Indonesia has done this before. A commodity export ban, a rush of downstream investment, processing capacity built faster than the upstream can honestly support, and a market that eventually corrects in the most painful way possible. The nickel sector wrote that playbook. The bauxite sector is now following it, page by page, with one additional complication that makes the stakes materially higher.

To more comprehensively and objectively reflect the overall industry inventory change trends, SMM has expanded the sample coverage for other segments in the weekly lithium carbonate inventory tracking. This week, downstream weekly inventory stood at 42,729 mt, other segments weekly inventory (large sample) at 76,157 mt, smelter weekly inventory at 18,374 mt, and total weekly inventory (large sample) at 137,260 mt, down 0.8% WoW. As of this Thursday, the overall market inventory situation was as follows: Upstream: Hedging registered warrants continued to increase Upstream lithium chemical plants saw hedging registered warrant volumes continue to climb. The main reason was that futures prices remained at a relatively high level in the earlier period, traders' purchase pace slowed down, and lithium chemical plants' delivery willingness strengthened. As of now, total lithium carbonate warrants have exceeded 50,000 mt. Downstream: Shift from wait-and-see to active restocking, with significant inventory buildup Downstream material plants had low spot order purchase willingness during the earlier price highs, mainly relying on consuming prior inventory, early-month customer-supplied increments, and long-term contract orders to maintain production. As lithium carbonate prices gradually pulled back, material plants' procurement pace showed notable changes: during the early stage of the decline, restocking was primarily driven by rigid demand; as prices continued to fall, stockpiling willingness rose significantly, and buying sentiment turned positive. As a result, downstream material plants saw substantial inventory buildup this week. Additionally, the replenishment from ex-China imports also deserved attention, as the volume of imported lithium chemicals converted into downstream inventory increased. Other segments: Diverging inventory trends between battery cell manufacturers and traders The "other" segment in this large sample mainly covered battery cell manufacturers and traders. Among them, battery cell manufacturers increased their lithium carbonate customer-supply volumes to material plants to control costs during the earlier price highs, resulting in some destocking of their own inventory; as prices continued to decline, battery cell manufacturers' long-term stockpiling willingness grew stronger. Trader side, some enterprises, influenced by "invoicing economics," gradually slowed down their pace of taking spot orders from upstream lithium chemical plants. However, as prices pulled back and downstream buying sentiment turned positive, trader inventory saw significant destocking. Market Supplement: Gradual Conversion of Invisible Inventory to Visible Inventory It is worth noting that as new goods in the market were largely absorbed by demand, some older goods gradually converted from invisible inventory to visible inventory, circulating and being traded in the market. This was also one of the important reasons driving the current increase in warrant volume.

I. Market Status: Negative TCs Enter Triple Digits, Structural Tightening in Copper Concentrate Supply-Demand As global smelter capacity continues to climb, China, as the world's largest copper smelting country, faces a continuously declining self-sufficiency rate in copper concentrates and rising external dependency. Compounded by geopolitical crises, production cuts by ex-China miners, declining mine grades, and frequent production accidents, the copper industry has undergone a dramatic shift from "tight balance" to "structural deficit." Currently, the global copper concentrate market has fallen into a state of persistently tight supply. On May 15, the SMM Imported Copper Concentrate Index (weekly) reported -$102.84/dmt, breaking through the -$100/dmt threshold for the first time in history, setting a record negative depth. The payable indicator for 20%-grade domestic trade ore was 97.5%-98.5%, up 0.5 percentage points MoM. Supply-side factors driving TCs persistently lower continue to accumulate. 1) Full production resumptions at Freeport's Grasberg mine have fallen short of expectations. According to Freeport's Q1 earnings call, the company plans to achieve full production resumptions by the end of 2027; 2) The Peruvian government signed Emergency Decree No. 003-2026 on May 11, triggering widespread market concerns over the country's energy supply and copper mine output; 3) Geopolitical disruptions—the continued blockade of the Strait of Hormuz has driven sulfur prices persistently higher, pushing smelting acid prices to rise continuously. With smelting profits climbing, smelters' purchase willingness has increased, driving copper concentrate TCs persistently lower. Customs data showed that China's copper ore and concentrate imports in April 2026 were 2.352 million mt in physical content, down 19.57% YoY; cumulative imports from January to April were 9.915 million mt in physical content, down 0.8% compared to the same period last year. Since December 2020, China's copper concentrate cumulative imports had maintained positive YoY growth; this marks the first decline in over five years. II. Smelter Operating Rates Stay High Contrary to the intuition of "industry-wide losses" implied by deeply negative TCs, operating rates at China's copper smelters have not experienced a cliff-like decline. From a pure smelting