SMM reported on March 5 that this week, total inventory across the two major stainless steel markets of Wuxi and Foshan showed a slight upward trend, rising from 1.0161 million mt on February 26, 2026 to 1.0164 million mt on March 5, 2026, up 0.3% WoW. This week, stainless steel social inventory increased slightly, remaining at a high level above 1 million mt. The market had entered the traditional peak consumption season of “Golden March and Silver April.” Although downstream end-users had gradually resumed work and production, the pace of actual demand release was slow, and the strength of the recovery still needed to be verified. SS futures lacked momentum for further upside and fluctuated within the week, making it difficult for spot prices to improve. Wait-and-see sentiment strengthened, and overall confidence pulled back compared with the previous period. Supply side, stainless steel mills’ expected planned production for March had increased significantly, and supply pressure was gradually emerging. Although supply and demand had yet to achieve a good match and the effectiveness of social inventory drawdown remained uncertain, stainless steel currently had strong cost support. Nickel ore-related news continued to ferment and provided a floor, while steel mills were proactive in maintaining prices and boosting shipments, fully aligning with procurement demand after downstream resumption of work, effectively curbing further inventory buildup. Overall, this week’s inventory trend was mainly driven by factors including a slower-than-expected downstream recovery, increased supply expectations, a pullback in market confidence, and steel mills’ active shipments. Although there was still a short-term risk of inventory buildup, supported by strong cost-side support and steel mills’ proactive adjustments, stainless steel social inventory was expected to remain broadly stable. Whether inventories can be effectively drawn down going forward will still hinge on the actual pace of downstream demand recovery.

Next week, key macroeconomic data releases include China’s February CPI y/y, the US February non-seasonally adjusted CPI y/y, the US January core PCE price index y/y, and the preliminary US March one-year inflation expectations; meanwhile, geopolitical tensions in the Middle East persist, with unchanged impacts on maritime shipping and energy supply, while a surge in oil prices has hit interest rate cut expectations, and US Treasury traders have increasingly expected that the US Fed will not cut interest rates this year. In addition, on March 6, SHFE officially announced the passage of the revision plan for lead futures contracts, with secondary lead substitutes at a discount of 150 yuan/mt to deliverable-grade material. LME lead, overseas geopolitical issues have mixed bullish and bearish impacts on the lead market: on the one hand, hindered transportation and rising energy prices such as natural gas have pushed up smelting cost, and lead-acid battery exports have also been constrained by transportation restrictions; on the other hand, there is the impact of damage to the economic environment. In addition, overseas lead inventory has remained elevated after surging by more than 50,000 mt during the Chinese New Year period, leaving lead prices under pressure. LME lead is expected to trade at $1,930-1,990/mt next week. SHFE lead, in March, both domestic lead ingot supply and demand increased, and with imported lead supplementing supply, the destocking speed of lead ingots has been slow, leaving insufficient momentum for lead prices to rise. The secondary lead segment is currently in a loss-making state, and some smelters have slowed the pace of resuming production, providing support for lead prices. In addition, next week is the week before delivery for the SHFE lead 2603 contract, and suppliers will transfer inventory and ship to delivery warehouse; expectations of a cumulative increase in visible inventory may weigh on lead prices. Overall, the most-traded SHFE lead contract is expected to trade at 16,600-17,000 yuan/mt next week. Spot price forecast: 16,500-16,700 yuan/mt. Demand side, the operating rate of lead-acid battery enterprises rose, and their lead ingot purchases will rise accordingly, with more expectations of purchasing as needed. Supply side, primary lead smelters’ production was steady to slightly higher, and market circulating supply was ample; however, considering the factor of shipping to delivery warehouse, this may ease suppliers’ pressure to make shipments, keeping spot discounts stable, while secondary refined lead smelters have resumed work at a slightly slower pace and, amid losses, secondary refined lead smelters will hold prices firm in shipments, with limited widening of discounts.

[Frequent Supply Disruptions; Imported TCs Continued to Decline]: Weekly data showed that the average weekly TC for SMM Zn50 domestic remained flat at 1,550 yuan/mt in metal content, while the SMM Imported Zinc Concentrate Index fell by $8.37/dmt MoM to $15.38/dmt...

