SMM News, May 25: Metals market: As of the midday close, base metals on the domestic market mostly rose. SHFE copper gained 1.06%. SHFE aluminum fell 0.47%. SHFE lead rose 0.06%, SHFE zinc rose 0.34%. SHFE tin gained 1.22%. SHFE nickel rose 0.23%. In addition, the most-traded casting aluminum futures fell 0.54%, the most-traded alumina futures rose 0.37%. The most-traded lithium carbonate futures rose 0.58%. The most-traded silicon metal futures rose 1.07%. The most-traded polysilicon futures rose 0.48%. Ferrous metals all rose. Iron ore gained 0.25%, rebar rose 1.23%, hot-rolled coil rose 1.03%, and stainless steel edged up. Coking coal and coke: the most-traded coking coal contract and the most-traded coke contract hit the daily limit up with gains of 7.97% and 7.99%, respectively. Overseas base metals: The London Metal Exchange (LME) was closed on May 25 for the UK bank holiday and will resume trading on May 26. Precious metals: as of 11:38, COMEX gold rose 0.86% and COMEX silver gained 2.44%. Domestic precious metals: the most-traded SHFE gold futures rose 0.64% and the most-traded SHFE silver futures rose 2.27%. In addition, as of the midday close, the most-traded platinum futures fell 0.2% and the most-traded palladium futures rose 0.01%. As of the midday close, the most-traded Europe containerized freight index contract fell 3.36% to 2,901 points. As of 11:38 on May 25, midday futures quotes for selected contracts: Spot and fundamentals Copper: Today, #1 copper cathode spot prices in North China against the front-month contract were reported at an average discount of 360 yuan/mt to a discount of 280 yuan/mt. The average price fell 10 yuan/mt from the previous trading day, and the average transaction price was 105,230 yuan/mt, up 1,035 yuan/mt from the previous trading day. Macro front Domestic: [Huawei Announces Semiconductor Tao's Law] On May 25, Huawei officially announced a new law in the semiconductor field. "Tao's Law" proposes replacing "geometric scaling" with "temporal scaling," achieving new breakthroughs in transistor density and system performance through logic folding technology. This marks the first time China has proposed a new principle guiding industrial development in the global semiconductor field. By 2031, high-end chip transistor density based on this law is expected to reach the equivalent level of the 1.4nm process node. (People's Daily) [PBOC Reverse Repo Operations Result in Net Injection of 257 billion yuan Today] The PBOC conducted 258 billion yuan of 7-day reverse repo operations in the open market, with an operation rate of 1.40%, unchanged from the previous day. 1 billion yuan of reverse repos matured today. On the US dollar: As of 11:38, the US dollar index fell 0.3% to 99.03. Kevin Hassett, chief economic adviser to US President Trump, said he believes that the eventual decline in oil prices will create room for the Fed to cut interest rates. "We again expect that once a deal is reached, energy prices will plunge," Hassett said. "When that happens, the Fed will have plenty of room to take the right action and lower interest rates." He emphasized that he respects the Fed's independence and praised Kevin Warsh, who was sworn in as Fed Chairman last Friday. Although the surge in US fuel prices caused by Iran's closure of the Strait of Hormuz poses a growing political risk to Trump and his Republican Party in the November midterm elections, Hassett believes that the accelerating inflation is mainly driven by energy prices. "If you look at the last few data reports, energy prices are absolutely concerning, but core prices have barely moved at all," he said. "I think once we see energy prices pull back, due to declining energy prices, you may actually see negative inflation." (Jin10 Data) According to CME's "FedWatch": the probability that the Fed will keep interest rates unchanged in June was 97.3%, and the probability of a cumulative 25-basis-point rate hike was 2.7%. The probability that the Fed will keep interest rates unchanged in July was 84.8%, the probability of a cumulative 25-basis-point rate hike was 14.8%, and the probability of a cumulative 50-basis-point rate hike was 0.3%. (Jin10 Data) On data: Today, data including China's year-to-date installed power generation capacity in April and its year-on-year rate will be released. In addition, attention should be paid to: 500 billion yuan of 1-year medium-term lending facility (MLF) and 1 billion yuan of 7-day reverse repos will mature today. In addition, it is worth noting that due to the Memorial Day holiday, US stock markets will be closed for one day on May 25 (Monday); CME's precious metals and US crude oil futures contract trading will end early at 02:30 Beijing time on the 26th, and US stock and US Treasury futures contract trading will end early at 01:00 Beijing time on the 26th. Due to the Buddha's Birthday holiday, Hong Kong stock markets will be closed for one day on May 25 (Monday), with both southbound and northbound trading suspended; South Korean stock markets will also be closed for one day on the same day. In addition, due to the Spring Bank Holiday, the UK stock market will be closed on Monday, May 25; trading of ICE Brent crude oil futures contracts will end early at 01:30 Beijing time on May 26. Investors are advised to take note. (Jin10 Data) Overseas exchange closure arrangements are as follows (all in Beijing time): Crude oil: As of 11:38, oil prices in both markets fell, with WTI down 5.92% and Brent down 5.32%. Rising expectations of a US-Iran deal boosted global risk sentiment, putting oil prices under pressure. The direct catalyst for the oil price decline was signs of improvement in actual transit conditions through the Strait of Hormuz. According to Iran's Islamic Republic News Agency citing a statement from the Islamic Revolutionary Guard Corps, 33 vessels — including oil tankers, container ships, and other commercial vessels — passed through the Strait of Hormuz within 24 hours on Sunday after receiving authorization from the IRGC Navy. (Wallstreetcn) The Washington Post reported on May 24 that the US and Iran had reached agreement on a framework for a memorandum of understanding (MOU), which, once signed, would fully restore shipping through the Strait of Hormuz within 30 days. Citing an anonymous senior US government official, the report said the US and Iran had developed an MOU "framework" that includes a 60-day ceasefire extension to allow both sides to reach a "final agreement" on permanently ending hostilities with Iran, during which the Strait of Hormuz would be demined and reopened. The official said the MOU includes a "commitment" that Iran will not possess nuclear weapons. Over the next two months, the US and Iran will discuss the "mechanism" for implementing this commitment. However, neither side signed any agreement on May 24. (Xinhua) Trump said on social media on Saturday that a US-Iran deal was largely done, including the opening of the Strait of Hormuz, and told US representatives not to rush into a deal. But on Sunday he said the deal was "not fully done yet." US Secretary of State Marco Rubio had previously said there could be "some good news" on the Hormuz issue in the coming hours. Iran remained cautious. Iran's Tasnim News Agency warned that the draft agreement could still collapse due to US obstacles on several key terms — including Iran's demand for unfreezing assets. (Wallstreetcn) Spot market overview: ► ► ► ► ► ► ► ► ► ► ► ► ► ►

[SMM Morning Meeting Minutes: U.S.-Iran Tensions Remained Elevated, LME Zinc Under Pressure] Last Friday, LME zinc opened at $3,439/mt. In the early session, LME zinc fluctuated upward and touched $3,457/mt during European trading hours. Subsequently, bears increased their open interest, and LME zinc fluctuated downward throughout the session, hitting a low of $3,418/mt during the night session, ultimately closing down at $3,441/mt, a decline of $6/mt or 0.17%. Trading volume rose to 10,480 lots, and open interest increased by 3,121 lots to 240,000 lots.

