[SMM Analysis] Indonesian HRC Low-Price Pressure Persists; Weak Steel Demand Continues Across Southeast Asia China–Indonesia Billet Spread Holds Narrow; Slab Spread Turns Positive In terms of the spread model, the China–Indonesia billet FOB spread has held within a narrow band, averaging -3 USD/t for the month (vs. a year-to-date average of -10). Some traders report that Indonesian billet offers remain relatively low, though the inversion has narrowed from the year-to-date average of -15. On the slab side, a notable recovery is underway: the monthly average spread has turned positive to +3 USD/t, a marked improvement from the half-year average of -30. Data source: SMM Southeast Asian Demand Yet to Rebound; Price Remains the "First Principle" of Order-Taking China's HRC and galvanized exports to Southeast Asia have remained weak recently, with no sign of a demand recovery at the end-user level. Downstream procurement continues to follow a "bearish wait-and-see, buy-as-needed, restock-slowly" rhythm, and order intake hinges heavily on price competitiveness. By regional competitive landscape: Indonesian material continues to move at low prices on the back of integrated industrial-park cost advantages and logistics convenience, while Vietnamese domestic mills have passively followed with covert price cuts to secure orders. By comparison, Chinese HRC offers remain relatively high, leaving exporters caught between volume and price, with no distinct edge in order-taking. By product category: Hot-rolled-substrate galvanized (hot-rolled-based HDG) coil has seen further declines in order intake under continued pressure from low-priced buy-side bids. On the demand side, although pre-stocking by some air-conditioner manufacturers has brought a marginal improvement, the drag from the construction sector remains significant, and a meaningful rebound is unlikely in the near term. On market sentiment: marginal changes are emerging — some HRC sellers have begun signaling intent to hold prices firm. With the month-end settlement window approaching, coil prices are expected to stabilize by end-August. Two key signals warrant close attention ahead: (1) the direction of Hoa Phat's monthly price adjustment for next month, and (2) whether Indonesian mills follow suit in supporting prices. Together, these will determine the pace at which the regional price center repairs in September. Copyright and Intellectual Property Statement: This report is independently created or compiled by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), and SMM legally enjoys complete copyright and related intellectual property rights. The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders. The above rights are strictly protected by relevant laws and regulations of the People's Republic of China, such as the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as applicable international treaties. Without prior written authorization from SMM, no institution or individual may: 1. Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating); 2. Disclose the content of this report to any third party; 3. License or authorize any third party to use the content of this report; 4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses. Data Source Statement: (Except for publicly available information, other data in this report are derived from publicly available information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, brokerage reports, data from the National Bureau of Statistics, customs import and export data, various data published by major associations and institutions, etc.), market exchanges, and comprehensive analysis and reasonable inferences made by the research team based on SMM's internal database models. This information is for reference only and does not constitute decision-making advice. SMM reserves the final interpretation right of the terms in this statement and the right to adjust and modify the content of the statement according to actual circumstances.

The European Commission is proposing a timeline extension for the phase-in of its Emissions Trading System (ETS) free allowance reductions, pushing the full carbon cost integration out to 2038. This regulatory revision would significantly moderate the near-term compliance costs imposed by the Carbon Border Adjustment Mechanism (CBAM). Turkish steel and aluminum exporters would benefit from a more gradual phase-in, protecting their price competitiveness within the European market over the next decade.

According to customs statistics, China witnessed a notable divergent pattern of rising exports and falling imports for die-casting zinc alloy in the first half of 2026. Exports registered exceptional strength, while imports continued to shrink.

[2026 H1 Die-Casting Zinc Alloy Import and Export Summary! Export Growth and Import Decline Pattern Forms] According to customs data, in H1 2026, China's die-casting zinc alloy imports and exports exhibited a pronounced divergent pattern of "rising exports and falling imports." Exports performed extremely strongly, while imports continued to shrink.

Per SMM statistics, the average operating rate of domestic die-casting zinc alloy manufacturers from January to June 2026 dropped by 6.25 percentage points year-on-year versus the same period in 2025, marking an evident slowdown in overall production activity.

SMM July 3 News: Pricing side, a certain operator in the Yangtze River Delta is currently quoting a Huawei 910B server (4×Kunpeng 920 + 8×Ascend 910-B2 64G, 1TB DDR4, NVMe + RoCE v2 networking) at 13,500 yuan/unit/month, equivalent to 2.34 yuan per card per hour. Another operator's 910-B2 specification is quoted at about 15,000 yuan/month, equivalent to 2.61 yuan per card per hour, showing strong price competitiveness in the domestic computing power leasing market. Online public pricing side, the standard 910B specification has a monthly rent of around 22,000 yuan, equivalent to 3.82 yuan per card per hour; however, factoring in annual rental discounts and other considerations, actual transaction prices could have room to decline. Demand and clearance side, SMM has learned that overall sales of the 910-B2 are struggling. Only enterprises with "high vacancy rates and needing server occupancy for digestion" show purchasing interest. A previous flash report indicated that structural obstacles exist in clearing the 910-B2: interested parties' existing equipment is deployed in their own IDCs, and new leased resources need to be integrated into a unified cluster for coordinated scheduling; however, the operator's resources are located in off-site intelligent computing centers, and constrained by equipment attributes, off-site management (equipment relocation) is difficult to implement, directly stalling transaction progress. Regarding the 910C, a certain operator previously had a batch that has been cleared. According to online information, Huawei plans to double the production of the 910C in 2026, with a clear trend of resources tilting toward the C-series. SMM analysis shows that the 910 series presents a differentiated landscape of "tight supply of 910C and sluggish sales of 910B2." The core pain point of the 910-B2 is not price—13,500–15,000 yuan/month is not considered high in domestic computing power—but rather the lack of reasonable absorption scenarios on the demand side. If demand for domestic large-model inference continues to grow in the future, the 910-B2's advantage of being positioned for both training and inference could be repriced; however, in the short term, it remains a buyer's market.