Nickel prices came under pressure and pulled back this week. Early in the week, rumors of tighter approvals for RKAB on the Indonesian ore side spurred the futures market to rally briefly, but it later retreated as US Fed officials repeatedly delivered hawkish remarks, the US dollar index held above 106, and global risk assets came under broad pressure. With tensions in the Middle East rising, macro risk-off sentiment strengthened, and nickel prices on SHFE and LME corrected notably. The most-traded SHFE nickel contract closed at 137,140 yuan/mt on Friday, down 1.6% on the week. The LME nickel 3M contract fluctuated between $17,000-17,900/mt this week, with a weekly decline of 2%. In the spot market, the weekly average price of SMM #1 refined nickel was 140,600 yuan/mt, down 2,150 yuan/mt WoW. The weekly average Jinchuan nickel premium was 6,900 yuan/mt, down 1,100 yuan/mt versus the week before Chinese New Year. Premiums for mainstream domestic brands of electrodeposited nickel ranged from -400-400 yuan/mt. After nickel prices fell this week, downstream restocking driven by rigid demand became more evident, and overall spot nickel plate shipments increased WoW. On the macro front, US ADP employment in February increased by 63,000, the largest rise since November 2025 and above the market expectation of 50,000, weakening expectations for US Fed interest rate cuts. Meanwhile, US January PCE and core PCE inflation data rose above expectations, and the US dollar index rebounded, creating short-term pressure on base metal prices. Geopolitical tensions continued to escalate this week, with Iran announcing the closure of the Strait of Hormuz, posing a potential threat to the sulfur supply chain. Domestically, the Two Sessions emphasized medium and long-term benefits from national defense spending, improving expectations for alloy demand in sectors such as defense industry and shipbuilding, which supported nickel alloy consumption. Inventory: Shanghai Bonded Zone inventory was about 2,200 mt this week, flat WoW. Domestic social inventory was about 85,000 mt, with an inventory buildup of about 8,000 mt WoW. Nickel prices are currently in a stalemate, with firmer cost support but unchanged near-term pressure. Tighter Indonesian RKAB quotas and tight nickel ore supply provided strong support for nickel prices, but levels above 140,000 yuan/mt faced strong resistance from high inventory and weak demand. The core expected trading range for the most-traded SHFE nickel contract next week is 130,000-140,000 yuan/mt.

[Die-Casting Zinc Alloy Plants Gradually Resumed Production; Operating Rates Continued to Rise This Week] This week, the operating rate of die-casting zinc alloy declined compared with before the holiday, mainly because there were still relatively few enterprises that had resumed production, and most alloy plants were expected to arrange production resumptions after the Lantern Festival......

[SMM Morning Meeting Minutes: Macro Sentiment-Driven, LME Zinc Center Shifts Lower] Overnight, LME zinc posted a large bearish candlestick, with the upper Bollinger Bands midline forming resistance and the lower 60-day moving average providing support. The Middle East conflict escalated, the US dollar strengthened, oil prices hit a new high since July of the year before last, inflation expectations rose, and the US Fed......

[SMM Daily Review: End-Use Consumption Recovery Remained Limited, High-Grade Supply Scarcity Was Significant] News on March 6: The upstream sentiment factor for SMM high-grade NPI was 2.88, up 0.01 MoM, and the downstream sentiment factor for high-grade NPI was 1.37, up 0.05 MoM.

Copper prices fluctuated downward this week. Early in the week, as the situation in the Middle East continued to escalate, expectations of a US-Iran conflict intensified. Risk-off sentiment rose, the US dollar index strengthened, and funds rotated back from risk assets. LME copper pulled back from around $13,400 to the $13,000 level, while SHFE copper also pulled back from above 103,000 yuan to around 101,000 yuan. Although the situation was briefly digested by the market and a short-lived pullback in the US dollar drove a technical rebound in copper prices, overall momentum remained limited. US ADP employment data came in better than expected; divisions within the US Fed over interest rate cuts persisted; and the White House’s nomination of Warsh as Fed Chairman also increased policy uncertainty. In terms of positioning, bulls reduced positions for several days, indicating continued exits by high-level funds. Overall, macro uncertainty and a stronger US dollar capped the rebound in copper prices, and prices remained in the doldrums in the short term. Fundamentals, as the market held expectations for higher sulphuric acid prices, the transaction center for copper concentrates was pushed further lower. Recent mine tender prices pointed to a midpoint of -$50/mt. Smelting pressure increased further. For copper cathode, post-holiday inventory buildup continued, and consumption remained sluggish with no sign of a destocking inflection point. LME, COMEX, and SHFE all showed a contango structure, leaving fewer trading opportunities. Looking ahead to next week, geopolitical tensions are expected to continue providing strong support to the US dollar, leaving copper prices facing significant resistance in the short term. Coupled with the current high-inventory fundamentals, an upside move will be difficult. LME copper is expected to fluctuate between $12,800-13,200/mt, and SHFE copper between 98,000-101,000 yuan/mt. In the spot market, as delivery approaches, spot market trading logic will fluctuate with the price spread between futures contracts and funding costs, and is expected to gradually lift next week. Spot prices against the SHFE copper front-month contract are expected to range from a discount of 120 yuan/mt to a premium of 20 yuan/mt.