perspective, operating willingness and actual profitability across different types of enterprises show significant divergence. Under the extreme environment of deeply negative TCs, the core reason China's copper smelters can maintain relatively resilient operations is that by-product revenues are becoming the key variable determining break-even. Meanwhile, China's copper cathode production declined MoM due to the maintenance peak. SMM data showed that China's copper cathode production in April fell 2.26% MoM. Cumulative copper cathode production from January to April 2026 reached 4.7067 million mt. However, according to SMM, some smelters postponed their maintenance plans or completed crude smelting maintenance ahead of schedule to capture revenue from the by-product sulphuric acid. III. Breakdown of Smelter Profit Sources (i) Sulphuric Acid: The Strongest Profit Contributor at the Current Stage Sulphuric acid is currently the most important by-product profit source for smelters. In pyrometallurgy-based copper cathode production, approximately 3-4 mt of sulphuric acid is produced as a by-product for every 1 mt of copper cathode. As of May 15, the SMM China Copper Smelting Acid Index stood at 1,665 yuan/mt, up 83.7% from the beginning of the year. Sulphuric acid prices currently stay high, meaning sulphuric acid revenue can offset a considerable portion of the revenue loss caused by negative TCs. However, this "sulphuric acid moat" is facing policy challenges. China suspended exports of ordinary industrial sulphuric acid and smelting by-product sulphuric acid starting in May for a period of 8 months. The export ban is not intended to suppress domestic sulphuric acid prices, but rather to prioritize domestic supply for agricultural phosphate fertiliser production and strategic industries such as new energy. Demand side, overall sulphuric acid demand remains tight. Although downstream sectors including phosphate fertiliser, titanium dioxide, and new energy materials saw declining operating rates due to high-priced raw materials, just-in-time procurement still exists. Meanwhile, the supply side is also constrained by concentrated smelter maintenance and high sulphur-based acid production costs, with industry-wide capacity utilization rates at low levels. Cost side, firm sulphur prices provide bottom support for sulphuric acid; supply side, concentrated maintenance limits downside room; demand side, although weak, has not yet formed a substantial enough impact to break down high prices. This means sulphuric acid continues to serve as a profit pillar for smelters. (ii) Precious Metal Recovery: "Incremental Game" Under High Copper Prices In addition, copper concentrates typically contain associated precious metals such as gold and silver, which can be recovered through anode slime processing during smelting. Copper prices are currently at historically high levels, and gold prices also fluctuate at highs, greatly enhancing the economics of precious metal recovery. According to SMM market sources, when gold and silver prices are at high levels, raw materials with impurities rich in gold and silver are assigned extremely high added value. The profit contribution of precious metal recovery to smelters is reflected in: smelters can achieve recovery utilization rates exceeding the gold and silver payable indicators through refined processing, profiting from spot smelting revenue. This portion of revenue is often a significant component of smelters' comprehensive profit structure. However, as gold and silver prices continue to rise, suppliers in the copper concentrates spot trade are simultaneously raising gold and silver payable indicators. The continuously rising precious metal payable indicators and payable benchmark pose an increasingly severe challenge to smelter profitability. IV. Future Trends: Coexistence of Industry Landscape Evolution and Technology Upgrade Requirements However, industry chain profits are irreversibly shifting toward the upstream ore side. Under the medium and long-term landscape of persistently tightening copper concentrates supply and demand, the scarcity value of the resource side is being reassessed by the market. As the copper concentrates supply-demand gap persists over the medium and long-term horizon, and smelters' bargaining power will remain under pressure over the long term. The market is widely concerned about whether TC can quickly pull back in tandem once the continuously rising sulphuric acid prices reach a turning point. Facing the long-term trend of profit squeeze at the mine end and losses in the smelting segment, the future landscape of the copper smelting industry will evolve in the following directions: Direction 1: Integrated consolidation extending upstream. Enterprises with upstream mine assets will have a significant advantage in profitability. Direction 2: Technological upgrades to achieve differentiated competition. Against the backdrop of narrowing profit margins from non-payable metals, the technological barriers of smelters will become increasingly important. Those who can more efficiently extract valuable metals from low-grade ore or complex ore will seize the initiative in the industry reshuffle. Under the extreme environment of persistently negative TCs, sulphuric acid by-product revenue and precious metal recovery are the core profit pillars currently sustaining smelter operations. The supply-demand pattern dictates that the pricing power and profit margins at the mine end will continue to outperform those at the smelting end. The copper smelting industry is transitioning from the traditional model of "earning TCs" to a new competitive landscape of "resource control + technological barriers + integrated operations."