2026 Year June 3–5 China · National Exhibition and Convention Center (Shanghai) No. 333 Songze Avenue, Qingpu District, Shanghai Multi-Energy Complementarity and Integrated Development of PV, Energy Storage, and Hydrogen www.snec.org.cn Approving Authority Shanghai Municipal Commission of Commerce Supporter Shanghai Municipal Development and Reform Commission Shanghai Municipal Commission of Economy and Informatization Shanghai Municipal Science and Technology Commission Lead Organizers Asia Photovoltaic Industry Association (APVIA) Chinese Renewable Energy Society (CRES) Renewable Energy Professional Committee of China Association of Circular Economy (CREIA) Shanghai Federation of Economic Organizations (SFEO) Shanghai Science and Technology Exchange Center (SSTEC) Shanghai New Energy Industry Association (SNEIA) Co-Organizers Solar PV Products Sub-Council of China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) PV Professional Committee of Chinese Renewable Energy Society (CPVS) Renewable Energy Professional Committee of China Energy Research Society Exhibition Organizers Shanghai Follow Me Technology Co., Ltd. Shanghai Follow Me New Energy Development Co., Ltd. Shanghai Solar Cloud Exhibition Services Co., Ltd. Follow Me Int'l Exhibition USA Inc. Follow me International Exhibition Co., Ltd. Conference Organizer Shanghai Follow Me Convention and Exhibition Services Co., Ltd. Preface: The “SNEC 19th (2026) International Solar PV and Smart Energy (Shanghai) Conference and Exhibition” (the “SNEC PV Conference and (Shanghai) Exhibition” for short), jointly organized by 25 international institutions and organizations including the Asia Photovoltaic Industry Association (APVIA), the Chinese Renewable Energy Society (CRES), the Renewable Energy Professional Committee of the China Association of Circular Economy (CREIA), the Shanghai Federation of Economic Organizations (SFEO), the Shanghai Science and Technology Exchange Center (SSTEC), and the Shanghai New Energy Industry Association (SNEIA), will be grandly held in Shanghai, China, from June 3 to 5, 2026. The “SNEC PV Conference and (Shanghai) Exhibition” grew from 15,000 m² at its first edition in 2007 to 360,000+ m² in 2025, with more than 3,000 enterprises from 95 countries and regions worldwide participating, of which international exhibitors accounted for 30%, and it has become the most influential international, professional, and large-scale PV event in China, Asia, and the world. The SNEC PV Exhibition is the world's most professional PV exhibition, featuring: PV production equipment, materials, solar cells, PV application products and components, as well as PV engineering and systems, energy storage, mobile energy, etc., covering all segments of the PV industry chain. The SNEC PV Forum is also remarkably diverse, involving analysis of future PV market trends, cooperative development strategies, national policy directions, cutting-edge industry technologies, PV financing, etc., providing the best opportunity to showcase achievements to the industry. We look forward to global industry professionals gathering in Shanghai, China, to take a problem-oriented approach from an industrial perspective, jointly assessing the solar PV power generation markets in China, Asia, and the world, and collectively leading the path of industry innovation and development. We hope to see you in Shanghai in June 2026! Schedule: Setup: May 31, 2026 13:30-18:00 June 1-2 09:00-20:00 Exhibition: June 3-4, 2026 09:00-17:00 June 5 09:00-14:00 Dismantling: June 5, 2026 14:00-22:00 Exhibit Content (Product Categories): Solar PV PV Production Equipment: Silicon rod/silicon lumps/casting ingot production equipment: complete production lines, casting ingot furnaces, crucibles, growth furnaces, other related equipment Silicon wafer production equipment: complete production lines, cutting equipment, cleaning equipment, detection equipment, other related equipment Battery production equipment: complete production lines, etching equipment, cleaning equipment, diffusion furnaces, coating equipment/deposition furnaces, screen printing machines, other furnace equipment, testers and sorters, other related equipment Cell panel/module production equipment: complete production lines, testing equipment, glass cleaning equipment, wiring/welding equipment, laminating equipment, etc. Thin-film cell panel production equipment: amorphous silicon cells, copper indium gallium selenium dioxide cells CIS/CIGS, cadmium telluride thin-film cells CdTe, dye-sensitized cell DSSC production technology and research equipment Solar Cells: Solar cell producers, cell module producers, cell module installers, agents, dealers and distributors, concentrator cells, etc. PV Related Parts: Batteries, chargers, controllers, converters, recorders, inverters, monitors, mounting systems, tracking systems, solar cables, etc. PV Raw Materials: Polysilicon, silicon ingots/silicon lumps, silicon wafers, encapsulation glass, encapsulation films, other raw materials PV Application Products: Lighting products, power supply systems, mobile chargers, water pumps, solar household products and other solar products PV Engineering and Systems: PV system integration, solar air conditioning systems, rural PV power generation systems, solar detection and control systems, solar heating system engineering, solar PV engineering process control and project management and software programming systems System Engineering Construction Equipment and Safety Protection: Electrical construction equipment, construction vehicles, engineering machinery, maintenance tools, aerial work vehicles/platforms, scaffolding, electrical safety tools, personal safety protective equipment Others Solar Energy and Green Buildings: Solar Thermal Utilization: Solar central hot water systems, household solar water heaters, solar heat pump water heaters, solar collector systems, solar heating systems, integrated solar thermal-PV products, solar water heater manufacturing equipment, solar water heater raw materials and accessories Solar PV and Concentrated Solar Power: Grid-connected solar PV power generation systems, off-grid PV power generation systems, PV-wind complementary power generation systems, PV power transmission and distribution equipment, PV modules and components and equipment, trough linear focus systems, tower systems, dish systems, collector tubes, heat storage equipment and corresponding materials, heat exchange technology and products, high-temperature heat transfer technology and products, system control Solar Cooling Systems and Equipment: Solar cooling products and systems, air energy products, solar central air conditioning, ground source heat pump air conditioning Solar Lighting and Building Materials: Solar lawn lights, garden lights, solar street lights and other optoelectronic products, solar PV glass, solar rooftop modules, solar PV building integration overall solutions, etc. LED Technology and Products: LED lighting, LED application products, display products/digital signage, parts, modules, kits, etc. Solar Accessories: Solar complementary automatic control devices and instruments, solar pipes and fittings, solar control systems, solar heat pipes, vacuum tube collectors, flat plate collectors, engineering manifolds, insulation materials, hot and cold water pumps, brackets, PV equipment accessories, batteries and other related production equipment and accessory materials International Energy Storage Technology and Smart Grid Energy Storage Technology, Equipment and Materials: Compressed air energy storage, pumped hydro energy storage, superconducting magnetic energy storage, flywheel energy storage, thermal/cold storage, hydrogen storage and other energy storage technologies applicable to plug-in EVs, equipment and materials; various batteries (nickel–metal hydride batteries, lithium-ion batteries, lithium polymer batteries, lead-acid batteries, smart batteries, sodium-sulfur batteries), energy storage power supplies, supercapacitors, renewable fuel cells, flow batteries and other technologies, equipment and materials ESS Power Stations and EPC Projects: BMS battery management systems, PCS energy storage inverters, microgrids, EV charging and battery swapping stations and related supporting facilities C. New Energy Power Generation Grid Connection and Smart Power Transmission and Distribution: Grid-tie inverters, light DC equipment, operation monitoring devices, grid connection control systems, flexible transmission equipment, ultra-high voltage transmission equipment, high-temperature superconducting equipment, high-temperature superconducting cables, distribution automation systems and protection devices, smart switchgear, transformers, instrument transformers, smart components, digital substations, substation integrated automation, distribution network automation devices, transmission and distribution online monitoring, fault diagnosis and self-healing devices, power quality monitoring, harmonic control and reactive power compensation, superconducting electrical technology, various new types of wires and cables, composite materials, safety protection D. Power Grid Dispatching and Automation Control: Smart grid dispatching systems, dispatching integrated data platform systems, grid security and control, smart inspection systems, integrated measurement and control protection and arc suppression line selection systems, security and stability control system solutions, power monitoring systems and microcomputer-based relay protection, wide-area dynamic monitoring systems, grid stability online monitoring systems, distribution network intelligent reactive power compensation devices, control software, remote control and telemetry devices, large-screen display systems, power system simulation E. Smart Metering and Power Consumption Management: Smart meters and chips, remote/centralized meter reading systems, power consumption information collection systems, power consumption management information systems, load management terminals, monitoring systems, verification