SMM, July 31: Sentiment in the A-share semiconductor industry chain futures market recovered, as improving industry chain fundamentals transmitted upward, driving a strong rally in the upstream strategic minor metal sector. As of around 10:15 on July 31, the minor metal sector index had risen 4.54%. Among individual stocks, Dongfang Tantalum and Yunnan Germanium hit their daily limit up, while Yunnan Tin, Xiamen Tungsten, China Rare Earth Nonferrous, China Tungsten High-Tech, Zhangyuan Tungsten, Xianglu Tungsten, and Dongfang Zirconium were among the top gainers. The rally in the minor metal sector was driven by the resonance of multiple industry dynamics. On one hand, demand for semiconductors and AI computing recovered, and expansion expectations for high-speed optical modules and AI servers improved. Germanium and tantalum, as core raw materials for semiconductor optoelectronic devices and high-end tantalum capacitors, saw continued strengthening of downstream demand from emerging industries. On the other hand, germanium and tantalum are strategic dispersed metals with concentrated global supply. Supply tightening expectations arose from geopolitical uncertainties outside China and domestic resource controls. Meanwhile, the ongoing localisation of high-end semiconductor materials further boosted market allocation sentiment, lifting the sector's performance. News [Yunnan Germanium: subsidiary signs major indium phosphide wafer supply contract worth 570 million to 855 million yuan; H1 net profit expected to rise YoY] Yunnan Germanium announced on July 24 that its controlling subsidiary Yunnan Xinyao recently signed a supply agreement with a client to sell indium phosphide wafers (substrates). The total contract value is estimated at between 570.08 million yuan and 855.12 million yuan (tax inclusive), representing 53.48% to 80.23% of the company's audited operating revenue in 2025. The contract will be performed from August 1, 2026, to December 31, 2027. Regarding the impact on the listed company, Yunnan Germanium stated: If the contract is successfully executed, it is expected to have a positive impact on the company's operating results for the performance years. The specific impact and the reporting periods affected will depend on the actual fulfillment of the contract and will be subject to the revenue confirmed by the company's audit. [Dongfang Tantalum: domestic demand for high value-added products such as superalloys and semiconductor tantalum targets is gradually rising] Dongfang Tantalum stated during an institutional survey on July 23 that with the sustained development of China's high-tech and new infrastructure sectors, domestic demand for high value-added products such as superalloys, semiconductor tantalum targets, and high-purity niobium materials is gradually rising. In recent years, the company has been fully advancing the technological upgrading and capacity expansion of its production lines, rationally organizing production, and gradually releasing new capacity. Guided by the strategy of achieving self-reliance in the industry chain, the localisation substitution process has evolved from individual product breakthroughs to systematic solutions, providing a solid foundation for the growth of tantalum, niobium and their alloy products. [Yunnan Tin: Expects H1 2026 Net Profit of 1.47–1.57 Billion Yuan, Up 38.43%–47.85% YoY] Yunnan Tin disclosed an earnings forecast on the evening of July 14, expecting attributable net profit in H1 2026 to be 1.47 billion to 1.57 billion yuan, up 38.43%–47.85% YoY; and recurring net profit is expected to be 1.88 billion to 1.98 billion yuan, up 44.23%–51.91% YoY. Spot Market Tin Overnight, some US chip stocks rebounded, and the Philadelphia Semiconductor Index surged, boosting the performance of tin, known as the “computing metal.” SHFE tin opened higher on July 31, lifting spot prices. In the tin spot market: On July 31, the average price of SMM 1# tin was 425,850 yuan/mt, up 1.51% from the previous trading day. As tin prices rose, spot market trading was sluggish. Fundamentals: (1) Supply: Tight ore and ingot supply, low inventory, amplifying elasticity. Myanmar’s rainy season extends through end-August, with mine flooding and logistics disruptions; Wa State’s June tin ore output was only 6,392 mt in physical content. China’s tin ore imports in July are expected to be basically flat MoM. The slow pace of production resumptions in Wa State has been priced in ahead of time, with no major shutdowns in the near term, but supply contraction expectations during the rainy season have yet to fully materialize. Indonesia’s tin ingot imports in July are expected to show some recovery MoM. (2) Demand: Improved solder operating rates, but acceptance of high prices needs to be tested. The operating rate at solder enterprises was 78.8% in June, up 4.6 percentage points from May; however, after the sharp spot price rally on July 30, downstream users were cautious and stayed on the sidelines, and whether high-priced spot cargoes can be absorbed still requires verification. Stockpiling for new Apple/Huawei models in late August is the next demand trigger point. Institutional Views A research report from Minmetals Securities points out: Germanium accounts for 60% of applications in optical communication and satellite PV fields, making it a metal for “AI computing power + space energy.” With its excellent refractive index tuning capability and radiation resistance, germanium has become a key material for AI data center optical interconnects and low-earth-orbit satellite PV systems. Looking at changes in demand structure, from 2020 to 2026, downstream germanium consumption grew from 160 mt to 240 mt, with optical communication’s