[SMM Analysis：Rare Earth Scrap Recycling Slows as Tax Compliance Tightens, Impacting Production Rates]Recently, multiple rare earth scrap recycling enterprises reported that operating rates may decline in June-July. Large enterprises, with a higher proportion of self-procurement, are seeing more significant production reductions; small and medium-sized enterprises, relying less on self-procurement and more on processing orders, are relatively less affected.

[China Inventory Continued to Decline This Week, Aluminum Prices Show LME Outperforms SHFE in the Short Term] China inventory continued to decline this week but at a modest pace, limiting the upside elasticity of SHFE aluminum, with the divergence between domestic and overseas markets expected to persist in the short term. Key areas to watch going forward include whether China inventory destocking accelerates, whether the US-Iran deal can be formally signed, further clarity on the US Fed's rate path, and whether China is further tightening regulations on aluminum capacity operations. Overall, aluminum prices are expected to continue moving sideways in the short term, with LME outperforming SHFE.

[SMM Aluminum Alloy Daily Review] The ADC12 aluminum alloy market was generally stable with slight rise today. Driven by cost pressure, some enterprises raised their quotes slightly by 100 yuan/mt, while most manufacturers remained steady and took a wait-and-see approach. Currently, invoiced aluminum scrap resources remained persistently tight, pushing up procurement costs, and some manufacturers were concerned about potential production reduction risk. However, downstream demand remained mediocre, with limited end-user order release, which constrained price increases.

[SMM Analysis] Sulphuric Acid: A Key Variable Reshaping Copper Pricing Logic

[SMM Lead Morning Meeting Minutes: Increasing Maintenance at China's Secondary Lead Enterprises VS Easing Spot Premiums in Southeast Asia, Lead Prices May Remain in the Doldrums] US President Trump ordered the sinking of any vessels laying mines in the Strait of Hormuz, claiming the strait had been "completely blockaded." Recently, the off-season trend in the lead-acid battery market intensified, with some downstream enterprises expanding production cuts, and enthusiasm for lead ingot procurement declined...

Early this week, the market continued to trade around expectations of US-Iran peace talks and fluctuations in the Middle East situation. The US and Iran maintained contact, with expectations of an extended ceasefire and subsequent talks driving a recovery in risk appetite. The pullback in the US dollar provided support for copper prices. Meanwhile, the US March PPI came in below expectations, temporarily easing inflation concerns and supporting copper prices to rise. However, as the US continued to expand its shipping blockade against Iran, disruptions to passage through the Strait of Hormuz had not been fully eliminated, and geopolitical uncertainties persisted. Overall, the macro theme this week remained warming expectations of US-Iran peace talks and a weaker US dollar being bullish for copper prices, but geopolitical fluctuations kept copper prices hovering at highs. On the fundamentals side, the ore supply tightness narrative continued to ferment. Amid Middle East disruptions, some sulphuric acid supplies to the DRC were obstructed, with some enterprises already cutting usage or even facing production reduction risks, as ore-side disruptions further transmitted to the production stage. Meanwhile, although Panama's Cobre Panama was authorized to process and export stockpiled materials, this did not signify a formal restart of the mine, and actual short-term incremental supply remained relatively limited. Overall, the current fundamentals still pointed to deepening ore supply tightness. Although longer-term supply expectations saw marginal improvement, this offered limited relief to the near-term tight landscape. Looking ahead to next week, the macro narrative is expected to remain largely unchanged. If US-Iran negotiations continue to advance, a weaker US dollar is expected to continue supporting copper prices; however, given the potential for renewed Middle East tensions, upside for copper prices is expected to remain constrained. On the fundamentals side, ore supply tightness and rising costs continue to provide support below prices, and copper prices are expected to most likely continue to fluctuate at highs in the near term. LME copper is expected to fluctuate between $13,000-13,500/mt, and SHFE copper between 100,500-103,500 yuan/mt. On the spot side, as absolute prices rise, downstream willingness to chase higher prices may be suppressed. Inventory destocking is expected to slow down, but spot cargo is still expected to find support due to tight spot circulation. Spot prices against the SHFE copper front-month contract are expected to range from a discount of 30 yuan/mt to a premium of 80 yuan/mt.

