SMM, August 12: Foxconn Industrial Internet’s semi-annual report posted substantial profit growth, further confirming the strong momentum of AI computing infrastructure and driving a recovery in sentiment across the high-speed interconnect industry chain. Against the backdrop of expanding computing power, high-speed copper cables have drawn attention from some market funds as a key short-range interconnect solution for AI servers. At the same time, SMM observes that the installation rush for power batteries, high prosperity in energy storage, and surging AI computing-end demand have collectively driven an ongoing climb in operating rates in the copper foil industry. As of the close on August 12, the high-speed copper cable concept rose 2.22%. Among individual stocks, Taichenguang and Hengdongguang jumped over 6%, while the biggest gainers included Xianying Technology, Ruikeda, Dingtong Technology, Far East, Changxin Bochuang, ZTT, and Zhaolong Interconnect. Market News [Shanghai: Build 100,000-card-level ultra-large intelligent computing clusters in Songjiang, Lingang, Qingpu, etc.] The Shanghai Municipal Commission of Economy and Informatization issued the “15th Five-Year Plan for the Development of the Software and Information Services Industry in Shanghai.” The plan mentions creating a tiered supply system that synergizes “large clusters + small clusters + edge computing,” building 100,000-card-level ultra-large-scale intelligent computing clusters in Songjiang, Lingang, and Qingpu, and constructing 1,000-card-level clusters in Baoshan, Pudong, and Jiading. It guides the transformation of traditional data centers and ICT server rooms into 100-card-level edge intelligent computing centers to meet ultra-low-latency computing demands from enterprises and individuals. Focusing on industries such as finance, education, healthcare, culture and tourism, and manufacturing, the plan supports building Model as a Service (MaaS) platforms, providing industry application marketplaces, model customization and hosting, agent building, low-code development, API interfaces, computing power provision and management, and AI inference services, thereby upgrading intelligent computing cloud service capabilities. It also highlights tackling next-generation model architectures and promoting exploration of multiple technology routes based on non-Transformer architectures such as state space models, recurrent neural network variants, and liquid neural networks. Efforts will be accelerated to lay out technology systems for cutting-edge foundation models, including physical intelligence, world models, quantum intelligence, and brain-inspired intelligence. The plan further addresses breakthroughs in networking technologies for ultra-large-scale intelligent computing clusters, focusing on core segments such as high-performance computing chips (GPU/NPU), quantum chips (QPU), high-speed optical interconnects (CPO), high-bandwidth memory (HBM), and heterogeneous servers to boost supply capacity for intelligent computing hardware and facilitate the deep integration of proprietary chips with mainstream large models. With an emphasis on new storage retrieval and data-model collaboration, the plan aims to achieve breakthroughs in high-precision heterogeneous processing, native multimodal fusion, and dynamic value alignment, and to build automated complex reasoning covering the full life cycle of corpus data. [Foxconn Industrial Internet: H1 2026 net profit up 95.99% YoY; AI computing demand continued to surge during the reporting period] Foxconn Industrial Internet announced on August 11 that its H1 2026 revenue was 557.861 billion yuan, up 54.63% YoY. Net profit attributable to shareholders of the listed company was 23.74 billion yuan, up 95.99% YoY. Net profit attributable to shareholders of the listed company after deducting non-recurring profit or loss was 22.984 billion yuan, up 96.99% YoY. Basic earnings per share was 1.2 yuan. The company plans not to distribute cash dividends, not to issue bonus shares, and not to convert capital reserve into share capital. The change in operating revenue was mainly due to the benefit from the continued surge in AI computing power demand, steady increase in market share among major clients, and strong performance of cloud service business, driving overall revenue growth. The change in net profit was mainly due to the benefit from the continued surge in AI computing power demand, with the company's main business operations achieving steady improvement in profitability. (Jin10 Data) [CoreWeave Second-Quarter Revenue Doubles, Shares Surge 12% After Hours] CoreWeave (CRWV.O) rose 12% in after-hours trading on Tuesday after reporting second-quarter revenue of $2.58 billion, up 112% YoY and surpassing Wall Street expectations, indicating that demand for AI computing power is still growing rapidly; net loss was $626 million, compared to $290 million in the same period last year; order backlog reached $104 billion, with projects under construction totaling 1.5 gigawatts of capacity. CoreWeave is accelerating the expansion of its data center business, competing with cloud computing giants such as Amazon, Google and Microsoft to capture the market for data centers equipped with chips capable of running generative AI models. However, CoreWeave has yet to achieve profitability. As of the end of the quarter, its debt on the balance sheet reached $35 billion, used to cover NVIDIA GPU and other equipment procurement costs. This quarter, Meta said it would invest an additional $21 billion in CoreWeave. Additionally, CoreWeave announced a multi-year cooperation agreement with Anthropic and received a $6 billion commitment from quantitative trading firm Jane Street. (Jin10 Data) [Axera Next-Generation High-Power AI Chip Completes Tape-Out, Supports Multi-Chip Cascading for Full-Fledged Large Model Inference on the Edge] From the earnings call of Axera's 2026 semi-annual report, it was learned that the company's next-generation high-performance, high-power AI chip has completed tape-out, with a significant increase in computing power specifications, equipped with high bandwidth, and supports two-chip or four-chip cascading, enabling high-performance inference of full-fledged large models on the edge. [Strategic Cooperation Intent Reached, Huawei to Provide Ascend Computing Equipment to Beijing Data Group] According to Beijing Data Group, on August 7, Beijing Data Group and Huawei held working talks and reached a strategic cooperation intent. Next, the two sides will focus on deepening cooperation in computing power clusters and city-level computing infrastructure construction. Beijing Data Group’s subsidiary Tongniu Information will participate in the construction of Beijing's city-level computing infrastructure, coordinating the deployment, daily operations, and computing services of the group's self-innovated computing clusters. Huawei will fully support Beijing Data Group in advancing the city-wide layout of self-innovated computing, providing advanced Ascend computing equipment, comprehensive technical solutions, and service support to jointly build a trusted city-level computing foundation in Beijing, continuously releasing the value of computing engines and offering stable, reliable computing support for the development of “Digital Intelligence Beijing.” [Nvidia Announces Partnership with Six Financial Giants to Arrange $500 Billion AI Infrastructure Financing System] Nvidia (NVDA.O) announced on the 10th local time that it has established a strategic partnership with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to create an independent computing financing platform, aiming to mobilize over $500 billion in third-party capital over the long term for building artificial intelligence infrastructure. Nvidia stated that the new financing platform transforms Nvidia’s computing and full-stack AI infrastructure into an investable asset class for global capital, expands access to AI factories, achieves long-term revenue tied to usage, and supports Nvidia’s ecosystem growth in hardware sales and software applications. [Tesla: Terafab Plan Launches in Texas, Targeting Over 1 Terawatt of Computing Capacity Annually] On August 6, Tesla (TSLA.O) stated that earlier this year, SpaceX and Tesla announced the launch of the “Terafab” project—the world’s largest chip manufacturing initiative, integrating logic chips, memory chips, and advanced packaging technology within a single facility. In April, Tesla broke ground on a new R&D fab at the