The champagne corks in Brussels may have popped too soon. On January 14, 2026, the European Commission released a soaring press statement celebrating the official entry of the Carbon Border Adjustment Mechanism (CBAM) into its "Definitive Regime." In the official narrative, this was a triumph of digitalization: over 10,000 customs declarations verified in real-time, with the system running as smooth as silk. However, if we shift the lens from the desks of Brussels to the customs brokers in Hamburg, the steel traders in Rotterdam, and the customs officials currently drowning in paperwork across the continent, a starkly different picture emerges. What we are witnessing is a carefully whitewashed administrative "cardiac arrest." Forensic-level investigation into the first seven weeks of 2026 reveals that the landing of CBAM is far from the glitz claimed by officials. On the contrary, plagued by suspected low-level data errors, catastrophic approval backlogs, and teetering temporary patches, the mechanism is currently mired in a dual crisis of legality and operations. I. The Absurd "Default Values": When Taiwan’s Stainless Steel "Became" Indonesian Coal If one were to find a single representative footnote for this chaos, the "Default Value Controversy" would be the undisputed choice. For importers unable to obtain precise carbon emission data from upstream factories, the EU’s official "default values" are a lifeline. This was supposed to be a baseline derived from rigorous scientific calculation. Yet, in the 2,400-page document released on December 31, 2025, mere hours before the new rules took effect, industry experts witnessed a jaw-dropping scene. This is not merely a margin of error; it looks more like a metallurgical farce. Industry bodies have pointed out that when the Directorate-General for Taxation and Customs Union (DG TAXUD) established the carbon emission default values for stainless steel from the Taiwan region, the data tables contained suspected structural errors, bearing traces of a "copy-paste" job from Indonesian data structures. The consequence? In the physical world, processing a steel slab into a precision tube requires significant electricity, meaning the finished product should logically have higher emissions than the semi-finished one. Yet, in the table published by the EU, industry players have flagged phenomena where "Taiwanese semi-finished stainless steel allegedly emits more than the finished product," vehemently questioning its rationality. In metallurgy, this is impossible; in a bureaucratic Excel sheet, it became legal reference. More fatally, Taiwan’s stainless steel industry relies primarily on Electric Arc Furnaces (EAF) and scrap recycling, resulting in a relatively low carbon footprint. In contrast, the Indonesian stainless steel industry is highly dependent on Nickel Pig Iron (NPI) and coal-fired power, yielding extremely high emissions. This suspected "slip of the hand" by the EU is akin to forcefully assigning the calorie count of a rich braised pork belly to a light garden salad. This has directly resulted in European buyers of Taiwanese stainless steel facing artificially inflated financial costs. II. A 27% Pass Rate: The 15,000-Strong Army Blocked at the Gate If data controversies are "soft tissue damage," the backlog in administrative approval is a fatal "compound fracture." The core rule of the CBAM definitive stage is simple: without "authorized declarant" status, you cannot import. This means every company wishing to ship a screw or an aluminum sheet into Europe must first secure an "entry ticket." The reality is brutal. According to the Commission’s official press release, by January 7, over 12,000 operators across the EU had submitted applications, with just over 4,100 approved (a pass rate of roughly 34%). However, industry estimates suggest that by late February, applications swelled to approximately 15,000, causing the pass rate to slide to around 27%. Where did the massive remainder go? They are stuck in the overwhelmed approval systems of National Competent Authorities (NCAs). In Germany, due to the deluge of applications, logistics giant DSV issued a public notice stating it could not support clients with CBAM authorization and registration, bluntly forcing thousands of SMEs to crash into the complex reporting system like headless flies. In France, the labyrinthine digital authentication process has turned the application into a maze only a hacker could navigate. To prevent European ports from paralysis, the EU was forced to administer a "painkiller": Customs Code Y238. This is a temporary "hall pass" allowing companies that applied before March 31 but have not yet been approved to keep goods moving for now. But make no mistake, this merely lengthens the fuse on the bomb. III. The Strategy of Silence and the Risk of "Retroactive Reckoning" Faced with industry skepticism, Brussels seems to have chosen the oldest PR strategy: silence. Although industry giants like the Gerber Group issued detailed technical warnings as early as January 9, pointing out the absurdity of the Taiwan/Indonesia data, the industry notes that as of late February, no official "Corrigendum" has been issued to legally revise the default values. The updated Excel version released on February 13 merely added a disclaimer: "information only." This rigid attitude transfers all risk to the enterprises. For companies currently relying on the Y238 temporary arrangement, the real danger is not "whether goods are released," but "whether they will be retroactively penalized." Competent authorities have publicly warned that if an authorization application is ultimately rejected, member states can, under Article 26 (2)/(2a) of the CBAM Regulation, retroactively penalize goods imported during the waiting period. Such fines can, in certain cases, reach 3 to 5 times the standard penalty. In other words, this is not a procedural flaw; it is a compliance risk that could land directly on cash flows and balance sheets. Conclusion: Who Pays the Price for Hubris? CBAM was supposed to be the crown jewel of the EU’s climate ambition, a lighthouse for global green trade. But the opening scene of 2026 makes it look more like an unfinished Tower of Babel. From the "data ghosts" haunting the industry to the severely backlogged approval channels, this "hard landing" exposes a chasm between regulatory ambition and administrative capability. For European importers, every day now is an exercise in navigating through fog. They are forced to calculate not just carbon emissions, but the cost of policy uncertainty. And for the European Commission, if it cannot step out of this arrogant "silence" and clarify these glaring operational controversies, what CBAM loses will be more than just data accuracy; it will be the trust of its global trading partners.