As of now, the FOB price of Indonesian MHP nickel was $15,418/mt Ni in metal content, and the FOB price of Indonesian MHP cobalt was $49,918/mt Co. MHP payables (against the SMM battery-grade nickel sulphate index) were 85.5-86.5, and the payable indicator for MHP cobalt element (against SMM refined cobalt (Rotterdam warehouse)) was 91. The FOB price of Indonesian high-grade nickel matte was $15,777/mt Ni in metal content.

Capacity side, according to incomplete statistics, the domestic alkaline electrolyzer market remained at 43.77 GW and the PEM electrolyzer market remained at 2.7 GW, with no new capacity added. The 16 green electricity smart hydrogen production systems built by Shuangliang Group for ACME Group’s Oman green ammonia project with a daily output of 300 mt officially commenced shipment. Updates on electrolyzer projects: Xinjiang Hynda Energy Technology Co., Ltd.: The EPC tender was released for an integrated production line project with an annual production of 120,000 mt of green hydrogen and 700,000 mt of green ammonia. It is understood that this project is the largest green ammonia producer in China in terms of both scale and production, with a total investment of 10 billion yuan. At present, company registration, project filing, and equipment selection have been completed. The preliminary site is in Wusu West Industrial Park, covering about 600-800 mu; the next step will be to accelerate project planning and design, EIA, energy assessment, safety assessment, and other pre-project procedures, striving to commence production and achieve results as early as possible. Sinopec Sales Co., Ltd. Xinjiang Jiangbei Petroleum Branch: The first public notice for the EIA information disclosure of the new construction project of the Kunlun Road integrated energy supply station in Karamay District was released. Construction location: opposite the bus company on Kunlun Road, Karamay District. Construction content: the project covers an area of 7,504.01 m², with a newly built station building of 390 m² and a canopy of 450 m²; it will include 4 oil storage tanks, 2 fuel dispensers, 1 set of LNG skid-mounted equipment, 2 fast charging piles, 1 set of water electrolysis hydrogen production equipment, a set of hydrogen storage cylinders, and one set of hydrogen skid-mounted and refueling equipment. Annual sales: 3,500 mt of refined oil products, 800 mt of LNG, and 120 mt of hydrogen. China Coal Pingshuo Group Co., Ltd. : A change announcement was released for the procurement project of complete sets of alkaline electrolyzer equipment and ancillary facilities for Phase I of the 600,000 kW off-grid renewable energy hydrogen production project in the coal mining subsidence area of China Coal Pingshuo Group (green hydrogen coupled with the coal chemical segment), and the bid opening time was postponed to March 17, 2026. It is understood that the project adopts a main-and-auxiliary supply model, and the quotation includes 12×1,200 Nm³/h alkaline electrolyzers, 3×4,800 Nm³/h gas-liquid separation systems, 3×4,800 Nm³/h gas purification systems, etc. Junrui Green Hydrogen Energy (Shangdu County) Co., Ltd. : The 30,000 mt/year hydrogen production project in Lingyuan City completed filing. Total investment was 146,037 yuan; the project covers 375 mu, including an electrolysis workshop, 2 purification and compression workshops, a power station, a hydrogen tank farm, etc.; core equipment includes 84 sets of 1,000 Nm³/h electrolyzers, hydrogen storage tanks, as well as hydrogen purification units, compressors, etc. Inner Mongolia Green Hydrogen Steel Union Technology Co., Ltd.: The filing for the green electricity and green hydrogen steel mill plant construction project, a banner/county industrial project, was successfully completed. It was learned that the project’s main construction location is Guyang County, Baotou City; total investment: 1.02 billion yuan, funded by self-owned capital; planned construction period: from March 2026 to October 2027; construction content: construction of green electricity, green hydrogen, and green steel plant buildings and auxiliary facilities. Inner Mongolia Junhong Technology Co., Ltd.: Cancellation of the Green Methanol Plant Building Construction Project. It was learned that the Green Methanol Plant Building Construction Project of Inner Mongolia Junhong Technology Co., Ltd. is located in Baotou City—Guyang County—Jinshan Industrial Park. The project entity is Inner Mongolia Junhong Technology Co., Ltd., with a total investment of 1.5 billion yuan. Policy Review 1. Premier Li Qiang delivered the Government Work Report at the Fourth Session of the 14th National People’s Congress, emphasizing that efforts must be made to advance the development of a green, low-carbon economy. Specific measures include: improving relevant policies to promote green and low-carbon development; carrying out actions to improve quality, reduce costs, and cut carbon emissions in key industry; further advancing the development of zero-carbon industrial parks and factories; establishing a national low-carbon transition fund and actively fostering emerging growth drivers such as hydrogen energy and green fuels; implementing strong and effective controls over high energy-consuming and high-emission projects, accelerating the phase-out of outdated capacity, while supporting innovation and application of green and low-carbon technology and equipment; improving the mechanism for total resource volume management and the comprehensive conservation system, and strengthening the recycling and utilization of renewable resources. 