share rising to 40% and satellite PV’s share to 20%, together accounting for 60% of total downstream demand. It expects that 90% of the demand growth in 2027 will come from two high-growth sectors: AI hardware and satellite PV. A research report from Caitong Securities shows: As AI computing power demand explodes, the market size of indium phosphide, used as a chip substrate material, will continue to expand. Indium resources are scarce and subject to policy restrictions, and product prices are entering an uptrend. High-purity red phosphorus is a very important semiconductor base material, with high purification technology barriers. Against the backdrop of accelerated AI application deployment driving related infrastructure construction, the indium phosphide substrate industry chain is expected to see dual opportunities from demand growth and domestic substitution. It is recommended to focus on enterprises with resource and technological advantages in the links of indium phosphide, indium, and high-purity red phosphorus. A research report from Datong Securities shows that minor metals have staged an independent rally, with tightened supply combined with strategic attributes leading to a value revaluation. The rare earth sector is preemptively pricing in new regulatory controls, with Myanmar ore imports disrupted, tight spot supply of Pr-Nd oxide driving prices sharply higher; tungsten and antimony ore grades are declining along with environmental protection-driven production restrictions, widening the supply gap, while PV and hard alloy demand remains firm during the off-season, and inventories are at low levels. AI computing power and communications sectors are boosting demand for gallium and germanium, and coupled with export control policies, concentrated stockpiling outside China is widening the price spread between Chinese and overseas markets. Scarce resources are resonating with financial attributes, and the sector continues to be favoured by capital. Recommended Reads:

On July 30, Chengtun Mining’s share price declined. As of 13:22 on the 30th, Chengtun Mining was down 5.03% at 10.2 yuan per share. On the news front: Chengtun Mining’s 2026 semi-annual report released on July 30 showed that in H1 2026, the company achieved total operating revenue of 19.264 billion yuan, up 39.56% YoY; net profit attributable to shareholders of 1.804 billion yuan, up 71.37% YoY; and net profit after deducting non-recurring items of 1.913 billion yuan, up 64.63% YoY. Regarding its core business, Chengtun Mining stated in its semi-annual report that the company was committed to the development and utilization of energy metal resources, especially metal varieties required for new energy batteries, while also expanding into precious metals such as gold. The company focused primarily on copper, nickel, cobalt, and gold, with its main business types being energy metals, base metals, metal trading, and others. Chengtun Mining’s semi-annual report showed that in H1 2026, the company’s DRC copper-cobalt segment delivered stable output, with copper production reaching 132,200 mt in metal content, of which Brother Mining (BMS) achieved copper production of 74,400 mt in metal content. BMS’s specialized energy management system took shape. The Kalongwe project advanced in a coordinated manner in optimizing the production system and engineering construction; multiple technological transformation initiatives reduced material consumption, and optimized reuse of return water lowered energy consumption and enabled refined cost control. The copper-cobalt smelting projects CCR and CCM maintained stable production and operations. The company also carried out exploration in prospective areas and extension-style resource M&A to strengthen the foundation for sustainable development. In the Indonesia nickel segment, Youshan Nickel maintained stable production and operations amid global nickel market price consolidation, achieving operating revenue of 1.663 billion yuan; by improving management, optimizing processes, and strengthening industry-chain synergies, it successfully withstood market shocks. Phase I capacity of the Guizhou project was gradually released, process flows became increasingly mature, and product quality improved steadily; Phase II of the project carried out trial production. Huajin Mining operated steadily, achieving gold sales of 156.31 kg and operating revenue of 145 million yuan. During the reporting period, operating revenue from production and manufacturing was 18.756 billion yuan, accounting for 97.36% of the company’s total revenue, up 2.92 percentage points YoY, and it continued to maintain high-quality operations. Regarding the status of its core businesses, Chengtun Mining’s semi-annual report showed: 1. Energy Metals Business. During the reporting period, the company’s energy metals business achieved revenue of 14.543 billion yuan, with a gross margin of 27.03%, basically in line with the gross margin in the same period last year. In H1 2026, output of copper products was 133,200 mt in metal content, cobalt products 3,700 mt in metal content, and nickel products 21,200 mt in metal content. ( 1) Copper-Cobalt Segment ① During the reporting period, the company’s DRC copper-cobalt segment delivered stable output, with copper production reaching 132,200 mt in metal content, of which Brother Mining achieved 74,400 mt in metal content. The company addressed power shortage issues through a multi-type energy mix, building a modern energy system that is specialized, intensive, and integrated, driving synchronized growth in operating efficiency and scale effects. ② Dali Sanxin actively advanced mine construction and aimed to achieve trial production in Q4. At