[8.19 Morning Meeting Minutes] The National Bureau of Statistics: In July, the value-added of industrial enterprises above designated size grew 4.5% YoY in real terms; sales prices of new commercial residential buildings in first-tier cities turned flat MoM after a 0.1% increase in the previous month. The most-traded SHFE nickel 2609 contract moved sideways in the morning session, ending at 128,410 yuan/mt, up 0.19%. Driven by factors including the mild cooling of the US July PPI and further easing of interest rate hike expectations, nonferrous metals broadly rose, and nickel prices rebounded from last week's lows. While Indonesia’s nickel ore RKAB quota is expected to be loose, sulfur prices remain elevated above $1,000/mt, providing ongoing cost support. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 125,000-130,000 yuan/mt.

SMM August 17: Battery metals demand faces a more gradual growth path as automakers and suppliers signal that hybrids and range extenders will retain a significant role well beyond earlier full-BEV transition timelines, carrying direct implications for the pace at which spodumene concentrate must convert into lithium carbonate (LC) and lithium hydroxide (LH) downstream. Industry executives argue that decarbonization progress should be measured by total emissions reduction rather than BEV penetration alone, with one powertrain executive projecting that half of passenger vehicles could still carry some form of combustion or hybrid system by 2040. For the lithium supply chain, pack size is the key variable rather than unit count. Hybrids and range extenders still require lithium-ion battery packs, but at a fraction of the capacity used in full BEVs, meaning each hybrid sold absorbs meaningfully less LC or LH per vehicle than a comparable BEV. Lithium remains structurally supported across almost every electrification pathway, unlike nickel, cobalt, and manganese, which carry closer ties to high-nickel chemistries used in longer-range BEVs. A longer hybrid phase would slow the rate at which large-format BEV packs absorb lithium units, easing the pace at which LC/LH conversion capacity needs to be brought online even as upstream spodumene mining and beneficiation projects continue ramping toward planned output targets. The demand path carries logistics implications as well. A more gradual absorption curve for battery-grade lithium salts gives converters and refiners processing spodumene feedstock from Africa, Australia, and South America greater runway to bring hydroxide and carbonate capacity online without facing the acute bottleneck pressure a steep BEV-only ramp would create, allowing producers and converters to better sequence CIF delivery schedules against a less compressed conversion timeline. Policy remains a swing factor: the EU's current framework targets a 100% cut in new car and van tailpipe emissions from 2035, effectively phasing out combustion sales absent new exemptions, though suppliers are pushing for a more technology-neutral approach that credits hybrids and range extenders. Greater EU flexibility would further extend the timeline over which spodumene supply needs to convert into battery-grade LC/LH. SMM View: A longer mixed-powertrain era points to a more forgiving supply-demand balance across the spodumene-to-lithium-salt chain in the near term, giving upstream concentrate producers and downstream LC/LH converters additional room to align capacity growth with actual offtake absorption rather than racing an aggressive BEV-only demand curve. This may moderate the urgency behind some conversion capacity expansions currently underway across major producing and processing regions, while the structural case for spodumene supply growth remains intact given lithium's exposure across virtually every electrification pathway.

[8.17 Morning Meeting Minutes] The overall increase in the US Producer Price Index (PPI) in July remained mild, indicating a further easing of inflationary pressures, and expectations for a US Fed interest rate hike in September cooled further. The most-traded SHFE nickel 2609 contract plunged sharply in early trading, closing the morning session at 127,300 yuan/mt, down 1.12%. The Indonesia Nickel Miners Association (APNI) recommended keeping the 2026 nickel ore RKAB at 270 million wmt and additionally setting a 30 million wmt strategic buffer, bringing the potential total quota to 300 million wmt. With expectations for looser RKAB quotas, nickel prices are expected to remain in the doldrums in the short term, and the trading range for the most-traded SHFE nickel contract is 125,000-130,000 yuan/mt.

According to SMM research, the domestic lithium battery recycling market exhibited clear diverging trends in July 2026. During the month, recycled lithium carbonate output declined by 2% month-over-month. Recycled nickel sulfate and cobalt sulfate continued their year-long downtrend, with the weak performance persisting in July and no price recovery in sight.