devices, metering cabinets and components, measuring instruments, sensors, semiconductors F. Smart Grid Information and Communication: IoT technology, cloud computing technology, multi-network convergence technology, transmission technology and equipment, access equipment, optical fiber and cables, industrial Ethernet, data communication and network technology and related products, in-plant communication equipment, power line carrier equipment, supporting equipment and instruments, digital microwave communication equipment, testing equipment and instruments, network online monitoring equipment G. Others International NEV and Charging Piles NEVs (Passenger Vehicles / Commercial Vehicles): Electric buses and trucks, electric sedans, electric sightseeing vehicles, electric golf carts, electric cleaning vehicles, hybrid buses and sedans, solar EVs, light EVs, hybrid vehicles (micro hybrid, mild hybrid, medium hybrid, full hybrid and plug-in hybrid), pure EVs, fuel cell vehicles, hydrogen and natural gas and other new energy clean fuels, hybrid vehicles and various low-emission environmental protection energy-saving vehicles; Power Drive Systems: Power batteries, battery management systems, fuel cells, hybrid systems, drive motors, electric control systems, engines, detection and repair equipment, related testing, monitoring, protection instruments, related technologies; C. Key NEV Parts: Power capacitors, supercapacitors, flywheels, inverters, electric heat pumps, electric power steering, electric air conditioning, tires, wire connections, electromagnetic technology, related materials; coatings, transmissions, filters, carburetors, exhaust systems; axles, steering, braking, suspension systems; auto body accessories; motors and electrical appliances, electronic components, electrical systems, circuits, wheel hubs, tires, etc.; D. Vehicle Design: Complete vehicle design, system control design, etc. E. Charging Facilities: Charging stations, charging piles; charging station smart network project planning and achievement display, gas station expansion to charging (battery swapping) stations, integrated gas and charging service station display, solar and wind complementary NEV charging station technology products, charging station power distribution equipment, chargers, power monitoring systems, active filter devices, transformers, distribution cabinets, cables, direct charging equipment, management auxiliary equipment, charging/swapping batteries and battery management systems, parking lot charging facilities, smart monitoring, charging station power supply solutions F. Others Participation Fees: Standard Booth (Deluxe, 3m x 3m ): Domestic enterprises: RMB 23,800/booth Foreign-funded enterprises: US$4,900/booth Basic configuration: one consultation desk, two folding chairs, one waste basket, one 220V/500W power supply socket, two spotlights, Chinese-English header board, carpet inside the booth. Indoor Bare Space (minimum 36 m² rental): Domestic enterprises: RMB 2,380/m ² Foreign-funded enterprises: US$490/m ² Exhibitor Notes: 1. Enterprises confirming participation shall complete the exhibition application form, affix the company seal, and fax or mail it to the Organizing Committee; 2. Upon receipt of booth reservation fees, the Organizing Committee will arrange booths according to the principle of "first application, first payment, first arrangement"; 3. Payment details for participation fees: (1) The above participation fees do not include "construction deposit", "construction management fee", "facility rental fee" and other fees; (2) Exhibitors who sign contracts shall remit the deposit to the Organizing Committee's account within ten working days from the date of signing the contract, and fax the remittance receipt to the Organizing Committee for verification; (3) The remaining participation fees shall be remitted to the Organizing Committee's designated account before December 31, 2025; 4. The order of conference booklet advertisements is based on the order of advertisement fee receipt, with the submission deadline being March 31, 2026; 5. The Organizing Committee will send the "Exhibitor Manual" to participating enterprises in April 2026. Inquiries Welcome: Shanghai Fulemi Exhibition Service Co., Ltd. SNEC 19th (2026) International Photovoltaic Power Generation and Smart Energy (Shanghai) Conference & Exhibition Contact: Manager Wei Room 905, Guangqi City, No. 425 Yishan Road, Xuhui District, Shanghai Postal Code: 200235 Room 905-907, Guangqi City Office Building, No. 425 Yishan Road, Xuhui District, Shanghai Tel: +86-13817218765 E-mail: weiwei@snec.org.cn Conference Website:

Recent Performance of Key Iron Ore Price Spreads Since 2024, large-scale iron ore projects in and outside China have been continuously commissioned, leading to a notable increase in iron ore supply. However, the sharp decline in downstream steel demand caused the iron ore supply-demand gap to widen continuously. The iron ore supply-demand pattern shifted from tight to loose, which also led to a year-on-year decline in average iron ore prices. Nevertheless, influenced by multiple factors such as iron ore supply and demand, port inventory, and steel mill profits, the frequency of price spread fluctuations among iron ore varieties increased. SMM reviewed the recent trends of key price spreads, as detailed below: ◼ Internal Differentiation Among Medium-Grade Resources, with Price Spreads Widening Significantly Affected by long-term contract negotiations, the trade liquidity of mainstream medium-grade ore deteriorated significantly. The lack of trade liquidity in certain varieties was directly transmitted to variety price spreads, with price spread fluctuations of mainstream medium-grade ore such as MNPJ intensifying notably. Among them, the price spread between PB fines and Jimblebar fines was the most sensitive: In early September 2025, the price spread between the two was 20 yuan/mt. As news of the ban on Jimblebar fines port cargo pick-up was released, its spot price came under pressure and dropped sharply, with the price spread quickly widening to around 50 yuan/mt. In addition, affected by the reduction in tradable varieties of mainstream Australian medium-grade ore, the variety price spreads between PB fines and Newman fines, as well as MAC fines, also showed a notable narrowing trend. Source: SMM ◼ High-Grade Premium Highlighted, Price Difference Between High and Medium-Grade Ore Widening Rapidly From Q4 2025 to date, price spread fluctuations among high, medium, and low-grade ore were equally intense. After entering 2026, structural contradictions in the iron ore market became further pronounced. Affected by declining raw ore quality from northern Brazilian mining areas, IOCJ fines supply experienced a trend of contraction. Coupled with the cost-effectiveness recovery brought by earlier price weakness and the release of concentrated restocking demand from steel mills ahead of Chinese New Year, IOCJ fines prices received strong support. Meanwhile, mainstream medium-grade ore remained tight in available resources due to trade flow disruptions. Against the backdrop of a shift between high and low-grade resources, the price difference between high and medium-grade ore widened again. Reviewing the period from November 2025 to March 2026, north China entered the heating season, and environmental protection-driven production restrictions became more frequent. As Chinese New Year and the Two Sessions approached, production restrictions were further tightened, with blast furnaces at steel mills in multiple areas of Hebei shut down, leading to a notable decline in hot metal production. Notably, during this period, steel mill profits remained generally stable, and some enterprises, in pursuit of higher output, tended to increase the blast furnace blending ratio of high and medium-grade ore while correspondingly reducing procurement of low-grade ore. Driven by this structural demand shift, the price difference between medium and low-grade ore widened. Source: SMM ◼ Lump-Fines Price Spread Experienced a "V"-Shaped Trend, Declining First Then Rising Since sintering processes generate relatively high pollution emissions, environmental protection-driven production restrictions typically prioritized restricting sintering and shaft furnace production. In north China and north-east China, during heating seasons or major events, if production restriction periods are prolonged, steel mills often increase the proportion of lump ore in their mix to alleviate tight supply of sinter and pellet, thereby driving lump ore prices to rise rapidly. However, over the past three years, the impact of seasonal factors on lump ore demand has gradually weakened, mainly for three reasons: first, steel mills have successively completed ultra-low emission retrofits for flue gas, reducing overall pollution intensity; second, sintering machines in Hebei and other regions have surplus capacity, and environmental protection-driven production restrictions have mostly been limited to within one week, significantly reducing the actual impact on production; third, steel mill profits have been under pressure, reducing the pursuit of hot metal production, and the proportion of high-grade ore usage has adjusted downward accordingly. Under the combined influence of the above factors, since H2 2024, lump ore premiums have continued to decline, hitting a new low by the end of 2025. Meanwhile, the price spread between PB lump and PB fines also narrowed significantly, contracting from 195 yuan/mt to 63 yuan/mt, a decline of over 50%. Against this backdrop, the cost-effectiveness of lump ore gradually became more prominent. Combined with the extended environmental protection-driven production restriction period in northern China in November 2025, the proportion of lump ore usage began to increase. However, as lump ore premiums had remained low for an extended period, product returns were poor, and major mines correspondingly reduced lump ore production. Driven by both supply contraction