SMM August 12: A sudden supply-side disruption has significantly altered the short-term supply-demand balance in the alumina market outside China. On August 11, Hydro’s Alunorte alumina refinery in Brazil was forced to activate emergency response measures due to a natural gas supply outage, cutting alumina production to 50% of capacity. The refinery has an existing capacity of 6.3 million mt/year, and after the 50% cut, the operating capacity fell to around 3.15 million mt/year, equivalent to a monthly production loss of approximately 250,000 mt—a non-negligible impact on the overall supply landscape outside China. Before this unexpected production cut, the alumina market outside China was in a slight surplus: in July, global alumina supply (excluding China) exceeded demand by about 486,000 mt, reflecting a loose supply-demand pattern. However, with Alunorte’s sharp output reduction, the August overseas surplus is expected to narrow quickly to around 177,000 mt. It is worth further noting that alumina prices outside China still lag behind domestic levels. This price spread means some alumina needs to be transshipped and repackaged in China before it can be exported, adding extra packaging and logistics costs. At the same time, China still maintains a net-import pattern for alumina, with monthly net imports averaging around 100,000 mt. Taken together, the actual surplus available for supply outside China will be further squeezed to merely about 70,000 mt. The supply-demand balance will abruptly shift from relatively loose to a tight balance, significantly elevating the risk of regional structural shortages, and alumina prices outside China are highly likely to find upward support in the short term. However, it must be objectively recognized that the price rally is not solely driven by Alunorte’s production cuts. Another structural support factor exists in overseas markets: due to strait passage issues, demand for bagged alumina in the Middle East is relatively urgent, while bulk alumina cannot effectively meet local supply because of transportation constraints. This situation has prompted some traders to first sell bulk alumina and then turn to purchase bagged alumina to fill the gap. Bagged alumina itself commands a notable premium—its FOB price is typically more than $20/mt higher than that of bulk alumina. This extra packaging and logistics cost has, to some extent, pushed up the overall price center in the regional market, serving as a secondary support for near-term alumina price strength outside China. Even if short-term sentiment and supply-demand fundamentals converge to drive prices higher, the upside room for alumina prices outside China may remain relatively limited. The core reason is that India still has plans to launch new capacity—a 1 million mt/year alumina project is expected to gradually advance its expansion in Q4 this year and Q1 next year, which will effectively supplement market supply at that time. Therefore, although supply was tight in Q3 due to production cuts at Alunorte, from a full-year perspective, the supply tightness in Q4 will ease noticeably, making it difficult to support a sustained sharp price increase. More attention should be paid to the uncertainty of disturbances on the time dimension. Currently, the duration of Alunorte’s natural gas supply issue remains unclear. If it is properly resolved in the short term, the impact of the production cuts will be relatively manageable; however, if the repair cycle is prolonged, the supply deficit outside China in Q3 will persist. Early signs of tight spot supply have already emerged in some regions. With the combination of fundamentals and sentiment, the likelihood of alumina prices outside China holding up well increases. Looking further ahead, new alumina capacity in Indonesia will be released gradually next year, and the global alumina supply landscape will evolve towards a looser balance, putting downward pressure on the long-term price center. In summary, the impact of this Alunorte production cut event on the alumina market outside China is mainly concentrated in Q3 this year. Short-term prices are expected to rise due to expectations of tightening supply-demand and regionally structural cost increases. However, constrained by the expectations of long-term growth from India’s new capacity about to be commissioned, as well as the continuous loosening pressure from capacity releases in Indonesia in Q4 this year and early next year, the current price rise reflects more of a periodic rebound rather than a trend reversal. It is expected that alumina prices outside China will consolidate on a strong note in Q3, and from Q4 to early next year, as new capacity comes online, the price center is likely to pull back gradually. (The above information is based on market data collection and comprehensive assessment by SMM’s research team. The information provided is for reference only. This article does not constitute direct investment advice. Clients should make prudent decisions and not use this as a substitute for independent judgment. Any decisions made by clients are not related to SMM.) Data source: SMM

On August 10, 2026, Ruizhi New Energy announced the completion of a several‑tens‑of‑millions RMB Pre‑A+ exclusive financing round, fully funded by Shanghai Chenyao Yichuang Investment Fund. Founded in 2021, Ruizhi is the first new‑energy‑battery technology commercialisation spin‑off from Northwestern Polytechnical University, focusing on two core products: active functional separators and membrane‑form solid‑state electrolytes.