northern campus of its Texas Gigafactory, which served as the predecessor to Terafab. And today, we officially announced that Terafab will be located in Grimes County, Texas. This facility will be an advanced semiconductor wafer fab, designed to bridge the vast gap between current global chip supply capability and future computing demand. The combined chip demand of SpaceX and Tesla is expected to exceed 1 terawatt (TW) of computing power, far surpassing the current global supply capability. We greatly appreciate our existing chip suppliers and encourage them to expand capacity where possible, but the widening supply-demand gap in the future is the core reason for the Terafab project. Terafab’s goal is to manufacture new computing capacity at unprecedented scale and speed. The project plans to build a vertically integrated factory with a manufacturing area exceeding 100 million square feet. The facility will cover the manufacturing, packaging, and testing of advanced logic chips and memory chips. Concentrating these processes at a single location will facilitate rapid iteration and accelerate the deployment of new computing power. [ZTE Partners With Sky47 to Build Pakistan's Largest Intelligent Computing Data Center] Recently, the inauguration ceremony of Sky47 Karakoram-01, the largest integrated general-purpose and intelligent computing data center in Pakistan, jointly built by ZTE and Pakistan's leading cloud service provider Sky47, was held in Islamabad. As Pakistan's first customized AI-native Tier III data center, Sky47 Karakoram-01 has a total power supply capacity of 8.5 MW. The center will provide robust cloud computing, data hosting, and advanced digital service support across Pakistan, fully meeting the computing power needs of government and enterprises in fields such as artificial intelligence (AI), machine learning (ML), and high-performance computing (HPC). Power Battery Cell Installation Rush and Robust AI Industry Chain Demand Keep Copper Foil Operating Rate Climbing According to SMM, In July, the operating rate of the copper foil industry continued to climb, supported by strong end-use demand from downstream. In the lithium battery sector, production schedules of major Chinese lithium battery companies hit another record high in July. The installation rush for power battery cells boosted production schedules, and demand for lithium battery copper foil remained positive. In the electronic circuit segment, AI industry chain-related demand remained strong; capacity continued to shift toward high-end products, and demand for electronic circuit copper foil across all specifications stayed robust. Voices From All Parties CSC Financial’s research report notes that the scaling of frontier models has entered a stage of parallel multi-path development. Anthropic Mythos 5 and Fable 5 are estimated by the industry to have 8 trillion and 5 trillion parameters respectively; Kimi K3 has a total of 2.8 trillion parameters; and ByteDance is reportedly pretraining a model with up to 10 trillion parameters. Post-training is further extended to million-token agent trajectories, thousands of tool calls, and complex tasks lasting several hours. The RSI review published on July 8 covered 1,250 papers, 74% of which were published in 2026, indicating a clear acceleration in AI R&D automation. We believe that model competition is shifting from single-parameter expansion toward coordinated evolution involving pretraining, reinforcement learning, inference-time computing, RSI, and long-term agent capabilities. Computing power demand will expand from training to inference and agent execution. We remain bullish on the Capex ecosystem of major players, domestic chips and super-nodes, computing services, Pre-AI, B-end AI applications, and local inference. Founder Securities' research report indicates that the market's oversold rebound has entered a critical phase, with divergence unfolding across tech and cyclical growth sectors. Continue to focus on allocation opportunities in three areas. First, tech stocks also require selective positioning by structure. At the index level, the Sci-Tech Innovation Board and ChiNext have rebounded about 10% from their lows, and there remains upside relative to the typical oversold rebound amplitude of major themes. The AI narrative has seen some shifts after US CSP earnings reports, with competitive capex marginally weakening; cloud business and healthy cash flow are decisive factors. Therefore, within AI, hardware and applications will become more balanced. Focus on core overseas computing power names with low crowding, as well as domestic computing power segments with high earnings visibility such as semiconductor equipment and materials; relatively undervalued AI applications and Hang Seng Tech deserve attention. Second, watch for opportunities in HALO assets, as expectations for US Fed interest rate hikes are easing. Beyond core resource-related non-ferrous metals and chemicals, oversold old and new energy, including power grids and electrical equipment, coal and petrochemicals, etc. Third, leading pharmaceutical names with improving fundamentals, low crowding, and abating headwinds. CITIC Securities' research report notes that since 2023, the rapid development of AI has driven the iterative upgrade of optical module technology. New technologies such as optical chip speed upgrades, silicon photonics integration, and CPO architecture are jointly driving the iterative upgrade of optical module testing equipment. Combined with the rapid expansion of AI computing power infrastructure, this is driving a "volume and price increase" for optical module testing equipment. Currently, international players remain relatively ahead in the 1.6T high-end market, but domestic enterprises are accelerating their catch-up, with the gap steadily narrowing. We are bullish on the long-term development of the domestic optical module industry and the trend of import substitution for high-end optical module testing equipment. China Merchants Securities, reviewing nine sharp A-share market corrections since 2015, found that sharp declines were mostly triggered by external shocks or liquidity risks, with stabilization marked by policy responses. The average rebound window after a correction is 34 trading days, with the Wind All A-Share Index rebounding by more than 19% on average, and the larger the prior decline, the greater the subsequent rebound tends to be. Sector performance exhibits "two-phase" rotation: in the first 10 trading days of a rebound, high-beta, oversold sectors such as electronics and computers lead the gains; after 20 to 60 trading days, the market shifts to themes with fundamental support, such as electrical equipment and food & beverage. For the current cycle, a two-step allocation is recommended: initially, prioritize TMT and other oversold, high-beta sectors (with focus on computing power leaders in China and overseas); after 10 to 20 trading days, return to a rebalancing of fundamentals, focusing on electrical equipment, chemical pharmaceuticals, coal, and non-bank financials. Along sector themes, key opportunities to capture are the catch-up potential in the overseas computing power price-hike chain, the elasticity of domestic computing power hardware, and gold's value as a safe-haven and rebalancing asset. The overall allocation revolves around three main themes: technology innovation, enterprises going global, and rebalancing of traditional low-valuation sectors. According to CICC research, since mid-to-late June, global AI chains experienced notable pullbacks, with South Korea—characterized by high leverage, high crowding, and high retail participation—being the most severe. Behind this were the amplifying effects of high crowding and high leverage, disturbances from macro factors (such as rising expectations for US Fed interest rate hikes and the renewed blockade of the Strait of Hormuz driving up oil prices), and market concerns over a re-emerging AI bubble (e.g., Meta renting out computing power, declining token spending). In fact, before the bubble finally burst in March 2000, the tech stock market saw at least four rounds of large-scale, prolonged corrections. The triggers for these declines are highly similar to the current adjustment: short-term setbacks in industry trends, headwinds in the macro environment, and overheated valuation sentiment. The eventual rebound in tech stocks was also due to the easing of these three pressures. Therefore, corresponding to the present, for the market to stabilize and even start a new round of increases, these three factors are needed: the digestion of high crowding and high leverage (largely achieved), the easing of expectations for US Fed interest rate hikes or the actual announcement (watch the July FOMC meeting), and more importantly, new catalysts from earnings reports and industry developments (the July-August earnings season). Recommended reading:

On August 10, Chifeng Gold's share price rose, closing up 3.9% at 43.73 yuan per share as of the end of trading. In news developments: On August 8, Chifeng Gold issued an announcement regarding its controlled subsidiary suspending operations at the Mengkang Rare Earth Ore Project in Laos. The announcement stated: In response to and in strict compliance with policy requirements for rare earth resource development, and to earnestly fulfill corporate social responsibility, on August 7, 2026, the 9th Board of Directors of Chifeng Jilong Gold Mining Group Co., Ltd. at its 9th session reviewed and approved the "Proposal on the Controlled Subsidiary Suspending Operations at the Mengkang Rare Earth Ore Project in Laos," agreeing that its controlled subsidiary, Xiamen Chijin Xiamen Tungsten Metal Resources Co., Ltd., shall suspend operations at the Mengkang Rare Earth Ore Project located in Mengkang County, Xieng Khouang Province, Lao People's Democratic Republic. The project overview provided in Chifeng Gold's announcement showed: In 2022, the company formed a joint venture with Xiamen Tungsten Co., Ltd. ("Xiamen Tungsten") named Shanghai Chijin Xiamen Tungsten Metal Resources Co., Ltd. (the company held 51%, Xiamen Tungsten held 49%, now renamed "Xiamen Chijin Xiamen Tungsten Metal Resources Co., Ltd."), aiming to leverage the strengths of both parties to build a cooperation platform for rare earth resource development and to advance the implementation and growth of the company's rare earth resource development business in Laos. On March 4, 2024, the company's controlled subsidiary Chijin Xiamen Tungsten and its wholly owned subsidiary CHIXIA Laos Holdings Limited ("CHIXIA Laos"), along with China Investment (Properties) Co., Ltd. ("CIP") and its wholly owned subsidiary China Investment Mining (Laos) Sole Co., Ltd. (now renamed "Chixia Mining (Laos) Co., Ltd.", the "Target Company"), entered into an Equity Transfer Agreement. CHIXIA Laos acquired 90% equity of the Target Company held by CIP through cash and debt assumption. As of March 25, 2025, all parties had confirmed in writing that the transaction was completed. The Target Company primarily operates the Mengkang Rare Earth Ore Project. Apart from this project, Chijin Xiamen Tungsten and its controlled subsidiaries do not operate any other rare earth projects. Since completion, the project has been in the trial production stage. The retained resource volume of the Mengkang Rare Earth Ore is as follows: Regarding the suspension of operations at the Mengkang Rare Earth Ore Project by Chijin Xiamen Tungsten, Chifeng Gold's announcement stated: As the national rare earth resource policy system becomes increasingly comprehensive, Chijin Xiamen Tungsten will comprehensively review and optimize its relevant operations to ensure all business activities are conducted in compliance with laws and regulations. In response to and in strict compliance with policy requirements for rare earth resource development, and to earnestly fulfill corporate social responsibility, after prudent study and assessment, Chijin Xiamen Tungsten has decided to suspend operations at the Mengkang Rare Earth Ore Project. It will continue the renewal process for mining rights and certificates, closely monitor relevant policy changes, and actively seek solutions. The board of directors of the company has approved the suspension of operations at the Chijin Xiamen Tungsten's Mongkhon rare earth project in Laos and authorized management-designated personnel to handle related matters within the board's purview, including but not limited to asset disposal, personnel settlement, and debt restructuring. Should any related matters exceed the board's decision-making authority, a separate shareholders' meeting will be convened for deliberation. When discussing the impact on the company, Chifeng Gold stated: The Mongkhon rare earth project is still in the trial mining phase. In 2025, Chijin Xiamen Tungsten produced 998.56 mt of rare earth products, with a net loss attributable to Chifeng Gold of -54.0637 million yuan, representing an absolute value of 1.75% of Chifeng Gold's consolidated net profit attributable to parent company shareholders for 2025. In Q1 2026, the company produced 63.6 mt of rare earth products, with a net profit attributable to Chifeng Gold of 372,800 yuan, representing 0.04% of its consolidated net profit attributable to parent company shareholders for Q1 2026. The suspension of operations is expected to have a relatively small overall impact on the company's operating performance. Specific details are subject to the company's audited financial reports. Currently, it remains uncertain when the project will resume operations, and the company will continue to monitor relevant policy changes and subsequent project developments. The company's main operations, such as gold and copper cathode, are performing well, with a sound and stable financial position and an asset-liability ratio at a relatively low industry level, providing a solid guarantee against various force majeure events. The company will actively respond and make its best effort to mitigate the adverse effects of the rare earth development suspension. Meanwhile, it will continue to focus on its main business, increase investment and accelerate project progress in resource exploration, technological transformation, and new expansion projects to lay a solid foundation for achieving its medium and long-term strategic goals. Chifeng Gold also announced on August 8: To ensure the production continuity and capacity utilization rate of its holding subsidiary, Lane Xang Minerals Limited Company (an indirectly held subsidiary operating the Sepon gold-copper mine in the Lao People's Democratic Republic, hereinafter referred to as "Laos," and referred to as "Lane Xang Minerals"), and to advance the development and mining of the Khanong project as planned, with primary ore mining commencing in Q2 2027 to ensure the designed capacity of 1.3 million mt/year reaches full production and to optimize the utilization rate of the newly commissioned 1.2 million mt/year mill, the company, following multiple rounds of tenders and technical and commercial evaluations, intends for Lane Xang Minerals to sign a Mine Development and Mining Services Contract as an independent contractor with China Railway 19th Bureau Group Laos Sole Co., Ltd. (hereinafter referred to as the "Contractor"). Under this contract, the Contractor will provide open-pit mining services (including ore mining and waste rock removal) and other mining services and activities related to Lane Xang Minerals' mining operations in Laos. Chifeng Gold stated that this contract constitutes a daily operational transaction, and its consideration makes it a disclosable transaction under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. On August 7, 2026, the company convened the ninth meeting of its ninth board of directors, which reviewed and approved the proposal regarding the signing of an overseas daily operational contract by the holding subsidiary, agreeing for Lane Xang Minerals to enter into the contract with the Contractor for an amount not exceeding $220,163,577 (excluding VAT), and authorized management to handle all subsequent contract-related matters based on project progress. This contract does not involve related-party transactions and, per the securities regulatory rules of the company's stock listing venues, this matter does not require shareholder meeting approval. Regarding the impact of the contract's execution on the listed company, Chifeng Gold announced that mining operations inherently involve various risks and uncertainties, including but not limited to geological changes, equipment failures, safety incidents, and cost fluctuations. Under the company's asset-light strategy, adopting an independent professional mining contractor model locks in unit mining costs for the contract period, effectively transferring cost risks related to fuel, labour, and consumables, which aligns with industry practice and allows the company to focus on ore processing and recovery rate optimization. To