In the first half of 2026, the new energy commercial vehicle (NECV) sector truly took off. According to CAAM data, China's NECV sales reached 548,000 units in H1 2026, up 36% YoY . Domestic sales accounted for 495,000 units, up 40%, while exports reached 53,000 units, up 8% . The strength in domestic sales can be attributed to two main factors: supportive policies and declining costs . On the policy front, the "two new" initiatives continued to support the scrappage of commercial vehicles with China IV emission standards or below, replacing them with low-emission models, with priority given to electric vehicles. Subsidies for new NECV purchases can reach up to RMB 140,000 per vehicle, and in some regions, this can be stacked to as high as RMB 220,000 per vehicle, substantially shortening the payback period for the price gap between electric and diesel vehicles. On the cost side, with oil prices remaining high this year, the cost advantage of electricity over diesel has become evident . Electric commercial vehicles can save approximately RMB 0.8 per kilometer in energy costs, translating into RMB 80,000 in annual savings for a vehicle travelling 100,000 km per year. In addition, declining battery prices, along with the growing maturity of battery swapping and leasing models, have significantly narrowed the initial purchase price gap between NECVs and their internal combustion engine counterparts. With both policy support and cost improvements in place, the penetration rate of NECVs has climbed steadily. In May, the penetration rate of NECVs in domestic sales reached 40%, up 15 percentage points from the same period last year. Among these, heavy-duty trucks stood out as the brightest spot, with cumulative domestic sales reaching 126,200 units in H1 2026, up 85% year-on-year . The "Implementation Plan for Promoting the Large-Scale Application of New Energy Heavy-Duty Trucks," jointly issued by the Ministry of Transport and other departments, sets clear targets: a penetration rate of 40% and a total stock of 1.6 million units by 2030, providing a clear growth trajectory for the segment. NECV exports have also progressed steadily. In May, the export penetration rate of NECVs exceeded 10% for the first time . Although its share in total commercial vehicle exports remains relatively small, the strategic significance of exports is evident amid increasingly fierce domestic competition. China is deepening its presence in traditional markets such as Asia-Pacific, South America, and Africa, while also breaking into higher-standard markets like Turkey, Australia, and Germany. Chinese commercial vehicles are gradually transitioning from a cost-effective positioning to one defined by high technological sophistication. With domestic NEV sales contracting by 13% year-on-year in H1 2026, and pressure on domestic sales likely to persist, the NECV sector still represents a blue ocean. SMM projects that the ratio of passenger to commercial vehicles in China's NEV market will be approximately 91:9 in 2026, shifting to 87:13 by 2030 . While passenger vehicles will remain the dominant segment, commercial vehicles have higher battery capacities per vehicle, which will meaningfully support long-term demand for upstream battery materials, particularly lithium iron phosphate. In terms of battery capacity, commercial vehicles are also seeing significant gains. In May, the average battery capacity of new energy buses and trucks both exceeded 210 kWh, compared with around 180 kWh in the same period last year. The rise in the share of heavy-duty trucks has been a key factor—the current average battery capacity for new energy heavy-duty trucks has already reached 460 kWh . Looking ahead, as heavy-duty truck penetration continues to increase, the average battery capacity per new energy truck is expected to exceed 300 kWh by 2030. From a global perspective, SMM estimates that in 2026, ICE vehicles will still account for 77.5% of the commercial vehicle market, while NEVs will take a 22.5% share, within which BEVs and PHEVs will account for 17.4% and 5.1%, respectively . BEVs have become the mainstream in NECVs for simple reasons: commercial vehicle operators prioritize per-kilometer costs, and pure electric operation is far cheaper than diesel. Heavy-duty trucks and buses tend to operate on fixed routes, making them ideal for battery swapping solutions, while policy support also favors BEVs. In the long run, BEVs are set to maintain their dominant position in the NECV sector .

According to data released by CAAM, China's total automobile sales in June reached 2.81 million units, but were down 3.2% YoY. However, the NEV market performed impressively, with sales reaching 1.643 million units, up 23.6% YoY. Export side, June automobile exports reached 1.037 million units, up 75.1% YoY; notably, NEV exports were particularly outstanding, reaching 523,000 units, up 1.6 times YoY.

CPCA branch secretary-general Cui Dongshu pointed out in an article that the new energy vehicle market performed poorly in June, while the auto export market continued to maintain strong growth. Meanwhile, producer inventories saw a slight reduction, and the industry did not experience inventory buildup. Due to the unprecedented strength of consumption policies last year, policy support has clearly contracted entering 2026, especially a significant reduction in entry-level consumption support policies, which directly led to the continued negative growth of the passenger car retail market from January to June this year. However, thanks to the increase in exports, the growth rate of producer sales in June remained relatively stable.

In H1 2026, silver experienced an extreme market trend marked by a sharp-peaked inverted-V and stepwise decline, driven by the interplay of two main themes: a spot silver squeeze anomaly and a shift in US Fed monetary policy. After hitting an all-time high of 30,900 yuan/kg in January, silver prices pulled back trend-wise to 13,816 yuan/kg in June, as interest rate cut expectations reversed and hawkish signals strengthened, representing a 55% pullback from the peak. On the supply side, silver ingot production rose 6.9% YoY, and imports surged before returning to normal. On the demand side, PV silver demand fell 21% YoY, with industrial demand taking over from investment as the main driver. In H2, attention will focus on the inflation turning point and marginal changes in the US Fed's policy; silver prices are expected to consolidate on a subdued note.

