Battery-grade lithium carbonate stood at RMB 139,000/mt as of August 4, down 16.27% month-on-month, continuing a weak downward trend even as fundamentals strengthen a "strong reality, weak price" divergence now driving the market. On the demand side, NEV and energy storage sectors remain robust, with domestic battery production schedules up 6-8% MoM in August and power battery demand steadily recovering, keeping utilization rates and rigid demand support above market expectations. On the supply side, overseas disruptions policy controls and geopolitical tension in lithium-rich countries, extreme weather in Argentina, and concentrated maintenance among domestic lithium salt producers continue to limit near-term supply growth. Inventories have now declined for 12 consecutive weeks, with total social inventories falling to 114,300 mt as of the week ending July 30 and the pace of destocking accelerating. Downstream and distributor stocks are being steadily worked off, while only upstream smelters show slight accumulation, easing inventory pressure across the industry. Despite this tightening spot picture, market funds have overdrawn pessimistic long-term expectations, with pricing logic now driven by forward supply demand outlook rather than current conditions. As H1 results from lithium battery producers confirm earlier optimism on energy storage demand, capital has rotated toward bearish positioning, focused on doubts over the sustainability of high-growth energy storage installation demand and expectations of an accelerated release of new production capacity pushing the market toward consensus on a looser future supply demand balance. SMM view: Lithium carbonate is likely to maintain a "near-term strong, far-month weak" divergence rather than a unilateral trend. Continued destocking and resilient downstream demand should firm up spot prices as pessimistic sentiment gradually unwinds, while far-month contracts stay pressured by expectations of loose future supply and elevated industrial chain valuations. Close attention to supply-demand shifts is still warranted.

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.

【SMM Weekly Magnesium Inventory Briefing】This week, the inventory of primary magnesium smelting enterprises remained basically flat month-on-month, with a clear divergence in inventory structure. Small and medium-sized smelting enterprises actively shipped goods in line with market prices, keeping their inventory at a low level; some large smelters showed strong reluctance to sell, leading to a noticeable rise in their inventory. On the whole, the current output of primary magnesium is at a low level, easing supply pressure. Meanwhile, with downstream manufacturers and traders entering the market for procurement, there has been no overall inventory accumulation in the market.

Refined Cobalt: The decline in spot prices for refined cobalt widened this week, with overall market sentiment weakening. On the supply side, mainstream smelters lowered their ex-factory quotations to 340,000 yuan/mt, while other small and medium-sized smelters largely suspended external quotations due to ongoing loss pressure. On the demand side, downstream enterprises remained in their summer break cycle, with limited purchase willingness and only maintaining small restocking for rigid demand. The price fall this week was mainly sentiment-driven, as overseas spot and futures quotation platforms also reduced their prices, causing previously relatively firm prices outside China to show signs of softening and significantly weighing on Chinese market sentiment. Coupled with the continued weakness in China's cobalt salt and intermediate product prices, bearish sentiment gradually intensified, and some previously wait-and-see suppliers began selling off, further intensifying the downward price pressure. Overall, the current period is the traditional consumption off-season for cobalt, with limited demand-side support, and together with weakening overseas prices and a shift to bearish market sentiment, prices are likely to remain in the doldrums in the short term. Cobalt Intermediate Products: The cobalt intermediate products market remained sluggish this week, with actual transactions still limited. Recently, some miners initiated intermediate product tenders multiple times, but due to the large divergence in price expectations between upstream and downstream, no actual deals were reached in the tenders. The latest tender had an indicative price of about $21-21.5/lb. Affected by the continued weakness in cobalt salt and refined cobalt prices, the psychological price levels of downstream smelters and traders for raw materials further pulled back to around $18-19/lb, with some enterprises only able to accept $17/lb. The gap with miners' quotations continued to widen, making actual transactions difficult to materialize. In the short term, although miners have the intention to hold prices firm, downstream demand support is insufficient, and the tug-of-war between buyers and sellers persists. A price recovery still needs to wait for the recovery of actual downstream demand. Cobalt Sulphate: The cobalt sulphate market remained sluggish this week, with the stalemate between upstream and downstream unchanged. On the supply side, primary smelters using intermediate products and MHP as raw materials, supported by costs, continued to hold their quotations firm above 80,000 yuan/mt; mainstream recyclers' quotations remained at about 95% of SMM's low-range price, while a few enterprises with higher willingness to sell lowered their quotations to 70,000-73,000 yuan/mt, with even a small number of extremely low prices reported below 70,000 yuan/mt. The demand side remained weak, with downstream procurement target prices continuing to fall, and some extreme inquiries pressing below 70,000 yuan/mt. In the short term, cobalt sulphate prices still face some downward pressure, and a stabilization and recovery in the market will need to wait for the release of concentrated downstream restocking demand. Cobalt Powder: The cobalt powder market continued its weak trend this week, with actual transactions remaining sluggish. On the supply side, mainstream producers maintained their quotations in the range of 440,000-460,000 yuan/mt, while some actual transaction prices had dropped to 430,000-440,000 yuan/mt. Low-priced offers in the trading segment increased, further lowering the market's psychological price level. On the raw material side, cobalt carbonate prices were under pressure, with some quotations already falling below the 200,000 yuan/mt mark, pushing market trading to near stagnation and lacking effective transaction guidance. Downstream cemented carbide enterprises were still constrained by end-user orders, with no improvement in raw material consumption speed, and their procurement pace remained slow. Apart from long-term contract orders, spot order transactions were relatively limited. In terms of market sentiment, participants mostly adopted a wait-and-see attitude, generally believing that it would be difficult to see significant improvement in the short term. SMM New Energy Research Team Wang Cong 021-51666838 Ma Rui 021-51595780 Feng Disheng 021-51666714 Lyu Yanlin 021-20707875 Xiao Wenhao 021-51666872 Zhang Haohan 021-51666752 Wang Zihan 021-51666914 Wang Jie 021-51595902 Xu Yang 021-51666760 Yang Lianting 021-51595835 Wang Zhaoyu 021-51666827

