SMM News, May 26: Metals market: As of the midday close, domestic base metals mostly fell. SHFE copper dropped 0.3%. SHFE aluminum edged down. SHFE lead fell 0.15%, and SHFE zinc rose 0.52%. SHFE tin gained 1.37%. SHFE nickel declined 1.08%. In addition, the most-traded casting aluminum futures fell 0.26%, and the most-traded alumina futures rose 5.08%. The most-traded lithium carbonate futures dropped 1.83%. The most-traded silicon metal futures fell 0.52%. The most-traded polysilicon futures rose 0.53%. Ferrous metals mostly fell. Iron ore dropped 1.82%, rebar fell 1.99%, hot-rolled coil declined 1.81%, and stainless steel edged down 0.03%. Coking coal and coke: the most-traded coking coal contract rose 6.05%, and the most-traded coke contract gained 2.54%. Overseas base metals, as of 11:45, LME metals mostly rose. LME copper gained 0.26%. LME aluminum edged up. LME lead rose 0.1%. LME zinc climbed 0.75%. LME tin rose 1.3%. LME nickel fell 1.09%. Precious metals, as of 11:45, COMEX gold rose 0.46%, and COMEX silver gained 1.4%. Domestic precious metals: the most-traded SHFE gold contract edged up 0.07%, and the most-traded SHFE silver contract dipped 0.02%. In addition, as of the midday close, the most-traded platinum futures fell 0.44%, and the most-traded palladium futures dropped 0.52%. As of the midday close, the most-traded Europe containerized freight index contract rose 0.41%, closing at 2,931.5 points. As of 11:45 on May 26, midday futures performance (selected): Spot Prices and Fundamentals Copper: Today in Guangdong, #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 160 yuan/mt, unchanged from the previous trading day; standard-quality copper was quoted at a premium of 80 yuan/mt, down 20 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 10 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 105,010 yuan/mt, down 735 yuan/mt from the previous trading day, and the average price of SX-EW copper was 104,900 yuan/mt, down 745 yuan/mt from the previous trading day. Spot market: Guangdong inventory ended a four-consecutive-day increase and resumed declining today... Macro Front China: [MOFCOM: China will attract more multinational companies to locate R&D and high-end manufacturing operations in China] The State Council Information Office held a press conference on the 2026 Qingdao Summit of Multinational Corporation Leaders. Vice Minister of Commerce Yan Dong stated that China will optimize the investment structure and activate new momentum for foreign investment. The Ministry of Commerce issued and implemented the 2025 edition of the *Catalogue of Industries for Encouraging Foreign Investment*, with a net increase of 205 encouraged categories, focusing on areas such as advanced manufacturing, modern services, high-tech, and energy conservation and environmental protection, providing policy support for foreign-invested enterprises to expand into high-end and emerging fields. Going forward, more multinational companies will be attracted to place their R&D and high-end manufacturing operations in China, optimizing the structure of foreign investment in China and strengthening innovation momentum. [Huang Guanglie, Deputy Secretary General of Guangzhou Municipal Government: Confident in Further Consolidating the Stabilizing and Improving Trend of Guangzhou's Property Market] On May 26, Guangzhou held a press conference on the series of supporting documents for the *Implementation Opinions on Further Promoting the Stable and Healthy Development of the Real Estate Market*. Huang Guanglie, Deputy Secretary General of Guangzhou Municipal Government, stated that going forward, Guangzhou will continue to improve the two major systems of the housing market and housing security, and continuously optimize property market regulation measures. Departments including the Municipal Bureau of Planning and Natural Resources, the Municipal Bureau of Housing and Urban-Rural Development, and the Municipal Housing Provident Fund Center have issued supporting detailed rules on matters such as land supply, special subsidies for "selling old and buying new," and "commercial-to-provident fund loan conversion." Huadu District responded swiftly by launching the "Huadu Eight Measures" as specific initiatives. State-owned enterprises represented by Guangzhou Anju Group are accelerating the launch of pilot work on the acquisition and revitalization of second-hand housing. It is believed that as these detailed rules are fully implemented and all sectors work in