2. The European Commission stated that it will maintain the fertilizer carbon tariff mechanism, while simultaneously implementing temporary tariff reductions and exemptions for fertilizers such as ammonia and urea, in order to balance environmental protection goals with agricultural cost pressure, ensure fair competition, and stabilize clean energy investment. 3. The European Commission approved a 4 billion euro dedicated fund for electrolyzers, providing a 30% equipment cost subsidy for projects with capacity ≥500MW/year, and setting the 2030 electrolyzer efficiency target for green hydrogen projects at ≥60% (LHV basis). Enterprise Updates Shandong Port Qingdao Port (Group) Co., Ltd. : At the Qianwan Port Area of Shandong Port Qingdao Port, the methanol bunkering vessel “Jianhang Lida” successfully carried out 2,500 mt of green methanol ship-to-ship bunkering operations for two international seagoing vessels. SPIC Green Energy Co., Ltd.: Tender Announcement for the 10th Batch of Centralized Tenders in 2026 (infrastructure projects). This includes multiple tenders related to the Lishu wind and solar power hydrogen-ammonia-methanol project: the foundation pile detection service project for the Lishu wind and solar power green hydrogen biomass-coupled green methanol project; the non-destructive detection service project for the Lishu wind and solar power green hydrogen biomass-coupled green methanol project; and the EPC project for the design and construction of the fine interior fit-out of the office building and canteen in the plant-front area of the chemical section of the Lishu wind and solar power green hydrogen biomass-coupled green methanol project. Hangzhou Fenghua Hydrogen Energy Technology Co., Ltd. : The major project approved by the Zhejiang Provincial Department of Marine Economic Development, jointly applied for with Windey, Baimahu Laboratory, Zhejiang University of Technology, and others—R&D and application demonstration of key equipment for an offshore wind power direct-coupled hydrogen production off-grid system—was approved. Tangshan Haitai New Energy Technology Co., Ltd. : Held a symposium with Beijing Energy International Holding Co., Ltd. The two sides focused on areas such as the construction of green electricity transmission corridors into Beijing and green hydrogen pipeline transportation, and conducted discussions and exchanges on deepening cooperation. China Huadian Corporation Ltd. : Party Secretary and Chairman Jiang Yi held talks in Baotou with Chen Zhichang, Member of the Standing Committee of the Inner Mongolia Autonomous Region Party Committee and Party Secretary of the Baotou Municipal Party Committee, and Meng Qingwei, Deputy Party Secretary and Mayor. The two sides exchanged views on further deepening cooperation between central enterprises and local governments. CIMC Enric Holdings Limited​​​​​​​: Formally signed the Strategic Cooperation Framework Agreement in Jakarta with PT SAMATOR Group, an Indonesian provider of industrial gases and energy solutions. Based on their deep accumulation in energy equipment, industrial gases, and clean energy, the two sides reached a consensus on long-term strategic cooperation. Zhizi Automobile Technology Co., Ltd.​​​​​​​: Completed a Series B financing of several hundred million yuan, with investors including Shengshi Juxin, Guoxin Venture Capital, Hebei Industrial Investment, Green Era, Youda Shangrong, the Private Economy Fund, Huoshui Capital, and Huitou Zhizao. The funds will mainly be used for R&D of core technologies such as intelligent driving and autonomous driving, replenishment of working capital, and global market expansion. Patent Applications 1. Shanghai Institute of Ceramics, Chinese Academy of Sciences (China) published patent CN2025110028, developing a ceramic-based anion exchange membrane with a laboratory-tested service life of 80,000 hours. 2. Johnson Matthey (UK) filed patent WO2025109876, disclosing a Fe-Ni-Mo ternary non-precious metal catalyst formulation with activity close to platinum-based materials. Technology Footprint/Technical Specifications 1. Xi’an Jiaotong University and a Peking University team jointly developed a new-type osmium-based catalyst, significantly improving the efficiency and cost-effectiveness of AEM water electrolysis for hydrogen production, supporting the large-scale deployment of low-cost green hydrogen. 2. Johnson Matthey and Syensqo achieved efficient recycling and reuse of platinum-group metals and ionomers from PEM fuel cells and electrolyzers, significantly reducing the carbon footprint. 3. Relevant research teams from the School of Electrical Engineering of Xi’an Jiaotong University and the National Key Laboratory of Electrical Insulation and Power Equipment Materials successfully developed a Ru/Ti3C2Ox@NF seawater electrolysis bifunctional electrocatalyst. 4.《Technical Specification for Wind and Solar Power + ESS Coupled Green Electricity Electrolysis Hydrogen Production (No. T/CIEP 0272—2025), a group standard, was issued and implemented by the China Industrial Environmental Protection Promotion Association. Zhongneng Dayou Energy Technology Co., Ltd. successfully conducted R&D of a 100 kW-class PEM electrolyzer hydrogen production multi-field coupling test device. 5. GKN Powder Metallurgy announced that it had developed a new-generation high performance, high-porosity, high-purity porous transport layer (HP-PTL) for proton exchange membrane (PEM) electrolysis.

