On its Q1 FY27 earnings call on August 4, India's Jindal Stainless (JSL) said reduced EU import quotas, not CBAM, are what will make its Europe volumes look smaller, adding it is confident of filling its quota allocation. On CBAM readiness, JSL said it has internationally accredited verifiers in place and is waiting on the EU to appoint verifiers, noting its scrap-based route — scrap feed is about 85-90% at Hisar and 70-75% at Jajpur, over 90% sourced from India and Southeast Asia. Exports are roughly 10-11% of volume, with Europe 30-40% and Europe plus the US around 60%; JSL is diversifying into Japan, South Korea and Brazil. India's anti-dumping public hearing is set for September 9, while the QCO suspension is expected to run to March 2027.

July Price Review ： Domestic grain-oriented silicon steel prices rose first and then retreated in July. Supported by rigid demand from downstream transformer manufacturers as well as orders in the new energy and UHV sectors from early to mid-July, mainstream grades including B23R085 climbed to cyclical highs. Nevertheless, persistently high prices suppressed downstream purchasing willingness, market trading turned sluggish, and spot prices came under pressure and fell at month-end, ending the upward rally. In view of forward expectations, the market generally holds the view that this round of price surge has come to an end. Fundamental Analysis Domestic steel mills plan to maintain roughly the same output of grain-oriented silicon steel in August as in July, sustaining high production levels with no obvious tightening in supply delivery pace. In terms of product mix, production is still overwhelmingly dominated by high magnetic induction (HIB) grain-oriented silicon steel, while the output proportion of conventional CGO grain-oriented silicon steel remains low. Output of both varieties changes little compared with July. Steel mills have no intention of carrying out concentrated voluntary production cuts. The continuously ample supply keeps weighing on the spot market and creates obvious resistance to further price hikes. Newly added installed capacity of various power sources showed divergent performance in June, forming structural support for grain-oriented silicon steel demand. Newly installed thermal power capacity maintained relatively strong year-on-year growth. Thermal power supporting step-up transformers and auxiliary transformers for power plants continued to generate rigid demand for grain-oriented silicon steel. Newly installed hydropower capacity increased substantially, driving demand for main and auxiliary transformers of hydropower stations. Newly installed wind and solar power capacity was weaker than the same period of previous years, leading to limited incremental demand for box transformers and main transformers supporting new energy. Newly installed nuclear power capacity declined, resulting in periodic weakening of demand for special grain-oriented silicon steel for nuclear power applications. Overall, construction of traditional power sources gained momentum in June. Thermal and hydropower installed capacity contributed major incremental demand, supporting orders for large power transformers and further boosting demand for high-grade grain-oriented silicon steel. Insufficient incremental wind and solar power installations offset part of the demand growth. Therefore, demand presented a structural pattern: strong demand from traditional power sources and weak demand from the new energy sector. August Price Outlook Looking ahead to August 2026: On the supply side, domestic supply of grain-oriented silicon steel will edge down slightly. Major state-owned steel mills will basically continue high-load production, while some private enterprises will conduct minor maintenance, leaving overall supply broadly stable. Despite the price correction of grain-oriented silicon steel in July, most steel mills still enjoy decent profits. In addition, leading steel mills including Baowu lifted the August base price of grain-oriented silicon steel by RMB 50 per tonne, demonstrating obvious price-support sentiment and sound overall production enthusiasm. Deliveries of high-grade products remain steady; however, sufficient supply of conventional grades has brought inventory pressure to the market. On the demand side, China’s 15th Five-Year Plan UHV projects keep being launched. Transformer enterprises prioritize fulfilling supporting orders for UHV construction, and demand for high-grade grain-oriented silicon steel used in transformers for new energy grid interconnection stays resilient. Nevertheless, the impact of the high-temperature off-season will surface in August. Most downstream enterprises will only conduct inventory replenishment for rigid demand. The conversion of tender orders issued by State Grid and China Southern Power Grid is subject to time lags, and enterprises lack motivation for proactive stockpiling. Furthermore, India’s ongoing anti-dumping investigation against Chinese grain-oriented silicon steel has disrupted exports. Cargo diverted from overseas markets flows back and continuously hits the domestic market, putting prices under pressure. On the cost side, hot rolled coil prices are expected to fluctuate weakly in August with limited upward momentum, and the monthly average price will continue to decline month-on-month. In summary, SMM forecasts that grain-oriented silicon steel prices will fluctuate on a weak trend in August 2026. High-grade grades will be relatively resilient against price falls, while conventional grades will face more prominent downward pressure. Data source statement: (Data in this report other than public information are all sourced from public information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, broker reports, National Bureau of Statistics data, customs import and export data, and various data published by major associations and institutions), market communication, and SMM's internal database models, and are produced by the research team through comprehensive analysis and reasonable inference; they are for reference only and do not constitute decision-making advice.) SMM reserves the final right of interpretation of the terms of this statement and the right to adjust and amend the content of the statement according to actual circumstances.