SMM Weekly Stainless Steel Futures Review — week of August 10–14, 2026. Chinese stainless steel futures fell for a fourth straight week, settling at RMB 14,245/mt (about $2,114/mt) on August 14.

July Price Review Source: SMM In July 2026, China’s non-oriented electrical steel market trended weaker, with prices across all grades starting to drift lower. Downstream home appliance and general motor industries entered the traditional off-season, and end manufacturers mostly adopted hand-to-mouth purchasing with limited willingness for bulk stockbuilding. Meanwhile, steel mills maintained relatively ample supply, leading to looser supply-demand balance and mounting inventory pressure on traders. Pervasive market caution widened spot negotiation ranges. July marked the start of the current downward price cycle, shifting market sentiment from earlier firm high levels to a weakening trajectory. Fundamental Analysis Source: SMM Supply Side Compared with July, the production scheduling mix of domestic non-oriented electrical steel will continue to optimize in August. The share of medium & low grades will edge down from 68% to 66%, high grades will stay flat at 19%, and new-energy dedicated grades will rise from 13% to 15%. Steel mills keep reallocating production capacity toward materials for new-energy motors while proactively cutting output of conventional medium & low grades. Nevertheless, despite lower scheduled output proportion for medium & low grades, overall spot supply in the market remains relatively sufficient. Traditional home appliance and general motor sectors are stuck in demand off-season with no improvement in end-users’ hand-to-mouth buying. Competitive pressure persists for mainstream medium & low grade products such as B50A800, lacking solid price support. The market will continue the weak trend seen since July. Source: Publicly Available Data Demand Side Home appliance output showed divergent performance in June. Air conditioner production fell year-on-year, while washing machine, refrigerator and TV output posted no notable growth. The traditional home appliance sector entered a phase of subdued demand. As the major downstream consumer of medium & low grade non-oriented electrical steel, the home appliance sector released limited orders and provided feeble support for this product category. The automotive sector saw structural divergence: output of new-energy passenger and commercial vehicles stayed at high levels, continuously underpinning demand for high-grade and new-energy-specific non-oriented electrical steel. In contrast, production of conventional internal combustion engine (ICE) passenger and commercial vehicles kept declining, dragging down motor procurement demand from traditional automakers. Overall demand presents a clear split: the new-energy vehicle segment lends support to high-grade electrical steel, whereas sluggish demand from home appliances and ICE vehicles fails to fuel consumption recovery of medium & low grade non-oriented electrical steel. No strong bullish catalysts emerge on the demand front. August Price Outlook Looking ahead to August 2026: On the supply side, planned output of China’s non-oriented electrical steel will keep declining, yet the scale of production cuts will narrow, concentrated mainly on medium & low grades. On one hand, prominent off-season effects persist amid stagnant downstream demand and prevailing hand-to-mouth purchasing, dampening steel mills’ production enthusiasm. On the other hand, leading producers including Baowu lifted August base prices by RMB 50/tonne, demonstrating obvious price-defending intentions. Even so, the market holds bearish expectations that prices face greater downside than upside. In addition, most manufacturers are already operating at a loss and forced to implement production cuts. On the demand side, the home appliance sector stays in a prolonged off-season with poor sentiment. Manufacturers have sharply reduced production schedules month-on-month. Weak domestic sales, phasing-out of state subsidies and consumption frontloading during the 618 shopping campaign weigh on the market, resulting in a marked sales drop. Manufacturers stated they will prioritize inventory destocking and further adjust production plans going forward. The automotive market enters its off-season with deteriorating business sentiment. After mid-year sales pushes, most automakers trimmed production schedules. At the retail end, high temperatures and frequent rainfall discourage consumer vehicle purchases. Automakers and dealers have rolled back partial sales incentives, while limited launches of new models contribute to a substantial month-on-month sales decline. On the cost side, hot rolled coil prices are projected to fluctuate weakly in August with limited upward momentum, and the monthly average price will continue to fall month-on-month. In summary, SMM forecasts that non-oriented electrical steel prices will fluctuate downward across August 2026, with certain room for price declines.