Futures: Overnight, LME lead opened at $1,965/mt, fluctuating downward during the Asian session; it dipped to $1,948.5/mt upon entering the European session, but then rose due to a weakening US dollar index, touching a high of $1,976.5/mt before finally settling at $1,974.5/mt. Overnight, the most-traded SHFE lead 2603 contract opened at 16,665 yuan/mt, briefly touched a low of 16,560 yuan/mt early in the session, then rebounded as bears reduced positions, reaching a high of 16,680 yuan/mt before finally settling at 16,665 yuan/mt, up 0.48%, forming a doji star. On the macro front: As markets awaited a series of US economic data, a weaker US dollar made dollar-denominated commodities more attractive to overseas buyers; spot gold extended gains. The White House's Hassett predicted worsening employment: AI boosts productivity, reduces labor demand. Alphabet planned to raise about $15 billion by issuing US dollar bonds. China's Ministry of Commerce held a symposium with automakers: Multiple measures to promote the expansion and quality improvement of auto consumption. The Shanghai, Shenzhen, and Beijing Stock Exchanges announced a package of measures to optimize refinancing. Seven departments including the Ministry of Human Resources and Social Security provided administrative guidance on employment to leading platform companies and courier firms. Three departments including the Ministry of Finance issued an announcement on tax incentives for re-exported cross-border e-commerce goods. : SHFE lead stopped falling and stabilized, but as the Chinese New Year holiday approached, logistics vehicles halted in some regions, leading to reduced shipments and quotations from suppliers. Only some cargoes self-picked up from primary lead smelters were quoted at premiums of 0-50 yuan/mt against the SMM #1 lead average price ex-works. In the secondary lead sector, more smelters were on holiday and reluctant to sell at low prices, with most enterprises suspending quotations; a few secondary refined lead offers were at discounts of 25 yuan/mt to premiums of 50 yuan/mt against the SMM #1 lead average price ex-works. Downstream enterprises generally entered the year-end wrap-up phase, with minimal inquiries, resulting in thin trading in the spot market. Inventory: On February 9, LME lead inventory decreased by 100 mt to 232,750 mt. As of February 9, SMM lead ingot social inventory across five regions rose to a five-month high. Today's lead price forecast: With previously in-transit lead ingots by rail concentratedly arriving at warehouses, social inventory of lead ingots increased significantly, mainly reflected in Jiangsu and Zhejiang region warehouses. Last week, lead prices fell, prompting lead-acid battery enterprises to conduct relatively concentrated stockpiling of lead ingots, leading to a noticeable decline in lead smelters' in-factory inventory. This week being the last before the Chinese New Year, the final batch of lead-acid battery enterprises will enter the holiday state, further weakening lead consumption. Meanwhile, with the start of the Spring Festival travel season, migrant workers have returned to their hometowns, and the number of vehicles in operation has gradually decreased. Currently, some regions no longer support road transportation. It is expected that the growth momentum of social inventory for lead ingots will slow down, and the inventory buildup of lead ingots is anticipated to be more reflected in the smelters' plant inventories. Overall, lead prices are in the doldrums ahead of the holiday. Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and do not constitute decision-making advice.