According to SMM data, during the first week of the traditional "Golden March" peak season (March 2 - March 6, 2026), the most-traded stainless steel futures contract (SS2604) exhibited a strong, high-level oscillating trend. This was driven by the resonance of international geopolitical storms and the tone set by China's macroeconomic policies. By the close at 10:15 on March 6, the contract traded higher at 14,235 yuan/mt (approx. $2,063/mt), up 85 yuan/mt (approx. $12/mt) (+0.60%) from last Friday's close of 14,150 yuan/mt (approx. $2,051/mt). The market this week was characterized by "strong expectations but weak reality." A sudden global supply chain crisis and firm raw material costs provided a solid floor for market valuations. However, high spot inventories and the looming pressure of resumed production kept prices cautious when attempting upward breakouts. Macro-Economy: A "Super Macro Week" Defined by Geopolitics and Policy Support On the macroeconomic front, this was undeniably a "super macro week" with exceptionally strong signals from China and the global market. Internationally, a geopolitical "black swan" emerged as Iran claimed the Strait of Hormuz was closed and threatened to strike passing vessels. This extreme event immediately sparked fears of a global supply chain crisis and surging energy expectations. U.S. Federal Reserve officials subsequently voiced concerns over the war's spillover effects and a potential rebound in inflation, significantly cooling expectations for interest rate cuts. However, in the commodities market, trades driven by "inflation hedging" and "supply chain disruptions" boosted the overall premium of the base metals sector. In China, the government work report delivered at the "Two Sessions" set the 2026 economic growth target at 4.5%-5%. It explicitly proposed utilizing capacity regulations and standard-setting to deeply rectify "involutionary" (cut-throat) competition. This policy direction provides strong expectation-driven support for supply-side optimization in traditional Chinese manufacturing. Fundamentals: Inventories Near Peak, Clash of Supply and Demand Imminent Fundamentally, social inventories are showing early signs of peaking, though the market will soon face the test of surging supply. The latest SMM data shows social inventories at 1.0164 million mt this week, a marginal increase of just 300 mt from last week's 1.0161 million mt. The seasonal inventory accumulation around the Spring Festival fully aligns with industry patterns and remains within market expectations. Traders have not resorted to panic selling, keeping short-term inventory pressure manageable. However, a shift is brewing on the supply side. The output reduction caused by concentrated maintenance at Chinese steel mills in February is nearing its end. As mills enter a concentrated resumption phase in March, scheduled production is expected to rise sharply. This surge in supply will clash head-on with recovering demand during the "Golden March and Silver April" period, leading to a phased reshaping of the market's supply-demand dynamics. Costs: Robust Upward Resilience Sets a Solid Floor On the cost side, raw materials continued to show robust upward resilience, establishing a solid baseline for futures prices. Driven by the ongoing fallout from Indonesian nickel ore quotas and premium news, raw material prices rose across the board this week. As of March 6, high-grade nickel pig iron (NPI) quotes climbed to 1,088 yuan/mtu (approx. $158/mtu), and high-carbon ferrochrome prices were adjusted upwards to 8,600 yuan/50 mt (approx. $1,246/50 mt). Although mainstream steel mills currently show low acceptance of high NPI prices and remain cautious in procurement—resulting in sparse actual market transactions—the raw material sector has minimal room to yield on price, dominated by expectations of tight ore supply and bullish sentiment. The steady climb in spot costs has effectively capped the downside risk for stainless steel prices. Outlook and Strategy In conclusion, the stainless steel market this week sought a balance amid the fierce tug-of-war between "geopolitical premiums + cost support" and "million-ton inventories + production resumption expectations." The macroeconomic shifts triggered by the Strait of Hormuz crisis, coupled with China's "Two Sessions" mandate to curb cut-throat competition, have injected immense confidence into the bulls regarding macro sentiment. Looking ahead to next week, the market will deeply enter the reality-check phase of the "Golden March" peak season. The core focus will shift to the actual implementation of steel mill resumptions in March and the pace at which downstream end-users digest substantial orders. In the short term, futures prices are expected to maintain wide fluctuations at high levels, underpinned by the cost line. Industry clients are advised to closely monitor geopolitical developments and the pace of spot inventory destocking, while rationally utilizing futures tools to lock in production margins.

This week, prices of 304 stainless steel scrap off-cuts in east China strengthened to 10,200-10,300 yuan/mt; stainless steel scrap off-cuts of the same grade in Foshan rose, with a price range of 9,900-10,200 yuan/mt. From the perspective of raw material-side production costs, the current cost of producing stainless steel entirely with stainless steel scrap was about 14,127.63 yuan/mt, while the production cost using only high-grade NPI was 14,789.63 yuan/mt. This week, stainless steel scrap prices strengthened and moved higher, mainly supported by the recovery in restarts, catch-up demand, and cost advantages. Entering March, the market fully resumed operations, yard shipments accelerated, and downstream inquiries and transactions increased significantly, lifting trading activity and laying the groundwork for prices to rise. On the futures and raw material side, SS futures saw a pause in gains this week, stainless steel spot prices posted limited increases, the pace of high-grade NPI price hikes slowed, and heat in the raw material market cooled. However, stainless steel scrap had previously been affected by the Chinese New Year holiday, and prices failed to keep pace; this week’s catch-up rally became the key driver of the price strength. In terms of supporting factors, stainless steel mills’ March production schedules rose sharply, boosting stainless steel scrap procurement demand; coupled with expectations for the “Golden March and Silver April” peak season, bullish sentiment was strong. Meanwhile, stainless steel scrap’s economic advantages over high-grade NPI were evident, lifting substitution demand and further supporting prices. However, downstream end-use demand recovered slowly, and stainless steel finished product inventory remained high, suppressing upward movement in finished product prices and transmitting to the stainless steel scrap market, thereby limiting the increase. Overall, the market this week showed a pattern of “restart recovery, increased transactions, and a catch-up price rise.” In the short term, there was still upward momentum, but gains were limited; over the longer term, attention should be paid to the pace of end-use demand recovery.