Production-wise, China's cumulative production of lithium battery separators from January to June was approximately 17.416 billion m², of which wet-process separators accounted for 15.005 billion m², or 86.16%, and dry-process separators accounted for 2.411 billion m², or 13.84%.

From a supply-demand balance perspective, China's lithium carbonate market exhibited a tight balance in H1 2026, with sellers and buyers continuously seeking new equilibrium points amid bargaining.

On June 17, 2026, the 2026 SMM (3rd) ASEAN Automotive Supply Chain Conference , organized by Shanghai Metals Market (SMM), successfully wrapped up at the Hyatt Regency Bangkok Suvarnabhumi Airport in Bangkok, Thailand! This conference serves as an annual gathering of Southeast Asia's auto industry, bringing together 400+ delegates, 40+ speakers, 15+ partners and 15+ exhibitors from 15+ countries. Conference Background The Southeast Asian EV industry is at a strategic crossroads. Thailand's "30/30" policy is driving adoption, with EV penetration projected to near 15% by 2025. Indonesia is building a full battery chain using its nickel resources, while Vietnam's market potential grows. Amidst supply chain restructuring and technological competition, strategic action is key. The 3rd SMM Asean Automotive Supply Chain Summit 2026 is designed to empower businesses by focusing on: Unlocking NEV Potential: Analyzing ASEAN's role as a production/export hub and examining OEM technology roadmaps. Bridging the Supply Chain: Leveraging SMM's platform to integrate resources and facilitate deals. Establishing a Price Benchmark: Promoting the use of SMM Southeast Asia metals price assessments in procurement. We believe in turning consensus into action. Join us in Bangkok in 2026 to transform strategic blueprints into tangible advantages. 》Click to Watch the Conference Live Video 》Click to View the Conference Photo Live Stream June 16 Main Forum Opening Address Speaker: Adam Fan, Chairman of SMM Opening Keynote: Thailand EV Outlook 2026 Guest Speaker: Dr. Yossapong Laoonual, Head of Mobility & Vehicle Technology Research Center (MOVE), King Mongkut’s University of Technology Thonburi (KMUTT) Dr. Yossapong Laoonual noted that the ownership of battery electric vehicle (BEV) models is expected to surpass that of hybrid models in the medium and long term. Thailand’s BEV penetration rate will also rise steadily, supported by well-developed charging infrastructure. Data shows that the number of DC charging piles in Thailand has continued to grow, with installations already exceeding the government’s planned phased targets. The country’s 2030 charging pile target is 12,000 units, and multiple supporting regulations for motor vehicles have already been implemented locally. Local planning stipulates that each pile should serve 10-15 BEVs. Compared with markets outside China, where each pile in Europe serves fewer than 15 BEVs on average and in China fewer than 10, Thailand currently faces an imbalanced vehicle-to-pile ratio and still requires the large-scale addition of new charging piles. Thailand’s charging piles are primarily located at gas stations, with shopping malls and office buildings as secondary deployment sites. Local gas stations feature diverse commercial formats, offering excellent conditions for setting up charging stations. However, range anxiety remains widespread among consumers, and charging facilities along highways need to be further improved to alleviate concerns about recharging on the road. Opening Keynote: Southeast Asia’s New Automotive Ambition:Can Industry Players Successfully Navigate Transformation Amid Challenges? Guest Speaker: Krzysztof Tokarz, Chairman of the Automotive Working Group at TEBA, Founder of Auteneo He stated that there were four core strategic challenges in the electrification transformation of Southeast Asian automakers: First, a shortage of professional talent, with undersupply of high-quality talent in the EV and software fields, fierce competition for industry talent, and enterprises needing to plan for talent cultivation and retention; Second, cross-cultural coordination difficulties: significant differences in working models among Chinese, Japanese, Korean, European, American, and local enterprises, which easily led to issues such as lack of trust and poor cooperation; Third, complex and changing regional regulations: fragmented regulatory systems across Southeast Asian countries, with a fast pace of policy updates over the past year or more, placing high demands on enterprises' policy adaptation capabilities; Fourth, profitability pressure, as electrification reshaped the pricing system, with many automakers experiencing simultaneous contraction in revenue and profit margins, necessitating the exploration of long-term profitable models. Overall, he believed that while he currently maintained a cautiously optimistic attitude towards the development of industry technology and products, the aforementioned challenges still urgently needed to be addressed. Panel Discussion: Leadership Dialogue: East Asian Titans' "Southeast Asian Chessboard" Moderator: David Huang, The Head of Strategy, Marketing and Business Development, Forvia China Panelists: Dr. Yossapong Laoonual, Honorary Chairman and Advisors, Electric Vehicle Association of Thailand (EVAT) Suphot Sukphisarn, Honorary Chairman, Auto Parts Industry Club (APIC), The Federation of Thai Industries (FTI), Deputy Secretary General, Thai Auto-Parts Manufacturers Association (TAPMA） Krzysztof Tokarz, Chairman of the Automotive Working Group at TEBA, Founder of Auteneo Dr. Viroj Patcharawatanakul, Chief Marketing Officer (CMO), AAPICO Hitech PCL. The panelists noted that ASEAN countries have distinct industrial advantages: Malaysia has ample electronic factory resources, Indonesia possesses mineral resources needed for battery production, and Vietnam offers comprehensive labor incentive policies. To fully leverage each country's locational appeal, overall integrated planning is required. The ASEAN NEV market is expanding rapidly overall, with the regional EV penetration rate more than doubling. Thailand and Vietnam have seen impressive growth in XEV production and sales. Local vehicle production capacity remains stable, and Chinese new energy brands such as BYD, MG, and Great Wall have established a presence in Thailand, driving up demand for new energy parts supply. Thailand has a well-established multi-tier parts supply system: 27 vehicle manufacturers, 500 Tier 1 suppliers, and 1,800 Tier 2 and Tier 3 parts producers. Traditional mechanical processing industries like stamping, injection molding, rubber