This week coincided with the Chinese New Year holiday, with most rare earth producers temporarily suspending external shipments and maintaining pre-holiday price levels. On the trading side, overseas inquiries increased in frequency, while domestic enterprises selectively took orders. Some companies, facing a shortage of spot resources, halted external shipments. In news, the opening of India's artificial intelligence summit became the hottest topic this week, with multiple countries announcing plans to strengthen rare earth mining to secure local supply chains.

[SMM Overseas Tungsten Weekly Review: European Tungsten Market Surged This Week with APT Up Over 13% and Scrap Also Strengthened] As of February 19, prices for tungsten raw materials and scrap in the European market climbed across the board. SMM data showed that the average CIF Rotterdam price for ammonium paratungstate (APT) was $1,800/mtu, up 13.56% WoW; the average price for ferrotungsten was $200/kg W, up 1.5% WoW. The scrap market also strengthened, with the average price for European scrap tungsten drill bits at €90/kg, up 12.5% WoW; offers for scrap tungsten alloy blades rose to €89/kg. In the Indian scrap tungsten market, offers held steady, with FOB prices basically flat WoW.

TÜV Rheinland InterCert Kft (hereinafter referred to as “TÜV Rheinland”) in Hungary has been officially authorized by the European Commission, becoming the first designated Notified Body (No. 1008) under the framework of the EU Battery Regulation (EU) 2023/1542.

Tungsten prices kept rising through the Chinese New Year. Europe saw higher quotes but few spot deals, with APT at $1,650+/mtu and ferro-tungsten hitting $205/kg. India’s scrap market stayed strong, with drill bits at $110/kg. In China, tight supply pushed APT long-term prices up by ¥200,000 to ¥1 million/t. Shortages persist, pointing to more post-holiday gains.