coordination, we are confident in further consolidating the stabilizing and improving trend of Guangzhou's property market. (Jin10 Data APP) [Guangzhou: Removing Restrictions on "Only Housing in the City" and the Number of Provident Fund Loan Uses] On May 26, 2026, the Guangzhou Housing Provident Fund Management Center issued the normative document *Implementation Measures for Converting Commercial Personal Housing Loans to Housing Provident Fund Personal Housing Loans in Guangzhou (Provisional)*. It proposed expanding the scope of commercial loan banks, removing the restriction that "the original commercial loan bank must be a housing provident fund entrusted bank," and allowing commercial loans from non-housing provident fund handling banks to be converted into pure housing provident fund loans. Requirements on loan types, terms, and provident fund contribution periods were relaxed. For commercial-to-provident fund conversion handled by housing provident fund loan handling banks, applicants whose convertible provident fund loan amount is not enough to fully repay the principal and interest of the original commercial loan may choose to convert to a combined loan. The requirement for opening an account and accumulating housing provident fund contributions was reduced from "60 months" to "36 months." The original commercial loan disbursement period was shortened from "more than 3 years" to "more than 2 years." The restrictions on "only housing in the city" and the number of provident fund loan uses were removed, no longer requiring that "the mortgaged property is the applicant's family's only housing in the city," and supporting applications for first and second improved housing. Applicants who have "never used or have only used housing provident fund loans once" are also eligible for the commercial-to-provident fund loan conversion, and are no longer restricted by the "never used housing provident fund loans" requirement. (Jin10 Data) [Xiongan New Area: Maximum Housing Provident Fund Loan Raised to 800,000 Yuan] The Xiongan New Area Housing Management Center issued a notice on optimizing and adjusting housing provident fund withdrawal and loan policies. According to the notice, for contributing employees who meet the rental withdrawal conditions in the new area but have not filed their housing rental contracts, the maximum annual withdrawal amount has been raised to 17,000 yuan; for those who have filed their housing rental contracts via the "Hebei Xiongan New Area Housing Rental Information Service Platform," the maximum annual withdrawal amount has been raised to 25,000 yuan. For contributing employees who purchase self-occupied housing in the new area and apply for a housing provident fund loan, the maximum loan amount has been raised to 800,000 yuan. For employees of Beijing-relocated entities whose housing provident fund contributions are based in the new area and who purchase self-occupied housing in the new area, the maximum housing provident fund loan amount has been raised to 1.2 million yuan. For multi-child families with two or more children who purchase self-occupied housing in the new area and apply for a housing provident fund loan, the maximum loan amount is increased by 200,000 yuan. Employee families who have only one fully repaid housing provident fund loan record nationwide and own no property in the new area are eligible for the first-home housing provident fund loan policy. (Xiongan Provident Fund) [PBOC's Reverse Repo Operations Result in a Net Injection of 248.5 Billion Yuan on the Day] The PBOC conducted 249 billion yuan of 7-day reverse repo operations today. As 500 million yuan of 7-day reverse repos matured today, this resulted in a net injection of 248.5 billion yuan on the day. US dollar: As of 11:45, the US dollar index rose 0.07% to 99.05. US Secretary of State Rubio, who concluded his visit to India, today (May 26) commented to the media on the so-called "self-defensive strikes" carried out by US forces this morning across multiple locations in southern Iran, stating that the Strait of Hormuz "must remain open, no matter what." Rubio said, "The (Hormuz) Strait must be open; it will eventually open in some way; it must be open." He also stated that the agreement expected to be reached with Iran may still require "a few more days" of negotiations over wording. (CCTV International News) According to CME's "FedWatch": the probability that the US Fed will keep interest rates unchanged through June is 99.9%, with a 0.1% probability of