present, land and other related procedures had been completed, shaft construction was basically completed, and surface civil works construction was being actively advanced. ③ In April 2026, the company disclosed that it planned to acquire a 50% equity interest in Nkoyi Leopard Mining and Investment Limited to indirectly obtain a 30% interest in a large, specific copper-cobalt mining right. The project completed the equity closing in July 2026, and subsequent cooperation matters regarding the mine were progressing normally. During the reporting period, the company actively sought resource security for sustainable development through exploration in prospective areas and by pursuing extension-style M&A and cooperation for copper ore resources. (2) Indonesia Nickel Segment During the reporting period, the global nickel market fluctuated amid the interplay of Indonesia policy adjustments and rising cost side pressures. Youshan Nickel maintained stable production and operations, achieving operating revenue of 1.663 billion yuan and demonstrating strong operating resilience. (3) Deep Processing and Materials Segment ① During the reporting period, Keli Xin’s operating revenue increased by 25.6% from the same period last year, with rapid growth in operating performance. Meanwhile, the company continued to expand its product lines and enrich product models to meet different battery systems’ requirements for high voltage and high safety, effectively improving client response speed and product compatibility. ② Zhonghe Nickel optimized process technologies, further advanced refined on-site production management, improved recovery rates of valuable metals, and enhanced the production system’s adaptability to multi-channel raw material sources. ③ Phase I capacity of the Guizhou project was gradually released, process flows became increasingly mature, and through various refined control measures, it ensured continuous and stable production operations, with product quality improving steadily. Phase II of the Guizhou project smoothly entered trial production. 2. Base Metals Business. During the reporting period, the base metals business achieved sales revenue of 4.213 billion yuan, with a gross margin of 9.50%, up 5.61 percentage points from the same period last year. (1) During the reporting period, Chengtun Zinc & Germanium operated steadily, with notable results in comprehensive recovery; indium and germanium recovery rates both improved. Technical breakthroughs achieved cost reductions in auxiliary material and a record high in silver recovery indicators; multi-dimensional cost reduction and efficiency enhancement significantly lowered logistics and inventory expenses, and overall production operations remained stable. (2) During the reporting period, the company actively advanced the orderly construction of domestic and overseas mines. Construction of the Baoshan Hengyuan Xinmao mining engineering project progressed steadily; Huajin Mining operated steadily, selling 156.31 kg of gold and achieving revenue of 145 million yuan. 3. Metal Trading Business and Others. During the reporting period, the metal trading business achieved operating revenue of 307 million yuan. At present, the scale of the company’s core businesses continued to grow steadily, the proportion of the trading business gradually declined, and the business structure continued to be optimized, achieving solid results on the path of high-quality development. In addition, Chengtun Mining announced on July 23 that the cumulative deviation in the increase of its stock’s closing price exceeded 20% over three consecutive trading days on July 21, July 22, and July 23, 2026, constituting abnormal fluctuations in stock trading. After verification, the company found no media reports or market rumors that needed clarification or response, and found no other material events that could have a significant impact on the company’s share price. As of the date of this announcement, other than information publicly disclosed by the company in designated media, there was no other material information that should have been disclosed but had not been disclosed, including but not limited to planning major asset restructurings involving publicly listed firms, share issuances, major transactions, business restructurings, share repurchases, equity incentives, bankruptcy reorganizations, major business cooperation, introduction of strategic investors, and other major matters. The company’s current operating conditions were normal, and there had been no material changes in the internal and external operating environment. Chengtun Mining announced on July 9 that the transaction in which its wholly owned great-grand subsidiary Preeminence Holdings Limited (Preeminence) acquired a 50% equity interest in Nkoyi Leopard Mining and Investment Limited (Nkoyi) had made new progress. As of the date of this announcement, Nkoyi had completed the change of its shareholder register, and all registration and filing procedures for changes involving directors and senior management in this transaction had been completed. Preeminence had now obtained a 50% equity interest in Nkoyi, and the company had, in accordance with the Share Purchase Agreement under the transaction, paid the equity acquisition consideration to the target company. In Huafu Securities’ nonferrous metals weekly report released on July 26, its commentary on industrial metals mentioned: Industrial metals: tight inventory coupled with geopolitical tailwinds lifted copper prices strongly. From a macro perspective, the Middle East US-Iran geopolitical conflict continued to recur. Multiple parties mediated to advance ceasefire talks, but differences between the two sides were difficult to