[Elevra and Mangrove Lithium Sign Non-Binding MOU for Spodumene Concentrates Offtake] North American lithium producer Elevra Lithium Limited ("Elevra") is pleased to announce the signing of a non-binding memorandum of understanding to supply spodumene concentrates produced by NAL to Mangrove Lithium ("Mangrove"). Elevra and Mangrove may enter into a binding definitive agreement in the future, subject to Mangrove reaching a final investment decision on the construction of its lithium conversion facility by June 2027 and the parties agreeing on the final terms of the agreement. Under the terms of the non-binding MOU, Elevra and Mangrove intend to negotiate a definitive agreement whereby Elevra would supply Mangrove with up to 144,000 mt of spodumene concentrates annually at market-related prices, with floor and ceiling prices, ensuring NAL generates positive cash flow at any stage of the pricing cycle. The proposed supply has an initial term of five years, commencing in 2028, and is expected to ramp up to the full annual volume of 144,000 mt by 2030, representing approximately 46% of projected sales. Mangrove plans to process the spodumene concentrates into battery-grade lithium hydroxide in Eastern Canada to support the establishment of a resilient domestic battery supply chain in Canada. Mangrove's designed annual capacity is 20,000 mt of battery-grade lithium, equivalent to the demand for 500,000 EVs. Source: https://news.smm.cn/ [Albemarle Announces Idling of Kemerton Lithium Hydroxide Processing Plant on February 11 Local Time] Albemarle decided to immediately idle and place into a state of care and maintenance the operational Train 1 production line at its Kemerton plant in Western Australia. This represents a further contraction following the idling of Train 2 in 2024 and the halting of the Train 3 and 4 expansion projects. Although lithium prices have recovered recently, the levels are not enough to support the cost pressures associated with hard-rock lithium conversion operations in the West. This move aims to improve financial flexibility and preserve future options. It is expected to have an accretive effect on adjusted EBITDA starting from Q2 2026, without affecting the sales target for the year, as customer demand will be met through other channels. Albemarle emphasized that its upstream lithium mine interests and exploration rights in Australia, such as Greenbushes and Wodgina, remain unaffected and are still a strategic core. Source: https://www.albemarle.com [Ultra-Thin, Compact Lithium-Ion Rechargeable Battery "EnerCera" Supports Tohoku University's Tsunami Balloon Project Demonstration Experiment] NGK Insulators, Ltd. (hereinafter "NGK") announced that it supported the demonstration experiment for Tohoku University's tsunami balloon project by manufacturing and supplying its ultra-thin, compact lithium-ion rechargeable battery, EnerCera®. The project aims to establish a new disaster prevention system that automatically deploys balloon-type evacuation markers during tsunamis, visually indicating the locations of tsunami evacuation facilities, such as evacuation towers and evacuation buildings, from the air. EnerCera powers the light sources installed in the balloons, making the evacuation sites clearly visible at night or under poor visibility conditions. In the demonstration experiment, EnerCera was used as the power source for the balloon-type evacuation marker lighting unit, which activated immediately after a tsunami. The experiment verified whether sufficient brightness was achieved when the balloons were deployed and whether the system met practical usage requirements. EnerCera combines a thin and lightweight design with high output and excellent environmental resistance, enabling stable operation in outdoor environments. By enabling wireless lighting control, the system is expected to enhance the visibility of tsunami evacuation facilities at night and help prevent evacuation delays. The Tsunami Balloon Project is an initiative led by a technical team from Tohoku University, aiming to develop a system that automatically releases balloons into the air upon receiving disaster information, such as tsunami warnings and emergency earthquake alerts, issued via the Quasi-Zenith Satellite System "Michibiki". In the demonstration experiment, a series of operational tests were conducted: upon receiving a tsunami warning (test signal), gas was rapidly injected into the balloon, inflating it to a diameter of approximately 2 meters and raising it to a height of about 40 meters within approximately 2 to 3 minutes. The balloon is marked with a person pictogram, allowing people to identify the evacuation facility simply by looking up at the sky. To improve nighttime visibility, EnerCera was integrated as the light source. Source: https://www.mynewsdesk.com/ ["Sacrifice Zone" or a Clean Energy Future? EU Court Considers Portuguese Lithium Mine Project] The risks in this case escalated further after EU officials refused in November to revoke the "strategic" status of the Barroso mine. A long-standing controversy over lithium mining in northern Portugal has reached the European Union's highest court. Environmental and community organizations have filed a lawsuit with the European Court of Justice against the European Commission's decision to grant the Barroso lithium project "strategic" status. The residents' association "United Defense Association of the Barroso Valley" and the environmental law organization ClientEarth raised objections on Thursday, February 5, arguing that the Commission failed to reassess the project after new evidence emerged regarding environmental, social, and safety risks. The core dispute in this case revolves around the EU's Critical Raw Materials Act of 2024. Projects designated as "strategic" gain fast-track access to permitting processes, financing channels, and the supply of raw materials for green products such as EVs and batteries. Source: https://www.euronews.com/ [How Argentina's Lithium and Uranium Boom Could Undermine Its Energy Sovereignty] Argentina possesses abundant critical natural resources, the demand for which is increasingly growing as the global energy transition continues to accelerate. However, although Argentina's potential geopolitical advantages have opened new avenues for economic growth, as world superpowers fiercely compete for the country's lithium and uranium resources, this may also entail significant trade-offs in energy sovereignty. The Argentine economy has finally seen a rebound after decades of painful recession. This shift is largely attributed to the radical austerity policies implemented by the right-wing President Javier Milei, elected in 2023. While Milei's aggressive financial reforms have had some positive effects on the economy, his approach has been highly controversial both domestically and internationally. Part of Milei's strategy involves forming a close alliance with the Trump administration. As part of this shift, he has shown a new willingness to cooperate with the US and other international partners in new nuclear energy plans. Milei declared his country an "unconditional ally of the US," with Argentina becoming the first partner country to sign the Trump administration's "Foundational Infrastructure for Responsible Use of Small Modular Reactor Technologies" initiative. Source: https://oilprice.com/