processing, machining, casting and forging, and assembly have a solid foundation, with huge annual parts capacity, providing the manufacturing capability to support new energy parts production. Keynote Speech: Navigating Automotive Disruption in Southeast Asia Guest Speaker: Timothy Wong, Principal, Roland Berger Roland Berger noted that AI-driven automation continues to advance and autonomous driving is developing steadily. It is expected that by 2040, autonomous driving will still struggle to become mainstream. However, AI technology has already disrupted the automotive industry, becoming a core driving force for enterprises to build differentiated advantages, enhance competitiveness, and innovate business models. The automotive industry is currently undergoing comprehensive disruptive changes, mainly in five dimensions: First, the automotive supply chain value chain is undergoing fundamental transformation, with vehicles and core parts upgrading toward electrification and electronics. Industry enterprises urgently need to adjust their product structures and proactively position themselves in emerging tracks; passively responding to market changes will entail significant risks. Second, the nature of automotive products is being reshaped by technology, shifting from traditional mechanical vehicles to software-defined vehicles. Sole mechanical manufacturing capabilities can no longer meet development needs; enterprises must build diversified cooperation ecosystems involving semiconductors, software, and sensors to cultivate new industrial capabilities. Third, the consumer market is undergoing significant iteration, with consumer car purchase preferences gradually tilting toward emerging brands, and industry competition continuing to intensify. Fourth, the pace of market iteration has greatly accelerated. Compared with the model update pace of once every few years by traditional automakers, Chinese brands iterate at a much faster pace, forcing the supply chain toward agile transformation and adaptation to rapidly changing vehicle specifications. Fifth, the aftersales distribution model is being disrupted, with traditional parts revenue being impacted by the growth of EVs. New direct-to-consumer models are emerging, requiring enterprises to restructure their distribution networks and expand aftersales services related to power batteries and electrification. Overall, all industry participants must proactively face transformation risks, actively transform and strategically restructure supply chains, vigorously explore new clients and deploy new businesses, abandon passive thinking that clings to existing models, and proactively plan future business development directions, so as to continuously maintain market competitiveness. Keynote Speech: Moving Beyond Negotiation: Fostering a New Framework for Southeast Asian Supply Chain Collaboration Based on the SMM Price Index Guest Speaker: Sing Yao, Director of Steel Business Unit, SMM Information & Technology Co., Ltd. She noted that Southeast Asia as a whole exhibits low per capita automobile ownership, limited NEV penetration, and a large young population, which holds enormous incremental market potential. This vast blue ocean is attracting leading Chinese NEV manufacturers to accelerate their footprint in the region. At the same time, however, Southeast Asian auto parts are highly dependent on imports, and the industry chain has long faced two major pain points: procurement difficulties and disorderly pricing. The launch of the SMM Southeast Asia Price Index may open up a new path for collaborative development of the local automotive supply chain. Low Per Capita Automobile Ownership, Limited NEV Penetration, and Large Young Population Create Vast Market Opportunities for Automakers According to SMM, in recent years, Southeast Asia’s automotive industry chain has shown remarkable resilience, with regional automobile production growing by 24.1% from 2020 to 2022. Although 2024 saw a cyclical decline for the first time due to global economic sluggishness, the decline in production and sales in Thailand and the broader Southeast Asian market has narrowed in 2025, underscoring the self-repair capability of the regional supply chain. As the region’s core hub, Thailand continues to dominate Southeast Asia’s automotive industry landscape with a capacity share of over 40%. In the short term, Thailand will maintain its position as a regional production center and export base, but its long-term competitive advantages are facing structural challenges: the sustained contraction of local capacity and the upgrading of neighboring countries’ industry chains are compelling it to accelerate technological transformation and supply chain restructuring. Driven by the immense allure of this industry “blue ocean,” leading Chinese NEV manufacturers are accelerating their expansion into the Southeast Asian automotive market. Keynote Speech:Baowu JFE Southeast Asia Strategy Sharing Guest Speaker: Liang Chen, Vice General Manager, Baowu Jiefuyi Special Steel Co., Ltd. He that overall steel production in Southeast Asia is declining, but the penetration rate of new energy electric vehicles (EVs) is surging: Thailand’s EV-related demand is up 80% YoY, while Indonesia’s demand has experienced a multiple-fold rise, with subsequent growth potential continuing to be released. Local NEV manufacturers previously purchased Japanese steel, but are gradually switching suppliers now, driven by industry competition and cost pressure. This also represents a core opportunity for the company to promote its supporting supply services. Leadership Panel: The Steel vs. Aluminum Debate and Cost Challenges Moderator: Michelle Leung, Head of Asia Metals and Mining, sustainability, Bloomberg LP Panelists: Thanakorn Thangwanichkapong, Director of Asia Operations, Maxion Wheels Martin Dilly, Southeast Asia Area Sales Director, Bureau Veritas The panelists noted that multiple disruptions, including the situation in the Strait of Hormuz and national tariff adjustments, have moved beyond short-term impact and are driving the restructuring of the entire steel and aluminum industry chain, with the structural transformation of the aluminum industry being particularly pronounced. Global supply chain vulnerability continues to intensify, and upward cost pressure on the industry has increased. Tariff barriers are reshaping the global trade landscape, and market competition is becoming increasingly fierce. The implementation of industrial localization has accelerated, but the pace of progress in Southeast Asia has seen a slowdown. Overall, only enterprises that possess both