[Tungsten Flash] SMM July 1 News: Xiamen Tungsten announced that its 60%-owned subsidiary Luoyang Yulu Mining has completely halted production. The enterprise relies on CMOC’s molybdenum beneficiation tailings to extract scheelite concentrates. Now, due to CMOC suspending tailings delivery, it has no raw materials for production, and the timing for production resumptions is undetermined. According to the announcement, Luoyang Yulu’s production and sales of scheelite concentrates (WO3 metal content) in 2025 were 1,924 mt and 1,614 mt, respectively, and in H1 2026, production and sales were 685 mt and 669 mt, respectively. This production halt is expected to have some impact on the company’s near-term operating performance. As it is currently impossible to determine how long Luoyang Yulu’s suspension will last, the impact on the company’s performance cannot be predicted at this time. Specific circumstances will be subject to the company’s audited financial reports.

[Tungsten Flash] SMM, July 1: The tungsten market mainly saw weak consolidation today. Trading volume at the mine side contracted, downstream smelters had few orders, and with inventories at high levels, enterprises mostly purchased tungsten concentrates and recycled raw materials as needed. Some traders mainly pushed for lower prices. The negotiation center for spot orders of 55% tungsten concentrates was around 440,000-460,000 yuan per standard tonne. SMM 65% tungsten concentrates closed at 491,000 yuan per standard tonne today, down 10,000 yuan per standard tonne from yesterday, but still up 56,500 yuan per standard tonne from early June. Going forward, key focus will be on mine tender transactions and the new round of long-term contract information.

SMM, June 30: Although market procurement demand remained mediocre, spot prices for Pr-Nd oxide recorded a second consecutive increase, supported by fluctuations in futures, difficulty in finding low-priced cargo in the market, some large manufacturers entering procurement, and a MoM decline of about 6% in Pr-Nd oxide production in June. On the demand side, long-term demand expansion expectations in the new energy industry chain such as robotics, along with the upcoming Q3 downstream concentrated procurement season in China and rising market expectations for subsequent demand recovery, bolstered the rare earth permanent magnet concept to strengthen on June 30, with the concept rising 2.79% by the close on June 30. In terms of individual stocks: Dongfang Zirconium Industry, Sinomine Resource Group, and Zhong Ke San Huan hit the daily limit up, while Hanghua Co., Ltd., Longhua Co., Ltd., Zhongxi Nonferrous, Sinosteel NMC, and Ningbo Yunsheng led the gains. Pr-Nd Oxide Spot Prices See Second Consecutive Increase; June Production Declines MoM In the spot market, on June 30, the average price of Pr-Nd oxide extended its upward trend from the previous trading day, rising another 0.68%. Currently, overall prices in the rare earth market remain stable. The increase in Pr-Nd oxide futures prices drove a simultaneous rise in supplier spot offers, making low-priced oxides hard to find in the market. However, metal enterprises were cautious in procurement due to unsatisfactory inquiries for metals, leading to generally moderate market trading activity. In the metal market, inquiry activity picked up slightly on the afternoon of the 30th, mainly driven by tender procurement from major magnetic material manufacturers, but most magnetic material enterprises remained on the sidelines, resulting in overall poor transactions. In the short term, Pr-Nd product prices may move sideways without significant improvement in downstream demand. On the supply side, further providing price support logic: in terms of production, according to SMM's latest survey, overall rare earth oxide production declined MoM in June, with Pr-Nd oxide seeing the most prominent decrease, shrinking approximately 6% MoM. Institutional Views SDIC Securities emphasized that heavy rare earths are accelerating inventory depletion due to a cliff-like decline in imports from Japan, opening a window for domestic substitution, with prices of dysprosium oxide and terbium oxide rebounding strongly. Materials such as AI high-capacity MLCCs, high-end ceramic substrates, and dental zirconia all require the addition of heavy rare earths. Growing demand combined with hard supply constraints is driving the price centers of both light and heavy rare earths upward together. Meanwhile, inflation trends in AI upstream materials such as MLCC dielectric powder, Low CTE electronic fabrics, M9 copper foil, and tantalum metals are clear, and the medium and long-term outlook is positive for the allocation value of strategic metals like rare earths, tungsten, copper, tin, molybdenum, antimony, germanium, gallium, tantalum, niobium, uranium, rhenium, and lithium. A research report from China Securities stated that domestic dental zirconia enterprises