Futures: Overnight, LME lead opened at $1,974/mt, touched a high of $1,981.5/mt during the Asian session before fluctuating downward; it probed a low of $1,960.5/mt during the European session, then rose in late trading to close at $1,977.5/mt. Overnight, the most-traded SHFE lead 2603 contract opened at 16,660 yuan/mt, touched a low of 16,635 yuan/mt early in the session before fluctuating upward to a high of 16,750 yuan/mt, and finally closed at 16,705 yuan/mt, up 0.24%, forming a small bullish candlestick. On the macro front: CME Group: Plans to launch single-stock futures this summer. US Fed—①Hammack: Economic outlook is positive, inflation remains high, no urgent need for interest rate cuts this year. ②Logan: Adopts a "cautiously optimistic" stance on the effectiveness of current interest rate policy, more concerned about inflation. US December retail sales month-on-month recorded 0%, below the median forecast of 0.4%, previous value 0.60%. According to the EU-China Chamber of Commerce, the European Commission accepted Volkswagen's price commitments for China-made pure electric vehicles. China's National Development and Reform Commission (NDRC) issued implementation opinions on accelerating the promotion and application of artificial intelligence in the bidding sector. Li Qiang: Reasonably develop rare earth resources, actively promote breakthroughs in key core technologies. The central bank released the China Monetary Policy Execution Report for Q4 2025: Continue to implement appropriately accommodative monetary policy. : Market circulation cargoes were limited in Jiangsu, Zhejiang, and Shanghai, coupled with most logistics being suspended, suppliers' quoting enthusiasm significantly decreased, with a few quoting following the market, mainly cargoes self-picked up from production site. Quotations for mainstream origin primary lead cargoes self-picked up from production site against the SMM #1 lead average price were at discounts of 30 yuan/mt to premiums of 50 yuan/mt ex-works. Secondary lead side, smelters awaited the holiday, quotations were scarce, a few secondary refined lead quotations against the SMM #1 lead average price were around parity ex-works. Additionally, most downstream enterprises had halted production, some operating enterprises were also in the final stage, spot order procurement basically stopped, and transactions were rare in the spot market. Inventory side: On February 10, LME lead inventory was flat from the previous day at 232,750 mt. As of February 9, SMM lead ingot social inventory across five areas rose to a five-month high. Today's lead price forecast: Enterprises across the lead industry chain successively entered the holiday period, trading activity significantly decreased. Most primary lead suppliers completed clearing inventory last week, spot order quotations were scarce; many secondary lead smelters were on holiday and reluctant to sell at low prices, most enterprises suspended quotations. Downstream enterprises generally entered the year-end final stage, stockpiling targets were completed, and inquiry willingness was low. Additionally, as the Chinese New Year holiday approaches, logistics and transportation have tightened, and the spot market is experiencing light trading activity. Overall, the impact of fundamentals on lead price trends before the holiday has weakened, with attention turning to fluctuations in overseas markets that may affect lead prices. Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, and are for reference only, not constituting decision-making advice.

On March 25, local time, the European Commission released a list of 47 strategic projects for critical raw materials, aimed at enhancing the capacity of strategic raw materials within Europe.

The European Commission is collaborating with the governments of Australia, the United States, and Canada to jointly promote global energy transformation, aiming to advance the development of low-emission electricity with a focus on the application of battery energy storage technology. This initiative, known as the "Super Energy Storage Battery Plan," was announced at the COP28 UN Climate Conference held in Dubai on December 6, and was initiated by the Clean Energy Ministerial to include the energy departments of various governments as members and participants.