[Geopolitical Disruptions Combined with Elevated Inventory Highlight LME Outperforming SHFE in Aluminum Market] Overall, the core pattern of LME outperforming SHFE in the aluminum market is difficult to reverse in the short term. LME strength will support room for SHFE aluminum to catch up after the holiday, but high domestic inventory and weak demand will cap overall gains. Going forward, the focus will be on the pace of aluminum ingot destocking in China and the strength of rigid demand release from downstream resumption of work and production resumptions.

On May 6, 2026, iron ore futures rose sharply today, with the most-traded contract I2609 closing at 816 yuan/mt, up 2.84% from the previous trading session. Port spot prices rose 10-18 yuan/mt from the previous day. Traders showed increased quoting activity, while steel mill purchases were mostly driven by rigid demand with few inquiries; overall spot transaction sentiment remained sluggish. The latest SMM survey data showed that daily average pig iron production edged down by 9,800 mt to 2.4307 million mt; the blast furnace operating rate declined 0.19% to 89.61%. This indicated that overall rigid demand for iron ore, though slightly lower, remained at a high level. Looking ahead, as previously constrained port inventory was released and well absorbed by the market, upward resistance on ore prices has eased amid continuously increasing destocking speed, and there is currently strong upward momentum. However, as raw material costs continue to climb and profits remain under pressure, steel mills may increase maintenance intensity going forward. Therefore, iron ore prices are expected to fluctuate upward in the short term, while medium and long-term trends still depend on the ability of steel mills to absorb supply.

SMM May 6 News: Data Brief: As of Wednesday, May 6, SMM copper inventories in mainstream regions nationwide increased by 9,900 mt WoW from pre-holiday levels to 252,900 mt. Total inventory was up 124,400 mt compared to the same period last year (128,500 mt), ending seven consecutive weeks of destocking. Specifically, Shanghai saw simultaneous increases in both imported and domestic copper arrivals, while elevated copper prices suppressed downstream rigid demand, pushing regional inventory into a buildup phase. Jiangsu continued its destocking trend, with reduced domestic supply arrivals and steady warehouse withdrawal pace, resulting in continued inventory pullback. Guangdong ended its prior destocking trend, as smelting maintenance dragged on domestic arrivals, but concentrated downstream stockpiling before the Labour Day holiday and marginal recovery in consumption supported steady regional inventory decline. Market outlook: Supply side, imported arrivals are expected to converge MoM while domestic supply increments are released, keeping overall supply relatively loose. Demand side, post-holiday downstream purchasing sentiment was mediocre, mostly limited to rigid-demand restocking, with overall consumption pace slightly weakening. Surveys indicated that copper cathode rod operating rates this week are expected to pull back to 58.89%, down 7.46 percentage points WoW. Overall supply-demand pattern suggests the current copper market features marginally loose supply with only rigid demand from downstream, and social inventory is expected to continue a modest inventory buildup trend in the short term.

[SMM Silicon-Based PV Morning Meeting Minutes] Polysilicon: N-type recharging polysilicon was quoted at 34-36 yuan/kg. Polysilicon prices remained relatively stable during the holiday, with extremely limited order signing in the market. Crystal pulling plants had no significant procurement demand for the time being. Post-holiday surveys and conferences were scheduled, and the market was watching subsequent developments. Wafer: Market prices for 18X wafers were 0.9-0.93 yuan/piece, 210RN wafers were 1.00-1.03 yuan/piece, and 210N wafers were 1.2-1.23 yuan/piece. During the holiday, wafer prices remained stable, and cell prices were expected to rise after the holiday.

During the 2026 Labour Day holiday (May 1–5), the Chinese SHFE market was closed, and LME copper exhibited a fluctuating trend of initial decline followed by recovery......

This week (April 24–30, 2026), the average operating rate of primary lead smelters in the three provinces was 64.62%, up 0.19 percentage points WoW. This week, some smelters in the Yunnan region resumed production after maintenance, leading to a slight increase in lead smelting output. Smelters in Hunan and Henan maintained stable production, with overall operating rates flat WoW. A small-to-medium-sized smelter in Anhui saw some relief from raw material shortages, with its operating rate slightly boosted this week. A small smelter in Jiangxi experienced a decline in operating rate this week due to equipment failure and maintenance. Other major producing regions in China maintained overall stable smelting production.