ensure smooth project progress, production continuity, and capacity utilization, the company invited qualified contractors to bid through a public tender process. After multiple rounds of technical and commercial reviews, this Contractor was ultimately selected as the bid winner due to its comprehensive strength and highly competitive bid. The Contractor's parent company is an experienced international mining services firm specializing in open-pit mine operations. Leveraging its experience and advanced knowledge, outsourcing part of the open-pit operations to the Contractor offers a more cost-effective solution for developing Lane Xang Minerals' Sepon gold-copper mine over the long term. The rates quoted by the Contractor were based on local materials, labour costs, and industry market price levels for the project. The contract price structure was determined through fair negotiation between the parties based on the project's specific scope, construction requirements, and market conditions, comprehensively considering factors such as project scale, quality standards, and mining operation pace. Based on these factors, the company believes the pricing adheres to general commercial practices, is fair and reasonable, aligns with the overall interests of the company and its shareholders, has a sufficient basis in commercial reasonableness, and represents the best interests of the company and its shareholders. (1) The above contract is a daily operational transaction. Its signing and smooth implementation will have a positive impact on the company's current and future performance, enhancing its ongoing profitability. (2) The transaction adheres to fair and equitable market pricing principles, without harming the interests of the company or its shareholders, and meets the company's actual operational development needs. (3) The contract's execution does not affect the company's business independence, nor will it create a dependency on the Contractor. In terms of performance, Chifeng Gold disclosed its H1 performance forecast on the evening of July 14, indicating that, based on preliminary financial estimates, the net profit attributable to shareholders of the publicly listed firm for H1 2026 is expected to be between 1.7 billion yuan and 1.78 billion yuan, an increase of 593.1 million yuan to 673.1 million yuan compared with 1,106.9 million yuan for the same period last year, up 54% to 61% YoY. The net profit attributable to shareholders of the publicly listed firm, excluding non-recurring gains and losses, is expected to be between 1.71 billion yuan and 1.79 billion yuan, an increase of 598.09 million yuan to 678.09 million yuan compared with 1,111.91 million yuan for the same period last year, up 54% to 61% YoY. For the primary reasons behind the performance changes for the period, Chifeng Gold explained that the substantial YoY increases in both net profit metrics were mainly driven by a significant rise in gold prices compared with the same period last year, with the average gold sales price up approximately 43% YoY, alongside the company's continuous efforts to strengthen production organization and operational management. Regarding its main business, Chifeng Gold introduced in its 2025 annual report that the company operates in the non-ferrous metal mining and beneficiation industry, with key products including precious metals like gold and non-ferrous metals like copper cathode. Its core main business is the mining, beneficiation, and sale of gold, while also engaging in multi-metal mining/beneficiation and comprehensive resource recovery. The company operates 6 gold mines and 1 multi-metal mine globally, with a business footprint covering China, Southeast Asia, and West Africa. Domestically, subsidiaries Jilong Mining, Wulong Mining, Huatai Mining, and Jintai Mining focus on gold mining and beneficiation, while Hanfeng Mining concentrates on zinc, lead, copper, and molybdenum multi-metal mining and beneficiation. Its holding subsidiary, Laos-based Lane Xang Minerals, focuses on gold mining/beneficiation and copper mining/smelting. Holding subsidiary Wassa in Ghana focuses on gold mining and beneficiation. Additionally, holding subsidiary Guangyuan Technology is engaged in comprehensive resource recovery, specializing in the dismantling of waste electrical and electronic products for environmental protection. A research report from Huaxin Securities on August 10 noted: On the data front, the US July ISM Manufacturing PMI was 55.6, versus a prior reading of 53.3 and expectations for 54. The US July ISM Services PMI was 54.1, versus a prior reading of 54 and expectations for 54.5. US initial jobless claims for the week ending August 1 were 199,000, versus a prior reading of 197,000 and expectations for 205,000. The US July unemployment rate was 4.1%, versus a prior reading of 4.2% and expectations for 4.2%. US nonfarm payrolls for July changed by -23,000, versus a prior reading of 57,000 and expectations for 80,000. A breakdown of the employment data shows that the private sector added a net 30,000 jobs, including a net gain of 25,000 in the goods-producing sector and a net gain of 5,000 in the service-providing sector, while the government sector had a net loss of 53,000 jobs. Overall, employment was mainly supported by the private sector, with the government sector declining. According to the CME FedWatch Tool, the probability of a 25bp rate hike by the US Fed in September 2026 fell to 43%, down from 67% a week ago (July 31). In summary, weakening expectations for US Fed interest rate hikes, combined with the PBOC’s continued gold purchases, which accelerated again in July, are expected to drive a continued rebound in gold prices. A Pacific Securities commentary on Chifeng Gold’s performance from May 7 indicated that multiple technological transformation projects, combined with scheduled maintenance, led to a YoY decline in gold production. In Q1 2026, the company's gold production was 2.98 mt, down 10.7% YoY and 21.7% QoQ, achieving 20% of the full-year target. The production decline was mainly due to these transformations and routine maintenance. Specifically, Jilong Mining's hoist upgrade from a single-rope to a multi-rope system and Wulong Mining's retrofitting of several blind shafts temporarily constrained ore extraction capacity. The Laos Sepon gold-copper mine's beneficiation plant underwent a large-scale annual maintenance shutdown, which, combined with a planned shutdown for one of its high-temperature autoclaves, led to a YoY decline in ore processing volume. A higher tax rate, coupled with the production decline, led to an increase in unit sales costs. Expense ratios were relatively stable, and the asset-liability ratio continued to decline. In Q1 2026, the company’s ROE was 6.9%, up 2.5 pct YoY; period expense ratio was 5.9%, down 0.6 pct YoY and up 0.1 pct QoQ. As of Q1 2026, the company’s asset-liability ratio was 29.4%, down 9.3 pct YoY and 4.5 pct QoQ. Risk warnings: price wild swings, cost side exceeding expectations, project progress falling short of expectations

The 15th Five-Year Plan officially kicks off in 2026, ushering in a critical period of transformation and upgrading for the conductor, cable, and electrical materials industry. Driven by the dual carbon strategy, new-type power system construction, energy transition, and AI technology empowerment, fields such as ultra-high voltage, new energy, computing centers, and NEVs are developing rapidly, effectively boosting demand for high-end copper and aluminum conductors and cable materials. Opportunities and challenges coexist: tight supply of copper and aluminum raw materials, significant price fluctuations, coupled with geopolitical trade and cost volatility, continue to climb operational and supply chain pressures on enterprises and intensify industry competition. Meanwhile, aluminum as an substitute for copper and new copper-aluminum composite materials are being adopted at an accelerated pace, while intelligent manufacturing and green, low-carbon technologies continue to drive industry quality improvement and upgrading. Against this backdrop, SMM will hold the November 5-6, 2026 in Yixing, Jiangsu , which will gather resources from the entire industry chain and establish a professional, efficient cooperation and exchange platform. SMM , in partnership with Shanghai Ruitong Copper International Trade Co., Ltd. , invites industry friends to attend the conference together, helping enterprises break through and boosting the industry's high-quality