 760,000 barrels per day. From the inventory perspective, according to the report released by the American Petroleum Institute (API) in the early morning, US crude oil inventories fell sharply by 10.133 million barrels in the week ending June 13. This decline not only far exceeded market expectations but also marked the largest weekly drop since the week ending August 25, 2023. Meanwhile, gasoline inventories decreased slightly by 202,000 barrels, while distillate fuel oil inventories increased by 318,000 barrels. Before the API data was released, analysts generally expected crude oil inventories to decline by about 1.8 million barrels, gasoline inventories to increase by about 600,000 barrels, and distillate fuel oil inventories to increase by about 400,000 barrels during the week. The API report reflects that as the traditional peak oil consumption season in summer approaches, market demand for petroleum products is rebounding. The significant decline in crude oil inventory suggests that the current trend of destocking may continue for some time. Influenced by these positive factors, the increase in crude oil futures prices in both domestic and overseas markets has expanded significantly. The International Energy Agency (IEA) released its monthly report for June, in which it slightly lowered its demand forecast and significantly raised its supply growth estimate. The IEA believes that the ongoing Israel-Iran conflict in the Middle East poses risks to the market, but has not yet affected supply. If geopolitical risks do not spiral out of control, the surplus pressure will further intensify. Specific data shows that the IEA has revised down its average oil demand growth forecast for 2025 to 720,000 barrels per day, from a previous estimate of 740,000 barrels per day, and revised down its average oil demand growth forecast for 2026 to 740,000 barrels per day, from a previous estimate of 760,000 barrels per day. (Wenhua Comprehensive) SMM Daily Review ► Aluminum prices approach the 21,000 resistance level, with aluminum scrap prices showing limited increases [Daily Review of Aluminum Scrap] ► June 18: SHFE aluminum surged unilaterally, destocking significantly hindered, and processing fees collapsed [Daily Review of Spot Aluminum Billet] ► [SMM Daily Review of Nickel Sulphate] June 18: Nickel salt prices maintained a downward trend ► Market fluctuations are relatively small, with spot prices temporarily stable [SMM Daily Review of EMM] ► [SMM Daily Review of MHP] June 18: Indonesian MHP prices slightly declined ► Traders lower quotes, rare earth prices slightly weaken [SMM Daily Review of Rare Earths] ► Silver prices surge significantly, attempting to break through previous highs, with spot-futures price spread widening and contango rising [SMM Daily Review]