SMM April 30: This week, aluminum fluoride enterprises mainly focused on fulfilling existing orders. As month-end approached, the market awaited new price guidance, trading atmosphere was sluggish, and prices remained stable. As of now, SMM aluminum fluoride prices closed at 10,980-11,900 yuan/mt; cryolite prices remained stable, with SMM cryolite quoted at 7,000-8,500 yuan/mt. Raw material side: Prices of core raw materials for aluminum fluoride diverged, but overall cost support remained relatively firm. This week, China's 97% fluorite powder delivery-to-factory prices weakened slightly, with mainstream transaction range at 3,300-3,500 yuan/mt and significant regional price spreads. Influenced by the steady recovery of operating rates in northern producing areas and continuous supplementation from Mongolian imports, the fluorite market's overall supply trended looser, with high-priced sources clearly under pressure in transactions. Demand side, some traders' bearish sentiment intensified, actively cutting prices to facilitate shipments and recover funds; coupled with the approaching holiday, wait-and-see atmosphere in the market was strong, in-market quotations became cautious, new orders lacked follow-through, and the focus was on digesting earlier orders. However, the significant rise in downstream hydrofluoric acid prices boosted fluorite producers' willingness to hold prices firm to some extent. Delayed resumption of operations at Zhejiang mine areas due to safety incidents and periodically low inventory also provided localized support, offsetting some downward pressure, but this was insufficient to counteract the bearish pressure from loose supply and sluggish trading, and fluorite prices overall showed small fluctuations with a weak bias. Aluminum hydroxide prices were under pressure, with the current SMM weighted average price at 1,660 yuan/mt, down 0.42% WoW. The sulphuric acid market was affected by Middle East geopolitical disruptions, with raw material sulphur circulation tight, coupled with firm downstream demand, sulphuric acid prices hovered at highs, and the market performed strongly. Overall, prices of core raw materials for aluminum fluoride diverged, the overall cost center fluctuated at highs, and production pressure on enterprises remained difficult to alleviate. The supply side exhibited a negative cycle of rigid cost increases—deeply pressured profitability—low willingness to operate. Recently, overall raw material costs for aluminum fluoride remained elevated, the industry fell into deep losses with cost inversion, enterprise production enthusiasm was significantly dampened, and the industry's overall operating rate dropped to a low of around 40%. Demand side, downstream operating aluminum capacity remained stable at highs, forming rigid floor demand for aluminum fluoride. Brief comment: This week, the aluminum fluoride market operated steadily overall, with prices maintaining the level after mid-month raises. Raw material side, fluorite and aluminum hydroxide prices weakened slightly, sulphuric acid prices fluctuated at highs, and comprehensive raw material costs remained elevated, continuously exerting significant operational pressure on producers. The supply side remained suppressed by high costs, with industry operating rates staying low and overall output unlikely to see significant increases; the demand side, although rigid demand from aluminum provided some support, downstream enterprises had limited ability to absorb costs, aluminum fluoride price increases faced resistance in passing through to downstream, elevated comprehensive production costs were difficult to effectively transfer, and most enterprises in the industry remained in losses. Currently, sulphuric acid prices remained on the strong side, cost pass-through to downstream still showed obvious lag, and industry profit recovery remained challenging. The current weak pattern of high costs, low profits, and low operating rates in the aluminum fluoride industry continued, the tug-of-war between sellers and buyers intensified, and under strong support from high raw material costs, producers showed clear willingness to raise ex-factory prices. Aluminum fluoride prices are expected to show a broad upward adjustment next month.

SMM News, April 30: From April 24 to April 30, 2026, SMM data showed that the weekly operating rate of secondary lead in four provinces in China was 40.54%, down 4.6 percentage points WoW. Maintenance pace diverged among Anhui smelters, with one resuming production after prior maintenance and another halting due to equipment failure. The operating rate in Anhui edged up 1.7 percentage points this week and is expected to pull back 2.4 percentage points next week. In Henan and Inner Mongolia, some enterprises cut production due to insufficient raw materials. A large smelter in Jiangsu halted production, dragging down the regional operating rate by 17.23% next week. The overall operating rate next week is expected to decline 6.8 percentage points WoW.

News Release: April 30, 2026 According to SMM statistics, China’s high-carbon ferrochrome output in April 2026 fell by 1.28% month-on-month but rose by 24.63% year-on-year, with notable regional divergence. The majority of the monthly output reduction came from Inner Mongolia in northern China. Affected by substation maintenance, ferrochrome producers in Fengzhen faced production restrictions, with output dipping slightly by 1.82%.

[Silicon Metal Futures Center Shifted Higher with Increased Enterprise Shipments; Heavy Wait-and-See Sentiment in Polysilicon Market]: In the futures market, the most-traded contract trended stronger during the week, with the SI2609 contract center at 8700-8800 yuan/mt and the highest point touching above 8,900 yuan/mt. Driven by macro factors and news, futures rose, boosting silicon producers' shipment sentiment, and silicon enterprises' shipments to trading firms engaging in both spot and futures market increased. On the fundamentals side, silicon metal supply and demand were in tight balance in April, and the supply-demand structure is not expected to see major adjustments in May. Facing the pressure of increased supply during the rainy season in Sichuan and Yunnan from June to July, the market outlook leaned toward caution. On the cost side, raw material prices remained firm. With upside in silicon metal prices capped and downside supported by costs, the price fluctuation range was narrow.