Yusco renewed an anti-dumping investigation petition in early July targeting Vietnamese 304 cold-rolled stainless steel, driven by surging import volumes. Customs data showed imports reaching approximately 6,200 tonnes in June and 6,000 tonnes in July, a 168% YoY surge, with cumulative imports for the first seven months of the year hitting 23,200 tonnes. Although formal case registration remains pending, Chinese Taiwan's Customs Administration has scheduled a preliminary hearing for September 14 due to heavy administrative workloads. Importers have expressed concern over potential retroactive AD duties affecting existing unfulfilled contracts. Yusco and Tang Eng previously filed a similar petition in October 2025 before temporarily withdrawing it; renewed import pressure and sluggish local demand have prompted the latest regulatory action to safeguard fair competition.

SMM Morning Meeting Summary: Overnight, LME copper opened at $14,071/mt, dipped to a low of $14,066/mt in early trading, then saw its price center drift higher to touch $14,151.5/mt before closing at $14,135.5/mt, up 0.18%. Trading volume reached 20,000 lots, with open interest at 266,000 lots, up 2,423 lots from the previous trading day, reflecting an increase in long positions. Overnight, the most-traded SHFE copper 2609 contract opened at 107,930 yuan/mt, initially rose to 107,990 yuan/mt, then saw its price center move straight down to touch a low of 107,660 yuan/mt, and subsequently swung wildly before closing at 107,790 yuan/mt, down 0.03%. Trading volume reached 28,000 lots, with open interest at 206,000 lots, down 3,254 lots from the previous trading day, reflecting long liquidation.

As EU anti-dumping and countervailing duties restrict direct imports of Indonesian finished stainless steel, Indonesian slab exports to Europe have gained significant traction. Indonesia exported approximately 330,000 tonnes of stainless steel slabs to Italy last year, with EU-bound shipments already exceeding 123,000 tonnes this year. Since slabs currently fall outside the scope of these trade measures, European mills — particularly in Italy — are importing Indonesian semi-finished slabs for local processing into hot-rolled or cold-rolled products, bypassing the tariff burden on direct finished product imports. The EU's Melt & Pour origin certification system, effective October 1, will require disclosure of where steel was originally melted and cast; Indonesian slabs processed in third countries will retain Indonesia as their melt-and-pour origin, though slabs themselves are currently excluded from the regulated product categories. Market participants are closely monitoring whether the EU may tighten regulations to scrutinize potential circumvention through third-country processing using melt-and-pour traceability data.