transformation. Click the to register immediately. We look forward to meeting you at the conference. Shanghai Ruitong Copper International Trade Co., Ltd. Shanghai Ruitong Copper International Trade Co., Ltd. is located in the Shanghai Nonferrous Metals Trading Center, specializing in bulk commodity trading and supply chain services primarily focused on nonferrous metals. It is one of the earliest companies in China to practice the integration of spot and futures trading. Growing from a startup to an industry benchmark with annual sales exceeding 100 billion yuan and serving over 2,000 manufacturing enterprises, it has carved out a distinctive path of high-quality development and is recognized by the Shanghai Municipal Government as a top-tier player. Corporate Competitiveness Research-Driven, Continuous Innovation The company's market share in copper cathode and aluminum trade volumes has consistently held a leading position in the industry. In 2025, annual sales of copper cathode reached 2.3 million mt, and together with other products (copper rod, aluminum rod, aluminum ingot, zinc ingot, nickel, silver, tin, lead, lithium carbonate, etc.) totaled 4 million mt. Deeply rooted in the industry for three decades, it is recognized annually by SMM and other professional organizations as a "Price Submitter" and "Quality Supplier," among other honors. Professional Team, Flexible Models Since its founding, the core team of Shanghai Ruitong Copper International Trade Co., Ltd. had already weathered multiple market cycles in the commodity sector. Faced with the industry changes brought by the Internet, the enterprise made two important decisions: first, adhering to the main business of non-ferrous metals and extending deeply into supply chain services; second, responding to the "Belt and Road" initiative and steadily expanding into the African market. Currently, the enterprise established nearly 30 projects in Africa, with over 3,000 Chinese and foreign employees, building momentum for expanding the international market. Robust Channels, Service First In line with the national planning guidance on accelerating the development of new-type international trade, the company has set up subsidiaries in the Shanghai Lin-gang Special Area, Singapore, and Hong Kong, actively laying out cross-border finance and trade businesses. Following the Belt and Road strategy, the company invests in Africa, and now its industries are spread across various sectors in Africa, including manufacturing, agriculture, warehousing and logistics, minerals, and recycled metals. Enterprise Vision The vigorous development of the bulk commodity industry is Ruitong's aspiration and mission. Ruitong is willing to join hands with peers to jointly build a more transparent, more standardized, and more efficient non-ferrous metal trading circle, promote the effective allocation of commodity resources in the real economy environment, and strive to enhance the competitiveness and industry discourse power of China's non-ferrous metal industry. Contact Information Business Director Xiong Li 138 1660 9892 Business Manager Xiong Xicheng 130 4415 6111 SMM Conference Contact Li Haiyang 135 2411 0203 lihaiyang@smm.cn Scan the QR code to attend immediately

Data from the National Bureau of Statistics (NBS) showed that in July, affected by imported factors, the Consumer Price Index (CPI) fell by 0.1% MoM and rose by 0.5% YoY. Excluding food and energy prices, the core CPI rose by 0.3% MoM and 0.9% YoY. Overall, CPI maintained a mild increase. Demand in some domestic industries increased, but affected by imported and seasonal factors, the Producer Price Index (PPI) fell by 0.7% MoM and rose by 3.5% YoY, with the growth rate pulling back 0.6 percentage points from the previous month. In July 2026, China's producer prices rose 3.5% YoY and fell 0.7% MoM. Industrial producer purchase prices rose 5.5% YoY and fell 1.0% MoM. For the January–July period, the PPI rose 1.8% YoY and industrial producer purchase prices rose 2.8% YoY. Dong Lijuan, Chief Statistician of the Urban Department at the NBS, interpreted the CPI and PPI data for July 2026. July 2026 Consumer Prices Rose 0.5% YoY In July 2026, the national consumer price index (CPI) rose 0.5% YoY. Specifically, urban CPI rose 0.5%, rural CPI rose 0.4%; food prices fell 1.5%, non-food prices rose 0.9%; consumer goods prices rose 0.2%, and service prices rose 0.7%. For the January–July period, the national CPI rose 0.9% YoY on average. In July, the national CPI fell 0.1% MoM. Specifically, urban CPI fell 0.1%, rural CPI fell 0.2%; food prices remained flat, non-food prices fell 0.1%; consumer goods prices fell 0.6%, while service prices rose 0.4%. 1. YoY Changes in Prices of Various Goods and Services In July, prices for food, tobacco, alcohol, and dining out categories fell 0.8% YoY, pulling the CPI down by about 0.22 percentage points. Among food items, livestock meat prices fell 6.0%, pulling the CPI down by about 0.25 percentage points, of which pork prices fell 13.3%; dairy prices fell 1.5%, pulling the CPI down by about 0.02 percentage points; fresh fruit prices fell 1.1%, pulling the CPI down by about 0.02 percentage points; egg prices rose 14.4%, pushing the CPI up by about 0.07 percentage points. Prices of the other seven categories recorded six increases and one decline YoY. Specifically, prices of other supplies and services and healthcare rose 5.8% and 2.9%, respectively; clothing and education, culture and recreation prices rose 1.4% and 1.3%, respectively; household goods and services and transportation and communication prices rose 0.8% and 0.4%, respectively; while residential prices fell 0.3%. II. MoM Changes in Prices of Various Goods and Services In July, prices for the food, tobacco, alcohol, and dining-out category remained unchanged MoM. Within food items, livestock meat prices rose 1.9%, contributing approximately 0.07 percentage points to CPI growth, with pork prices rising 4.1%; fresh vegetable prices rose 1.3%, contributing approximately 0.02 percentage points to CPI growth; fresh fruit prices fell 3.8%, pulling down CPI by approximately 0.07 percentage points; and egg prices fell 1.7%, pulling down CPI by approximately 0.01 percentage points. For the other seven major categories, three saw MoM increases, two were unchanged, and two saw decreases. Specifically, prices for education, culture, and entertainment; healthcare; and household goods and services rose by 1.0%, 0.8%, and 0.4%, respectively; prices for housing and other goods and services were both unchanged; and prices for transportation and communication and clothing fell by 2.2% and 0.4%, respectively. In July 2026, Industrial Producer EXW Prices Rose 3.5% YoY In July 2026, national industrial producer EXW prices rose 3.5% YoY but fell 0.7% MoM. Industrial producer purchase prices rose 5.5% YoY but fell 1.0% MoM. From January to July, on average, industrial producer EXW prices were up 1.8% versus the same period last year, and purchase prices rose 2.8%. I. YoY Changes in Industrial Producer Prices In July, within industrial producer EXW prices, producer goods prices rose 4.8% YoY, contributing approximately 3.72 percentage points to the overall increase in industrial producer EXW prices. Specifically, extractive industry prices rose 16.4%, raw material industry prices rose 6.1%, and processing industry prices rose 3.1%. Consumer goods prices fell 0.8%, pulling down industrial producer EXW prices by approximately 0.17 percentage points. Within this, food prices fell 2.1%, clothing prices fell 1.1%, general daily necessities prices fell 1.0%, and durable consumer goods prices rose 0.4%. In industrial producer purchase prices, non-ferrous metal materials and wires prices rose 19.0%, fuel and power and chemical raw material prices both rose 9.3%, textile raw material prices rose 3.2%, and ferrous metal material prices rose 1.4%; building materials and non-metallic mineral product prices fell 4.1%, and agricultural and sideline product prices fell 0.8%. II. MoM Changes in Industrial Producer Prices In July, within industrial producer EXW prices, producer goods prices fell 0.9% MoM, pulling down overall industrial producer EXW prices by approximately 0.7 percentage points. Of which, mining industry prices fell 0.2%, raw material industry prices fell 2.4%, and processing industry prices fell 0.1%. Consumer goods prices dropped 0.1%, pulling the overall industrial producer EXW price level down by about 0.01 percentage points. Among them, both food and durable consumer goods prices were flat, clothing prices fell 0.3%, and general daily necessities prices fell 0.2%. Among industrial producer purchase prices, prices of fuel and power and chemical raw materials both fell 2.6%, non-ferrous metal materials and wires prices fell 1.4%, ferrous metal materials and textile raw materials prices both fell 0.2%, building materials and non-metallic categories prices fell 0.1%; agricultural and sideline product prices rose 0.5%. In July 2026, CPI Maintained Mild Growth, PPI YoY Growth Pulled Back Somewhat — by Dong Lijuan, Chief Statistician at the Urban Division of the National Bureau of Statistics, Interpreting the July 2026 CPI and PPI Data In July, due to imported international factors, the consumer price index (CPI) fell 0.1% MoM and rose 0.5% YoY; the core CPI excluding food and energy prices rose 0.3% MoM and 0.9% YoY, with CPI overall maintaining mild growth. Domestic demand increased in some sectors, but due to imported and seasonal factors, the industrial producer EXW price index (PPI) fell 0.7% MoM and rose 3.5% YoY, with growth pulling back by 0.6 percentage points from the previous month. 