and demand growth, lump ore premiums rebounded, and the lump-fines price spread widened accordingly. As of mid-March 2026, lump ore premiums have risen to a periodic high, up nearly 280% from early January. The lump-fines price spread has also gradually widened to above 100 yuan/mt. Source: SMM Key Driving Logic of Product Price Spreads Mix Adjustment Led by Steel Mill Profits (Core Driver) ◼ 1 Profit Expansion Phase: High Hot Metal Production Drives Demand for High-Grade Ore When steel mill profits widened and per-mt crude steel returns were higher, steel mills pursued pig iron production and tended to raise the grade of furnace feed. When selecting iron ore, they preferred to purchase high-grade or medium-grade ore. As shown, in H1 2025, profits of common billet at China's steel mills rebounded notably. Common billet profits reached a peak of nearly 350 yuan/mt. At this point, to boost production, steel mills moderately increased the proportion of high-grade IOCJ fines, as well as high-grade lump and pellet usage. Demand growth over a certain period stimulated high-grade ore price increases, and it was clearly evident that the price spread between high-grade and medium-grade ore began to widen. Source: SMM ◼ 2 Profit Contraction Phase: Cost Reduction and Efficiency Improvement Boost Low-Grade Ore Procurement After steel mill profits contracted, to reduce costs and improve efficiency, steel mills significantly increased their focus on cost-effectiveness across iron ore products, tending to prioritize products with higher cost-effectiveness. Within the mid-grade ore range, steel mills preferred varieties with a larger price spread relative to PB fines. Meanwhile, weakening profits meant that higher pig iron or crude steel production led to greater loss pressure. Therefore, steel mills controlled pig iron production rationally from the perspective of economic efficiency. However, given the high comprehensive costs of shutting down or reducing blast furnace loads, steel mills tended to maintain normal blast furnace operations while lowering furnace charge grade and increasing the use of low-grade ore. Under these circumstances, assuming other conditions remained unchanged, the price spread between mid- and low-grade ore tended to narrow. Taking the market around October 2025 as an example, billet profits continued to decline, and the mid-to-low-grade ore price spread narrowed accordingly. Data source: SMM Dual Transmission Paths of Seasonal Effects ◼ Seasonal factors influenced iron ore variety demand through dual paths of "end-use demand fluctuations" and "heating season environmental protection-driven production restrictions" ◼ 1. Seasonal fluctuations in end-use demand: impact on steel mill production and raw material procurement pace The shift between off-season and peak season in end-use demand created cyclical impacts on iron ore variety demand. Off-seasons were mainly concentrated in summer (June–August) and winter (November–February): high temperatures and heavy rainfall in summer suppressed construction, while hydropower replacing thermal power in south China lowered electric furnace production costs and squeezed blast furnace hot metal production; in winter, construction sites in north China shut down and steel demand contracted. During off-seasons, steel mills increased blast furnace maintenance and lowered furnace charge grade to control production, with demand for high-grade iron ore weakening accordingly. During peak seasons (spring March–May, autumn September–October), downstream construction activity was released intensively, steel mills actively ramped up production, and furnace charge grade rose in tandem, strengthening demand for high-grade fines, lump ore, and pellet, supporting their premium performance. In summary, seasonal fluctuations in end-use demand drove cyclical changes in iron ore variety demand by influencing steel mill production and furnace charge grade selection. Transmission logic: end-use demand fluctuations → steel mill production adjustments → changes in total iron ore procurement volume → corresponding shifts in variety demand structure Data source: SMM Data source: SMM ◼ 2. Environmental protection-driven production restrictions during the northern heating season: direct disruption to furnace charge structure and variety premiums Heating season environmental protection-driven production restrictions primarily targeted steel mills in north China, spanning November to April of the following year . During this period, if air quality failed to meet standards, local environmental protection authorities would initiate production restriction measures, prioritizing restrictions on sintering machines and shaft furnaces, leading to tighter supply of sinter and pellet. To maintain blast furnace operations, steel mills were forced to increase the proportion of lump ore in their charge mix, driving a seasonal strengthening of lump ore demand, which in turn supported lump ore premiums and a rise in the lump-fines price spread. Transmission logic: environmental protection policy → sinter machine production restrictions → forced adjustment of furnace charge structure → stronger demand for lump ore and pellet ore → premium fluctuations Data source: SMM Coke prices affected the iron ore product mix through dual channels of fuel costs and profit margins ◼ 1 High coke prices suppressed lump ore demand As raw material directly charged into furnaces, lump ore consumed more coke than sinter and pellet ore, so steel mills typically controlled the lump ore charging ratio at around 10%. During periods when coke prices fluctuated at highs, steel mills tended to reduce lump ore proportions to control fuel costs. Before H1 2024, coke prices fluctuated at highs, and the lump ore usage ratio continued to decline, falling to a low of 9.8%. However, as coke prices underwent nearly a year of decline and entered a low range, combined with relatively low lump ore premiums and the push from environmental protection-driven production restriction policies, the lump ore charging ratio gradually rebounded, once exceeding 11%. Data source: SMM ◼ 2 Demand for high-silicon fines suppressed The higher the silicon content in iron ore, the greater the blast furnace slag volume and the higher the coke ratio. Therefore, low-silicon smelting is a key direction for blast furnace process optimization and a critical lever for cost reduction and efficiency improvement. Among current iron ore products on the market, mainstream mid-grade ore Si content mostly ranges from 4-6%. Brazilian high-silicon BRBF has relatively high Si content at 10-12%. Therefore, Australian ore is mostly used as the primary material, while Brazilian ore and non-mainstream ore serve as auxiliary materials. When coke prices were at highs, the cost disadvantage of high-silicon resources became prominent, and steel mills tended to reduce Brazilian high-silicon BRBF, Indian fines, and South African fines, shifting to mid-to-high-grade fines with lower silicon content (such as PB fines and IOCJ fines). Going forward, the iron ore oversupply pattern will become more prominent, while under overcapacity pressure in China's steel sector, steel mill profits will remain poor. Therefore, cost reduction and efficiency improvement will be a long-term direction, driving stronger demand for low-silicon, low-aluminum products. Consequently, mainstream mid-grade ore will remain the product with the best market circulation. Data source: SMM ◼ 3 Rising share of mid-to-low-grade fines under low profits High coke and ore prices squeezed steel mill profits, and steel mills no longer pursued hot metal production maximization, instead increasing mid-to-low-grade fines usage and lowering charging grade to control costs. Based on historical data, such situations occurred in Q3 2024 and Q2 2025. Auxiliary Variables: Inventory, Substitution, and Preferences ◼ 1 Product substitution effect: mid-grade inter-substitution and "high-low blending" substitution In the product mix of steel mill sinter, "high-low blending" and "mid-grade blending" are commonly mentioned concepts, with the core principle being to select the optimal products based on the cost-effectiveness of different iron ore varieties. Under normal circumstances, steel mills use MNPJ (i.e., mainstream medium-grade ore types such as Mac fines, Newman fines, PB fines, and Jimblebar fines) as primary materials, or adopt a high-low grade combination of " IOCJ fines + super special fines " as primary materials, and adjust auxiliary material ratios based on the acidity and alkalinity of the primary materials. Using mainstream medium-grade ore types as primary materials is the more common practice. When mainstream medium-grade ore types are periodically less cost-effective — for example, when the combined cost of "IOCJ fines + super special fines" is lower than that of medium-grade PB fines — some steel mills periodically switch to high-low grade combinations as primary materials to reduce costs. As shown in the chart, during March to April of 2024 and 2025, the cost-effectiveness advantage of high-low grade combinations was significantly superior to that of medium-grade ore, and therefore some steel mills in regions such as Hebei and Shanxi predominantly chose high-low grade combinations as primary materials during these periods. Data source: SMM ◼ 2. Inventory Structure Drives Price Spreads among Varieties: Inventory Changes and Price Transmission Logic Inventory is the most intuitive reflection of short-term supply-demand imbalances in the iron ore market. When supply is loose or demand weakens, port inventory continues to rise, and inventory levels generally exhibit a negative correlation with prices. Once inventory accumulates to a certain level, it tends to exert significant downward pressure on prices. Over the past two years, the inventory and price trends of Ukrainian concentrate (hereinafter "Ukrainian concentrate") have well validated this pattern. In November 2023, Ukrainian concentrate shipments gradually resumed, but as