[SMM Analysis]Macro Factors Drove, and Supply and Demand Gradually Recovered,ADC12 Prices Were Expected to Rise in March

SMM, March 5: Today, market sentiment in the Foshan A00 spot aluminum market adjusted in the doldrums. Downstream players basically completed the resumption of work after the Lantern Festival, with bullish sentiment spreading. Purchase willingness and buying intensity both increased, and market transactions were in a phase of accelerated recovery. The overall supply-demand pattern changed relatively little. Although overall deliverable cargo in warehouses was ample, pressure from in-transit cargo eased slightly due to the expanded suspension of rail loading in South China. Aluminum prices rose for several consecutive sessions, leaving traders hedging positions relatively passive. Today, mainstream quotes in the South China market were at a discount of 170-180 yuan/mt to the SHFE aluminum 03 contract, with mainstream transactions at a discount of 180 yuan/mt to the SHFE aluminum 03 contract. Aluminum billet: Today, the average processing fee for SMM 6063 aluminum billet (Guangdong) was -50 yuan/mt for Φ90/100, and -100 yuan/mt for Φ120 and above, down 230 yuan/mt from yesterday. As overseas aluminum supply saw renewed turbulence, the base price fluctuated sharply. Aluminum billet processing fees came under pressure, with the discount widening. Downstream players were wary of high prices, mainly purchasing on rigid demand while pushing for lower prices, and overall market trading sentiment was average.

This week, ternary material prices edged slightly downward. From a raw material perspective, nickel sulfate, cobalt sulfate, and manganese sulfate prices remained relatively stable with no significant fluctuations. The primary downward pressure on prices came from lithium sulfates: spot prices of lithium carbonate and lithium hydroxide saw notable declines in early week, weakening the cost support for ternary materials. Despite the pronounced decline in lithium sulfate prices early this week, ternary cathode material manufacturers showed relatively limited restocking interest. There are two main reasons for this: First, prior to the price adjustment, most cathode manufacturers had already finalized March orders with downstream battery cell makers and are currently in the order delivery phase , maintaining relatively sufficient raw material inventories. Second, manufacturers generally maintain a " buy on rising, not on falling " mentality, viewing this adjustment primarily as short-term volatility influenced by international situations, with no expectation of sustained lithium sulfate price declines. In terms of pricing, although lithium carbonate futures prices experienced adjustments, cathode manufacturers' quotations did not see significant declines, mainly because their raw material costs remain higher than current futures prices . Spot market transactions were also quite subdued this week, with market activity dominated by long-term contract supplies. On the demand side, the EV market showed seasonal recovery, but downstream customers' order fulfillment pace remained slow due to Q1 new energy vehicle sales falling short of expectations . In contrast, e-mobility and consumer electronics markets saw relatively notable growth, primarily driven by some consumer batteries facing "export rush" demand , leading to forward order placements.