flexible logistics and procurement capabilities and a robust compliance management system can gain an advantage amid the industry transformation. Keynote Speech: Analysis of Southeast Asia's Secondary Aluminum Market and Price Trends Guest Speaker: Wong Yan Ling, Senior Aluminum Analyst, SMM Information & Technology Co., Ltd. She noted that Southeast Asia has become one of the fastest-growing secondary aluminum markets globally, and the worldwide competition for scrap resources is continuously reshaping the regional supply landscape. As resource protection policies are progressively implemented across various countries and regional manufacturing demand steadily expands, ASEAN countries are expected to further consolidate their core position in the global secondary aluminum industry chain. Regarding secondary aluminum price trends in H2 2026, SMM analysis suggests that weak seasonal demand in Southeast Asia may suppress the upside room for secondary aluminum prices, while the geopolitical situation in the Middle East remains a key variable affecting market trends. If shipping through the Strait of Hormuz returns to normal, cost pressures from logistics could ease. However, persistently tight scrap supply coupled with potential logistics disruptions may still drive up regional secondary aluminum prices. Specialized Seminar: Co-building a Resilient Automotive Materials Supply Chain for Southeast Asia Moderator: Sing Yao, Director of Steel Business Unit, SMM Information & Technology Co., Ltd. Panelists: Zongyan Fu, Purchasing Manager, Changan Auto Southeast Asia Co., Ltd. Weijiang Xue, Chief Engineer of Product R&D, Jiangsu Yonggang Group Co.,Ltd. Hui Yuan, General Manager, Tianjin Dewy Metal Surface Treatment Co., Ltd. Yi Huang, Deputy General Manager, Guangdong Superband Precision Industry Co.，Ltd. Thanakorn Thangwanichkapong, Director of Asia Operations, Maxion Wheels Hongwei Liu, General Manager, BYH NEW TECHNOLOGY CO., LTD. Saurabh Sharma, Sr General Manager & Executive Director, Hero Motors Thai Ltd. Jun Zou, Overseas Region Head, Marketing, Management Office, Baowu Jiefuyi Special Steel Co., Ltd. HaiBin Jia, Deputy Marketing Director, Beijing Jianlong Heavy Industry Group Co., Ltd. The panelists engaged in in-depth exchanges, drawing from their own business practices, focusing on the core topic of deep development in the Southeast Asian automotive industry. They focused on enterprises' current business layouts, operating status, and development trends in the Southeast Asian automotive market, and deeply analyzed core pain points and challenges such as supply chain adaptation, stable supply, and logistics support in the process of going global. At the same time, they shared detailed experiences regarding common challenges faced by enterprises going global, including localization certification, compliance system adaptation in and outside China, and alignment of policy standards. They also discussed core paths for enterprises to anticipate market changes, precisely allocate industrial resources, and quickly adapt to regional market rules and industry demands, focusing on industry trends. Furthermore, focusing on supply-demand coordinated development, they elaborated on their expectations for future cooperation models, collaboration mechanisms, and partnership needs with Chinese material suppliers. As buyers, they also clarified the types and directions of high-quality Southeast Asian clients they plan to prioritize for connection and cooperation, providing practical ideas and references for precise supply-demand matching and deep cultivation of the Southeast Asian automotive market for Chinese enterprises going global. Day 2: June 17 Keynote Speech: Analysis and Outlook of the Supply Chain in the Southeast Asian New Energy Market Speaker: Jena Wang, New Energy Consulting Project Manager, SMM Information & Technology Co., Ltd. She stated that driven by the rapid growth of the Southeast Asian NEV market, several automakers are accelerating their localization strategies. Battery demand in each country will also increase rapidly, with the region's total battery demand expected to grow by about ten times from 2025 to 2030, reaching approximately 201 GWh. However, it is worth noting that currently, Southeast Asia faces issues with low localization rates, significant structural gaps, and heavy import dependence for cathode materials and motor components. In Southeast Asia, the supply of local cathode materials and key motor components cannot meet demand, and the low localization rate and large capacity gaps have become key bottlenecks restricting the development of the NEV industry chain in the region. Data indicates that China's global production share of key new energy raw materials—such as batteries, cathode materials, lithium chemicals, and rare earth permanent magnets—generally exceeds 70%, with its capacity ranking first worldwide, demonstrating a significant advantage. In addition, she introduced the capacity distribution and industrialisation progress of key materials in the new energy markets of core Southeast Asian countries. Vietnam: Local automaker VinFast is boosting rapid development of the entire vehicle and upstream/downstream supporting industry chain. Thailand: As a core hub for automotive manufacturing and export in Southeast Asia, it boasts a relatively complete supporting system for motor and electric drive-related industries. Malaysia: It possesses a mature automotive industry foundation, but its local supporting capability for the three electric systems is insufficient; local policies focus on supporting vehicle assembly and regional distribution operations. Indonesia: With abundant nickel resources, it holds a pronounced competitive edge in the battery raw material industry. Overall, SMM believes that the capacity for core new energy components in Southeast Asia is relatively small. National policies are promoting localisation and industrial upgrading, leaving significant room for supply chain development. Leadership Panel: Supply Chain Security and Opportunities in Southeast Asia Moderator: Peter Klöpfer, Senior Manager Automotive Business Unit, RUTRONIK Electronics Worldwide Panelists: Akshay Prasad, Principal, Arthur D. Little SEA Alex Zhan, Head, ZF LIFETEC Thailand Asst.Prof.Uthane Supatti Ph.D., Head of the Power Electronics Applications and Energy Management (PEEM) Research Unit, Faculty of Engineering at Sriracha, Kasetsart University, Thailand, Vice President, Electric Vehicle Association of Thailand (EVAT) The panelists discussed about core themes of the Southeast Asian automotive supply chain. First, they addressed the delivery