steel mills still had concerns about the stability of its supply, actual usage did not increase significantly, leading to continued port inventory accumulation. By May 2024, SMM ten-port inventory data by variety showed that Ukrainian concentrate inventory exceeded 3 million mt , exerting significant downward pressure on prices, with Ukrainian concentrate prices falling from 1,200 yuan/mt at the beginning of the year to 900 yuan/mt. Meanwhile, the price spread between Ukrainian concentrate and PB fines also narrowed from 160 yuan/mt to 80 yuan/mt, and its cost-effectiveness advantage gradually emerged, driving a notable increase in steel mill demand. Entering early 2026, affected by a decline in Ukrainian concentrate supply, port inventory retreated from highs to around 1.1 million mt, and tightening supply supported a notable rebound in Ukrainian concentrate prices, with the price spread versus PB fines also widening from 80 yuan/mt to around 100 yuan/mt . Data source: SMM Variety Cost-Effectiveness Assessment Model and Selection Strategy ◼ 1. Horizontal Comparison: Micro-Indicator Assessment among Same-Grade Varieties. In recent years, global mainstream iron ore supply entered a resource transition period, with notable structural adjustment characteristics. On one hand, some aging mines faced resource depletion , with declining mining grades; on the other hand, new mines were still in the capacity ramp-up stage , and the transition between old and new resources still required time. As a result, quality indicators of multiple mainstream varieties were broadly downgraded. Among them, medium-grade ore indicators represented by PB fines and Newman fines weakened; due to declining raw ore quality in Brazil's northern system, not only did IOCJ fines production contract, but the proportion of high-silicon special IOCJ fines output also rose, with silicon content increase being particularly notable beyond the decline in iron grade. Against this backdrop, steel mills tended to assess the most cost-effective varieties by calculating comprehensive price spreads. From the perspective of minor indicator adjustment values, the smaller the adjusted price spread relative to the MMI 61% index, the better the variety met steel mill demand. Based on Q1 averages, Jimblebar fines offered the best cost-effectiveness, followed by PB fines, Mac fines, Newman fines, and BRBR. However, since Jimblebar fines could not be traded or delivered, PB fines remained the optimal choice among medium-grade ores. Data source: SMM ◼ 2. Vertical Comparison: Historical Percentile Timing of High, Medium, and Low-Grade Price Spreads Beyond the horizontal comparison of price spreads among varieties of similar grades, vertically examining price spread changes among high, medium, and low-grade ores was equally important. By analyzing historical percentiles of the price difference between high and medium-grade ore and the price difference between medium and low-grade ore, the relative valuation of each grade could be assessed to guide variety switching and timing. Price difference between high and medium-grade ore: when at historical highs, the high-grade premium was excessive, and switching to medium-grade was advisable under profit pressure; when at historical lows, high-grade cost-effectiveness stood out, and moderate allocation increases were appropriate. Beyond premiums, using IOCJ fines and PB fines as benchmarks and calculating based on their indicator costs, the neutral value of the price spread between the two was 100 yuan/mt. When the spread exceeded 100 yuan/mt, PB fines offered better cost-effectiveness; when below 100 yuan/mt, IOCJ fines were more cost-effective. Price difference between medium and low-grade ore: when at historical highs, low-grade advantages were evident, suitable for cost reduction during thin-margin periods; when at historical lows, medium-grade cost-effectiveness improved, allowing flexible adjustments. Using PB fines and SSF as benchmarks and calculating based on their indicator costs, the price spread between the two ranged from 100-120 yuan/mt, with a midpoint of 110 as the neutral value. When the spread exceeded 110 yuan/mt, super special fines offered better cost-effectiveness; when below 110 yuan/mt, PB fines were more cost-effective. Combining the historical percentiles of both, allocation windows for each grade could be captured based on profit cycles to achieve cost optimization. Data source: SMM ◼ 3 Morphology Comparison: Arbitrage Logic of Fines-Lump Price Spread and Lump Ore Premium. Taking the price spread between PB lump and PB fines as an example, influenced by steel mill profits and coke prices, the fines-lump price spread exhibited notable fluctuations. Historical data showed the price spread between PB lump and PB fines ranged approximately 80–500 yuan/mt. In H1 2021, driven by high steel mill profits and supply-demand mismatch, the fines-lump price spread once approached the historical high of nearly 500 yuan/mt. In recent years, as steel mill profits narrowed, the price spread contracted significantly. In 2025, the fines-lump price spread operated within a range of 70–220 yuan/mt, with an annual average of approximately 128 yuan/mt. In early 2026, the lump ore premium fell to $0.04/dmt, and the price spread narrowed to 65 yuan/mt. Given that China's overcapacity landscape has not fundamentally changed, steel mill profits are expected to remain basically flat with 2025, and the fines-lump price spread is likely to maintain the current range. Based on this assessment: When the lump-fines price spread exceeds 120 yuan/mt, PB fines offer better value; When the lump-fines price spread falls below 120 yuan/mt, PB lump offers better value. Steel mills can choose accordingly based on their own conditions. Data source: SMM ◼ 4 Substitution Comparison: Cost-Effectiveness Competition between Lump Ore and Pellet Generally, when steel mill profits are favourable, steel mills consider increasing the usage ratio of lump ore and pellet. Typically, the combined usage share of lump ore and pellet ranges between 20%–30%. In actual ore blending decisions, steel mills' price spread analysis between lump ore and pellet falls into two categories: inland steel mills usually compare the price spread between domestic pellet and lump ore such as PB lump and Newman lump; while coastal port steel mills focus more on the price spread between imported pellet and corresponding lump ore. In recent years, with the increase in China's pellet capacity and the decline in imported pellet volumes, the weighting of price spread comparison between same-grade lump ore and domestic pellet has further increased. Historical data showed the price spread between 62% grade pellet in Qingdao and PB lump ore at Qingdao port ranged approximately 40–260 yuan/mt, with an annual average price spread of approximately 108 yuan/mt in 2025. Considering steel mills' actual cost accounting, the price spread equilibrium point between pellet and lump ore is generally set at 120 yuan/mt. When the pellet-lump price spread exceeds 120 yuan/mt, lump ore offers better value; When the pellet-lump price spread falls below 120 yuan/mt, pellet offers better value. Steel mills can choose accordingly based on their own raw material conditions, logistics structure, and production requirements. Data source: SMM Carbon Neutrality as a Two-Way Driver: Steel Industry Restructuring Shifts Iron Ore Demand ◼ The rapid advancement of industrialisation has significantly intensified the impact on the global climate, making the urgency of achieving carbon neutrality increasingly pressing. Particularly over the past five years, major economies represented by China and the EU have not only defined their respective emission reduction targets but also successively introduced legally binding regulations, marking a shift in global climate governance from consensus to action. Going forward, China's Ecological Environment Code and the EU's European Climate Law and "Fit for 55" package will become the two major institutional benchmarks for global climate governance. China's carbon market and the EU's CBAM, from the two dimensions of domestic carbon pricing and cross-border carbon adjustment respectively, form core policy tools for effectively controlling carbon emissions. Source: SMM ◼ Driven by both domestic and international legislation, the steel industry will undergo an evolution in emission reduction pathways: process transformation from long-process to short-process steelmaking; low-carbon transition driving non-blast furnace ironmaking development and carbon constraints driving furnace charge structure upgrades. These pathways will collectively reshape the demand structure of iron ore, manifested as strengthened preference for high-grade, low-impurity iron ore concentrates and premium mainstream ore types, while demand for traditional sintering fines tends to narrow. ◼ 1. Process restructuring: the shift from long-process to short-process steelmaking will drive increased demand for mainstream varieties and high-grade ore Under the global backdrop of "carbon neutrality" goals, the steel industry is regarded as one of the key areas for industrial emission reduction. The traditional long process (blast furnace-converter process), due to its reliance on coke and iron ore, is considered a major source of high carbon emissions and has become a key target for regulation and transformation. Many countries have begun shifting toward the more environmentally friendly short process (steel scrap-electric furnace process), but this transition has been relatively slow in China. On one hand, electric furnace steelmaking is largely limited to rebar production; on the other hand, steel scrap supply is constrained. Additionally, considering factors such as melting costs and losses in steel scrap smelting, pig iron costs should be higher than steel scrap prices by 100-150 yuan/mt for steel scrap to be more cost-effective; if the price spread is below this level, pig iron offers better value. In 2025, the price spread