1. CPI MoM Decline Narrowed, YoY Growth Remained Mild On a MoM basis, the national CPI fell 0.1%, with the decline narrowing by 0.2 percentage points from the previous month. International market price fluctuations led to a 10.7% drop in domestic gasoline prices, with the decline widening by 5.8 percentage points from the previous month, pushing the MoM CPI down by about 0.35 percentage points. Food prices were flat from the previous month, 0.6 percentage points below the seasonal level. Within food, fresh vegetable prices rose 1.3% and egg prices fell 2.1%, both significantly below seasonal levels; as seasonal fruits entered the market in large quantities with ample supply, fresh fruit prices fell 3.8%, pushing the MoM CPI down by about 0.07 percentage points. The effects of comprehensive hog production capacity control policies became evident, and coupled with frequent extreme weather such as high temperatures and heavy rainfall in some regions, which pushed up transportation costs, pork prices turned from a 0.8% decline in the previous month to a 4.1% increase, pushing the MoM CPI up by about 0.07 percentage points. Driven by artificial intelligence, consumer electronics underwent iterative upgrades, boosting related product demand and prices. Tablet computers, computers, and mobile phones saw price increases of 11.3%, 5.5%, and 1.0%, respectively, collectively pushing the MoM CPI up by about 0.03 percentage points. Service prices shifted from unchanged last month to a 0.4% increase, contributing about 0.21 percentage points to the MoM rise in CPI. Within services, driven by increased summer travel demand, travel agency fees, hotel accommodation, airfares, and vehicle rental prices rose 7.2%, 6.5%, 4.2%, and 3.6%, respectively, collectively contributing about 0.1 percentage points to the MoM rise in CPI. Policy-driven price adjustments in some regions continued to advance, with medical service prices up 1.1%, contributing about 0.07 percentage points to the MoM rise in CPI. On a YoY basis, the national CPI rose 0.5%, maintaining a mild increase. The YoY CPI inflation rate pulled back 0.5 percentage points from the previous month, mainly affected by the pullback in gasoline price gains. Gasoline prices rose 1.0%, with the increase pulling back 16 percentage points from the previous month, reducing its upward impact on CPI by about 0.45 percentage points compared to last month, which drove the energy price gain down to 0.6%. Prices of industrial consumer goods excluding energy rose 1.5%, with the increase pulling back 0.2 percentage points from the previous month, contributing about 0.37 percentage points to the YoY CPI rise. Among these, gold jewelry, personal care products, and household appliances prices rose 24.6%, 1.7%, and 0.2%, respectively, with all increases pulling back, collectively contributing about 0.13 percentage points to the YoY CPI rise; computer, tablet, and mobile phone prices rose 17.4%, 17.2%, and 8.5%, respectively, with all increases expanding, collectively contributing about 0.14 percentage points. Service prices rose 0.7%, with the increase pulling back 0.1 percentage points from the previous month, contributing about 0.36 percentage points to the YoY CPI rise. Within services, medical service prices rose 4.3%, with the increase expanding 0.9 percentage points from the previous month, contributing about 0.28 percentage points; domestic services, dining out, and education services prices rose 1.3%, 1.0%, and 0.6%, respectively, with increases generally stable. Food prices fell 1.5%, with the decline narrowing 0.1 percentage points from the previous month, dragging the YoY CPI down by about 0.25 percentage points. Within food, pork prices fell 13.3%, with the decline narrowing 2.6 percentage points from the previous month, dragging the YoY CPI down by about 0.25 percentage points; price declines for fresh vegetables, fresh fruits, grains, edible oils, and dairy products ranged from 0.3% to 1.5%; egg prices rose 17.8%, with the increase pulling back 2.2 percentage points from the previous month; mutton, beef, and poultry prices rose between 1.6% and 6.2%. II. PPI Fell MoM, with YoY Increase Pulling Back On a MoM basis, the national PPI fell 0.7%, with the decline widening 0.4 percentage points from the previous month. Key features of the MoM PPI movements this month: First, imported factors dragged down prices in related domestic industries. Prices of oil extraction, refined petroleum product manufacturing, and organic chemical raw material manufacturing fell by 11.8%, 8.4%, and 4.2%, respectively. Prices of non-ferrous metal mining and dressing, and non-ferrous metal smelting and rolling processing decreased by 2.1% and 1.7%, respectively. These five industries together contributed about 0.65 ppt to the MoM PPI decline. Second, seasonal factors led to price decreases in some industries. In July, high temperatures, heavy rain, and typhoons were frequent, slowing the progress of construction projects. Prices of ferrous metal smelting and rolling processing, and non-metallic mineral products fell by 0.8% and 0.5%, respectively. With increased hydropower and wind power generation, their prices dropped by 10.3% and 3.9%, respectively. These four industries combined contributed about 0.11 ppt to the MoM PPI decline. Third, industrial transformation and upgrading, along with consumption quality improvement and expansion, drove up demand and prices in some sectors. New growth drivers expanded and strengthened, with sectors such as AI, high-end equipment, and new materials flourishing. Prices of intelligent unmanned aerial vehicle manufacturing, carbon-based new materials, and ship and related equipment manufacturing rose by 2.5%, 0.4%, and 0.3%, respectively. Consumption of high-quality goods grew relatively fast, with prices of smart home consumer devices and skincare cosmetics manufacturing up by 3.4% and 0.7%. On a YoY basis, national PPI rose 3.5%, with the growth rate pulling back by 0.6 ppt from the previous month. By industry, among the major sectors with price increases, oil and natural gas extraction, petroleum, coal, and other fuel processing, and chemical raw materials and chemical products manufacturing rose by 3.2%, 8.2%, and 9.1%, respectively. Non-ferrous metal mining and dressing, and non-ferrous metal smelting and rolling processing were up 22.6% and 20.2%, while ferrous metal smelting and rolling processing increased 2.7%. All saw their growth rates pull back from the previous month. Together, these six industries contributed about 2.55 ppt to the YoY PPI increase. Coal mining and washing rose 27.1%, electrical machinery and equipment manufacturing increased 5.7%, and computer, communication, and other electronic equipment manufacturing grew 4.4%, with growth rates all widening from the previous month. These three industries combined added about 1.53 ppt to the YoY PPI increase. The upward pull from the above nine industries on PPI was 0.56 ppt less than the previous month. The five industries with the largest downward pull on prices were: electric power and heat production and supply, automobile manufacturing, non-metallic mineral products, pharmaceutical manufacturing, and alcoholic beverages and refined tea manufacturing. Their YoY declines ranged from 2.3% to 5.7%, together contributing about 0.76 ppt to the YoY PPI decline, 0.05 ppt less than the previous month.