In its half-year results announcement, UAE-based EGA unveiled the production resumption timeline for the Al Taweelah smelter, which was forced to shut down following an attack on 28 March. 18% of the plant’s total 1,262 reduction cells have been restarted. Output is projected to return to pre-incident levels in Q1 2027. Capital expenditure for the recovery is estimated at USD 400 million; most spending will be incurred in 2026, with the remainder falling into 2027. The newly built recycling plant is currently operating at 10% capacity, targeting full production by end-Q4 2026. Output at the alumina refinery fell sharply year-on-year in H1 2026. Its capacity recovered to 50% of pre-incident levels in early July.

In its half-year results announcement, UAE-based EGA unveiled the production resumption timeline for the Al Taweelah smelter, which was forced to shut down following an attack on 28 March. 18% of the plant’s total 1,262 reduction cells have been restarted. Output is projected to return to pre-incident levels in Q1 2027. Capital expenditure for the recovery is estimated at USD 400 million; most spending will be incurred in 2026, with the remainder falling into 2027. The newly built recycling plant is currently operating at 10% capacity, targeting full production by end-Q4 2026. Output at the alumina refinery fell sharply year-on-year in H1 2026. Its capacity recovered to 50% of pre-incident levels in early July.

SMM News on August 12: Metals market: As of the midday close, base metals in the domestic market rose almost across the board. SHFE copper rose 0.27%, and SHFE aluminum rose 0.93%. SHFE lead rose 0.25%. SHFE zinc rose 0.7%. SHFE tin rose 1.44%. SHFE nickel fell 0.16%. In addition, the most-traded cast aluminum futures contract rose 0.74%, and the most-traded alumina contract rose 0.93%. The most-traded lithium carbonate contract rose 2.97%. The most-traded silicon metal contract edged up. The most-traded polysilicon futures contract rose 3.69%. Ferrous metals all rose. Iron ore rose 0.28%, rebar rose 0.37%, and hot-rolled coil rose 0.34%. Stainless steel rose 0.24%. For coking coal and coke: the most-traded coking coal contract rose 2.17%, and the most-traded coke contract rose 1.75%. Overseas base metals: as of 11:46, LME metals rose across the board. LME copper rose 0.27%, and LME tin rose 1.14%. LME zinc rose 0.5%. Gains in LME aluminum, LME lead, and LME nickel were all within 0.3%. Precious metals: as of 11:46, COMEX gold rose 0.54%, and COMEX silver rose 1.12%. Domestic precious metals: SHFE gold rose 0.69%, and the most-traded SHFE silver contract rose 1.22%. In addition, as of the midday close, the most-traded platinum futures contract fell 0.18%, and the most-traded palladium futures contract fell 1.09%. As of the midday close, the most-traded European container shipping contract rose 1.44% to 1,585.5 points. As of 11:46 on August 12, midday moves in some futures: Spot and Fundamentals Aluminum: Today, futures continued to surge, while the spot market in South China faced pressure from the “three mountains.” First, high absolute prices combined with high premiums in reality prompted suppliers to rush to sell more to cash out... Macro front China: [PBOC reverse repo operations recorded a net withdrawal of 5 billion yuan on the day] The PBOC conducted no reverse repo operations today. As 5 billion yuan of 7-day reverse repos matured today, it recorded a net withdrawal of 5 billion yuan on the day. [Guangdong power load hit a new high for the fourth time this year] At 13:47 on August 11, power load on the Guangdong power grid hit a new high for the fourth time this year, reaching 175.7 million kW, up 6.53% YoY. At present, Guangdong’s power supply is stable and orderly. On the same day, loads in cities including Yangjiang, Shantou, Jieyang, and Chaozhou within Guangdong Province hit record highs. ​​​(Guangdong Fabu) [C919 domestically produced large aircraft officially began operating international commercial routes] Starting today (the 12th), Air China’s Beijing–Ulaanbaatar route to the capital of Mongolia will be operated by the domestically produced C919 large aircraft, marking the official launch of international scheduled commercial route operations for the domestically produced large aircraft. (CCTV News) US dollar: As of 11:46, the US dollar index rose 0.05% to 99.87. The market awaits the upcoming US July CPI data, hoping to find clues on the Fed's rate path. According to CME "Fed Watch": the probability that the Fed keeps rates unchanged in September is 52.0%, and the probability of a cumulative 25bp hike is 48.0%. The probability that the Fed keeps rates unchanged in October is 38.7%, a cumulative 25bp hike is 49.0%, and a cumulative 50bp hike is 12.2%. (Jinshi Data APP) The Wall Street Journal reporter Nick Timiraos said that the market will focus on the MoM change in the July inflation data to be released on Wednesday, as an increasing number of FOMC members indicate that inflation readings in the coming months will determine whether they believe the forecast of "inflation pulling back to 2% over the next two years" remains achievable without further rate hikes. Meanwhile, the Fed's new