bridge quickly, and the market continued to trade the potential risk of disrupted shipping through the Strait of Hormuz. Once passage through the waterway is restricted, it would not only push up international crude oil prices and raise global smelting and logistics costs, but also affect outbound shipments of Middle Eastern sulfur, directly disrupting the supply of raw materials for ex-China hydrometallurgical copper production, continuously injecting a geopolitical risk premium into copper prices; repeated changes in news flow also amplified intraday fluctuations in LME copper. This week, tensions in the US-Iran Strait of Hormuz situation remained elevated, and shipping risks in the strait continued to affect market sentiment. Individual stocks: Copper—watch JCC, CMOC, Chengtun, Zangge, JCHX, and Beitong; for H-shares, watch NFC and Minmetals, among others. Aluminum—watch Tianshan, Hongchuang, Yunnan Aluminum, Shenhuo, Huatong, Hongqiao, and Zhongfu, among others. Citigroup recently published a report stating that it held a constructive view on the copper market over the coming weeks, maintaining its expectations unchanged for a 0–3 month short-term copper price target of $14,500 per mt and a year-end target of $15,000 per mt. Citigroup noted that over the past month, despite a pullback in speculative long positions and overall weakness in commodities, copper prices remained resilient. While demand growth remained weak, the supply side faced greater pressure. Global mine supply remained under pressure, while year-to-date scrap supply appeared to respond weakly to high prices. Chilean mine supply risks and sulfur supply constraints could, at the margin, lift market sentiment. A CITIC Securities research report said that multiple positive factors drove copper prices to again challenge $14,000, and that core drivers such as declining inventory and supply disruptions were expected to persist; most potential tariff paths remained positive for copper, and under a neutral assumption, copper prices were expected to challenge $15,000 within the year. The copper sector was still at the beginning of a valuation recovery, and the formation of expectations for price hike and improvements in market sentiment would continue to drive valuation recovery.

MMG Limited, a subsidiary controlled by state-owned China Minmetals Corp., has completed the $1.875 billion acquisition of the Khoemacau copper mine in Botswana. Situated in the Kalahari Copper Belt, the asset features copper reserves exceeding 6 million metric tons and mining rights spanning over 4,000 square kilometers. The project marks the largest overseas copper mine acquisition by a Chinese company since 2018 and stands as the single largest investment by a Chinese enterprise in Botswana to date. First commissioned in June 2021, Khoemacau currently targets an annual production baseline of 60,000 tons of copper and 1.6 million ounces of silver in concentrate, with near-term expansion plans positioned to scale output toward 130,000–155,000 tons of copper annually. China currently maintains a domestic copper resource dependency rate exceeding 70%, importing over 60% of its copper ore from Chile and Peru. This strategic transaction diversifies Chinese supply channels beyond South America, bolstering raw material security amidst accelerating demand driven by global decarbonization, electric vehicles, power grid infrastructure, and emerging clean technologies.

On July 23, Minmetals New Energy released its performance forecast, expecting a net profit attributable to the parent of 340 million yuan to 400 million yuan for the first half of 2026, compared to a loss of 26.8265 million yuan in the same period last year, marking a turnaround from loss to profit. The net profit after deducting non-recurring gains and losses is expected to be between 330 million yuan and 390 million yuan. In the first half of 2026, the company seized industry development opportunities, coordinated efforts across three major areas—power battery materials, energy storage materials, and consumer electronics materials—resulting in a significant year-on-year increase in product sales. At the same time, the company continued to promote technological iteration and process optimization of core materials, ensuring a stable supply of raw materials and further enhancing its product delivery capabilities.

SMM Cobalt Morning Briefing: The cobalt industry chain was generally in the doldrums this week. Refined cobalt prices drifted lower, affected by import data exceeding expectations, the demand off-season, and downstream summer breaks. Sellers and buyers of cobalt intermediate products had a wide psychological price spread, making it difficult to advance transactions, and prices remained temporarily stable. Market inquiries and transactions for cobalt sulphate, cobalt chloride, and Co3O4 were sluggish, with downstream users mainly pushing for lower prices and making just-in-time procurement. Cobalt powder prices continued to hit bottom, while cobalt carbonate was also under pressure.

On June 30, Minmetals New Energy announced that its wholly-owned subsidiaries, Hunan Changyuan Lithium New Energy Co., Ltd. and Jinchi Energy Materials Co., Ltd., have won a contract dispute lawsuit against Zhicun Lithium Group and others. The second-instance judgment was issued, dismissing the appeal and upholding the original ruling, with the subsidiaries prevailing. The case involves RMB 181 million and related interest, and the second-instance court acceptance fee of RMB 370,400 is to be borne by the appellant, Nan Jinxi. The company had previously made relevant bad debt provisions, and this ruling may increase current-period profits, subject to the final audit results.