a cumulative 25-basis-point rate cut. The probability that the US Fed will keep interest rates unchanged through July is 90.3%, with a 9.6% probability of a cumulative 25-basis-point rate hike and a 0.1% probability of a cumulative 25-basis-point rate cut. (Jin Shi Data) Other currencies: Bank of Japan Deputy Governor Himino Ryozo emphasized that timely policy adjustments were crucial for maintaining market participants' confidence amid the recent sell-off in Japanese government bonds. Himino Ryozo said on Tuesday: "Regarding monetary policy and long-term interest rates, we believe it is very important to adjust the degree of monetary easing at an appropriate pace in response to future economic, price, and financial conditions, thereby maintaining market confidence that inflation will be properly controlled." The remarks appeared to suggest that the BOJ was open to raising interest rates in the near term. Himino Ryozo and other officials, including BOJ Governor Ueda Kazuo, recently emphasized the need to maintain a responsible attitude toward financial markets, and the market widely expected the BOJ to raise interest rates at its meeting next month. Meanwhile, Japanese Prime Minister Takaichi Sanae last week subtly released signals that she hoped the BOJ would maintain policy stability, as she was trying to mitigate the economic impact of the Iran war. Himino Ryozo said: "The BOJ will strive to implement policy appropriately to maintain such market confidence and achieve the price stability target in a sustainable and stable manner." (Jin Shi Data) DBS Group Research FX strategist Philip Wee said the Reserve Bank of New Zealand was very likely to keep interest rates unchanged at its Wednesday meeting, but the overall stance would be hawkish. "The RBNZ may prioritize above-target inflation over weak GDP growth and high unemployment." Wee also said that a rate hike on Wednesday could not be ruled out, and therefore NZD/USD was expected to return to the upper half of this year's 0.5700–0.6100 trading range. (Jin Shi Data) Data: Data to be released today include the UK May CBI retail sales balance, US March FHFA House Price Index MoM, US March S&P/CS 20-City Composite Home Price Index YoY (non-seasonally adjusted), US May Conference Board Consumer Confidence Index, and US May Dallas Fed Business Activity Index. In addition, attention should also be paid to Xiaomi Group's earnings call. Crude oil: As of 11:45, oil prices in the two markets diverged, with WTI down 5.33% and Brent up 1.62%. The notable divergence between the two reflected a high degree of uncertainty in the market's assessment of the situation. (Wallstreetcn) US Central Command said the US and Israel struck multiple Iranian vessels in the Strait of Hormuz, hours after Trump said negotiations with Tehran on an interim deal were making progress. The renewed fighting underscored the fragility of the US-Iran ceasefire agreement. The market is closely watching strikes that could derail negotiations. (Jin10 Data) According to Al Arabiya, a draft US-Iran agreement has been reached. The draft agreement permits free passage through the Strait of Hormuz and the clearing of mines; navigation through the Strait of Hormuz must be restored within 30 days. The agreement stipulates that the US commits to easing the blockade on Iranian ports; the agreement allows Iran to sell and export oil; the agreement will provide specific sanctions exemptions for Iranian oil exports, and will consider phased easing of sanctions on Iranian oil, with specifics depending on Iran's implementation of its commitments. The agreement stipulates the continuation of nuclear talks to reach a long-term consensus. Spot market overview: ► ► ► ► ► ► ► ► ►

[SMM Daily Comment: Bullish and Bearish Factors Intertwined, NPI Market Continued to Move Sideways] May 26, the SMM upstream sentiment index for high-grade NPI was 3.09, down 0.03 MoM, while the downstream sentiment index for high-grade NPI was 2, flat MoM.

[SMM Zinc Morning Comment] Overnight, LME zinc was closed due to Memorial Day. Considering expectations of easing geopolitical conflicts, LME zinc is expected to mainly fluctuate at highs during the day.

[SMM Cast Aluminum Alloy Morning Comment: Weak Supply-Demand Pattern for Aluminum Alloy Continues, Short-Term Sideways Movement Expected] Last Friday, the ADC12 market overall maintained a stable-price wait-and-see pattern. Market sentiment was cautious, and the SMM ADC12 price held steady from the previous day at 23,700 yuan/mt.