timeline crisis caused by sudden supply shortages, the crisis of lacking transparency in the industry chain, the crisis of industry-wide collaboration barriers, and the crisis of trust failure between upstream and downstream players. They jointly explored systematic resolution strategies and elaborated on their respective countermeasures. Building on this, the on-site guests further discussed the Japanese industry chain and China’s domestic supply chain, analyzing the development opportunities, long-term prospects, and practical implementation logic of two-way opening, healthy competition and cooperation, and deep integration between the two. Leadership Panel: Capacity Coopetition and Customer Breakthrough: Winning the Southeast Asian Supply Chain Battle Moderator: Wacharapisuth Thannapong, Researcher, BCG (Bio-Circular-Green Economy Policy) Research Team, Thailand Development Research Institute (TDRI) Panelists: MARK BRIAN PIRIE, Senior Vice President Purchasing & Supplier Management Asia Pacific, Executive Board Member, Schaeffler Frank Yu, General Manager of the Automotive Rubber & Metal Components Business Unit and Thailand Branch, Shanghai Baolong Automotive Corporation The panelists assessed the overheating of three-electric system (battery, motor, electronic control) capacity in Southeast Asia. They noted that overcapacity in three-electric systems is a global trend. The capacity now deployed in Southeast Asia and Thailand already exceeds confirmed demand, intensifying market uncertainty and heightening investment concerns. Risks are structurally differentiated: Tier-1 suppliers are more conservative and risk-averse compared to China’s domestic vehicle makers that are rapidly going global. There is localized overcapacity in basic e-drive parts and low-difficulty electronic components, while supply bottlenecks persist for key items such as high-performance automotive-grade semiconductors, advanced materials, and electrical steel. This is also a core motivation for Chinese suppliers setting up in Southeast Asia. Moreover, Southeast Asia’s geographical advantages are prominent, and mine development in Australia is progressing rapidly. Many mines are set to commence production by Q3 next year. The core contradiction in the industry is not simply overall surplus, but a mismatch between the regional allocation of capacity, the technologies adopted, and actual market demand. Additionally, the guests noted that the core challenges in Southeast Asia and Thailand revolve around three major issues: regional adaptation, supply chain gaps, and industrial competition and collaboration. Enterprises must independently weigh risks and expansion scales based on their own supply chain conditions to find a development balance suited to their needs. Meanwhile, to adapt to the unique environment of Southeast Asia—characterized by high temperatures, high humidity, floods, complex road conditions, and underdeveloped charging infrastructure—the EV technologies originally designed for the Chinese and European markets must undergo localized R&D and verification. This process ensures the reliability of batteries, electronic controls, and lubrication systems, as well as overall vehicle durability. It is recommended that Tier 1 suppliers and upstream partners proactively collaborate in depth with OEM design teams. Even for domestically mature production car models going global in Southeast Asia, it is essential to iterate and optimize products by leveraging local expansion opportunities while drawing on the cost, process, and quality control expertise gained from large-scale domestic production. Leadership Panel: Techno-Economic Analysis and Strategic Pathways for Battery Material Localization in Southeast Asias Moderator: Jay Yu, Senior director, SMM Information & Technology Co., Ltd. Panelists: Brian, Sales Director for the Electrolyte Division in Japan, South Korea, and Southeast Asia, TINCI Materials Max Miao, Director, SEVB Thailand Feng Hao, Southeast Asia Marketing Director, Hefei Guoxuan High-Tech Power Energy Co., Ltd. The panelists noted that amid the restructuring of global manufacturing, Southeast Asia’s lithium battery industry faces both challenges and opportunities. Enterprises are following downstream OEM clients in going global, establishing nearby supply systems centered on customer needs. Three key operational aspects require consideration. First, at the policy level, Southeast Asia’s lithium battery industry must supply both the local market and target exports to Europe and the U.S. Regional policy changes have far-reaching impacts, requiring enterprises to conduct ongoing in-depth analysis and implement corresponding response strategies. Second, in terms of human and cultural factors, local traditions and family values are distinct, necessitating flexible management that fully respects local customs, cares for local employees, and stabilizes production teams. Third, regarding the industry chain, the region’s upstream lithium battery materials are notably underdeveloped. Key raw materials such as high-purity solvents, lithium chemicals, and functional additives currently rely heavily on imports from China, Japan, and South Korea. The establishment and improvement of local upstream and downstream supply capabilities urgently need to be addressed, making this a key focus for future enterprise deployment. In addition, they also mentioned that in H2 this year, NEV-related subsidies in Southeast Asia may be gradually phased out, and Thailand's EV 4.0 policy and the year-end tax rebate policy will also undergo adjustments. Drawing on China's NEV development experience, local automakers will gradually break free from reliance on policy subsidies and instead compete in the market by leveraging product strength and market-based pricing. This year, Thailand's NEV sales are conservatively estimated to reach 120,000 units, with a potential to hit 160,000 units. Compared with Japanese car models, Chinese NEV models have ample room for price adjustment, offering a clear advantage. Currently, battery enterprises are actively assisting automakers in expanding markets and securing more orders, while also suggesting that automakers moderately raise vehicle selling prices. The industry generally believes that automakers will most likely offset the operational pressure from subsidy reductions through price adjustments in the future. Procurement Matchmaking Meeting >Click to view more highlights from the event Check-in & Networking This is the end of the 2026 SMM (3rd) ASEAN Automotive Supply Chain Conference . Thank you for the support of all industry peers. See you next year!