between hot metal costs and steel scrap fluctuated in a range of -100-210. Pig iron costs were mostly more favorable than steel scrap, so the share of blast furnace steelmaking in China stayed high. Source: SMM In China, apart from profitability, short-process electric furnaces are also constrained by high electricity prices, steel scrap price fluctuations, and cost disadvantages , resulting in slow capacity growth. Although the national carbon market is already operational, current carbon prices have not been effectively incorporated into trading, which is not enough to drive a large-scale shift from long-process to electric furnaces, and enterprises mostly adopt gradual adjustments . Source: SMM Based on current policy and market conditions, before China's steel industry is formally included in the national carbon market trading and during the early stage of the EU's CBAM policy implementation, the blast furnace-converter long process will remain the dominant mode of global steel production over the next five years. However, under the dual pressures of domestic steel capacity capping and rising carbon prices in the future, China's electric furnace short process is entering a historic development opportunity, with its share of steelmaking set to gradually increase. By 2030, the share of electric furnace steelmaking is expected to reach around 35%. In the long term, this trend will gradually suppress iron ore demand, causing it to weaken. Against the backdrop of oversupply, competition among iron ore varieties will intensify, and therefore high cost-effective varieties with low silicon and aluminum content will become the optimal choice for steel mills. Undoubtedly, mainstream medium and high-grade ore such as PB fines, Mac fines, Newman fines, IOCJ fines, BRBF, and Simandou fines all belong to relatively high-quality varieties. ◼ 2 Low-carbon transition driving non-blast furnace ironmaking development, demand for high-grade iron ore concentrates with Fe content above 65% expected to continue rising Currently, global DRI production accounts for only 10% of total global production. As low-carbon technologies such as hydrogen-based DRI accelerate in application, DRI production share is expected to rise to 13% by 2030. In comparison, China's non-blast furnace ironmaking share is even smaller, with mass production not yet achieved and only leading steel enterprises in the trial production stage. Under current carbon neutrality requirements, China's non-blast furnace ironmaking is facing significant development opportunities. According to incomplete statistics, announced non-blast furnace ironmaking capacity totaled approximately 18 million mt, of which only 2 million mt were under construction, with the remaining 16 million mt of projects still in early stages, carrying relatively high risk coefficients. Whether these projects materialize depends on multiple factors including funding, market conditions, decarbonization policies, and government support, resulting in significant uncertainty regarding future commissioning time. Future projects will primarily be gas-based; current major DRI equipment uses coke oven gas (COG), but in the medium and long-term will gradually shift to green hydrogen. Data source: World Steel Association Data source: SMM Currently, the core requirements for DRI raw materials are "high grade, low impurities," with Fe grade ≥66% and SiO2+Al2O3 ≤3.5%. China's concentrates generally have relatively high silicon content, with some exceeding 10%. Therefore, only a few low-silicon concentrates can be used to produce direct reduced pellet feed. Ex-China high-grade concentrates offer a wider range of options. Data source: SMM As DRI production grows, demand for high-quality iron units is also increasing, leading to a structural rise in the share of high-grade iron ore and pure iron raw materials. As shown in the chart, varieties within the red box all have Fe content above 66%, with Si+Al content around 3.5%; these include some high-grade iron ore concentrates from China, Brazilian pellet feed concentrates, Peruvian concentrates, and emerging Simandou fines, all of which can serve as DRI raw materials. Data source: SMM ◼ 3. Carbon constraints drive furnace charge structure upgrades, with pellet replacing sinter becoming key to carbon reduction, and pellet-making concentrates with grades above 62% set to see significant growth. As China's steel industry pursues structural adjustment, optimization, and green, low-carbon, high-quality development, pellet ore as a premium raw material for blast furnaces has been increasingly favoured by the industry, driving the rapid development of the pellet sector. The energy consumption of the pellet production process is approximately 50% of that of the sinter production process. According to CISA's 2025 statistics, the average energy consumption of the sintering process among its member units was 48.5 kg/mt, while the average energy consumption of the pellet process was 25.23 kg/mt, indicating lower energy consumption in pellet production. Due to the different heat supply methods in pellet roasting compared to sintering, SO2, NOX, and CO2 emissions after combustion are much lower than those from the sintering process. In addition, pellet ore generates much less dust than sinter, making the pellet process more environmentally friendly. The emission comparison between the sintering process and the pellet process is shown in the chart below: Data source: SMM ◼ A high proportion of pellet ore in furnace charge is the direction and demand of current blast furnace charge structure development Compared with other countries in the world, China's blast furnace charge structure is dominated by sinter with a low pellet ratio , while blast furnaces in North America and Europe primarily use high proportions of pellets, with some blast furnaces reaching 100%. For example: SSAB's blast furnace in Sweden had a pellet ratio of 97.2%, Dofasco in Canada achieved 100% all-pellet smelting, and USS No. 14 blast furnace had a pellet ratio of 80%, etc. According to CISA's 2025 statistics, the average fuel ratio per unit of ironmaking at China's key steel enterprises was 523-525 kg/mt, approximately 70 kg higher than the average fuel ratio of European and American blast furnaces. The reason is that China's blast furnace charge is dominated by sinter, with sinter iron grade at around 54-57%, while pellet ore iron grade is above 62%. High sinter usage leads to high slag volume and high energy consumption in blast furnaces. Therefore, against the backdrop of carbon reduction, increasing the proportion of pellet ore usage is imperative. Data source: SMM ◼ Currently, there are three main types of pellet production equipment in China: shaft furnaces, chain grate-rotary kilns, and travelling grates . In recent years, pellet equipment with a single-unit capacity below 1.2 million mt/year (excluding ferroalloy and foundry pig iron pellets) has been classified as a restricted category; therefore, capacity replacement of pellet equipment continues, with new pellet projects predominantly using travelling grates, with single production line capacity mostly at 5 million mt. As a result, current pellet production is mainly based on rotary kilns and travelling grates. These two types of equipment have less stringent raw material requirements compared to shaft furnaces, allowing the blending of multiple ore types such as magnetite, hematite, and limonite. However, it must be concentrate, with a particle size requirement generally of -200 mesh, 70% or above. Commonly used varieties include: domestic concentrate, Ukrainian concentrate, Brazilian concentrate, Middle Eastern concentrate, Chilean concentrate, Australian concentrate, Sierra Leonean concentrate, etc. As the proportion of pellet usage increases in the future, demand for concentrate with grades of 62% and above will continue to expand. ◼ Overall, before 2030, as carbon neutrality policies and Europe's CBAM are still in the early stages of implementation, carbon emission costs have not yet become significantly prominent. Meanwhile, China's steel production is trending downward, while iron ore supply is accelerating, steel mill profits are under pressure, and cost reduction and efficiency improvement remain the industry's mainstream strategy. Therefore, procurement will continue to focus on low- and medium-grade iron ore, demand for non-mainstream ore varieties will remain robust, the price spread among high-, medium-, and low-grade ore will be difficult to widen, and premiums for lump ore and pellets will also stay at current low levels. ◼ After 2030, market requirements for green steel will gradually increase, the share of electric furnace steelmaking and non-blast furnace steelmaking will rise, and overall iron ore demand will decline notably. Although blast furnace capacity will decrease, operating rates may improve, driving down sinter demand while pellet demand increases significantly. This shift will lead to a sharp decline in fines demand and an expansion of market share for mainstream medium-grade ore; meanwhile, demand for high-quality concentrate will rise, pushing the price difference between high and medium-grade ore wider, and pellet premiums will also continue to climb. Additionally, although lump ore demand has some growth potential, the increase will be limited under carbon emission constraints, and lump ore premium elasticity will diminish accordingly.

U.S. Treasury Secretary Bessent stated in an exclusive interview on Friday, outlining his policy blueprint for artificial intelligence, energy, taxation, and financial regulation, and indicated that he did not rule out the possibility of serving as Fed Chairman in the future.Bessent said he did not rule out the possibility of serving as Fed Chairman in the future, but explicitly refused to run for any public office. He explained that the Fed Chairman does not need to participate in elections, can shape the direction of the economy, and that the US Fed itself is an important institution.

