China’s Purchasing Managers' Index (PMI) returned to expansion territory in March, indicating a recovery driven by infrastructure investment and improving manufacturing activity.

However, the real estate sector remains slow to recover, while steelmakers continue to face pressure from export restrictions and the EU’s Carbon Border Adjustment Mechanism (CBAM), limiting profit margins. Globally, a strong U.S. dollar, supported by the Federal Reserve’s high interest rate policy, has weighed on metals sentiment.

On the raw materials side, nickel prices are supported by supply disruptions in Indonesia, while ferrochrome gains remain limited due to increased supply. In March, China’s scheduled crude steel production surged to a record 3.697 million tons and is expected to rise further in April.

Although seasonal demand in April may provide support, persistently high production and inventory levels are expected to keep the market fluctuating at a high level.