SMM May 25 News: Driven by rising market expectations for coal policy changes and concerns over tightening supply, bullish sentiment was released in a concentrated manner. Coking coal and coke futures hit the daily limit up on May 25 and remained locked at the limit. As of the close of the daytime session on May 25, the most-traded coking coal and coke futures contracts were locked at the daily limit with gains of 7.97% and 7.99%, respectively. The limit-up moves in coking coal and coke lifted the broader ferrous metals and related raw material sectors, with the ferrosilicon continuous most-traded contract rising 3.97% on May 25. Supported by the strengthening prices of raw materials such as coal and ferrosilicon, magnesium ingot prices moved higher, with magnesium ingots gaining over 2% in a single day on May 25. Bullish sentiment in the market had already begun to emerge last Sunday. Rising Coal and Ferrosilicon Prices Highlight Cost Support for Magnesium Ingots Spot market: Primary magnesium smelting is highly dependent on raw materials such as coal and ferrosilicon, with a clear cost transmission chain. As coal prices continued to rise, cost pressure on upstream magnesium enterprises increased significantly. Some upstream enterprises reported that they had already raised their quotations to 16,700 yuan/mt last Sunday. On May 25, although morning inquiries were lukewarm, supported by the rigid cost underpinning from rising raw material prices, most producers still held firm at 16,700 yuan/mt, with a strong willingness to hold prices firm. By region, magnesium ingot prices across China were generally raised by 350 yuan/mt. Mainstream quotations for magnesium ingots (9990) in Fugu, Shenmu, and Inner Mongolia were 16,700 yuan/mt, while quotations in Wenxi were 16,900 yuan/mt. Currently, relevant policies for the coal mine market have not yet been officially implemented. The industry as a whole maintains a cautious wait-and-see stance, and the pace and impact of subsequent policy implementation deserve close attention. Outlook Looking at this round of magnesium price increases, the core driving factor was the rise in raw material costs such as coal and ferrosilicon, representing a typical cost-push price increase rather than one driven by improvements in supply-demand fundamentals. From the current magnesium market fundamentals perspective, the overall oversupply pattern has not shown significant improvement. Although downstream demand demonstrated a certain degree of resilience, end-use demand showed no notable incremental growth, while supply within the market also showed no obvious contraction, leaving fundamentals lacking strong upward support. Overall, the short-term raw material price increases effectively underpinned magnesium prices, supporting magnesium prices to hold up well. However, constrained by the weak supply-demand pattern, the rebound room for magnesium prices in this round is relatively limited. Going forward, it is essential to continue closely monitoring price fluctuations in coal and ferrosilicon raw materials and the implementation of coal mine-related policies, while paying close attention to the release of downstream demand and changes in market supply, in order to assess the pace and upside room for subsequent magnesium price movements. Recommended Reading:

Today, the most-traded BC copper contract 2606 opened at 93,030 yuan/mt, dipped to 92,550 yuan/mt in early trading before the center fluctuated upward, touching a high of 94,030 yuan/mt after the day session opened, then the center moved lower, ultimately closing at 93,660 yuan/mt, up 0.68%. Open interest stood at 5,272 lots, down 2,753 lots from the previous trading day, while trading volume reached 9,164 lots, up 2,407 lots from the previous trading day. On the macro front, the US-Iran agreement has not yet been finalised. Trump stated that the deal was largely reached but there was no rush to sign, demanding Iran give up highly enriched uranium. Israel opposed the agreement, preparing for high-intensity operations and demanding the dismantlement of Iran's nuclear facilities. The next round of talks may be held on June 5. Market expectations for a US-Iran deal warmed, exerting a bullish impact on copper prices. Fundamentals side, supply side, arrivals of imported sources remained relatively low, domestic source arrivals edged up, and the tight supply pattern improved marginally. Demand side, consumption was suppressed by rising copper prices, with overall performance remaining weak. Inventory side, as of Monday, May 25, SMM copper inventories in mainstream regions nationwide increased by 2,300 mt WoW to 245,200 mt, with total inventories up 105,500 mt compared to the same period last year at 139,700 mt. SHFE copper 2606 contract closed at 105,520 yuan/mt. Calculated based on the BC copper 2606 contract at 93,660 yuan/mt, its after-tax price was 105,836 yuan/mt. The price spread between SHFE copper 2606 contract and BC copper was -316 yuan/mt, showing an inversion that narrowed from the previous day.