SMM Cobalt Morning Brief: This week, the cobalt industry chain continued to consolidate on a weak note overall. Refined cobalt traded around 380,000 yuan/mt. Although smelters slightly raised their offers, high inventory and weak end-use demand limited price recovery. The trading center of cobalt intermediate products moved lower. Cobalt sulphate ground lower on a weak note. Transactions of cobalt chloride and Co3O4 were sluggish. Cobalt powder remained under pressure due to the traditional off-season. The pullback in raw material prices dragged down ternary cathode precursors and ternary cathode materials. LCO remained stable with a weak bias. Future market trends still require attention on Q3 restocking and end-use demand recovery.

★ macro ★ 01 ★★ [The central bank achieved a net withdrawal of 278.5 billion yuan from open market operations.] The central bank conducted 10 billion yuan of 7-day reverse repo operations today, with a bid volume of 10 billion yuan and an allotment volume of 10 billion yuan, at an operation rate of 1.40%, unchanged from the previous level. As 288.5 billion yuan of 7-day reverse repos matured today, a net withdrawal of 278.5 billion yuan was achieved on the day. 02 ★★★ [NBS: June Consumer Prices Rose 1.0% YoY] Data from the NBS showed that in June 2026, the national CPI rose 1.0% YoY. Urban areas rose 1.0%, rural areas rose 0.8%; food prices fell 1.6%, non-food prices rose 1.5%; consumer goods prices rose 1.1%, services prices rose 0.8%. In H1, the national CPI rose 1.0% YoY. In June, the national CPI fell 0.3% MoM. Urban prices fell 0.4%, rural prices fell 0.3%; food prices fell 0.4%, non-food prices fell 0.3%; consumer goods prices fell 0.6%, services prices remained flat. 03 ★★★ [ [NBS: June Industrial Producer Prices Rose 4.1% YoY] ] Data from the NBS showed that in June 2026, the national PPI rose 4.1% YoY and fell 0.3% MoM. Industrial producer purchasing prices rose 6.4% YoY and fell 0.2% MoM. In H1, industrial producer prices rose 1.5% YoY, and industrial producer purchasing prices rose 2.4%. ★ Industry and Downstream ★ 01 ★★★ [Zhejiang Activates Level IV Typhoon Emergency Response] The 9th typhoon of this year, Bavi, was located on the ocean surface about 1,210 kilometers east-southeast of Keelung City, Taiwan, at 5:00 a.m. on July 9, with maximum sustained winds of Force 16 near its center (super typhoon). It is forecast to move northwest at about 15–20 km/h, gradually turning to move northwest tonight, and gradually approaching the waters east of Taiwan. Affected by Bavi, winds in the southern East China Sea will gradually strengthen to Force 8–11 on the night of the 9th. According to the Zhejiang Provincial Emergency Plan for Flood Control, Typhoon Prevention and Drought Relief and the work plan for defending against Typhoon Bavi, after assessment and consultation, the Zhejiang Provincial Flood Control and Typhoon Prevention Headquarters decided at 9:00 a.m. on July 9 to adjust the maritime typhoon emergency response to a Level IV typhoon emergency response. 02 ★★ [H1 NEV Production and Sales Both Exceeded 7 Million Units] On July 9, the latest data released by CAAM showed that from January to June this year, China’s NEV market saw steady growth in production and sales as well as exports. NEV production and sales totaled 7.438 million units and 7.446 million units, up 6.7% YoY and 7.3% YoY, respectively; in June, NEV new-vehicle sales accounted for nearly 60% of total new-vehicle sales. On the export front, from January to June, auto exports reached 5.096 million units, up 65.3% YoY. Of this, NEV exports were 2.355 million units, up 1.2 times YoY. 03 ★★ [China Index Academy: Full-Year Floor Space of Newly Built Commercial Buildings Sold Is Expected to Fall 7.8% YoY] China Index Academy released Summary of China’s Real Estate Market in H1 2026 & Trend Outlook for H2, expecting that in H2, policies on both the supply and demand sides will continue to gain traction, and stabilizing home prices may become a key focus. Overall, the real estate market remains in the process of consolidating at lows, and the market recovery will continue to show divergent characteristics. Looking ahead to H2, the second-hand housing market in core cities is expected to maintain a certain level of activity; sustained improvement in transactions, together with a stabilization in listings, will further narrow the pace of price declines, and the foundation for price stabilization in some cities will gradually strengthen. For new homes, affected by a low base in the same period of 2025, the YoY decline in nationwide new-home sales in H2 is expected to narrow gradually, but a comprehensive market recovery will still take time. 04 ★★★ [Shipbuilders’ Orders Scheduled Through 2030, Industry Sees Clear Upcycle Opportunities] Riding the wave of the global shipbuilding industry’s recovery, China’s shipbuilding sector is seeing clear upcycle opportunities. In H1, Hengli Heavy Industry signed 207 new vessel orders, with cumulative orders on hand exceeding 500 vessels, and its delivery schedule has been locked in through 2030; China State Shipbuilding’s delivery cycle is also scheduled through 2030; and Sumec’s newly won orders in Q1 2026 surged by more than 600% YoY. Overall, orders at leading shipbuilders in China are generally full, and industry dividends are being released. Amid the high-prosperity cycle, potential risks also warrant attention. Analysts noted that overly rapid capacity expansion under optimistic sentiment should be guarded against. In addition, variables such as trade policy disruptions, divergence in segmented demand, and shortcomings in fuel technologies may constrain the industry’s upside room and profitability. 