Overall, this week the aluminum processing industry remained in the doldrums under the dual pressure of deepening off-season effects and the aluminum price rebound. Export support faded, and recovery in domestic demand was slow. It is expected that the overall operating rate of the aluminum processing industry will maintain a weak trend in August.

[Silicon Metal Production Cuts Improve Market Sentiment, Futures Trend Narrowly Stronger]: This week, spot silicon metal prices held steady, while futures prices trended stronger. This week, silicon metal futures prices drifted higher. On Thursday, the SI2609 contract closed at 8,425 yuan/mt, up 255 yuan/mt from last Friday. In the spot market, SMM east China oxygen-blown #553 silicon was at 9,000-9,100 yuan/mt, flat WoW, and #441 silicon was at 9,200-9,300 yuan/mt, also flat WoW. During the week, futures prices stopped falling, stabilized, and rebounded. On one hand, production cuts on the silicon metal supply side expanded. Following some capacity reductions at the end of July, new production cut information emerged this week in regions such as Gansu and Ningxia. Silicon metal production in August is expected to drop 9% MoM, and total silicon consumption on the demand side is expected to increase MoM. The fundamentals of reduced supply and increased demand showed significant improvement, and market sentiment warmed, with more bullish views emerging. On the other hand, influenced by downstream PV anti-involution policies, the market trading atmosphere was bullish.

SMM August 6 News: Germanium ingot in the spot market, driven by tight raw material supply, saw its price edge up slightly; leading tungsten enterprises slightly raised their long-term contract quotations. Meanwhile, the US Department of Commerce's Bureau of Industry and Security (BIS) on August 6, 2026, formally published in the Federal Register the interim final rule "Allocation Order and Additional Requirements for Recyclable Critical Minerals and Materials," under the Defense Production Act (DPA) and a presidential determination on July 30, 2026, imposing mandatory domestic sales controls on two types of critical recycled minerals: shredded tungsten scrap and lithium battery black mass. The rule will take effect on August 27, 2026, and remain valid until August 27, 2027, intensifying concerns about tight tungsten raw material supply outside China. As of now, activity in domestic spot tungsten transactions has shown some rebound, and the transaction center for spot tungsten ore orders has edged up slightly. Secondary market sentiment heating up boosted the minor metal sector, which collectively strengthened. As of the close on August 6, the minor metals sector rose by 2.08%. In terms of individual stocks: Yunnan Germanium surged over 8%, while China Tungsten High-Tech, Xianglu Tungsten, Xiamen Tungsten, Haotong Technology, and Orient Tantalum led the gains. Spot Market Germanium Order to View SMM Historical Metal Spot Prices Germanium is a strategic rare metal with a highly concentrated global supply structure. The ongoing implementation of domestic resource controls and frequent geopolitical disruptions outside China, combined with the normal enforcement of export control policies, have collectively reinforced supply tightening expectations. Currently, low-priced supply in the market is scarce, and downstream just-in-time procurement must accept high-priced materials, causing germanium ingot prices to edge up on August 6. Meanwhile, overall stable demand from end-use industries has provided support for the continuous rise in germanium prices this year. Tungsten Order to View SMM Historical Metal Spot Price Trends Currently, the tungsten ore market is operating steadily. A large tungsten enterprise slightly raised its long-term contract quotation, providing some support to market confidence. Meanwhile, the US Department of Commerce's Bureau of Industry and Security (BIS) on August 6, 2026, formally published in the Federal Register the interim final rule "Allocation Order and Additional Requirements for Recyclable Critical Minerals and Materials," under the Defense Production Act (DPA) and a presidential determination on July 30, 2026, imposing mandatory domestic sales controls on two types of critical recycled minerals: shredded tungsten scrap and lithium battery black mass. The rule will take effect on August 27, 2026, and remain valid until August 27, 2027, which has escalated market concerns about tight tungsten raw material supply outside China. As of now, activity in domestic spot tungsten transactions has shown some rebound, and the transaction center for spot tungsten ore orders has edged up slightly. On the domestic front, the market is reassessing the impact of the "Opinions of the National Mine