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  During the Chinese New Year period, warehouse inventory increases far exceeded expectations, spot copper cathode saw significant discounts [SMM Southern China Spot Copper Cathode Weekly Review]

• Lithium Prices at High Levels Combined with Supply Disruptions in Africa, New Energy Vehicles Face Critical Validation Period in Q2

  The main focus in March shifted from the volume after resuming production to whether costs could be passed on and if orders were sustainable. With a general increase in raw material prices, battery prices also diverged due to different pricing models: battery manufacturers using a formula-linked mechanism found it easier to pass on costs at the financial level; whereas those with fixed-price contracts experienced more significant profit compression. However, most enterprises chose not to push price negotiations to the extreme in Q1, instead opting to leave more room for discussions to be concentrated after the New Year. This strategy led to a situation where, on the surface, the industry chain in March was still in production and making deliveries, but profit pressures were accumulating internally, and the real contradictions were merely postponed rather than resolved. As a result, market expectations for Q2 began to diverge in March: optimists saw new vehicle cycles and production schedule resilience, while the cautious were more concerned about the potential for profits to be affected first if sales did not materialize.

• [SMM Analysis] Rising Cost Pressures May Curb March NCM Demand Recovery

  Although March traditionally marks a demand recovery period and represents the final deadline for "export rush" orders ahead of policy changes, leading to a significant MoM increase compared to February, the magnitude of this recovery is expected to be more limited than pre-holiday forecasts suggested.

• This week, domestic mainstream copper inventories saw a significant buildup, reaching a historically high level [SMM weekly data].

• [SMM Analysis] Post-holiday raw material side disturbances reemerged, nickel salt prices rose.

  As of Thursday this week, the SMM battery-grade nickel sulphate index price was 31,813 yuan/mt, the quotation range for battery-grade nickel sulphate was 31,570-33,000 yuan/mt, and the average price rose compared to pre-holiday levels.