[SMM Daily Commentary: Silver Price Corrective Rebound, Spot Silver Transactions at Parity Await Guidance] SMM June 12 - The US-Iran tensions have eased, and silver prices rebounded slightly. Affected by the "rush to buy amid continuous price rise and hold back amid price downturn" mentality, transactions in the spot market were concentrated at parity. Going forward, attention needs to be paid to downstream purchase willingness.

SMM, June 11: This week, transaction sentiment in China's aluminum fluoride enterprise sector was moderate, and aluminum fluoride prices remained stable. As of now, SMM aluminum fluoride prices closed at 11,280-11,700 yuan/mt; cryolite prices were stable, with SMM quotations at 7,000-8,500 yuan/mt. Raw material side: This week, China's 97% fluorite wet powder market was steady, with mainstream delivery-to-factory prices at 3,100-3,400 yuan/mt and notable regional price spreads. Supply side, mine operations in the north continued to recover, and domestic spot supply increased steadily; imported cargoes from Mongolia arrived at ports gradually, further easing the supply surplus. However, recent coal mine accidents in Shanxi triggered market expectations of stricter mine safety and environmental protection supervision, which may cause periodic disruptions to some mine production subsequently, maintaining a wait-and-see sentiment on the supply side. Demand side remained persistently weak, as downstream hydrofluoric acid enterprises were dragged by insufficient terminal operating rates for refrigerants and fluoropolymers, resulting in primarily just-in-time procurement with limited large orders. Affected by weak raw materials and insufficient end-use demand, the price center for hydrofluoric acid shifted downwards, weakening support for fluorite. Overall, the domestic supply recovery, replenishment of low-priced imports, and sluggish downstream demand combined as multiple bearish factors, resulting in a loose supply-demand pattern, and short-term fluorite prices are likely to remain under slight downward pressure. This week, China's aluminum hydroxide market held up slightly, with the SMM weighted average price for aluminum hydroxide at 1,663 yuan/mt, edging up 0.4% MoM. Upstream costs underpinned spot offers, while downstream purchases were made as needed, limiting volume growth. This week, China's sulphuric acid market was in a stalemate at highs and moved sideways. Sulphur prices surged again, continuously strengthening bottom-level cost support; losses at sulphuric acid plants led to production cuts, and combined with ongoing maintenance at many acid plants, regional spot supply was differentiated and tight. Although the phosphate fertiliser industry was mired in losses and off-season procurement remained restrained, capping upside room, just-in-time procurement from the new energy LFP sector and base-level purchases from some chemical enterprises provided a floor. In the short term, the sulphuric acid market is consolidating at highs, stuck between upward and downward pressures. Overall, raw material markets for aluminum fluoride diverged this week, with rising aluminum hydroxide and sulphuric acid prices pushing the industry's overall cost center higher. Cost increases from raw materials were difficult to pass downstream smoothly, intensifying cost pressure on enterprise production. Supply side, the operational pattern of "rigid high costs—persistent profit pressure—low operating rates" continued. With sulphuric acid and aluminum hydroxide prices rising this week, the industry was generally in a state of losses, leading to more maintenance and flexible production at enterprises. The industry operating rate remained low at around 40%, with limited effective incremental supply. Demand side, downstream operating aluminum capacity stayed high and stable, forming rigid floor demand for aluminum fluoride, but aluminum smelters' procurement focused on just-in-time restocking and pushing for lower prices with a wait-and-see approach, with no additional incremental demand. Commentary: This week, raw material markets for aluminum fluoride showed mixed performance. Stronger aluminum hydroxide and sulphuric acid prices further pushed up overall costs, continuously squeezing enterprise operating profits. The industry maintained a "triple pressure" structure of high costs, low profits, and low operating rates, making it difficult to boost production enthusiasm. The market currently lacks a directional driver, with the tug-of-war between upstream and downstream causing a stalemate. Transactions were limited to just-in-time procurement. In the short term, aluminum fluoride prices are likely to remain stable, with limited room for wild swings. Close attention should be paid to subsequent developments in raw material cost dynamics and marginal adjustments in the procurement pace of downstream aluminum enterprises.

\LME aluminium prices have retreated steadily from their late-May peak, falling from nearly $3,680 per metric ton to around $3,480 per metric ton. More notably, the LME aluminium Cash-3M spread narrowed sharply over just one week, dropping from a cash premium of $104.56 per metric ton on June 1 to $15.17 per metric ton on June 9, a loss of nearly $90 per metric ton. This marks the steepest contraction in the backwardation structure since the outbreak of the Middle East conflict.