chair Warsh recently dismissed this framework of linking policy-sensitive forecast revisions to high-frequency data. He previously stated that he does not believe the Fed's current "data-dependent" policy has much practical value. Furthermore, Nick added that the working group established by Warsh seems in part to help construct a framework to replace the old one. However, until the new framework is clear, the old framework appears to remain in operation. Glenmede strategists said regarding the US July CPI that investors are anticipating another relatively mild inflation report, with headline CPI expected to rise 3.4% YoY, while core price pressures remain manageable. As US-Iran tensions escalate, oil prices rose further in July, and the energy sector could once again bring pressure. However, the market reaction this time has been more stable, thanks to proactive measures and strategic reserve releases that maintained oil supply stability. The Fed has ample time before its next meeting to assess two inflation reports, giving it more time to evaluate whether energy pressures remain contained or begin to broaden, a distinction that could well influence future policy direction. Other currencies: According to foreign media reports, yen traders are ramping up options market activity ahead of key US inflation data, and amid a lack of consensus on the yen's future direction, they are using derivatives to enhance trading flexibility. The one-week implied volatility for USD/JPY rose for a second straight session on Wednesday, after the gauge had declined for five consecutive sessions. The reason was that traders were positioning ahead of the release of the US inflation report. The data was expected to influence the US Fed's monetary policy outlook and the US dollar's trajectory. Additionally, volatility in longer-dated options also edged up. The rise in volatility reflected a divergence in market views. For short tenors, the market remained concerned about the possibility of joint US-Japan intervention in the foreign exchange market, so USD/JPY put options continued to trade at a premium over call options, showing that investors were seeking protection against a sudden drop in the exchange rate. However, over longer tenors, investors continued to buy call options to bet on a renewed rally in USD/JPY. (Jin10 Data APP) Data-wise: Figures to be released today include the US July unadjusted CPI YoY, US July seasonally adjusted CPI MoM, US July seasonally adjusted core CPI MoM, US July unadjusted core CPI YoY, and Germany's July CPI MoM final reading. In addition, Tencent will hold its Q2 earnings call, MSCI will announce its August index review, the EIA will release its monthly Short-Term Energy Outlook, the IEA will publish its monthly Oil Market Report, and OPEC will release its monthly Oil Market Report (the specific release times for the monthly reports are to be determined, typically published around 18-21 Beijing Time). Crude oil: As of 11:46, both benchmarks rose, with WTI up 1% and Brent up 0.92%. Uncertainty over the US-Iran deal outlook supported prices. Iran’s state television (IRIB), citing an advisor to the Supreme Leader, reported: The Strait of Hormuz will remain closed until relevant conditions are met. (Jin10 Data APP) Iran's Oil Minister Mohsen Paknejad stated on the 11th that Iran was repairing natural gas production facilities damaged by the war, with daily capacity planned to rebound to 95 million m³ by the end of September. Paknejad said that reconstruction work on four damaged gas processing facilities was progressing rapidly, contractors had commenced work, and completion was anticipated ahead of schedule, restoring pre-war capacity. Earlier reports indicated that Iran's daily natural gas production had decreased by about 230 million m³ since the US and Israel launched military operations against Iran. (Jin10 Data APP) The latest Short-Term Energy Outlook (STEO) from the US Energy Information Administration (EIA) indicated that, due to persistently severe restrictions on crude oil transport through the Strait of Hormuz, the degree of global oil supply disruption was greater than previously expected, prompting the EIA to raise its future oil price forecasts. The EIA projects that the 2026 Brent spot price will average $87/bbl, up from the prior forecast of $82/bbl ; and that the Q3 2026 Brent average will be about $85/bbl, with prices in the coming months largely sustaining levels seen in the first week of August. EIA says its latest forecast assumes that recent threats to vessels carrying Saudi crude through the Bab el-Mandeb Strait have not caused additional production halts, and severe shipping restrictions in the Strait of Hormuz will persist into August . EIA expects that most Middle Eastern crude oil production will return close to pre-conflict average levels by early 2027. However, some supply disruptions are expected to persist until the end of 2027, at a scale of around 600,000 barrels per day. The average price for 2027 is forecast at $69/barrel, up from $65/barrel previously. (Wallstreetcn) Additionally, Russia has started importing gasoline from the distant Indian market, after Ukrainian attacks on