[SHFE/LME Price Ratio Rebounded and Hovered Around 7.4]: This week, the SHFE/LME price ratio rebounded and fluctuated around just below 7.4, and the zinc ingot import window remained closed. Overseas, continued destocking supported the upward shift in the center of LME zinc; subsequently, as geopolitical developments fueled inflation concerns, a stronger US dollar pressured the base metals sector, and LME zinc retreated after rapid rise, with its center moving lower.

SMM News on March 6: From February 27, 2026 to March 6, 2026, the weekly operating rate of SMM secondary lead across four provinces was 27.12%, down 2.6 percentage points WoW. Most smelters in Anhui had yet to resume production, while smelters in Henan cut production due to tight raw material supply; workers at smelters in Jiangsu returned to work after the Lantern Festival, and the operating rate increased by about 5 percentage points this week; the operating rate in Inner Mongolia was flat WoW. Affected by factors including environmental protection requirements during the Two Sessions, tight raw material supply, and weak downstream demand, secondary lead smelters’ production resumptions were concentrated at month-end March, and SMM expected relatively small fluctuations in the operating rate next week. > Subscribe to view SMM historical metal spot prices

[SMM Stainless Steel Daily Review] SS Futures Trade Rangebound; Bullish Sentiment for Spot Stainless Steel Weakens SMM News on March 6: SS futures showed a pattern of holding up well. SS moved in the doldrums during the night session, but after the daytime session opened, it gradually strengthened and probed higher, finally closing at 14,115 yuan/mt. In the spot market, spot quotes pulled back in the morning under the influence of weaker SS performance in the night session; however, as futures fluctuated upward, spot quotes also followed with some gains, and the overall adjustment was limited. Recently, affected by factors such as expectations for a high stainless steel production schedule in March, a slowdown in the rise of high-grade NPI prices, and a slow recovery in downstream demand, traders’ earlier bullish expectations have weakened somewhat, and their willingness to make shipments has increased. The most-traded SS futures contract fluctuated upward and strengthened. At 10:15 a.m., SS2604 was quoted at 14,240 yuan/mt, down 35 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 280-480 yuan/mt range. In the spot market, Wuxi cold-rolled 201/2B coils were generally steady; for cold-rolled mill-edge 304/2B coils, the average price in Wuxi fell 25 yuan/mt, while the average price in Foshan was steady; cold-rolled 316L/2B coils in Wuxi were steady; hot-rolled 316L/NO.1 coils in Wuxi were quoted steady; cold-rolled 430/2B coils in both Wuxi and Foshan were steady. As the market enters the traditional peak consumption season of “Golden March and Silver April,” the stainless steel market is seeing a window for demand recovery. Downstream demand has gradually resumed work and production after the Chinese New Year holiday, and demand is showing a gradual recovery trend. However, although transactions have improved compared with the earlier period, the bustling peak-season momentum has yet to emerge. End-user procurement is mainly driven by rigid demand, with stockpiling…

SMM Nickel News, March 6: Macro and Market Updates: (1) The central bank announced that, to keep liquidity in the banking system ample, on March 6, 2026, the People’s Bank of China will conduct 800 billion yuan outright reverse repo operations via fixed-amount, interest-rate tender with multiple-price allotment. The tenor will be three months (91 days). (2) Amir Heydari, deputy commander of Iran’s Khatam al-Anbiya Central Headquarters, said in an interview on the morning of the 5th local time that Iran had not actually closed the Strait of Hormuz. In a statement, the Islamic Revolutionary Guard Corps said that military and commercial vessels belonging to the US, Israel, and European countries and their supporters are strictly prohibited from transiting the waters; once discovered, they will be struck. Spot Market: On March 6, SMM #1 refined nickel prices rose by 150 yuan/mt from the previous trading day. For spot premiums, the average for Jinchuan #1 refined nickel was 6,750 yuan/mt, up 100 yuan/mt from the previous trading day; the range for domestically mainstream brands of electrodeposited nickel was -400-400 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2605) opened lower and then fluctuated upward, closing the morning session at 137,580 yuan/mt, up 0.65%. A rebound in the US dollar index put pressure on nonferrous metal prices. In the short term, nickel prices are expected to maintain a fluctuate upward trend, and the most-traded SHFE nickel contract may trade in the 135,000-143,000 yuan/mt range.

In the spot market, during this week (March 2, 2026–March 6, 2026), post-holiday social inventory of primary lead continued a slight upward trend. Downstream buyers still mainly picked up goods under long-term contracts and worked down pre-holiday inventory, and overall spot transactions remained sluggish. This week, refined lead supply in Henan increased steadily, with suppliers concluding deals at a discount of 230 yuan/mt against the SHFE lead 2604 contract or at a discount of 50–0 yuan/mt against the SMM #1 lead average price. In Hunan, smelter supply had not yet fully recovered, suppliers’ offers were relatively firm, and spot transactions were at a slight premium of 0–30 yuan/mt against the SMM #1 lead average price.