[Full-Scale US-Iran War Risks Climb, Strengthening Short-Term Upward Drivers for Aluminum Prices] Overall assessment suggests that with the volatile Middle East situation, persistent market concerns over interest rate hikes, and continuously recovering supply, the destocking trend will be hard to reverse in the short term. Amid the tug-of-war between longs and shorts, aluminum prices are expected to consolidate and adjust in the near term. Going forward, close attention should be paid to the progress of production resumptions in the Middle East, the trajectory of geopolitical conflicts, LME aluminum ingot inventory changes, and the status of China’s downstream processing orders.

[SMM Cast Aluminum Alloy Morning Comment: Overnight Aluminum Alloy Futures Narrowly Rebounded, Tug-of-War Between Sellers and Buyers Continues in Off-Season] On Tuesday, the ADC12 market remained in the doldrums, with the quotation center edging slightly lower. Fundamentally, the pullback in aluminum prices weakened cost support; meanwhile, the off-season effect continued to intensify, downstream buyers maintained just-in-time procurement, and overall transactions were sluggish.

On July 15, at the , hosted by SMM Information & Technology Co., Ltd. and Shandong Aisi Information Technology Co., Ltd., co-organized by Guangxi Dasheng Power Equipment Co., Ltd., and strongly supported by Solarabic, a Middle Eastern new energy industry media, and the Guangdong Province Industrial and Trade Development Promotion Association, Shenzhen Bendakang Cable Co., Ltd. Chairman Hou Shaofan shared insights on “Copper Spot and Futures Price Fluctuations and the Status Quo of the Wire and Cable Industry”. Macro Insights: Global and Regional Copper Consumption Patterns 2026 Global and China Copper Consumption Overview ► Global copper cathode consumption grows mildly, supply-demand pattern tightens Global copper cathode consumption is expected to reach around 25 million mt in 2026, up 1.6% YoY. NEVs, PV and wind power, and AI computing centers become core drivers. The market will see a supply deficit, with ore supply tightness persisting. ► China's copper consumption leads the globe, driven by emerging fields China accounts for half of global copper consumption. Its apparent consumption is set to exceed 13 million mt in 2026, up around 2% YoY, leading the world. Power grid investment, new energy, and AI data centers are the core drivers. Demand in emerging sectors is robust, while growth in traditional sectors is slowing down. South China: A Growth Pole Driven by Export-Oriented and Emerging Momentum South China, especially Guangdong Province, as one of the core engines of China's manufacturing, exhibits a distinct "export-oriented" and "emerging momentum-driven" copper consumption structure. It closely relies on downstream industries such as electronic information and NEVs, with a notable export orientation, making it a key growth pole for domestic copper consumption. Regional Pattern: An Analysis of the Industrial Gap Between South China and East China North-South Industrial Divergence: Five Core Gaps Between South China and East China's Wire and Cable Industries ► In-depth Analysis of Regional Industrial Development Models and Core Competitiveness From five dimensions – enterprise structure, risk management, industry chain support, client resources, and industry ecosystem – the current development status of the wire and cable industries in the two regions is compared, revealing the underlying logic and development pain points behind the industrial divergence. Industry Growing Pains: In-depth Analysis of Three Core Pain Points Pain Point 1: Party A's "Imposed Terms" – Imbalanced Bargaining Power 01 Excessively long payment cycles; 02 "Back-to-back" payment terms shifting risk; 03 High security deposits squeezing capital; 04 Fixed prices disregarding cost fluctuations. Pain Point 2: Wild Swings in Copper Prices – The Risk of "High-Cost In, Low-Price Out" Losses 01 Two-way risk: both sharp rises and falls put pressure on; 02 Transmission lag: the core crux of losses; 03 Breakthrough solution: using financial instruments to build a solid