05 ★★ [ Mongolia’s Coal Exports Reached 59.21 Million mt in H1 2026 ] According to statistical data released by Mongolia’s customs authorities, from January to June 2026, Mongolia’s cumulative coal exports totaled 59.2149 million mt, with average monthly coal exports close to 10 million mt, an increase of 21.34 million mt compared to the same period last year, up 56.3% YoY. Among them, hard coal exports were 56.8428 million mt, up 62.0% YoY; lignite exports were 2.3721 million mt, down 15.2% YoY. In June, Mongolia’s coal exports continued to surge, with monthly exports reaching 10.3057 million mt, up 69.0% YoY and up 4.8% MoM. Of this, hard coal exports stood at 9.9272 million mt, up 72.7% YoY and up 4.3% MoM; lignite exports were 378,400 mt, up 8.8% YoY and up 17.8% MoM. ★ Other Hot Topics ★ ⭕ [Tata Steel’s Q1 FY2027 India Crude Steel Production at 5.82 Million mt] Indian steelmaker Tata Steel Group released its production and delivery data for Q1 FY2027 (April 1, 2026 to June 30, 2026). Tata Steel India’s crude steel production reached 5.82 million mt, down about 6% MoM and up 11% YoY, primarily driven by higher output at the Jamshedpur and Kalinganagar plants; during the same period, its India deliveries stood at 5.17 million mt, down about 16% MoM and up about 9% YoY, with domestic deliveries up 11% YoY. ⭕[Fangda Jiugang Successfully Trial-Rolls 36mm Large-Size HG6E/C High-Strength Seismic Rebar] Recently, Fangda Jiugang successfully trial-rolled 36mm large-size HG6E/C high-strength seismic rebar for the first time. Testing shows that all performance indicators, dimensional accuracy, and surface quality comply with relevant standards, marking a major breakthrough in the high-end construction steel segment for the enterprise. HG6E/C is a 635MPa-grade ultra-high-strength seismic rebar, a high-grade, high-end specialty steel for construction, offering significant comprehensive advantages over conventional rebar used in general engineering. ⭕ [Tsingshan Special Material Stainless Steel Deep-Processing Project Commissioned] The “Four-Chain” Integration Promotion Meeting for the stainless steel industry chain and the Tsingshan Special Material Launch & Development Conference were held in Zhouning County. Attendees included Xiang Guangda, Chairman of Tsingshan Holding Group; Zhang Jimin, Chairman of Xintuo Group; Zhang Longqiang, Deputy Secretary General of the China Iron and Steel Association (CISA) and Party Secretary and President of the Metallurgical Industry Information and Standards Research Institute; Li Yan, Member of the Standing Committee of the Municipal Party Committee and Executive Vice Mayor; Wang Qingjie, Executive President of the Stainless Steel Branch of CISA; Zhang Luyao, Chairman of Fujian Tsingshan Special Materials Co., Ltd.; Lei Chunxiong, Secretary of the County Party Committee; Yang Chenxia, Director of the Comprehensive Division of the Provincial Department of Industry and Information Technology; and Zheng Jinsi, Deputy Director of the Municipal Bureau of Industry and Information Technology. The meeting was chaired by Chen Dongyue, Deputy Secretary of the County Party Committee, Secretary of the Party Leadership Group of the County Government, and Acting County Magistrate. * This report is an original work and/or compilation of SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), and SMM holds the copyright in accordance with the Copyright Law of the People's Republic of China and other applicable laws, regulations, and international treaties. Without written permission, no one may reproduce, modify, sell, transfer, display, translate, compile, and disseminate or otherwise disclose the above content to any third party or permit any third party to use it. Once discovered, SMM will pursue legal liability for infringement, including but not limited to demanding the assumption of contractual liability for breach of contract, restitution of unjust enrichment, and compensation for direct and indirect economic losses. 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1. NEVs: Domestic Sales Growth Under Pressure, Exports Surge In H1 2026, global NEV sales reached approximately 10.25 million units, a cumulative 14% YoY increase; China’s NEV sales totaled about 7.4 million units, up 7% YoY cumulatively, with an average penetration rate of around 48%. While total volume kept growing, the mix of domestic sales and exports diverged markedly. In the Chinese market, domestic sales accounted for about 69% of the total, with cumulative volume falling 14% YoY and the monthly penetration rate peaking at 62%. China’s NEV market has entered a high-base mature stage. The rush to buy ahead of the expected subsidy reduction at the end of 2025 pulled forward some demand that would have occurred in early 2026. Pushing the penetration rate beyond 60% is now encountering considerable headwinds—the remaining internal combustion engine vehicle users are mostly those with limited charging access, rigid long-distance travel needs, or high price sensitivity, making their conversion significantly harder than that of early adopters. Domestic demand is in a transitional phase shifting from policy-driven to market-driven growth. Exports, on the other hand, accounted for about 31% of China’s NEV sales in H1 2026, a sharp jump from 15% in H1 2025, with cumulative volume surging nearly 120% YoY. Three drivers fueled this export surge. First, a low base effect magnified the YoY growth: exports in H1 2025 were artificially suppressed by the EU anti-subsidy probe, creating an unusually low base. Second, automakers rushed to export ahead of tariff implementation, opening a temporary export rush window. Third, Chinese NEVs’ product competitiveness in emerging markets such as Southeast Asia and Latin America continued to improve; coupled with rising fuel vehicle operating costs outside China due to shifting international dynamics, this stimulated the release of overseas NEV demand. From a technology perspective, BEV models accounted for about 66%, basically flat from a year earlier. Beneath