SMM April 20: Metals Market: As of the daytime close, base metals on the domestic market mostly rose, with only SHFE aluminum and SHFE nickel declining. SHFE aluminum fell 1.49% and SHFE nickel fell 0.9%. The rest of the metals rose, with SHFE zinc up 0.69% and the others gaining less than 0.6%. The alumina front-month contract rose 0.43%, while the casting aluminum front-month contract fell 1.31%. Additionally, the lithium carbonate front-month contract rose 2.6%, the silicon metal front-month contract rose 1.05%, and the polysilicon front-month contract hit the daily limit again during intraday trading, closing at 42,955 yuan/mt with a 9% gain. The Europe containerized freight front-month contract rose 0.38% to 2,103.2. Ferrous metals all rose except stainless steel, which fell 0.47%. Hot-rolled coil, rebar, and iron ore all gained over 1% (hot-rolled coil 1.17%, rebar 1.24%, iron ore 1.16%). Coking coal and coke: coking coal rose 2.77% and coke rose 2.27%. Overseas market, as of 15:07, all metals fell except LME nickel, which led the gains with a 1.36% rise. The rest declined, with LME copper leading the losses at 0.63%. Precious metals, as of 15:07, COMEX gold fell 1.5% and COMEX silver fell 2.67%. In China, SHFE gold fell 0.08% and SHFE silver rose 1.34%. Additionally, the platinum front-month contract fell 0.18% and the palladium front-month contract fell 0.18%. Market Data as of 15:07 Today Macro Front China: [NEA: Total Electricity Consumption Reached 2,514.1 billion kWh, Up 5.2% YoY, January-March] The National Energy Administration released March electricity consumption data. From January to March, total electricity consumption reached 2,514.1 billion kWh, up 5.2% YoY. By sector, the primary industry consumed 33.6 billion kWh, up 7.1% YoY. The secondary industry consumed 1,598.7 billion kWh, up 4.7% YoY; of which, industrial electricity consumption was 1,583.6 billion kWh, up 4.9% YoY, and high-tech and equipment manufacturing consumed 274.6 billion kWh, up 8.6% YoY. The tertiary industry consumed 483.3 billion kWh, up 8.1% YoY; of which, EV charging and battery swapping services and internet data services consumed 37.6 billion and 22.9 billion kWh respectively, with growth rates of 53.8% and 44.0%. Urban and rural residential electricity consumption was 398.5 billion kWh, up 3.4% YoY. [April LPR Unchanged: Both 5-Year and 1-Year Rates Held Steady for the Eleventh Consecutive Month] The April LPR was announced: PBOC kept the 1-year and 5-year LPR at 3% and 3.5% respectively, unchanged for the eleventh consecutive month. [Foshan's Commercial Housing "Trade-in" Policy Is Here! First Batch Involves 22 Residential Projects] Recently, the Notice on Organizing the First Batch of Commercial Housing "Trade-in" Program by the Foshan Municipal Housing and Urban-Rural Development Bureau was officially released. This is not merely an encouraging document; it is a solution that systematically clears bottlenecks in housing replacement through model innovation and a policy package. It aims to drive the real estate market's transition from "one-sided transactions" to a "virtuous cycle between existing and new housing stock," achieving a win-win outcome for residents, enterprises, and the market. The innovation of Foshan's trade-in policy lies in bringing multiple real estate enterprises into the program: Foshan Anju, Chancheng Anju, Nanhai Youju, Shunde Chengtie, Gaoming Airport Construction, and Sanshui Anju serve as acquisition entities, while Foshan Chengfa, Foshan Urban Renewal, Foshan Lianzhi, Heyue Yaji, Shunkong Chengtou, Yongdeli Commerce, Sanshui Chanfa, and Miaohui Real Estate provide new housing sources. This model determines the value of existing homes through negotiation, establishes a "contract termination protection period" to avoid blindly pushing for lower prices, thereby completing the "sell old, buy new" closed loop and serving as a market stabilizer. (Foshan Release) US Dollar: As of 15:07, the US dollar index rose 0.03% to 98.26. According to a CITIC Securities research report, US Fed Governor Miran and three other economists recently co-published a working paper titled "A User's Guide to Restructuring the Federal Reserve's Balance Sheet," whose structure bears similarities to the previously widely discussed "A User's Guide to Restructuring the Global Trading System." The paper challenges the conventional view that the US Fed cannot significantly reduce its balance sheet, arguing that reserve demand is largely determined by the regulatory environment and that balance sheet reduction can be achieved without causing unexpected market stress by adjusting the regulatory framework, curbing precautionary motives, and addressing other sources of reserve demand. Using Monte Carlo simulations, the paper estimates the potential balance sheet reduction space at $1.2 trillion to $2.1 trillion. We believe the "balance sheet reduction guide" has a certain degree of real-world feasibility, but some options are somewhat idealistic. (Jin10 Data APP) According to the CME "Fed Watch": the probability of the US Fed raising interest rates by 25 basis points in April was 0.5%, while the probability of keeping rates unchanged was 99.5%. The probability of a cumulative interest rate cut of 25 basis points by June was 4.5%, the probability of keeping rates unchanged was 95%, and the probability of a cumulative rate hike of 25 basis points was 0.5%. (Jin10 Data APP) On the macro front: Germany's March PPI month-on-month rate, Canada's March CPI month-on-month rate, and other data were to be released today. Also worth noting: German Chancellor Merz and European Central Bank President Lagarde delivered speeches; Trump said a US delegation would arrive in Islamabad on the evening of the 20th for negotiations, while Iran denied reports of a second round of talks being held in Islamabad. Crude oil: As of 15:07, oil prices in both markets surged, with WTI up 6.42% and Brent up 5.9%. Iran had once again closed the Strait of Hormuz, driving oil prices sharply higher. On the 19th local time, an Iraqi oil ministry official said the closure of the Strait of Hormuz would block the export of nearly 4 million barrels of Iraqi crude oil over the next three days. The Iranian Islamic Revolutionary Guard Corps Navy issued a statement on the 18th saying that, due to the US violating ceasefire commitments and failing to lift the naval blockade on Iranian ports and vessels, the Strait of Hormuz would be blocked starting that evening. (CCTV News) Gary Pedersen, head of trading house Gunvor, warned that the oil market was facing more turbulence as Middle East tensions collided with seasonal slowdown in crude oil demand, increasing the likelihood of further sharp and unpredictable fluctuations in crude oil prices. (Jin10 Data) The International Energy Agency forecast that global crude oil demand would decline by 1.5 million barrels per day in Q2, the largest drop since the COVID-19 pandemic. OPEC's forecast was relatively mild, projecting a daily decline of 500,000 barrels. (Jin10 Data) A CICC research report noted that as the Iran situation entered its 7th week, the situation saw a further turning point. Although the first round of peace talks "collapsed," both the US and Iran "announced" the reopening of navigation through the Strait of Hormuz, which still largely boosted optimistic sentiment in the market, despite subsequent reversals. This was largely in line with our base case assumption: while short-term reversals remain possible, a complete loss of control over the medium term is not the base case scenario, as Trump still has midterm elections to consider, and a comprehensive and uncontrollable escalation serves neither side's interests. Under this scenario, the Brent crude oil price center would gradually pull back to around $80 in Q2 and Q3, and the US Fed could still cut interest rates. (Jin10 Data APP) SMM Daily Review ► ► ► ► ► ► ► ► ► ► ► ►

SMM April 20: Metals market: As of the midday close, most base metals on the domestic market rose. SHFE copper was up 0.79%. SHFE aluminum was down 1.22%. SHFE lead was up 0.18%, and SHFE zinc was up 1.08%. SHFE tin was up 0.26%, and SHFE nickel was down 0.88%. In addition, the most-traded casting aluminum futures fell 1.1%, and the most-traded alumina futures rose 0.32%. The most-traded lithium carbonate futures rose 1.96%. The most-traded silicon metal futures rose 1.05%. The most-traded polysilicon futures hit the daily limit up with a 9% gain. Ferrous metals mostly rose. Iron ore was up 0.77%, rebar up 0.8%, hot-rolled coil up 0.9%, and stainless steel down 0.23%. Coking coal and coke: the most-traded coking coal contract was up 3.13%, and the most-traded coke contract was up 2.56%. Overseas base metals, as of 11:40, most LME metals rose. LME copper was down 0.21%. LME aluminum was up 0.66%, LME lead edged up, and LME zinc was up 0.61%. LME tin was down 0.28%. LME nickel was up 1.53%. Precious metals, as of 11:40, COMEX gold was down 1.32%, and COMEX silver was down 1.8%. Domestic precious metals: the most-traded SHFE gold futures fell 0.1%, and the most-traded SHFE silver futures rose 1.84%. In addition, as of the midday close, the most-traded platinum futures rose 0.47%, and the most-traded palladium futures rose 0.23%. As of the midday close, the most-traded Europe containerized freight index contract was up 0.23%, at 2,100 points. As of 11:40 on April 20, midday futures quotes for selected contracts: Spot and Fundamentals Copper: Today in Guangdong, #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 260 yuan/mt, up 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 170 yuan/mt, flat with the previous trading day; SX-EW copper was quoted at a premium of 110 yuan/mt, flat with the previous trading day. The average price of #1 copper cathode in Guangdong was 102,880 yuan/mt, up 840 yuan/mt from the previous trading day; the average price of SX-EW copper was 102,775 yuan/mt, up 835 yuan/mt from the previous trading day. Spot market: Returning from the weekend, Guangdong inventory continued to decline sharply and had now fallen for 24 consecutive trading days, mainly due to low arrivals...... Macro Front China: [National Energy Administration: Total electricity consumption reached 2,514.1 billion kWh cumulatively from January to March, up 5.2% YoY] The National Energy Administration released data on total electricity consumption for March. From January to March, total electricity consumption reached 2,514.1 billion kWh cumulatively, up 5.2% YoY. In terms of electricity consumption by sector, the primary industry consumed 33.6 billion