defense. Pain Point Three: Industry Price Involution — the Meager Profit Dilemma of Being "Cheaper than Vermicelli" ►01 Fierce Price War: Survival Struggle in the Quagmire of Meager Profits The industry presents a pattern of “big industry, small enterprises,” with CR10 below 12%, over 90% being small and medium-sized enterprises, and the market highly fragmented. The price war in the low and mid-end cable sector is intensifying, even giving rise to the industry joke of being “cheaper than vermicelli,” directly resulting in the industry’s average net profit margin falling below 3%. Small and medium-sized enterprises are trapped in a survival dilemma with meager profits, or even negative profits. ►02 Vicious Cycle: The Industry Paradox of Bad Money Driving Out Good Low-price competition forces some enterprises to cut corners, causing product quality and safety risks. More seriously, substandard cable products directly threaten public property safety and even pose significant risks to the lives of the public. Entrepreneurs (this great group of people) who originally immersed themselves in industry with a craftsman’s spirit and aspired to contribute to social and economic development, once they breach the quality bottom line in the low-price involution, not only harm users and society but ultimately violate the law, end up imprisoned, and cause an irreparable tragedy. Meager profits prevent enterprises from investing in R&D and innovation, trapping them in a vicious cycle of “low price—low quality—even lower profits.” Meanwhile, the industry’s low-end capacity is severely surplus, while the high-end market has long been dominated by foreign brands, with technical barriers difficult to overcome. Future Outlook: Industry Chain Synergy and Development Trends Grasp the Industry Pulse · Co-Build a Synergistic Ecosystem · Open a New Chapter of Cooperation Based on the new stage of industrial development, we start from three dimensions—trend analysis, synergistic co-construction, and cooperation opportunities—to analyze the future direction of the copper wire and cable industry. The aim is to build industry consensus, promote deep integration of the upstream and downstream, and through institutional innovation and resource integration, build a safe, stable, and win-win new pattern of industrial development. 01 Industry Trends: Growth and Standardization Demand side benefits from the dual drivers of new energy and new infrastructure, with market growth continuously released; risk control side sees derivative tools becoming standard, with bare position models gradually phased out; the industry landscape is accelerating toward concentration among large-scale, compliant leading enterprises, with the Matthew effect prominent. 02 Synergy Initiatives: Shared Responsibility and Joint Governance We advocate for the industry-wide adoption of a copper price-linked adjustment mechanism to share price fluctuation risks; collaborate with financial institutions to promote the “option hedging + performance guarantee” model to build operational defenses; establish an industry alliance to unify pricing floors, resist low-price involution, and share risk control and market resources. 03 Cooperation Invitation: Openness and Win-Win Provide stable batch supply of national standard cables for PV, power grid, and new energy supporting applications; connect with professional institutions to offer copper option price insurance consulting and financial guarantee services; sincerely invite copper enterprises, financial institutions, and EPC contractors to engage in long-term strategic joint ventures to jointly create industry value. In addition, they shared the breakthrough path: Bendakang practical cases and solutions from such perspectives as Bendakang Cable—from scale leadership to value guidance; financial innovation practice: the "option price protection" policy, empowering industry chain win-win; practical reference: Bendakang's combined strategy of "option price protection + performance bond"; innovation engine: a high-end and intelligent product matrix; smart manufacturing upgrade: digitally driven lean production practice, etc.