【SMM Steel】On June 9 2026, Vallourec and Ultra Corpotech Pvt Ltd signed a Memorandum of Understanding to deploy VAM threading capabilities near Mumbai, India. A dedicated threading cell is scheduled for implementation in late 2026 with commissioning in early 2027, aiming to provide premium thread protection and related services for the Indian oilfield services sector. The asset-light cooperation allows both parties to respond quickly to regional demand with minimal capital footprint. Vallourec will license its VAM threading and inspection technology along with quality control system support. The agreement reflects a strategic shift for Vallourec as the company expands access to its premium connection technology through local partners in Asia, following similar agreements with Vietnam Process Equipment and Technology Joint Stock Company in March 2025 and Saudi Arabia's Industrial Investment Company in November 2025.

Over the next 1-2 weeks, the domestic petroleum coke market is expected to mainly edge lower amid stability. Low-sulphur petroleum coke prices will face relatively greater downward pressure, while mid and high-sulphur petroleum coke may see limited declines due to rigid demand support from the prebaked anode industry. The overall market will remain in the doldrums.

[Price Review] This week (6.8-6.11), silver extended its accelerated decline, with both international and domestic futures markets plunging sharply in tandem. The price center moved notably lower WoW, hitting a new low in nearly two months. The non-farm payrolls data triggered the first heavy sell-off: on June 5, the US May non-farm payrolls report showed an increase of 172,000 jobs, far exceeding the market expectation of 85,000; data for the prior two months were revised up by a combined 93,000, and the unemployment rate held at a historic low of 4.3%. Following the release, market expectations for US Fed rate hikes surged sharply, and silver immediately suffered a heavy blow. On June 10, the US May CPI data came out, up 4.2% YoY and 0.5% MoM. The inflation data further cemented market expectations that the US Fed would maintain high interest rates. Paired with renewed deterioration in the US-Iran conflict, with US forces striking Iran for two consecutive days, the US Fed was expected to have difficulty releasing dovish signals in the near term. Industrial demand side, the premium of standard silver ingots against TD mainstream quotations in the Shanghai market continued to rise WoW; mainstream quotations were generally at parity or with slight premiums, and most transactions settled in the range from parity against SGE TD to a premium of 10 yuan/kg. As silver prices plunged during the week, downstream inquiry activity was relatively active. Inventory side, downstream consumption recovered somewhat WoW, and some smelters showed lower willingness to sell due to falling prices, so social inventory of silver ingots in Shanghai and Shenzhen destocked overall. Gold/silver ratio side, as of June 10, the LBMA gold/silver ratio widened from 63.8 a week ago to 67.2, highlighting silver's greater weakness relative to gold under sustained macro pressure. [Important Data] Bearish US May non-farm payrolls rose by 172,000, far exceeding expectations, with labor market resilience surprising to the upside. US May CPI up 4.2% YoY, a three-year high, as inflationary pressures re-emerged. After taking office as Fed Chairman, Warsh set a clear hawkish tone, and subsequent official remarks continued to send tightening signals. India's silver import control policy remained in place, weighing on physical consumption demand. Bullish: Peru's energy crisis persisted, with a national state of emergency until year-end; 12 large mines have already implemented staggered production, and May silver output is expected to decline by 5%–8%. The global supply-demand gap remains, providing some floor support for silver prices. [What to Watch] June 16-17: US Fed June FOMC meeting and Warsh post-meeting press conference (key event) June 18: US May retail sales data June 20: University of Michigan preliminary June consumer sentiment index Key focus: Fed official speeches, latest developments in US-Iran negotiations. [Price Forecast] Silver is expected to maintain a pattern of hovering at lows and seeking a bottom next week, remaining under an overall high macro pressure environment. The Fed's FOMC meeting from June 16 to 17 will be the core focus next week, with the market closely watching Wash's speech content and the Fed's latest guidance on the interest rate path. If the Fed releases a clear signal of rate hikes, silver prices may dip further; if the meeting outcome leans dovish, silver prices could see a rebound from oversold conditions. On the domestic fundamentals side, downstream purchases have slightly recovered, pressure from spot selling at lows in the market has eased somewhat, and the social inventory of spot silver ingots is destocking overall. Since most enterprises remain cautious amid heavy fear of price declines, mainstream traded spot premiums are expected to remain in a range of parity to a 10 yuan/kg premium over SGE TD, and the market is unlikely to quickly shift to higher premiums in the near term.