kWh, up 7.1% YoY. The secondary industry consumed 1,598.7 billion kWh, up 4.7% YoY; of which, industrial electricity consumption was 1,583.6 billion kWh, up 4.9% YoY, and high-tech and equipment manufacturing consumed 274.6 billion kWh, up 8.6% YoY. The tertiary industry consumed 483.3 billion kWh, up 8.1% YoY; of which, electricity consumption for charging and battery swapping services and internet data services was 37.6 billion kWh and 22.9 billion kWh respectively, with growth rates reaching 53.8% and 44.0% respectively. Urban and rural residential electricity consumption was 398.5 billion kWh, up 3.4% YoY. [April LPR Rates Released: Both 5-Year and 1-Year Rates Remained Unchanged for the Eleventh Consecutive Month] The April Loan Prime Rate (LPR) was released: PBOC kept the 1-year and 5-year LPR at 3% and 3.5% respectively, unchanged for the eleventh consecutive month. [Foshan Launches Commercial Housing "Trade-in" Program! First Batch Involves 22 Property Projects] Recently, the "Notice of Foshan Municipal Housing and Urban-Rural Development Bureau on Organizing the First Batch of Commercial Housing Trade-in Program" was officially released. This is not merely an encouraging document; it is a comprehensive solution that systematically addresses bottlenecks in housing replacement through model innovation and a policy package. It aims to drive the real estate market's transition from "one-sided transactions" to a "virtuous cycle between existing and new housing stock," achieving a win-win outcome for residents, enterprises, and the market. The innovation of Foshan's trade-in policy lies in the involvement of multiple real estate enterprises: Foshan Anju, Chancheng Anju, Nanhai Youju, Shunde Chengtie, Gaoming Airport Construction, and Sanshui Anju serve as acquisition entities; while Foshan Chengfa, Foshan Urban Renewal, Foshan Lianzhi, Heyue Yaji, Shunkong Chengtou, Yongdeli Commerce, Sanshui Chanfa, and Miaohui Real Estate provide new housing sources. This model determines the value of existing homes through negotiation, establishes a "contract termination protection period" to avoid blindly pushing for lower prices, thereby completing the "sell old, buy new" closed loop and serving as a market stabilizer. (Foshan Release) US dollar: As of 11:40, the US dollar index was up 0.05% at 98.28. According to the CME "FedWatch" tool, the probability of a 25-basis-point rate hike by the US Fed in April was 0.5%, while the probability of keeping rates unchanged was 99.5%. The probability of the US Fed cumulatively cutting interest rates by 25 basis points by June was 4.5%, the probability of maintaining rates unchanged was 95%, and the probability of cumulatively raising rates by 25 basis points was 0.5%. (Jin10 Data) A CITIC Securities research report noted that US Fed Governor Milan and three other economists recently co-published a working paper titled "A User's Guide to Restructuring the Federal Reserve's Balance Sheet," whose structure bears similarities to the previously hotly debated "A User's Guide to Restructuring the Global Trading System." The paper challenges the conventional view that the US Fed cannot significantly reduce its balance sheet, arguing that reserve demand is largely determined by the regulatory environment and that balance sheet reduction can be achieved without causing unexpected market stress by adjusting the regulatory framework, curbing precautionary motives, and other sources of reserve demand. Monte Carlo simulations estimated the potential balance sheet reduction space at $1.2 trillion to $2.1 trillion. We believe the "balance sheet reduction guide" has a degree of real-world feasibility, but some options are somewhat idealistic. (Jin10 Data) On other currencies: Asian Development Bank President Kanda Masato stated that the yen could face further pressure if the market perceives the Bank of Japan as acting too slowly in addressing inflation risks. Kanda Masato, who previously served as Japan's top foreign exchange diplomat, told reporters on Friday evening that investors buy US dollars during periods of global tension partly because the US is an oil exporter, but even if these positions are unwound, the yen would find it difficult to appreciate significantly against the US dollar. He said: "The biggest reason is the interest rate differential. As the market pays particular attention to what the US Fed might do, if many people believe the Bank of Japan will fall behind the curve in addressing inflation risks, the yen will be left behind." Kanda Masato said during the International Monetary Fund and World Bank Group meetings in Washington this week that investors could also sell the yen if they are concerned about Japan's fiscal sustainability. (Jin10 Data) On data: Germany's March PPI month-over-month rate and Canada's March CPI month-over-month rate, among other data, were to be released today. Also worth watching: German Chancellor Merz and European Central Bank President Lagarde delivered speeches; Trump said a US delegation would arrive in Islamabad on the evening of the 20th for negotiations, while Iran denied reports of a second round of talks being held in Islamabad. On crude oil: As of 11:40, oil prices in both markets surged significantly, with WTI up 5.73% and Brent up 5.38%. Last Friday, the market was still celebrating ceasefire prospects, but within 72 hours over the weekend, the situation took a sharp turn — the Strait of Hormuz was closed again, the US seized an Iranian vessel, and Trump issued tough threats, quickly dashing the market's optimistic sentiment. (Wall Street Insights) The Strategic Petroleum Reserve Project Management Office website under the US Department of Energy (DOE) released information on the 17th stating that it would lend over 26 million barrels of crude oil from the Strategic Petroleum Reserve to 9 oil enterprises. This was the third batch of petroleum reserves released by the Trump administration to stabilize oil prices since the US-Israel-Iran conflict began on February 28. (Jin10 Data) Australia's Viva Energy Group stated that its refinery in Geelong, Australia, would increase production of diesel, aviation fuel, and gasoline to 90% of full capacity in the coming weeks, after a major fire forced it to reduce production. The company stated that its inventory was sufficient to cover the production decline and was not expected to impact clients. (Jin10 Data) A CICC research report stated that as the Iran situation entered its 7th week, the situation saw further positive developments. Although the first round of negotiations "collapsed," both the US and Iran "announced" the reopening of navigation through the Strait of Hormuz, which still largely boosted market optimism, despite subsequent fluctuations. This was largely consistent with our base case assumption: while short-term reversals remain possible, the situation ultimately spiraling out of control in the medium term is not the base case scenario. Trump still has midterm elections to consider, and a comprehensive and uncontrollable escalation does not serve either side's interests. Under this scenario, the Brent crude oil price center would gradually pull back to around $80 in Q2 and Q3, and the US Fed could still cut interest rates. 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[SMM Analysis: Key Anchor in Great Power Rivalry: The U.S. "Project Vault" and the Changing Resource Landscape in Latin America] While the second phase of Chinese company's Mirador copper mine in Ecuador remains mired in a 'completed but awaiting approval' deadlock, 10,000 kilometers away in Washington, the President, alongside the Export-Import Bank of the United States, is announcing a historic supply chain security initiative named 'Project Vault.'

As the world places greater emphasis on sustainable development, the recycling and reuse of metal resources not only effectively reduces resource waste but also mitigates environmental pollution, thereby promoting a green transformation of the economy.

According to Wells Fargo's mid-2025 outlook report, precious metals will continue to benefit from geopolitical conflicts and economic uncertainties, with gold prices expected to hit a record high of $3,600 per ounce in 2026. Analysts noted in the report that the significant correction in commodity prices presents attractive opportunities later this year and into 2026. Additionally, they anticipate that improvements in the US economic conditions later in 2025 will drive growth in commodity demand. Wells Fargo recommends that investors pivot to sectors that may benefit from an improving macro environment, such as energy or precious metals, and adjust their portfolios to hedge against policy and geopolitical uncertainties. Exercise patience Wells Fargo emphasized in the report that rapid changes in economic policies over the past few months have disrupted investors and capital markets. Since the 2024 US elections, uncertainty surrounding US economic policies has continued to escalate, primarily due to tariff volatility, with recent uncertainties surpassing those during the COVID-19 pandemic. Analysts highlighted that these uncertainties are expected to continue driving gold prices higher over the next two years, as private investors and global central banks will continue to purchase gold. By 2026, central banks alone are expected to account for 21% of global gold demand. Meanwhile, US short-term interest rates are expected to decline in 2026, and the US dollar is also expected to rebound mildly, which will further strengthen the upward trend in precious metal prices. However, analysts also caution that investor optimism about precious metals' rise has reached levels historically preceding significant corrections, leading them to prefer exercising patience and waiting for price dips before buying. The bank expects gold prices to pull back slightly to a range of $3,000 to $3,200 by the end of this year, with the outlook for gold prices rising to $3,600 per ounce by the end of 2026. Analysts also recommend that investors focus on quality factors rather than speculative assets and diversify their portfolios through commodities like precious metals, which may outperform broader market indices. Chantelle Schieven, Managing Director of Capitalight Research, also believes that due to the resilience of the US economy and labour market, gold prices may stagnate throughout the summer but will oscillate near high levels. However, considering the inflationary impact of tariffs, she expects the US to face stagflation risks over the next two years, which will support gold prices.