In April 2026, the secondary copper rod operating rate was 12.79%, higher than the expected 11.93%, down 1.46 percentage points MoM and 21.1 percentage points YoY. Looking back at the entire month of April, the secondary copper rod market, under the prevailing theme of copper prices fluctuating upward, was mired in structural contradictions triggered by industrial policies,...

After pushing to fresh highs in early May, Chinese Nickel Pig Iron prices have begun retreating as every pillar that supported the late-April surge — refined nickel, stainless margins, and scrap economics — starts to weaken simultaneously.

[SMM Weekly Platinum and Palladium Review] This week (May 11 – May 15), the most-traded platinum contract PT2606 on China's GFEX opened at 509 yuan/gram and closed at 499.05 yuan/gram, down 14.95 yuan/gram or 2.91% from last week's settlement price, with a weekly highest price of 542.25 yuan/gram and a weekly lowest price of 496.05 yuan/gram; the most-traded palladium contract PD2606 opened at 366 yuan/gram and closed at 345 yuan/gram, down 26.45 yuan/gram or 7.12% from last week's settlement price, with a weekly highest price of 376.85 yuan/gram and a weekly lowest price of 340 yuan/gram. In terms of futures trading: the most-traded platinum contract PT2606 recorded a total weekly trading volume of 32,874 lots with a total turnover of 17.139 billion yuan and open interest of 9,970 lots, down 4,309 lots WoW. The most-traded palladium contract PD2606 recorded a total weekly trading volume of 18,453 lots with a total turnover of 6.651 billion yuan and open interest of 6,565 lots, down 499 lots WoW. Platinum and palladium first rose and then declined during the week. Peru experienced a sudden energy crisis within the week and issued a national emergency decree. Power rationing was expected to cause mine shutdowns, thereby affecting supply. As the world's 12th largest mining country, Peru holds 21.8% of global silver reserves, which triggered a silver rally. Driven by sector spillover effects, platinum and palladium also rose accordingly. The subsequent decline was concentrated on Friday, when platinum and palladium plunged sharply intraday. Trump's visit to China eased tariff expectations and suppressed strategic resource premiums, while a rising US dollar index and elevated medium- to long-term US Treasury yields jointly weighed on precious metal valuations. On the Middle East geopolitical front: Gulf states discussed post-war regional governance. Saudi Arabia proposed a non-aggression pact, and Israel's defense minister stated that military action against Iran might be taken again. On the US Fed front: the US Senate confirmed Warsh as Fed Chairman by a vote of 54 to 45. However, Powell is expected to remain as a Fed governor. This vote marked the most partisan-divided confirmation in history. "The strongest dissenting governor" Miran officially submitted his resignation on Thursday, stating that the current interest rates were too high. On trade and tariffs: during Trump's visit to China, the two sides reached multiple important consensuses, agreeing to manage tariff differences and restart dedicated trade negotiations. The US suspended new tariffs on China and will gradually reduce punitive tariffs. Both sides enhanced strategic mutual trust and expanded cooperation across multiple areas, laying an important foundation for the easing and stable development of bilateral relations. In terms of supply: South Africa's power shortage eased significantly, and PGM mine expansions progressed; Nornickel's Q1 platinum and palladium production declined sharply, mainly due to Western sanctions affecting its payments, logistics, and equipment imports. Nornickel's platinum and palladium production is expected to see significant production cuts in 2026. On the demand side: PGM demand from the fiberglass industry showed positive momentum. In 2026, China's fiberglass industry is expected to shift from platinum-based to palladium-based applications, with multiple enterprises deploying related technologies and considerable substitution potential. Recent precious metals market trading focused on uncertainties arising from recurring Middle East geopolitical conflicts, US Fed monetary policy expectations, economic stagflation, and financial market risks. Continued attention should be paid to changes in Middle East geopolitical dynamics, the implementation of power rationing in Peru, and speeches by US Fed officials, as well as palladium trial results in the fiberglass sector.