have confirmed "receipt of a notice from Japan's Tosoh Corporation regarding the suspension of zirconia powder supply," marking a shift in raw material shortages from expectations to reality following overseas rare earth supply restrictions. Yttria-stabilized nano zirconia (YSZ) is a high-performance ceramic material with yttrium oxide added as an additive. Due to restricted rare earth supply outside China, the price spread between Chinese and overseas markets has reached hundreds of times at its peak. The domestic price spread for yttrium oxide between Chinese and overseas markets is huge. Rare earths are indispensable additives for high-end materials and high-end manufacturing. As overseas rare earth supply tightens and the price spread between Chinese and overseas markets widens, domestic high-end materials containing rare earths are expected to gain a larger share of the global market, benefiting the upstream, midstream, and downstream segments of the rare earth industry chain. Recommended reading:

On June 29, Xiamen Tungsten's share price declined. As of around 14:04 on the 29th, it had fallen 1.22% to 83.47 yuan per share. In terms of news, an announcement from Xiamen Tungsten on June 27 showed: To concentrate resources and focus on developing its three core businesses—tungsten & molybdenum, new energy materials, and rare earths— the company has decided to exit the real estate business. To gradually achieve this exit, Xiamen Tengwangge plans to publicly list for transfer, in the name of its partner Jianming, the unsold properties from Phases I through IV of the Straits International Community project and certain fixed assets within the Phase II commercial properties on the Fujian Provincial Property Rights Exchange, with a reserve price of 192 million yuan (RMB, the same hereinafter). The Straits International Community project (i.e., the commercial housing project on the north side of the Xiamen International Conference & Exhibition Center) was developed under Jianming's name, with related assets registered under Jianming. Through relevant cooperation agreements, Xiamen Tengwangge holds a 67.285% interest in the project, while Jianming holds a 32.715% interest. Commenting on the transaction’s impact, Xiamen Tungsten stated that this transaction is an optimization and adjustment of the company's resource allocation and asset structure based on its strategic development plans. It will help the company further focus on its core businesses and aligns with its long-term strategic planning. The transaction does not harm the interests of the company and its shareholders, particularly minority shareholders. As this is a listed transfer, whether the transaction will ultimately be completed and the final transaction price remain uncertain, and the impact on company performance is subject to change. It will be determined based on actual completion, and currently cannot be estimated. Performance: Xiamen Tungsten’s 2025 annual report shows that for 2025, the company achieved consolidated operating revenue of 46.265 billion yuan, up 30.79% YoY, and consolidated operating costs of 37.984 billion yuan, up 31.07% YoY. Net profit attributable to shareholders of the parent company reached 2.309 billion yuan, up 34.89% YoY, while net profit attributable to shareholders of the publicly listed firm after deducting non-recurring gains and losses was 2.19 billion yuan, up 44.16% YoY. The revenue and profit of its tungsten & molybdenum, energy new materials, and rare earth businesses all registered solid growth. Market shares for its major competitive products—such as tungsten powder, fine tungsten wire, cemented carbide rods, ammonium molybdate, and LCO—remained at the forefront, while profitability of key products, including cemented carbide, cutting tools, fine tungsten wire, magnetic materials, and LCO, further improved. Regarding its main business, Xiamen Tungsten stated that the company focuses on its three core industries: tungsten & molybdenum, rare earths, and energy new materials. Leveraging deep technological expertise and a strong management culture, the company continuously pursues technological and management innovations. It steadily advances its industrial layout in tungsten, molybdenum, rare earths, and lithium battery cathode materials, actively expanding its tungsten & molybdenum deep-processing, rare earth deep-processing, and energy new materials industries, and accelerating the transformation and upgrading of its industry chain. Regarding the business plan, Xiamen Tungsten stated in its annual report: Overall annual work approach: The company will fully implement the guiding principles of the Fourth Plenary Session of the 20th CPC Central Committee, take the 15th Five-Year Plan as its guide, and embark on a transformation toward "Industrial Services" and "Digital Operations"; pursue internationalization, digitalization, and product-as-a-service while advancing both organic