Russian refineries caused a severe domestic fuel supply shortage. According to shipping data provider Kpler, this marks the first time Russia has imported motor gasoline from a South Asian country. Kpler said the first gasoline cargo arrived on August 5, and more shipments may arrive in Russia in the future. These fuel volumes were shipped via a series of tankers linked to Russia, and were transshipped near Egyptian waters before heading to Russia. Kpler's chief analyst Sumit Ritolia said, "The emergence of Indian gasoline supply is particularly noteworthy." He said these cargoes from India, along with continued gasoline imports from Belarus and other neighboring markets, highlight the severity of the current domestic gasoline supply-demand imbalance in Russia, and also reflect how declining refinery operating rates are reshaping traditional Russian oil product trade flows. (Jin10 Data APP) Spot Market at a Glance: ► ► ► ► ► ► ► ► ► ►

SMM News, August 12: Metals Market: Overnight, base metals on both domestic and overseas markets showed mixed performance. SHFE lead closed flat at 15,860 yuan/mt, LME aluminum rose 0.82%, SHFE aluminum gained 0.58%, and other metals saw slight fluctuations in their % changes. The most-traded alumina contract rose 0.93%, and cast aluminum ticked up 0.42%. In the ferrous metals sector overnight, all contracts gained except stainless steel. Stainless steel fell 0.07%, iron ore rose 0.76%, rebar and hot-rolled coil both edged up within 0.5%, while coking coal and coke gained 1.64% and 1.01%, respectively. In precious metals, COMEX gold rose 0.18% overnight, while COMEX silver fell 0.63%. On the domestic front, SHFE gold dropped 0.28% and SHFE silver slid 0.42%. Overnight closing prices as of 6:38 am, August 12: Macro Front China: [Zhengzhou Adjusts Housing Provident Fund Contribution Base] On August 11, the Zhengzhou Housing Provident Fund Management Center issued a notice on adjusting the 2026 housing provident fund contribution base. The notice specified that Zhengzhou's 2026 contribution base would be adjusted starting July 1, 2026. Both employee and employer contribution ratios must be no lower than 5% of an employee's average monthly salary from the previous year, and no higher than 12%. Employers may independently determine the ratio within the 5%-12% range based on their actual circumstances. (From Wall Street CN APP) [Weihai, Shandong Optimizes and Adjusts Housing Provident Fund Usage Policies] The Weihai Housing Provident Fund Management Center in Shandong Province has optimized and adjusted its policies. The maximum loan amount for a single depositor was raised from 600,000 to 800,000 yuan, and for dual depositors from 1 million to 1.2 million yuan. After stacking multiple preferential policies, the ceiling reaches up to 1.6 million yuan for a single depositor and 2 million yuan for dual depositors. (From Wall Street CN APP) [Shanghai Aims to Expand Software and IT Services Industry to 4 Trillion Yuan by 2030] Shanghai issued the "15th Five-Year Plan for the Development of Shanghai's Software and Information Services Industry." By 2030, the city aims to build the industry into a "power source" for economic growth, a "main arena" for AI-enabled applications, and a "bridgehead" for global competition, with the following key targets: total industry scale is expected to reach 4 trillion yuan, and industry added value to exceed 1.1 trillion yuan. Industry quality and efficiency will further improve, with a batch of breakthrough achievements in key areas such as artificial intelligence and critical software. The number of enterprises with revenue exceeding 10 billion yuan is projected to rise to 35, fostering a group of high-quality enterprises with industrial ecosystem dominance and emerging firms with potential leading influence. The industry structure will be further optimized, with the proportion of high-end software, digital content, and digital-intelligent services increasing, and the formation of several internationally competitive industrial bases and regional clusters. (From Wall Street CN APP) US Dollar: As of the overnight close, the US dollar index rose 0.01% to 99.82. Business Insider analyst William Edward noted two possible scenarios following the Wednesday CPI release: ① If inflation runs hot, stocks may fall. This could be the worst-case market scenario: stagflation. Investors had hoped the weak July jobs data would provide the US Fed with the rationale to cut interest rates. Hence, stocks surged sharply on Friday—bad news on the jobs front was actually good news for markets. However, given Warsh's outspokenness on curbing inflation, a hot CPI report could prompt him to raise interest rates even amid a soft employment outlook. In any case, it is hard to imagine stocks continuing to rally if inflation comes in higher than expected. Unlike employment data, bad news on CPI is truly bad news. ② If inflation eases, stocks could soar. While inflation is unlikely to drop below the Fed's 2% target, investors would likely welcome any reading below 3%, seeing it as a sign that CPI growth is slowing down, allowing the Fed to cut interest rates comfortably—or at least hold steady. Even