Safety Administration on Standardizing Construction Teams for Metal and Non-Metallic Mine Mining (Stripping)" on the non-coal mining industry. The document requires that by May 1, 2027, for underground mines and by May 1, 2028, for open-pit mines, one of two options must be chosen: ① establish an in-house mining team; ② engage in compliant integrated contracting; fragmentary subcontracting and layered transfers are prohibited, and labor dispatch is strictly banned. Mines failing to complete rectification by the deadline will be ordered to suspend production for rectification. Domestic tungsten mines are primarily underground, with the vast majority of wolframite extracted through underground mining, and some scheelite extracted through both open-pit and underground methods. In tungsten-rich regions such as Jiangxi and Hunan, a large number of small and medium tungsten mines have long been highly dependent on external contracted mining teams. The implementation of the new regulation will impose tangible constraints on tungsten ore supply, production costs, and the operations of small and medium mines. Recently, the spot tungsten ore market has started to become more active, with traders actively entering the market, while downstream smelters continue to maintain a wait-and-see sentiment. Overall, market sentiment has eased amid frequent mining policies and intensive safety inspections in Yunnan, Jiangxi, and Henan. Supply-side disruptions have increased, and if demand shows mild entry, the tungsten market is expected to see a turnaround. Institutional Voices Guojin Securities research report believes: Tantalum: Global tantalum resource supply is highly concentrated and frequently disrupted, while development of AI servers and advanced semiconductor manufacturing is expected to continue driving demand growth in tantalum capacitors, tantalum targets, and other areas. Against the backdrop of ongoing supply constraints and gradual demand release, the tantalum market is expected to shift from supply-driven to supply-demand resonance, pushing the tantalum price center further upward. Related equities: Oriental Tantalum, Guotai Group, Ximei Resources, Xinjinlu, Jiangwu Equipment. Minmetals Securities research report points out: Germanium accounts for 60% of applications in optical communications and satellite photovoltaics, making it an "AI computing power + space energy" metal. With its excellent refractive index control capability and radiation resistance, germanium has become a critical material for AI data center optical interconnects and low-earth orbit satellite photovoltaic systems. Looking at changes in demand structure, from 2020 to 2026, downstream germanium consumption grew from 160 mt to 240 mt, with optical communications' share rising to 40% and satellite photovoltaics' share to 20%, together accounting for 60% of total downstream demand. It is expected that 90% of demand growth contributions in 2027 will come from two high-boom sectors: AI hardware and satellite photovoltaics. Caitong Securities research report shows: With the explosive demand for AI computing power, the market size of indium phosphide, used as a chip substrate material, will continue to expand. Indium resources are scarce and subject to policy restrictions, and product prices have entered an upward channel. High-purity red phosphorus is a critically important semiconductor base material with high purification technology barriers. Against the backdrop of accelerated AI application deployment driving related infrastructure construction, the indium phosphide substrate industry chain is expected to see dual opportunities from demand growth and domestic substitution. Investors are advised to follow related enterprises with resource and technology advantages in indium phosphide, indium, and high-purity red phosphorus. Datong Securities research report shows that minor metals have embarked on an independent upward trend, with supply tightening and strategic attributes driving a valuation re-rating. The rare earth sector is front-running expectations of new regulations, with Myanmar ore imports disrupted and Pr-Nd oxide seeing tight spot supply and soaring prices. In tungsten and antimony, declining ore grades combined with environmental protection-driven production restrictions have widened supply gaps, while demand from photovoltaics and cemented carbides remains firm even in the off-season, with inventories at low levels. AI computing power and the communications industry are driving demand for gallium and germanium, and coupled with export control policies, overseas stockpiling has widened price spreads between Chinese and overseas markets. Scarce resources and financial attributes resonate, and the sector continues to attract capital favor.