On July 14, China Northern Rare Earth's stock price rose. As of the close on July 14, it was up 2.18% to 39.83 yuan per share. In market news, China Northern Rare Earth released its semi-annual earnings forecast, showing: Based on preliminary estimates by the company's financial department, net profit attributable to owners of the parent for H1 2026 is expected to be between 1.98 billion and 2.06 billion yuan, representing an increase of 1.05 billion to 1.13 billion yuan compared with the same period last year (as per statutory disclosure data), up 112.74% to 121.33% YoY. Excluding non-recurring items, net profit attributable to owners of the parent for H1 2026 is expected to be between 1.99 billion and 2.07 billion yuan, an increase of 1.093 billion to 1.173 billion yuan YoY, up 121.90% to 130.82%. The main reasons for the expected profit increase in the period are: In H1 2026, the company served the national rare earth resource strategy and fully implemented the requirements for safety control of the rare earth industry chain. Affected by factors such as supply constraints on the raw material side and the release and sustained growth of downstream demand at multiple points, rare earth product prices generally strengthened and consolidated. The company focused on its annual production and operation targets, carried out integrated planning and comprehensive measures, strengthened comprehensive budget management, and worked on cost reduction, quality improvement, and efficiency gains in a coordinated manner. It scientifically organized production scheduling, intensified marketing operations, deepened reform and innovation, and strengthened group management and risk control. The company advanced the deep integration of professional management, lean management, and 5S management to a high standard, promoted key project construction, and accelerated the development of new quality productive forces through management and R&D innovation. With strong value creation capabilities across the industry chain and core competitiveness, the company provided solid support and assurance for achieving good operating results. The company refined the organization and operation of production scientifically, with production volumes of rare earth smelting and separation products, rare earth metal products, and new rare earth materials all reaching historical highs for the same period; the subsidiary Inner Mongolia Northern Rare Earth Magnetic Materials Co., Ltd. achieved operating revenue of approximately 9.5 billion yuan in H1, up about 107% YoY, maintaining growth for three consecutive years; the subsidiary Inner Mongolia Xi'ao Ke Hydrogen Storage Alloy Co., Ltd. officially put its first batch of 1,000 hydrogen-powered two-wheelers into operation in Baotou, with a cumulative safe driving mileage of 170,000 kilometers, demonstrating notable project success. The company persisted in benchmarking against internal and external excellence, tapping into internal potential, and strengthening refined management, leading to significant improvements in multiple economic and technical indicators. Targeted measures were adopted for each business segment: In smelting and separation, the division overcame new cost changes brought by rising prices of raw and auxiliary materials, effectively managed cost fluctuations, scientifically organized production scheduling, and ensured new product supply demands. In rare earth metals, leveraging the concept of lean production as a starting point, digital and intelligent methods were further used to strengthen on-site process operation management, driving new breakthroughs in economic and technical indicators such as quality and material ratios. In new rare earth materials and applications, the segment fully utilized newly added capacity advantages, precisely aligned with client needs, and made new progress in promoting sales through production. Deepening industry chain synergy, the Company solidified the foundation of downstream client cooperation while ensuring stable product supply. The Company closely tracked market demand, strengthened marketing management, optimized sales structure, client credit evaluation, and product account period management, adjusted and shortened account periods by category, secured the fundamental base with long-term agreement orders, and met differentiated market demand through retail. Sales of rare earth metals and magnetic materials rose steadily, achieving full coverage of top-tier magnetic material players; sales of lanthanum-cerium products increased YoY, further digesting historical inventory; sales of polishing materials increased YoY; 5 new equipment items and 20 customized and distinctive new products were developed, continuously expanding product application scenarios. Key project construction advanced efficiently, continuously enhancing intelligence and informatization levels. The first phase of the rare earth green smelting upgrade and transformation project has been put into production, with the entire production line connected; the second phase construction is progressing in an orderly manner. Projects across the industry chain, including mergers and acquisitions, restructuring, joint ventures, cooperation, and capacity expansion and production increase for rare earth metals, magnetic material alloys, magnets, and secondary resource utilization, are accelerating toward implementation. The secondary resource utilization project achieved volume increase and quality and efficiency improvement; the Company accelerated its pace of digital and intelligent transformation, with digitalization and intelligence levels continuously improving. Regarding the 2026 operating plan, China Northern Rare Earth announced in its 2025 annual report: 2026 is the opening year of the 15th Five-Year Plan and a crucial year for the Company to advance high-quality development and accelerate the building of a world-class rare earth