[SMM Magnesium Weekly Review: Cost Support Keeps Magnesium Ingot Bottom Firm; Weak Domestic and Overseas Demand Keeps the Market Consolidating] This week, domestic magnesium ingot prices drifted lower overall. 99.90% magnesium ingot in Fugu and Shenmu was quoted at 15,950-16,050 yuan/mt, down 350 yuan/mt from the previous week. After the holiday, market pessimism spread. Smelters sold actively, while downstream made only just-in-time procurement. Amid strong supply and weak demand, prices continued to grind lower. The average FOB price at Tianjin port was $2,365/mt. Domestic smelters were unable to hold prices firm, and FOB offers were lowered accordingly. As the summer break approached outside China, new orders were scarce, and foreign trade transactions were sluggish. Dolomite cost support was limited. Magnesium powder and magnesium alloy weakened in tandem. Downstream off-season demand weakness dragged on the market. In the short term, magnesium ingot prices are likely to consolidate on a subdued note.

Aug 6, 2026 Guangdong region: This week, premiums in the region consolidated at lows. Spot premiums had rebounded slightly due to consecutive declines in inventory but subsequently edged lower again as copper prices continued to rise, weakening downstream demand. As of Thursday, high-quality copper was quoted at 90 yuan/mt, down 60 yuan/mt WoW; standard-quality copper was at a premium of 10 yuan/mt, down 70 yuan/mt WoW; and SX-EW copper was at a discount of 30 yuan/mt, down 50 yuan/mt WoW. As of Thursday, the premium spread for standard-quality copper between Shanghai and Guangdong stood with Shanghai higher by 30 yuan/mt. The relatively small price difference meant no cross-regional shipments this week. According to SMM statistics, as of Thursday, total inventory in Guangdong warehouses stood at 18,900 mt, up 1,900 mt WoW, while total warrants reached 4,300 mt, up 400 mt WoW. Specifically, weekly arrivals into warehouses were 11,800 mt/week, up 900 mt/week WoW, below the annual average of 14,000 mt/week, with the decline in domestically produced copper arrivals being the main reason. Warehouse withdrawals were 9,900 mt/week, edging up 100 mt/week WoW, far below the annual average of 14,200 mt/week. As copper prices continued to rise and hit recent highs, downstream processing enterprises generally held a wait-and-see stance, with subdued purchasing appetite. Looking ahead to next week, based on our understanding, arrivals of both imported and domestically produced copper are expected to be relatively low, and some smelters have plans to export. Meanwhile, downstream consumption is expected to be slightly better than this week. As a result, inventory may edge down, and premiums may edge up. (The above information is based on market collection and comprehensive assessment by the Shanghai Metals Market research team. The information provided is for reference only. This article does not constitute direct investment, research, or decision-making advice. Clients should make decisions with caution and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to Shanghai Metals Market.)