[SMM Silicon-Based PV Morning Meeting Summary: Some Module Makers Looking to Hold Prices Firm, Silicon Metal in the Doldrums] Over the weekend, N-type recharging polysilicon was quoted at 34-36.5 yuan/kg. Weekend market prices remained temporarily stable. The market is currently approaching its lows, providing some price support, but the surplus remains significant, and downstream buyers still have a mindset to push for lower prices.

[Frequent Fluctuations in Market Trading Contradictions: What Are the Key Focal Points for Zinc Prices?] Currently, international geopolitical conflicts have seen repeated twists and turns, and commodity prices have also followed with intensifying volatility. So how will zinc prices trend under different geopolitical conflict scenarios? What variables need to be monitored in the short term?

[China’s Aluminum Ingot Inventory Continues to Build Up, Aluminum Prices Remain in a High-Level Consolidation Pattern ]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, coupled with support from expectations of a gradual release of peak-season demand in China. In the short term, aluminum prices are expected to remain in a high-level consolidation pattern.

SMM News, March 31， In Q1 2026, amid macro tailwinds, expectations of a supply gap, and successive geopolitical conflicts in the Middle East, aluminum prices repeatedly hit new highs. The quarterly average SMM A00 aluminum price reached 24,028 yuan/mt, up 17.5% YoY; the quarterly average closing price of the LME aluminum 3M contract at 15:00 Beijing time reached $3,196/mt, up 21.8% YoY. High prices suppressed downstream consumption: At the end of 2025, SMM expected China’s primary aluminum consumption growth in 2026 to be 2.0%; as of February, that growth rate had fallen to 1.1%. As a result, the proportion of liquid aluminum in the aluminum industry declined significantly, and aluminum social inventory hit a nearly three-year high. As of March 31, the inflection point in China’s aluminum social inventory was still unclear, while the absolute inventory level had already entered the upper range of SMM’s previous forecast of 1.35-1.4 million mt. However, affected by geopolitical conflicts in the Middle East, aluminum supply and demand were both weak, fundamental risks increased, and prices saw wild swings. Under the impact of high prices, aluminum ingot inventory may continue to build further. According to SMM, as of the end of March, some aluminum ingots in certain regions were still backlogged at rail platforms and outside warehouses. High prices also accelerated supply growth: As of the end of Q1, average profits in China’s aluminum industry exceeded 8,000 yuan/mt. Stimulated by high profits, China’s aluminum supply growth is expected to exceed expectations. At the end of 2025, SMM expected China’s aluminum supply growth in 2026 to reach 1.7%; as of the end of Q1 2026, SMM expected that growth rate had risen to 1.9%. Outside China, supply growth was also boosted by high prices: 1) A smelter in Spain had originally planned to resume full production by 2026, and according to foreign media reports in March, it had already resumed to 90% of operating load; 2) In October 2025, an Icelandic smelter cut production on one line due to equipment failure. It had originally planned to resume production in September-October 2026, but has now moved the plan forward to start by the end of April; 3) At the end of 2025, expectations were that Indonesia’s operating aluminum capacity would reach 2 million mt by the end of 2026; that expectation has now been raised to 2.2-2.5 million mt. Q2 Outlook: At present, one of the decisive factors for global aluminum fundamentals and price trends is the geopolitical situation in the Middle East. SMM analysis showed that outside China, aluminum capacity that had already cut production or faced substantial production reduction risk exceeded 3 million mt. If subsequent production cuts from this portion of capacity are confirmed, outside China aluminum supply is expected to maintain negative YoY growth for an extended period, and global aluminum fundamentals are expected to face a large gap, with the gap outside China far exceeding that in China. In this case, aluminum prices in and outside China are expected to rise sharply again, with overseas prices expected to outperform domestic prices. China’s net aluminum imports are expected to decline, while exports from downstream aluminum plants are expected to increase. However, if actual production cuts come in below expectations, while consumption sees a marked reduction due to factors such as energy and inflation, the upward move in aluminum prices may face insufficient momentum. At present, geopolitical conflicts in the Middle East are disrupting the global aluminum supply-demand pattern, and SMM will continue to follow related developments.