“ In the critical period of global energy transition and the reshaping of the manufacturing landscape, the lead-zinc industry chain is undergoing profound structural adjustments. Upstream mine resources remained tight continuously, smelting and processing profits were under pressure, while downstream application fields represented by batteries and galvanizing faced opportunities and challenges from new technology iterations and green low-carbon transformation. Against this backdrop, collaboration and price risk management across the industry chain are more important than ever before. SMM deeply insights into industry needs and dedicates to creating a unique industry conference. This conference will focus on downstream applications and long-term contract supply-demand matching, aiming to build a high-end communication platform integrating macro outlook, price analysis, and long-term contract negotiations. The conference will not only analyze in depth the market trends of lead, zinc, precious metals, copper, tin, antimony, bismuth, and other associated metals, but also innovatively set up a long-term contract supply-demand negotiation meeting as a highlight, striving to help clients seize market opportunities in 2027 and foster business cooperation through precise data services and practical agenda design. In the golden autumn of October, we sincerely invite leading enterprises and elites of the lead-zinc industry chain from China and overseas to gather together, to have open exchanges and seek common development in a relaxed and pleasant negotiation atmosphere! Nandan County Zhenghua Non-Ferrous Metals Company will attend this grand event, discussing industry development trends with industry peers and jointly promoting the lead-zinc industry to a new height. Click on the to register immediately, and join us to witness and participate in this significant and far-reaching industry event, creating a new chapter of brilliance together! Nandan County Zhenghua Non-Ferrous Metals Company was founded in 2000, with a history of over 20 years. Located at Xiaoping Tun, Daping Village, Chehe Town, Nandan County (within Hechi-Nandan Non-Ferrous Metal New Material Industrial Park), the company is mainly engaged in non-ferrous metal rolling and processing. It completed construction of a lead-antimony smelting production process using the advanced "oxygen-enriched bottom side-blowing bath smelting-oxidation-reduction fuming triple furnace—smelting flue gas double conversion and double absorption acid-making" technology to process antimony-lead concentrates, gold-antimony ore, and comprehensively recover gold, silver, copper, and bismuth, and has a complete antimony industry chain deep processing enterprise. Designed total metal capacity is 45,000 mt/year, including antimony ingot (10,000 mt/year), antimony trioxide (10,000 mt/year), lead ingot (25,000 mt/year), silver ingot (100 mt), gold ingot (2 mt), sulfuric acid (60,000 mt), and comprehensive recovery of other valuable metals. Total investment is 850 million yuan, covering a total area of 172 mu. The company has obtained certifications for quality management system, environmental management system, occupational health and safety management system, and energy management system from the national quality certification center, and has been rated as a Guangxi S&T enterprise, high-tech enterprise, specialized and sophisticated enterprise, enterprise technical center, gazelle enterprise, and national-level green factory. Zhenghua Nonferrous Metals Co., Ltd. has a group of experienced and skilled management personnel, technical personnel, and operators, forming an excellent management team with high enforcement capability. The company has departments such as Office, Production Department, Safety and Environmental Protection Department, Finance Department, Operations Department, Logistics Department, Engineering Department, and Electrical and Mechanical Section, with over 400 employees, including 60 professional and technical personnel. Over the years, with the care and support from Party committees and governments at all levels, peers in the industry, and people from all walks of life, Zhenghua Company has been committed to the concepts of safe production, circular economy, green development, honest operation, and win-win cooperation, dedicated to serving users wholeheartedly, committed to gathering talents and building a first-class management team, and striving to advance towards the goal of "10 billion Zhenghua". Contact Information zhenghuayelian@163.com Long Press to Scan and Sign Up Now 2026 SMM Lead-Zinc Annual Conference

After hitting the daily limit on August 5, Baowu Magnesium’s share price pulled back over the past two trading days. As of around 10:55 a.m. on August 7, the stock was up 2.74%, trading at 11.26 yuan per share. On the news front, Baowu Magnesium’s investor relations activity record dated August 4, 2026 shows: Question: What are Baowu Magnesium’s main businesses? Baowu Magnesium responded: The company’s businesses include magnesium materials, magnesium products, aluminum products, mineral products, and building formwork. Its main products include magnesium alloys, magnesium alloy deep-processed products, aluminum alloys, aluminum alloy deep-processed products, master alloys, and strontium metal. Question: Could you introduce the company’s ore resources? Baowu Magnesium responded: The company’s subsidiary Chaohu Baomei holds 90 million mt of dolomite ore reserves and is in active mining operation; subsidiary Wutai Baomei holds 580 million mt of dolomite ore reserves; and associate company Anhui Baomei holds 1.3 billion mt of dolomite ore reserves. The subsidiary Gansu Mining under Gansu Baomei holds 14.91 million mt of available quartzite ore reserves. Question: How was China’s magnesium product production in H1 2026? Baowu Magnesium responded: In H1 2026, China’s primary magnesium production was approximately 603,100 mt, up 26.49% YoY. China exported approximately 239,100 mt of various magnesium products, up 7.95% YoY. Question: How does the company promote magnesium metal? Baowu Magnesium responded: Relying on its full magnesium industry chain, the company focuses on lightweighting and high-end manufacturing, seizes the rapid growth opportunity of magnesium applications in lightweighting, and will focus on the following points: 1. Full-chain guarantee: With an integrated industry chain covering ore mining, magnesium smelting, alloys, and deep processing, we ensure a stable magnesium supply to support large-scale applications across sectors. 2. Technology leadership: Leveraging our technological strengths, we collaborate with universities, research institutes, and clients on R&D for new magnesium alloys, and break through key technologies such as large-scale integrated die casting and magnesium alloy corrosion resistance and flame retardancy. 3. Application expansion: Guided by high-end, green and intelligent development, we focus on automotive, robotics, aerospace and other fields, and provide integrated services covering materials, components, and solutions. Question: What is the pace of design wins and mass production of magnesium alloy die castings in the NEV sector? Baowu Magnesium responded: The company has concentrated superior technical resources to continue deepening its presence in mid-to-large magnesium casting businesses such as drive motors, instrument panel cross car beams, seat frames, and integrated auto body structural components. In the cross car beam area, we focused on breaking through with leading automakers, securing design wins for multiple hot-model cross car beams, and during this period launched the world’s first “semi-solid process CCB.” In drive motors, we are orderly advancing customer mass production deliveries, actively conducting aluminum-to-magnesium feasibility studies with industry-leading suppliers, and have achieved major breakthroughs in both rare earth alloy R&D and process optimization. Meanwhile, "magnesium alloy auto body integrated castings" became a hot topic in magnesium applications most concerned by NEV manufacturers in 2025. After successfully passing the whole-vehicle road test for a certain automaker's tailgate inner panel, one-stage sample trial production of magnesium components was subsequently completed, contributing substantial verification and testing data for industry technology iteration and further boosting NEV manufacturers' confidence in large magnesium part applications. Under this favorable situation, the company gradually established in-depth R&D cooperation with some leading automakers. In terms of performance: Baowu Magnesium's semi-annual performance forecast showed it expected a net loss of RMB14-20 million in H1. Regarding the reasons for the performance change, Baowu Magnesium stated: Due to a slight YoY increase in magnesium prices, the profitability of the company's magnesium materials segment was basically stable YoY. The main reasons for the YoY decline in the company's H1 performance include: due to aluminum price fluctuations and lower sales volume of aluminum products compared to the same period last year, the aluminum products business saw a decline in profitability; the newly built ferrosilicon project of subsidiary Gansu Baowu Magnesium was just commissioned in May, with consumption indicators not yet stable, leading to relatively high product costs; the company's associate company Anhui Baowu Magnesium was still in the capacity ramp-up stage, with crude magnesium and alloy production significantly higher YoY, and various production technical indicators gradually optimized, but the products remained loss-making, impacting the company's investment income YoY; and due to the appreciation of the renminbi against the US dollar and euro, the company's foreign exchange losses on export business increased YoY, etc. On July 14, Baowu Magnesium issued an announcement on daily related-party transactions. Due to daily production and operation needs, the company and its controlled subsidiaries plan to conduct daily related-party transactions in 2026 with related parties including the controlling shareholder Baosteel Metal and its affiliates, other Baowu second-level subsidiaries and their affiliates, and the associate company Yi'an Yunhai. The types of related-party transactions include purchasing products and goods from related parties, accepting operational services from related parties, selling products and goods to related parties, providing operational services to related parties, providing and financial services (including deposits and loans, factoring, discounting, foreign exchange settlement and sales, etc.). The total estimated amount of daily related-party transactions (excluding financial services) in 2026 is RMB1.28 billion; in addition, the estimated amount of financial related-party transactions with Baowu Group Finance Co., Ltd. has not been adjusted, and the relevant quotas are already included in the overall arrangement. These