Second-life battery cell market remained steady overall this week. Upstream raw material cost support weakened. Lithium carbonate briefly rebounded during the week before its overall center shifted lower. Nickel sulphate futures ran steady, while cobalt sulphate continued its sustained downward trend. The raw material side failed to provide effective support for second-life battery cell prices. The supply side was notably impacted by the MIIT Announcement No. 20 on July 30. The document abolished the previous clauses related to power battery second-life applications, removed over a hundred listed second-life enterprises from the compliance catalog, and explicitly prohibited the use of retired power batteries in two-wheeler EV applications. Driven by the policy, dismantled second-life battery cells accelerated their flow into recycling and smelting channels. Quotations for dismantled supply fell under pressure, with some specifications' prices gradually converging toward scrap recycling prices, signifying a structural reshaping of the pricing logic for second-life battery cells. On the demand side, using second-life batteries in the small power sector was already a violation. The new policy means this gray market has been completely eliminated at the regulatory level. The energy storage scenario has become the core demand support for second-life battery cells. Energy storage demand remained stable, but downstream acceptance of high prices was limited, with procurement primarily driven by rigid demand and insufficient momentum for price increases. In the short term, the market is expected to maintain stable operation.

SMM, August 6: Domestic Bauxite: Supply Disruptions Push Domestic Ore Prices Up, Overall Rise in Long-Term Contract Purchase Prices for Alumina Enterprises Due to the impact of the Shanxi coking coal incident, mining at bauxite mines in major production areas such as Shanxi and Henan was slightly disrupted in the short term, leading to temporary changes in bauxite supply. Meanwhile, alumina prices remained at a relatively high level, and alumina enterprises had a moderate tolerance for rising raw material costs, mostly passively accepting current ore prices in the short term. As of today, the EXW price of bauxite with an Al/Si ratio of 5 and 60% alumina content, excluding VAT, at crushing plants in Shanxi was approximately 530-550 yuan/mt; in Henan, the EXW price was around 500-540 yuan/mt; in Guiyang, the EXW price including VAT was 490-540 yuan/mt; and in Guangxi, bauxite with an Al/Si ratio of 6 and 53% alumina content, excluding VAT, at crushing plants was 320-335 yuan/mt. Imported Bauxite: High Ocean Freight Rates Combined with Rainy Season Disruptions, August Long-Term Contract Prices Under Continuous Discussion As of July 31, data showed that total weekly bauxite port departures from major Guinean ports were 3.8703 million mt, up 800,600 mt from the previous week, with a slight rise in shipments. Due to the renewed intensification of the US-Iran situation, oil prices rebounded again, and ocean freight rates from Guinea to China followed with an upward trend, with market quotations rising to around $35/mt, and costs at various mines rising to varying degrees; coupled with Guinea's policy uncertainty and adverse weather affecting transportation, Guinean mines strengthened control over bauxite shipments. In Australia, as of July 31, total weekly bauxite port departures from major Australian ports were 1.0527 million mt, up 4,600 mt from the previous week, with basically flat shipments; future attention is needed on the shipment pace of Australian mines and changes in port departures. As of July 31, China's bauxite port arrivals were 3.8747 million mt, up 1.1144 million mt from the previous week; continuous monitoring is needed for the impact of high and fluctuating oil prices and ocean freight rates on future port arrival pace and landed costs. In terms of prices, Guinea's bauxite long-term contract quotations for July were between $70-71.5/mt, and August long-term contract prices are still under discussion, but market rumors currently indicate these prices may rise compared to July. Meanwhile, bauxite inventories at China's alumina refineries remained high. This week, these inventories remained relatively stable, with days of inventories of about 94 days, forming certain ceiling pressure on ore prices. For Guinean bauxite, the rebound in transportation costs from Guinea to China, combined with mine cost overlays from shipment reductions driven by the traditional rainy season and bad weather, kept offers from upstream players and traders persistently firm, with slight increases to a high price range of $72-73/mt. China's alumina refineries, impacted by the dual pressures of consistently high inventories and shrinking profits, kept intended transaction prices in the range of $70-71/mt. Serious price divergence existed between upstream and downstream sectors in the bauxite market, with market transactions slowing down and the bargaining stalemate continuing from last week. As of this Thursday, the FOB offer for Guinean bauxite was $38-42/mt, with the average price up $1/mt from last Thursday; the CIF price was reported at $70-74/mt, with the average price up $1/mt from last Thursday; the SMM Imported Bauxite Index price was reported at $71.57/mt, up $0.7/mt from last Thursday. Future bauxite prices will still depend on individual mine cost situations, the impact of Guinea's traditional rainy season and government bauxite export quota policy on overall shipments, and SMM will continue to closely monitor market trends and transaction conditions in the bauxite market. Overall , domestic ore market prices maintained current levels; meanwhile, bauxite inventories at China's alumina refineries remained high (about 94 days), and the bargaining game between buyers and sellers continued. The uncertainty of Guinea's quota policy, the decline in shipments, and the traditional rainy season also exerted certain upward pressure on bauxite costs. In the short term, due to the dual impact of cost and policy leading to reduced shipments, imported ore prices are expected to continue the pattern of high-level bargaining, and focus should then be on the implementation of Guinea's quota policy and ocean freight rate trends.

According to foreign media reports, the DRC government signed an order on June 29 banning the export of copper and cobalt concentrates, with the ban taking effect immediately; projects that meet "strategic" conditions may be granted an export exemption of up to one year upon approval by the Minister of Mines. The DRC had already imposed strict approval procedures on copper and cobalt concentrate exports, with enterprises required to obtain export quotas or exemptions before shipping, so this policy is more a reiteration and tightening of existing controls rather than a sudden, complete halt of exports. According to SMM, the copper concentrates previously exported by the DRC mainly came from the Kamoa-Kakula copper mine, jointly owned by Zijin Mining and Ivanhoe. In 2025, the mine produced copper concentrates containing 388,800 mt of copper, and a supporting 500,000 mt/year blister copper smelter was commissioned at year-end, producing copper anode with a purity of 99.7% that still needs to be shipped overseas for further refining. In Q2 2026, the smelter produced 62,100 mt of copper anode, and as capacity ramps up, the project’s export product is shifting from copper concentrates to copper anode. Given that DRC copper concentrate exports were already subject to approval restrictions and Kamoa-Kakula possesses local smelting capacity, this ban may have limited additional impact on short-term global copper concentrate trade. However, the policy sends a relatively clear signal: as the strategic status of critical minerals rises, resource-rich countries are increasingly focusing on keeping more resource added value and industry chain segments at home through export restrictions, local processing requirements, and tax policies, and the impact of resource protectionism on the global copper raw material supply landscape is continuously rising.