growth and external expansion; promote organizational change and talent development; strengthen industry chain synergy and global footprint; upgrade value across the entire chain covering R&D, production, sales, procurement, and investment; enhance functional management efficiency and risk control, consolidate the foundation for development, and ensure that transformation tasks are implemented effectively. Overall annual target: In 2026, the company plans to achieve YoY growth in operating revenue and total profit. To achieve the above business targets, the company will focus on the following key tasks: 1. Advance the comprehensive development of core businesses. In the tungsten sector, the emphasis is on strengthening resource security, driving the transformation of cemented carbide, cutting tools, and rock drilling tools toward high-end and service-oriented offerings, consolidating the advantages of PV tungsten wire and other products, and incubating new products. In the molybdenum sector, the focus is on raising smelting capacity and powder quality, maintaining the gross margin of wire-cut molybdenum wire, and expanding the market share of molybdenum end-cap assemblies and molybdenum discs. In the rare earth sector, the company will expand overseas raw material sources, scale up the fine chemicals, luminescent materials, alloys, and magnetic materials businesses, accelerate new base construction and overseas deployment, increase R&D investment in motor products, and expand into high-end market segments such as equipment manufacturing. In the energy new materials sector, the company will strengthen supply chain cooperation, expand production of core materials, promote the industrialisation of cutting-edge technologies, and accelerate overseas project construction. 2. Strengthen mine resource security. Stabilize domestic mine operations, with a focus on overcoming challenges such as declining grades and rising costs at operating mines; accelerate the development of new mines, promote the injection of the Dahutang tungsten mine, and advance infrastructure construction at the Bobai tungsten mine in Guangxi in an orderly manner. Promote overseas mine projects, conduct preliminary research on mine planning, develop a global map of non-ferrous metals relevant to Xiamen Tungsten's businesses, explore multiple modes of resource acquisition, and study the boundary conditions and rules for engaging in other strategic metals. 3. Strengthen and supplement chains through global layout. Prioritize deep processing capacity construction projects for tungsten-molybdenum, rare earth, and energy new materials, accelerate overseas industrial deployment, and enhance the coverage of the global manufacturing network. Advance M&A projects in and outside China, deploy functional components and devices related to strategic emerging industry chains, and leverage industrial funds to invest along the upstream and downstream of the company's current and future industries. Promote capital operations of subsidiaries and the disposal of non-performing assets and equity stakes to enhance asset operation efficiency. 4. Pilot the transformation to "Industrial Services" and "Digital Operations". 5. Solidify the Five Pillars for Value Chain Value Enhancement. 6. Deepen the Safe Production and Green Manufacturing System. 7. Annual Function Enhancement and Safeguard Measures. Xiamen Tungsten previously disclosed in its Q1 2026 report that in Q1, the company achieved total operating revenue of 15.743 billion yuan, up 86.99% YoY, and net profit attributable to shareholders of the parent company of 1.107 billion yuan, up 189.14% YoY. Regarding the main reasons for the performance change, Xiamen Tungsten explained in its Q1 report that during the reporting period, the company actively responded to rising prices of major raw materials such as tungsten and cobalt, achieving effective linked increases in selling prices of main products across all segments of the industry chain, while sales of key products including cemented carbides, cutting tools, battery materials, and magnetic materials grew steadily, leading to a significant improvement in overall profitability. Xiamen Tungsten introduced: During the reporting period, the company focused on its core manufacturing business and operated steadily. The main highlights were as follows: 1. Tungsten and Molybdenum Business. In Q1 2026, the tungsten and molybdenum business achieved operating revenue of 7.321 billion yuan, up 83.13% YoY, and total profit of 1.763 billion yuan, up 238.82% YoY. The company proactively responded to the sharp rise in tungsten raw material prices, dynamically adjusted its business strategy, and achieved effective linked increases in selling prices of main products throughout the industry chain, significantly enhancing profitability. Among major products, cemented carbide product sales increased 5% YoY, with sales revenue up 156% YoY; cutting tool product sales grew 69% YoY, with sales revenue up 78% YoY; and fine tungsten wire, due to product mix adjustments, saw a 19% YoY decline in sales volume but a 73% YoY increase in sales revenue. 