related-party transactions strictly follow market-based fair pricing principles, with fair and reasonable transaction terms, which are conducive to ensuring the company's sustained and stable operations, will not harm the lawful rights and interests of the publicly listed company and minority shareholders, nor affect the company's operational independence. When asked "Hello, board secretary, could you tell me whether your company can stably mass-produce semiconductor-grade ultra-high-purity magnesium metal ingots as found online, and is the only publicly listed company? Also, what is the proportion of your sales in this area to the company's total sales over the past few years?" Baowu Magnesium responded on the investor interaction platform on June 23: The company's business includes magnesium materials, magnesium products, aluminum products, mineral products, and building formwork. The company's main products include magnesium alloys, magnesium alloy deep-processed products, aluminum alloys, aluminum alloy deep-processed products, master alloys, and strontium metal. Please refer to the 2025 annual report for the proportion of revenue by product segment. Regarding the specific products and sales proportion you mentioned, the company has not publicly disclosed such information; please refer to the company's official periodic reports or announcements. In response to the questions: "1. Regarding the Anhui Qingyang project, what is the mine commissioning progress, and what is the current approximate ore output of the mine? 2. What are the advantages of the company's vertical retort magnesium smelting technology? How does it compare with peers in Fugu?" Baowu Magnesium replied on the investor interaction platform on June 17: The company adopts the vertical retort magnesium smelting process, which has outstanding technical advantages: increased per-retort capacity, shortened production cycle, improved production efficiency, extended service life of reduction retorts, and a higher level of mechanized and automated operations. The Anhui Qingyang mine project has achieved a capacity of 20 million mt per year. Regarding the main business engaged in during the reporting period, Baowu Magnesium introduced in its 2025 annual report: The company is the leader in magnesium-based new materials under China Baowu, possessing the advantages of the entire industry chain and mine resources, leading vertical retort magnesium smelting technology, and its magnesium alloy capacity and market share rank among the top globally. The company focuses on lightweight materials, with products covering automobiles, household consumer electronics, e-bikes, building formwork, and other fields. After more than 30 years of development, the company has become a high-tech enterprise integrating mining, non-ferrous metal smelting and processing, committed to becoming a global leader in the magnesium industry. The company's business includes magnesium materials, magnesium products, aluminum products, mineral products, and building formwork. Its main products include magnesium alloys, magnesium alloy deep-processed products, aluminum alloys, aluminum alloy deep-processed products, master alloys, and strontium metal. For the company's future development outlook, Baowu Magnesium stated in its 2025 annual report: 2026 marks the starting year of the company's 15th Five-Year Plan, and the industry will usher in an important period of opportunity for high-end and large-scale development. The company's board of directors will lead the management to, with "building a lightweight solution provider and becoming a mainstay of China Baowu's new materials" as the core positioning, focus on the main business, deepen and refine operations, promote the upgrading of the entire industry chain, technological innovation, market expansion, and green development, achieving sustained improvement in operating performance and significant enhancement of core competitiveness. 1. Strengthen strategic guidance, consolidate the foundation for magnesium industry new quality productive forces. Accelerate the construction of a development pattern for the entire industry chain covering primary magnesium—alloys—deep processing—end-use applications, focus on tackling key technologies in green smelting and stable production with cost reduction, and accelerate large-scale promotion of key products. 2. Coordinate key project construction, synergistically enhance overall operational efficiency. Accelerate the construction and comprehensive acceptance of the Huayuan Wu's Mine in the Qingyang project, orderly promote the construction of the main plant area and optimization of production indicators, and orderly advance key projects of Gansu Baowu Magnesium, Wutai Baowu Magnesium, and Chaohu Baowu Magnesium. 3. Deepen magnesium industry reform and innovation, promote the modernization of corporate governance systems. Steadily promote business development transformation and innovation, advance asset integration, and further optimize governance and control as well as business management models. 4. Accelerate the layout of smart development, comprehensively advance the construction of information systems. Complete full coverage of the Baowu standard financial system and the update and launch of the cost systems of subsidiaries, build a full-process informatization model project for magnesium business, and further enhance Baowu Magnesium's capabilities in operation management, cost-based management, compliance operation, and risk prevention and control. 5. Focus on reducing primary magnesium costs, continuously enhance market competitiveness. Reduce manufacturing costs of the three core components—reduction retorts, center tubes, and cones—optimize steel grades to extend the service life of reduction retorts, lower auxiliary energy consumption and the material-to-magnesium ratio. 6. Implement cost-based management, systematically build a high-quality development operating model. Deepen comprehensive benchmarking to identify gaps, systematically tackle the "four major costs" of primary magnesium, energy, logistics, and quality, and improve the operation management and control system. 7. Strengthen safety and environmental protection fortifications, systematically enhance green development levels. Continuously strengthen safety and environmental compliance rectification, highlight risk control and inherent safety improvement in key areas, and accelerate the construction of green factories and low-carbon capacity building. 8. Major risk factors and countermeasures the company faces (1) Risk of fluctuations in main raw material prices The company's main business involves magnesium, aluminum alloys and deep processing, with main raw materials being magnesium and aluminum metals. Magnesium and aluminum prices are affected by supply-demand dynamics, global and Chinese economic conditions, and are closely related to factors such as the progress of automotive lightweighting and demand from the 3C industry. If future magnesium and aluminum prices experience wild swings, it will have a certain impact on the company's cost control and profitability. The company is increasing the self-supply ratio of raw materials, adjusting product mix, and increasing the proportion of deep-processed products to mitigate the impact of raw material price fluctuations. (2) Risk of market demand fluctuations The company's magnesium and aluminum lightweight alloy products are mainly used in automobiles, consumer electronics, and other fields. At present, seizing the opportunity of automotive lightweighting development, while stabilizing the supply of magnesium and aluminum alloy base materials, the company is focusing on expanding downstream deep-processing businesses such as magnesium alloy automotive die-casting parts, magnesium alloy building formwork, and aluminum alloy extrusion products. Market demand in areas such as automotive lightweighting progress and 3C electronics consumption is influenced by multiple factors including macroeconomics, industrial policies, and process technology innovation. If downstream market demand falls short of expectations, it will affect the company's operating performance level. The company is expanding the application of its products in various fields, increasing the penetration rate of products in various application fields, to reduce the risk of market demand fluctuations. Looking back at the Chinese magnesium market in H1 2026, affected by the concentrated production stoppages at magnesium plants earlier, the pattern of strong supply and weak demand was quietly reversed. Tight spot supply and low inventory provided a good foundation for a phased rise in the magnesium ingot market fundamentals. Coupled with market disturbances such as the explosive demand for magnesium alloys, speculative demand surged, and market purchasing enthusiasm ran high. Magnesium prices showed a staircase-like increase in Q1. Overly high expectations boosted magnesium plants' production enthusiasm, and magnesium production climbed all the way. By June 2026, China's primary magnesium production exceeded 110,000 mt. The persistently rising production increased sales pressure on magnesium plants. As both inventory and production grew, magnesium prices trended downward in a staircase-like manner in Q2, and overall magnesium prices in H1 showed an inverted V-shaped trajectory. From the price performance of 99.90% magnesium ingot (Fugu, Shenmu) in H1 this year, it can be seen: the average price of 99.90% magnesium ingot (Fugu, Shenmu) on June 30, 2026 was 15,850 yuan/mt, compared to its average price of 17,950 yuan/mt on December 31, 2025, its average price fell by 2,100 yuan/mt in H1, a decline of 11.7%. Its daily average price in H1 was 16,607.33 yuan/mt, compared to its daily average price of 16,241.45 yuan/mt in H1 2025, its daily average price increased by 365.88 yuan/mt YoY, an increase of 2.25%. According to SMM quotes, the price of 99.90% magnesium ingot (Fugu, Shenmu) on August 7 was 15,850-15,950 yuan/mt, with an average price of 15,900 yuan/mt, up 0.32% from the previous trading day. Low-priced supply in the market tightened, and magnesium prices edged up slightly. On the supply side, affected by rising coal costs and sustained losses, producers had a strong willingness to hold prices firm, but some sources still offered small discounts, leading to a divergence in selling attitudes. On the demand side, downstream users and traders maintained a strong wait-and-see sentiment, with weak restocking willingness, making only small-scale just-in-time procurement, and market trading was sluggish. Cost support limited the downside room, but production cuts have not yet effectively promoted inventory destocking, and social inventory pressure remained. In the short term, magnesium prices lack upward momentum and face downside limitations, likely to continue moving sideways. Subsequent attention should be paid to the downstream recovery pace and restocking signals.