[SMM Cast Aluminum Alloy Morning Comment: Dual Pressure from Policy and Demand, Secondary Aluminum Weekly Operating Rate Pulls Back] ADC12 prices are expected to move sideways in the short term. On the cost side, high-level support, combined with the tightening of reverse invoicing and expectations for production cuts at some enterprises, limits the downside room for prices; however, demand is unlikely to see significant improvement in the short term, and inventory remains in an accumulation cycle, which will continue to suppress upside room for prices. Going forward, key attention should be paid to the recovery of end-use consumption and the further impact of policies on the scale of production cuts on the supply side.

[Standard Lithium Signs 10-Year Supply Agreement with Trafigura for 8,000 mt of Battery-Grade Lithium Carbonate Annually] Smackover Lithium, a joint venture project under Standard Lithium (NYSE.A/TSXV: SLI), announced that it had signed its first binding commercial sales agreement with commodity giant Trafigura Trading LLC, committing to supply 8,000 mt of battery-grade lithium carbonate annually for a 10-year term, effective from the commencement of commercial production. The agreement covers over 40% of the SWA project's total target supply volume, marking a substantive step forward on the commercialization path for this Arkansas-based direct lithium extraction (DLE) project. The remaining supply negotiations are expected to be completed in Q3 2026, and the company maintains its plan to make a final investment decision and commence construction in 2026, with a target of achieving first commercial production in 2029. On the technology validation front, the company simultaneously announced three milestones at its Arkansas demonstration plant: cumulative processing of over 1 million barrels of real formation brine, completion of over 15,000 DLE cycles, and a zero-safety-incident record across 340,000 cumulative work hours, effectively validating the feasibility and stability of the SWA project's core process route. The SWA project is jointly advanced by a joint venture formed by Standard Lithium and Norwegian state oil company Equinor, conducting direct lithium extraction operations on Smackover formation brine in Arkansas. The conclusion of the Trafigura agreement further reinforced market confidence in the project's long-term commercial prospects. Source: [Elevra Lithium Buys Out All Moblan Project Offtake Rights, Equity Settlement Terminates Discounted Sales Obligation] Australian lithium mine company Elevra Lithium (ASX: ELV; NASDAQ: ELVR) announced that it had acquired and terminated the Moblan lithium mine project spodumene concentrates offtake agreement previously granted to an investment vehicle under Waratah Capital Advisors. Upon completion of the transaction, Elevra gained full control of all offtake interests it is entitled to on a pro-rata basis in the Moblan project. The original agreement originated from a 2021 arrangement that granted Waratah the right to purchase 10% of Moblan's annual spodumene concentrates production at a 5% discount over the full life of the mine. The termination was settled through equity, with Elevra issuing ordinary shares valued at $5 million at an issue price of A$12.2 per share and warrants valued at $500,000 to Waratah, preserving cash for subsequent development plans. The Moblan lithium mine project is located in central Quebec, Canada, with Elevra holding a 60% interest and Investissement Québec holding 40%. It is one of the leading undeveloped lithium ore assets in North America by scale. By eliminating the obligation of discounted sales over the full mine life cycle, Elevra significantly improved the long-term economics of the project and retained greater strategic flexibility for further scaling. Source: [Rain City Resources Signs First MOU with Bolivia's National Lithium Company YLB for the Uyuni Basin] Canadian lithium company Rain City Resources Inc. (CSE: RAIN) announced that it had signed a memorandum of understanding (MOU) with Bolivia's national lithium company YLB (Yacimientos de Litio Bolivianos), establishing a formal cooperation framework for the evaluation and application of Rain City's next-generation direct lithium extraction (DLE) technology under Bolivian brine conditions. This was the first publicly disclosed lithium cooperation MOU signed between YLB and a foreign enterprise since the new Bolivian government took office. Bolivia holds the world's largest proven lithium resources, primarily concentrated in the Uyuni salt flat and surrounding salt lake systems. Despite the enormous resource potential, the country has historically maintained a cautious stance toward