leader. The Company will uphold Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guide, take fostering a strong sense of community for the Chinese nation as the main theme, fully implement the spirit of the 20th CPC National Congress and all previous plenary sessions of the 20th CPC Central Committee, and translate into action the important speeches and instructions of General Secretary Xi Jinping on Inner Mongolia and the rare earth industry, as well as the decisions and plans of higher-level authorities such as the Inner Mongolia Autonomous Region and Baotou City. Adhering to the general principle of pursuing progress while ensuring stability, the Company will fully, accurately, and comprehensively implement the new development philosophy, bravely shoulder its responsibilities and missions, steadily improve the quality and efficiency of operations, build an industry system covering all elements and categories, promote the deep integration of scientific and technological innovation with industrial innovation, accelerate the pace of deepening reforms, enhance modern governance capabilities, continuously strengthen core functions and enhance core competitiveness, accelerate the realization of a world-class rare earth leader, ensure a good start and solid beginning for the 15th Five-Year Plan, and make new and greater contributions to the construction of the "Two Rare Earth Bases." The main production and operation targets for 2026 (these targets are merely planned objectives, and there is uncertainty as to whether they can ultimately be achieved. They do not constitute a substantive commitment by the Company to investors. Investors and relevant parties should maintain sufficient risk awareness and understand the differences between plans, forecasts, and commitments): achieve operating revenue of 44 billion yuan or more, and total profit of 3.5 billion yuan or more. While achieving operational targets, employee compensation is linked to enterprise economic performance and labor productivity in the same direction. Looking back at the price trend of Pr-Nd oxide in H1, SMM data show that it started the year at 609,000 yuan/mt, then hit a H1 high of 890,000 yuan/mt by the month-end of February, marking a cumulative increase of up to 46.7% from the beginning of the year. The core driver came from the supply side: spot Pr-Nd oxide remained tight, futures surged sharply, suppliers held back from selling amid strong bullish sentiment, and metals enterprises were stockpiling ahead of holidays, all of which pushed prices up rapidly. At the same time, disruptions in Myanmar ore supply, domestic separation plants resuming production slower than expectations, and boosted market sentiment formed a combined effect of "undersupply + bullish holdback." However, during March-April, affected by bearish supply-side news and lackluster demand from end-user traditional sectors, the Pr-Nd oxide price quickly pulled back to around 700,000 yuan/mt. That said, the rise in China Northern Rare Earth's concentrate prices in April, supply support from production halts at separation plants, and the release of export orders under the export control extension window jointly drove prices to rebound slightly. Starting in May, the downstream gradually entered the off-season, and purchasing became more cautious. It was not until late June that the Pr-Nd oxide price was boosted again by factors including the official implementation of the Mineral Resources Law Implementation Regulations, which designates rare earths as strategic minerals, and production cuts at scrap recycling enterprises due to tax invoice issues, rebounding to 7.425 billion yuan/mt on June 30. According to SMM quotes, as of July 14, the average price of Pr-Nd oxide was 762,500 yuan/mt, down 0.33% from the previous trading day. Currently, influenced by the intense tug-of-war between upstream and downstream, the oxide market is experiencing significant price fluctuations, while the metals market is relatively sluggish in terms of inquiries, with suppliers holding their quotes relatively firm and showing no obvious adjustments. In the short term, as some raw ore separation and scrap recycling plants undergo production cuts and suspensions, oxide suppliers' willingness to sell at low prices is weak, which is expected to drive Pr-Nd product prices to drift higher. Recommended reading:

[SMM Magnesium Market Analysis: Semi Coke Losses Raise Smelting Costs; China’s Magnesium Ingot Comprehensive Cost Rose MoM in June] At the end of May, a safety accident at the Qinyuan coal mine directly tightened the supply of raw coal in the region, rapidly driving up market coal prices. There was a significant time lag in the transmission of semi coke prices, and losses on production at semi coke plants intensified, substantially increasing the energy raw material cost for primary magnesium smelting. Enterprises mitigated fixed expenses such as plant and equipment depreciation by raising capacity, which only slightly alleviated cost pressure. The incremental cost impact from higher energy prices was stronger, pushing up the industry’s overall smelting cost. Processing profits at upstream plants continued to be squeezed, and profit margins narrowed for most enterprises.

[H1 2026 Silicone Market Analysis and Outlook: Short-term Positives Drive a Retreat after Rapid Rise; Subsequent Focus on Supply and Demand Changes Needed] In H1 2026, China's silicone market was affected by the resonance of multiple factors—the cancellation of export tax rebate policies, industry self-discipline emission reductions, raw material cost fluctuations, and the end-user seasonal switch between off-peak and peak periods. The overall market trended in an inverted V-shape, strengthening first and then weakening, retreating after a rapid rise. The market pattern shifted from phased supply-demand tightness in Q1 to a weak pattern of ample supply and sluggish demand in Q2.