2. Energy New Materials Business. In Q1 2026, the battery materials business achieved operating revenue of 6.585 billion yuan, up 117.82% YoY, and total profit of 260 million yuan, up 94.24% YoY. The company continuously improved product quality and market development, achieving substantial growth in sales of main products and a significant boost in profitability. In Q1, sales of the company’s power battery cathode materials (including ternary cathode materials, LFP, and others) reached 15,700 mt, up 26% YoY, with sales revenue up 82% YoY; LCO sales volume was 14,700 mt, up 20% YoY, with sales revenue up 154% YoY. 3. Rare Earth Business. In Q1 2026, the rare earth business achieved operating revenue of 1.826 billion yuan, up 31.68% YoY, and total profit of 70 million yuan, up 65.72% YoY. The company optimized its product mix, achieving volume and profit growth for high-value-added products, effectively enhancing profitability. Sales of the main deep-processing product, magnetic materials, rose by 24% YoY, with sales revenue up 50% YoY. 4. Real estate business. In Q1 2026, the real estate business reported revenue of 10 million yuan, down 8.08% YoY, while total profit was -19 million yuan, narrowing losses slightly YoY. Tungsten: Looking back at the 2025 tungsten price trend, taking SMM wolframite concentrates (≥65%) as an example: The average price of wolframite concentrates (≥65%) on December 31, 2025, was 453,500 yuan/standard tonne, up 217.69% compared with 142,750 yuan/standard tonne on December 31, 2024. Reviewing Q1 this year, the average price of wolframite concentrates (≥65%) on March 31 was 992,500 yuan/standard tonne, surging by 539,000 yuan/standard tonne from the 453,500 yuan/standard tonne on December 31, 2025, representing a gain of 118.85%. After the earlier sustained rebound, wolframite concentrates returned to 500,000 yuan/standard tonne and then moved sideways. On June 29, the average price of wolframite concentrates was 507,000 yuan/standard tonne, down 0.98% from the previous trading day. Fundamentals side: Supply-demand wise, upstream mines still hold prices firm, and high-grade tungsten ore supply remains tight. Downstream, affected by the traditional off-season, cemented carbide and mechanical processing enterprises maintain hand-to-mouth restocking, leaving overall market transactions subdued. In the short term, supply and demand remain in a tug-of-war. Outside China, with increasingly stringent export controls and tight primary tungsten supply, European APT prices continue to fluctuate at highs. The price spread between Chinese and overseas markets remains large, providing some support for domestic tungsten prices. Meanwhile, tax policies related to the tungsten scrap recycling sector are being further refined, expected to boost compliant tungsten scrap circulation. This will, in the medium and long term, promote standardized development of the recycled tungsten industry and improve China’s tungsten resource supply structure . The domestic tungsten market is expected to mainly consolidate in the short term, with focus on long-term contract price adjustments, pace of mine shipments, changes in downstream off-season demand, and the impact of overseas export policies on market sentiment. Over the medium and long term, attention should be paid to declining supply during the seasonal mine output gap in Q3, while improving consumption expectations during the September-October peak season will further optimize the supply-demand structure, bringing bullish sentiment to prices. Recommended reading:

SMM Analysis | June 30 marks a critical milestone in the U.S. Section 232 copper investigation. Will refined copper tariffs proceed as expected? Whether the outcome is a broad tariff, targeted measures, or a delay and exemption, the decision could reshape the COMEX–LME arbitrage, U.S. physical premiums, global copper trade flows, and regional supply dynamics.

On June 26, Xiamen Tungsten New Energy announced that the Company plans to establish a new wholly‑owned subsidiary in Hong Kong, namely Xiamen Tungsten New Energy (Hong Kong) Co., Ltd., and through this subsidiary, together with EMI, to set up a holding subsidiary in Malaysia via a joint venture. The project involves an investment of approximately USD 64.58 million (equivalent to about RMB 450 million) for the construction of a 10,000‑ton‑per‑year lithium‑ion cathode material project. The funding for the project will come from the Company’s own funds and self‑raised funds, with the construction period scheduled from September 2026 to June 2027. This investment is intended to improve the overseas production capacity layout and meet overseas market demand. It does not constitute a related‑party transaction or a major asset reorganization.