foreign investment in the lithium sector, with institutional access thresholds constituting a significant strategic barrier for international developers, making the signing of this MOU a highly landmark event. Under the agreement, both parties will advance a structured research process centered on formal proposals, technical coordination, and periodic reporting, with a joint technical coordination committee established for oversight and management. The MOU itself does not confer concession rights, resource ownership, or commercial production agreements, but establishes a credible institutional pathway for technology evaluation under real Bolivian brine conditions. Rain City stated that, given the complexity of the brine chemistry in the Uyuni Basin and the scale of its lithium resources, this formal entry into Bolivia's evaluation process represented a significant strategic move for the company to extend its low-water-consumption DLE technology to the broader Lithium Triangle region. Source: [USGS Assesses Potential Lithium Ore Reserves Exceeding 530,000 mt in New England Region] The U.S. Geological Survey (USGS) released its latest geological assessment report, confirming the presence of substantial potentially undiscovered lithium deposits in Maine, New Hampshire, and eastern Vermont. The report indicated that recoverable lithium resources in the region exceeded 530,000 metric tons at a 50% probability level, based on existing geological data and historical field observation records. This assessment came at a time when the US federal government was accelerating efforts to build critical minerals supply chain resilience. The US currently relies heavily on lithium ore imports, with domestic production concentrated at only one operating facility in Nevada, a structural vulnerability that has long drawn attention from energy security analysts. Federal officials promoted this study as a significant achievement in advancing the strategy for self-sufficiency in lithium resources supply. Geologists also noted that this assessment carried a wide range of uncertainty, and even if the relevant deposits were confirmed through subsequent exploration, the region would still face a lengthy permitting and development cycle before reaching the commercial extraction stage, with actual industrialisation prospects remaining distant. The USGS has classified lithium as a critical mineral and is advancing similar assessments nationwide to systematically identify the potential of undiscovered lithium resources. Source:

According to Miningweekly, citing Bloomberg, a Cold War-era mine near the Slovak capital Bratislava is attracting attention from the EU. The project, known as Trojarova, is situated on a densely wooded hillside in what is known as the Little Carpathians in Slovakia, where Soviet engineers first discovered antimony-bearing ore layers in the 1980s. Its owner, Canada-based Military Metals Corp (MMC), is seen as an opportunity for Europe to secure a military metal. For critical minerals such as antimony, EU countries appear unable to provide funding and take action, leaving projects like Trojarova vulnerable to being snapped up by competitors. MMC has so far failed to secure an offtake agreement from the EU. As President Trump threatens to raise tariffs on Europe, the project illustrates the danger of Europe falling behind in the fierce competition among superpowers. As imports of critical minerals such as rare earths face restrictions, the US has been actively seeking partnerships with resource-rich countries and funding projects around the world to accelerate development, but Europe has lagged behind. "Member states remain reluctant to foot the bill for mining and processing projects outside their borders, even when geo-economic realities demand it," said Schulz Sabrina, Germany director of the European Initiative for Energy Security (EIES). "Financing remains the main obstacle." The 2023 European Critical Raw Materials Act (CRMA) laid out the EU's strategy. The CRMA set targets that at least 10% of Europe's annual critical materials supply should come from domestic extraction and 40% from domestic processing. These targets compelled member states to take action, identify security gaps, and concentrate investment to ensure secure supplies of battery metals such as lithium. Since then, global competitors have pivoted to military resources such as antimony, gallium, and germanium, but Europe has not followed suit. Insiders believe this is because EU officials lack the authority to pursue policies similar to those of the US and lack the funding to invest. This has made it difficult for underfunded enterprises to launch minor metal projects, as they