Morning Insight: April 27, 2026

Morning Insight:April 27, 2026 LinlinGaoCertification：Z0002332gaolinlin@gtht.comYu Chen Wu (Contact)Certification：F03133175 wuyuchen@gtht.com Main Body Nickel & Stainless Steel:Speculative momentum drives outright strength;look for structural arbitrage opportunities News-driven speculative flows have triggered breakout buying, while near-term fundamentals impose some elasticity constraints. Incrementalspeculative capital and existing fundamental-driven positioning arelikely to form a tug-of-war. In the short term, Indonesian nickel oreprices have stabilized, but market sentiment has been stirred by news ofpotential production cuts at WBN due to insufficient mining quotas.Although the quota shortage is not new information, the narrative isincreasingly being reflected in reality, and with additional quotas yetto be confirmed, speculative funds have re-entered the SHFE nickelmarket, amplifying short-term volatility. For nickel, a sharp rise in sulfur prices has led to convergence betweenhydrometallurgical and pyrometallurgical production costs, potentiallyshifting marginal cost pricing toward the hydromet route. As a result,developments around the Strait of Hormuzhave become a key marginalfactor. Changes in ore pricing mechanisms may lift cost expectations, butdownstream resistance to high-priced ore remains strong, so the extent ofcost pass-through will depend on actual transaction prices. Attentionshould be paid to new contract pricing toward month-end. Frequent news flow has fueled outright speculative sentiment. However, asdomestic refined nickel inventories have accumulated more than overseasstocks, the economics of delivering into overseas markets still need toimprove. Investors can consider opportunities in domestic vs. international bull spreads when import arbitrage margins are elevated.On the stainless steel side, open interest has doubled since mid-April.Compared to other metals, new entrants may be operating under a differentframework than traditional fundamental logic. Strong price performancecould stimulate some restocking demand,which represents a key riskfactor. Based on nickel pig iron priced at around RMB 1,100 per nickelunit, stainless steel cash margins are estimated to approach 10%, nearingthe profithighs seen during the 2024 global“reflation”trade andmarking a three-year high for mills. Going forward, attention shouldfocus on delivery dynamics under this high-margin environment, as well asopportunities in calendar spread (bear spread) strategies. At the same time, speculative inflows are pushing prices higher,narrowing the near-term backwardation structure and reducing rolloverlosses. With basis levels approaching statistical arbitrage lows, theremay be opportunities to initiate light-position cash-and-carry (futures-spot bull spread) trades. Natural Rubber:Expected to trade rangebound with a slight downside biasin the short term On the supply side, as of last Friday, raw material prices in Thailandstood at THB 78.75/kg for latex and THB 61.5/kg for cup lump. In Yunnan,latex prices were RMB 16,200/ton delivered to whole-latex plants and RMB16,500/ton to concentrated latex plants, with a price spread of RMB300/ton between the two. Block rubber prices in Yunnan were around RMB14,000/ton. In Hainan, state-owned latex prices were RMB 15,800/ton forwhole-latex production and RMB 18,700/ton for concentrated latex,implying a spread of RMB 2,900/ton. As of April 19, 2026, China’s total social inventory of natural rubberstood at 1.334 million tons, down 17,000 tons week-on-week (–1.3%). Amongthis, dark rubber inventory totaled 919,000 tons (–1.15%), while lightrubber inventory was 415,000 tons (–1.5%). On the demand side, operating rates at downstream tire producers have shown slight fluctuations recently, with most plants maintaining stableproduction. However, some facilities have scheduled maintenance towardmonth-end, which may weigh on overall capacity utilization. Currently,domestic shipment momentum remains slow, finished goods inventories arerising, and cost pressures persist, leading to increased production andsales pressure. As a result, operating rates are expected to see seasonaldeclines. Weather-wise, rainfall expectations in producing regions arestrengthening. While post-rain conditions are generally favorable fortapping activities, raw material prices may face downside risks fromelevated levels, which could dampen bullish sentiment. Overall, previous bullish sentiment has gradually faded, and the marketis reverting to typical seasonal dynamics during the tapping period. Inaddition, external market conditions and broader petrochemical pricevolatility should be monitored. Natural rubber prices are thereforeexpected to remain rangebound with a slight downward bias ahead of theholiday. Iron Ore:Hot metal output remains high; pre-holiday restocking supportsprices, but post-holiday inventory build may cap upsideHigh hot metal production, combined with restocking ahead of the