★ Macro ★ 01 ★★★ [WTI Crude Oil Futures Expand Gains to 3%, Hit Monthly High] WTI crude oil futures rose 2.99%, settling at $84.583/barrel; Brent crude oil futures rose 2.60%, settling at $90.003/barrel. ★ Industry and Downstream ★ 01 ★★ [Zhengzhou Adjusts Housing Provident Fund Contribution Base] The Zhengzhou Housing Provident Fund Management Center issued a notice on adjusting the 2026 housing provident fund contribution base. The notice stated that the contribution base would be adjusted effective July 1, 2026. Both the employee and employer must contribute no less than 5% and no more than 12% of the employee’s average monthly salary from the previous year. Employers may independently set the rate within the 5%–12% range based on their actual situation. 02 ★★ [Weihai Optimizes and Adjusts Housing Provident Fund Policies] The Weihai Housing Provident Fund Management Center in Shandong Province optimized and adjusted its housing provident fund policies. The maximum loan amount for single contributors was raised from 600,000 to 800,000 yuan, and for dual contributors, from 1 million to 1.2 million yuan. With additional preferential policies, the ceiling for single contributors shall not exceed 1.6 million yuan, and for dual contributors, 2 million yuan. For eligible families with multiple children, high-level talent, those purchasing high-grade housing, or ready-built new commercial housing projects, the housing count requirement can be correspondingly reduced. After applying this reduction, contributors with no local housing or only one house and no outstanding housing provident fund loans may apply for a loan and be eligible for the first-home policy. 03 ★★ [CPCA Branch: New Forces’ Retail Share 26.8% in July, Up 5.4 pp YoY] The CPCA branch released data showing that the retail share of new forces was 26.8% in July, up 5.4 pp YoY. BEV sales accounted for 77.6% of new forces’ total, a significant increase from 63.7% in the same period last year. The share of the 100,000–150,000 yuan price bracket among new forces’ BEV sales grew sharply. Independent NEV brands spun off from traditional Chinese automakers, as second‑generation ventures, performed strongly, with a share of 17.7%, up 5.4 pp YoY. 04 ★★ [CAAM: China’s H1 NEV Exports to Belt and Road Countries Reached 1.135 Million Units, Up 59.4% YoY] According to customs data compiled by CAAM, from January to June 2026, the cumulative export value of automotive goods to Belt and Road countries reached $83.67 billion, up 30.8% YoY, accounting for 57.5% of total auto goods exports. Of which: exports of complete vehicles reached 3.381 million units, up 48.1% YoY; exports of NEVs reached 1.135 million units, up 59.4% YoY. 05 ★★ [SMM HRC Arrivals] This period's arrivals rebounded from a low SMM Steel, August 11 – According to SMM statistics, it is estimated that this week's total resource shipments in mainstream markets were 260,400 mt, up 43.63% WoW from last week's shipment level. 06 ★★ [SMM Zhangjiagang HRC Inventory] Zhangjiagang Inventory Edges Up This Week This week, Zhangjiagang HRC inventory reached 305,000 mt, up 8,000 mt WoW, an increase of 2.69%; the calendar YoY increase was 25.51%. 07 ★★ [SMM Beijing Building Materials Inventory] Weak Demand Persists, Inventory Continues to Build Up As of August 11, Beijing building materials inventory was 670,800 mt, with an inventory buildup of 1,600 mt from last week. During most of this cycle, demand was weak, with only a slight increase last Thursday when over-sold futures rebounded and demand picked up slightly. Inventory continued to accumulate, though the pace of buildup narrowed. ★ Other Hot Topics ★ ⭕ [CPCA Sub-council: August Passenger Vehicle Market Shows Overall Weak Recovery and Strong Structural Divergence] The CPCA Sub-council stated that in August 2026, the overall passenger vehicle market showed a trend of "overall weak recovery and strong structural divergence." With 21 production and sales working days and the high-temperature off-season, the end-use market recovery pace was moderate, and a mix of macro and industry factors shaped the market landscape. Affected by the disruption to shipping through the Strait of Hormuz, international oil prices drifted higher in July, and domestic refined oil prices were raised twice cumulatively by nearly 985 yuan/mt, significantly lifting the costs of using and maintaining internal combustion engine vehicles, and continuously suppressing users' willingness to buy such vehicles. Traditional fuel vehicle demand continued to weaken, which also became a key external catalyst for NEVs' counter-trend strength, continuously broadening the domestic and overseas market growth space for NEV models. ⭕[Indonesia Makes Affirmative Final Anti-dumping Ruling on HRC from China's Wuhan Iron and Steel Co., Ltd.] According to China Trade Remedies Information, on August 10, the Indonesia Anti-Dumping Committee issued a notice, making an affirmative final anti-dumping determination on hot-rolled plate/coil of iron or non-alloy steel produced by China's Wuhan Iron and Steel Group Co., Ltd. It recommended imposing anti-dumping duties on Wuhan Iron and Steel Group Co., Ltd. and its exporters at either an ad valorem rate of 4.87% or a specific duty of $28.06/mt for a period of five years. ⭕[Typhoon "White Dolphin" Decommissioned] Typhoon "White Dolphin" weakened into a tropical depression in Hubei Province this morning. Its wind force has further weakened, making its circulation center hard to identify. At 17:00, the Central Meteorological Observatory decommissioned it. The Central Meteorological Observatory reminds that discontinuation does not mean the impact has ended. In the coming days, remnant circulation will bring heavy rainfall to the Huanghuai and North China regions. Please stay safe. *This report is an original work and/or compilation created by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), which legally holds copyright and is protected by laws and regulations such as the Copyright Law of the People's Republic of China and applicable international treaties. Without written permission, no part of the above content may be reproduced, modified, sold, transferred, displayed, translated, compiled, disseminated, or otherwise disclosed to any third party, nor may any third party be licensed to use it. 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