struggle to raise capital in private markets at the very least. With tight budgets across Europe, many EU member states are unknown on how to take action. In Germany, for example, the economics ministry, the chancellery, and the foreign ministry have yet to agree on how to address critical minerals risks. The result is a deadlock, with EU officials worried that member states fear missing out on opportunities. Last month, the EU reached an agreement with the US on policy coordination to secure critical minerals supply chains. For MMC, this was an important development that could lead to joint US-EU investment and offtake partnerships for Trojarova. On March 24, Hartmann Frank, a German foreign ministry official responsible for Asian affairs, said at an event in Berlin that Europe was not acting fast enough and "not doing enough." "We must implement a long-term strategy, keep the funds and capital in our hands, and invest in these critical minerals over the next decade," he said at a panel discussion hosted by the German Council on Foreign Relations. "Otherwise, we will not be able to break free from this dependency." The Trojarova project, acquired by MMC about two years ago, could be an opportunity. Antimony is a silvery-white metal commonly associated with gold, widely used in military applications such as ammunition, night-vision goggles, and infrared sensors, accounting for 15% of total demand. Other uses include flame retardants, nuclear energy, and renewable energy. "Antimony is a versatile minor metal," said Schulz. "Antimony supply is highly concentrated, and Europe is almost entirely dependent on imports." This is also why MMC has been pitching the Trojarova project to investors as a significant opportunity in Europe, capable of supplying antimony ingots directly to national defense clients. MMC CEO Eldridge Scott said smelters in Germany and Sweden could process ore from the project, helping Europe establish an entire antimony supply chain from mining to processing. The mine, located near the wine town of Pezinok in southwestern Slovakia, was first discovered and mined by the Soviets. Although the 1.7-kilometer-long mine was later abandoned, it remains one of Europe's most significant antimony deposits. MMC is too small to resume production at the mine on its own and needs to co-invest with partners and build a smelter. If production resumes within two to three years, the mine could produce 6,000 mt of antimony annually, meeting one-third of Europe's demand. However, the company, with a market capitalization of less than $30 million, needs substantial funding. In addition, critical minerals prices are prone to wild swings, and even in markets such as lithium, several major projects have stalled as miners seek government funding. No matter how high-quality this company's project may be, Europe still lacks the funding and determination to ensure the development of these resources. Germany's own 1 billion euro raw material fund has so far supported only two projects, creating more barriers for companies to qualify than it has removed. The European Commission and its member states have signed multiple memoranda of understanding with producing countries. For example, Spain reached an agreement with Brazil last month. However, US agreements with these countries are larger in funding scale and progressing faster. The US government's agreement with the EU reflects its so-called price floors to safeguard producers' operations. European countries have been hesitant, but sometimes have had no choice but to agree to US proposals. Meanwhile, the momentum for EU action has largely given way to other more pressing crises. In contrast, although the US government has recently been focused on conflicts such as the Iran war, the president's team of aides has been busy identifying mineral projects and bidding to secure them. A US enterprise has already approached MMC to request a field trip to the Trojarova project. Meanwhile, the US government's investment arm agreed last month to a $5 million deal to restart another shuttered antimony mine in North Macedonia. MMC president Hüser Thomas hopes Trojarova will not face a similar outcome. The German national, formerly a manager at Glencore, joined the company this year. "What we still lack is not plans, but enforcement," he said. "Europe's raw material strategy remains fragmented, slow, and often disconnected from industrial reality."

US April PPI was up 6% YoY, the highest since December 2022, versus expectations of 4.9%, with the prior reading revised from 4.00% to 4.3%. April PPI was up 1.4% MoM, the highest since March 2022, versus expectations of 0.5%, with the prior reading revised from 0.50% to 0.7%.