the latter case alone could unwind the rate-hike expectations priced in for later this year, letting investors breathe a little easier. (Jin10 Data APP) Wall Street Journal reporter Nick Timiraos noted that the market will focus heavily on the MoM change in the July inflation data due Wednesday, as a growing number of FOMC members say the inflation readings over the coming months will determine whether their forecast of "inflation falling back to 2% over the next two years" remains achievable without further rate hikes. However, new Fed Chair Warsh has recently dismissed this framework that ties policy-sensitive forecast revisions closely to high-frequency data. He previously stated he sees little practical value in the Fed's current "data-dependent" approach. Nick also mentioned that part of the working group established by Warsh seems aimed at helping build a framework to replace the old one. But until a new framework is clearly defined, the old one still appears to be operating. (Jin10 Data APP) According to CME "Fed Watch": the probability of the US Fed holding rates unchanged in September stands at 52.0%, while the probability of a cumulative 25bp rate hike is 48.0%. For October, the probability of holding rates unchanged is 38.7%, a cumulative 25bp hike 49.0%, and a cumulative 50bp hike 12.2%. (Jin10 Data APP) Bank of America analysts believe that if the US CPI report surprises to the downside, the US dollar could see a relatively stronger reaction, as it would "essentially rule out" a Fed rate hike in September and challenge current market pricing. Analysts including Alex Cohen, Stephen Juneau, and Meghan Swiber wrote in a Tuesday note: "Following the clearly soft June CPI data, we expect the July CPI to be more in line with recent trends, with headline CPI up 0.1% MoM and core CPI up 0.2% MoM." (From Wall Street CN APP) Macro: Today, data including the US July unadjusted CPI YoY, US July seasonally adjusted CPI MoM, US July seasonally adjusted core CPI MoM, US July unadjusted core CPI YoY, and Germany July final CPI MoM will be released. In addition, Tencent will hold its Q2 earnings conference call, MSCI will announce its August index adjustment notice, EIA will publish its monthly Short-Term Energy Outlook, IEA will release its monthly crude oil market report, and OPEC will release its monthly crude oil market report (exact release time TBD, generally around 18-21 Beijing time). Crude Oil: Overnight, oil prices on both sides of the Atlantic rose, with WTI up 1.34% and Brent up 1.8%. Doubts over the prospect of a potential peace deal between the US and Iran fueled concerns that Middle East supply disruptions will persist. The US now expects that the about 600,000 bbl/day of oil supply disruptions caused by the US-Iran war will last until the end of next year, as the conflict continues to impede oil shipments through the critical Strait of Hormuz. According to the EIA's Short-Term Energy Outlook, an average of about 4.9 million bbl/day of oil were transported through the Strait of Hormuz in Q2 this year. That compares with a daily average of 21.6 million barrels in Q4 2025, before the US and Israel attacked Iran. As the conflict enters its sixth month, global consumers again face the risk of higher fuel prices and elevated inflation. The EIA raised its 2026 gasoline and diesel price forecasts by 3.7% and 5.4%, respectively, and lifted its 2027 retail gasoline price estimate by 6.5% from a month ago. The agency also estimated that the scale of Middle East production outages fell to around 5.5 million bbl/day in July, down from 7.5 million bbl/day in June. Outages are expected to widen again in Q3 to an average of 6.6 million bbl/day. The report assumes that recent threats against vessels carrying Saudi crude through the Bab el-Mandeb strait have not caused additional supply disruptions. If this assumption holds, the agency expects that most production and trade activities may not return to pre-war levels until early 2027. (Wall Street CN) The EIA released its Short-Term Energy Outlook (STEO): it forecasts Brent crude prices at $87/bbl in 2026 (previously $82/bbl) and $69/bbl in 2027 (previously $65/bbl). US oil production is projected at 13.8 million bbl/day in 2026 (previously 13.8 million bbl/day) and 14.2 million bbl/day in 2027 (previously 14 million bbl/day). The roughly 600,000 bbl/day of crude oil supply disruptions in the Middle East are expected to persist through the end of 2027. US LNG exports are forecast at 17.4 billion cubic feet per day in 2026 (previously 17.4 billion cubic feet per day) and 18.6 billion cubic feet per day in 2027 (previously 18.6 billion cubic feet per day). The next STEO will be released on September 9. (Wall Street CN) API data showed that last week, US API crude inventories rose by 9.072 million barrels, following a 2.69 million-barrel increase the prior week. API Cushing crude inventories rose by 157.1 barrels, after a 2.358 million-barrel increase previously. API gasoline inventories fell by 1.531 million barrels (compared with a 156,000-barrel build the prior week), while distillate inventories decreased by 596,000 barrels (versus a draw of 118,000 barrels the week before).