this “frozen” share, two opposing forces are at play. On one hand, as NEVs penetrate into lower-tier cities, inadequate charging infrastructure makes plug-in hybrid and extended-range models, which can run on both electricity and fuel, still the most practical choice. On the other hand, the popularization of 4C fast charging technology and the expansion of ultra-fast charging networks are gradually addressing the range anxiety weakness of BEVs, building momentum for a rebound in their market share. I. Vehicle Battery Capacity, from January to May the average capacity reached 68.4 kWh, up 34% YoY. The growth drivers were concentrated in three aspects: first, consumption structure upgrades, with the trade-in policy steering demand from A00/A0 to B- and C-class models—larger models carry higher-capacity batteries, and this structural effect lifted the overall average; second, the battery capacity of plug-in hybrid and extended-range models continued to expand, with all-electric driving range rising from 50–80 km to 150–250 km and corresponding battery capacity roughly doubling from 8–18 kWh to 18–40 kWh, while extended-range models grew to over 50 kWh; third, the share of commercial vehicles increased, and the vehicle battery capacity of heavy trucks and logistics vehicles generally exceeded 200 kWh, exerting a notable leverage effect on the overall average. 2. Power Battery Installations: Growth Shift, Bottoming Out in Q2 In H1 2026, China's power battery installations are estimated at around 340 GWh, up 10% YoY. Q1 was dragged by soft domestic sales and subsidy phase-out, keeping growth sluggish; Q2 saw a month-on-month recovery, with May installations reaching 71.9 GWh, a new high for the year, signaling a gradual repair in end-use demand. In the global market, H1 installations are estimated at about 580 GWh, up roughly 15% YoY, with incremental volume outside China mainly coming from the acceleration of electrification in Europe and continued ramp-up in emerging markets such as Southeast Asia and Latin America. Notably, growth outside China has outpaced the Chinese market—Q1 installations outside China reached 117.4 GWh, up 17.4% YoY, and the combined market share of Chinese enterprises in markets outside China rose to 52%. A shift in growth driver—where the Chinese market downshifts and markets outside China take over—is becoming a new feature of the industry’s growth structure. 3. Power Battery Cell Production: Strengthened LFP Dominance and Analysis of the Gap Between Production and Installations In H1 2026, China's total power battery production was about 790 GWh, with cumulative YoY growth of 43%; global power battery cell production totaled about 860 GWh, with cumulative YoY growth of 31%. In the Chinese market, LFP power battery cell share rose to 76% from 66% in the same period of 2025, with production up 64% YoY; ternary power battery cell share was around 24%, basically flat YoY. LFP’s share rose from 66% to 76%, driven by three key factors. First, the electrification ramp-up of commercial vehicles provided the most direct incremental contribution. Commercial vehicles almost entirely adopted the LFP route; heavy trucks, logistics vehicles, and buses place far higher demands on cost and safety than on energy density. The structural growth in commercial vehicle installations directly boosted LFP’s overall share. Second, the penetration rate of LFP in the passenger car segment continued to rise on its own. Extended-range and plug-in hybrid models naturally favor the LFP route, while the maturation of 4C fast-charging LFP solutions effectively addressed the range anxiety shortcoming, further squeezing the market space for mid-end ternary batteries. Third, the explosion in energy storage demand created a siphoning effect on LFP production lines. LFP production lines can flexibly switch between EV and ESS, and the high growth in energy storage orders drove LFP line operating rates significantly higher than those of ternary lines. Strengthened economies of scale further lowered costs, forming a positive feedback loop. There was a notable growth gap between power battery cell production (790 GWh, +43%) and installations (approximately 340 GWh, +10%), but this did not stem from inflated demand. Rather, it resulted from the combined effect of the following factors: First, export diversion—about 30% of production flowed to markets outside China either as complete vehicle exports or direct battery cell exports, and was not included in domestic installation statistics. Second, timing mismatch—some battery cells whose production schedules were accelerated in Q2 were still in inventory or in transit and are expected to translate into installations in H2. In addition, after the destocking cycle in H2 2025, battery cell manufacturers’ finished product inventory cycle was compressed from 2 months to 1.3 months, and there was active restocking in H1 2026. Overall, the high production growth reflected the buoyancy of battery enterprises’ production activity, while the slower installation growth was more affected by export diversion and inventory cycle disruptions. The gap between the two does not represent a substantive deterioration in the supply-demand relationship. 4. Cost Changes In H1 2026, prices of key raw materials for power battery cells rose overall. Unlike the previous cycle of soaring lithium prices, top-tier players’ cost control methods during this price rise were more diverse. As lithium carbonate futures trading matured, battery and cathode material enterprises hedged to lock in procurement costs ahead of time, effectively offsetting spot price fluctuations. Some long-term contract orders adopted formula pricing, allowing for smoother price transmission. Coupled with the ongoing large-scale centralized procurement of auxiliary materials and technological cost reductions, the increase in cost per Wh for mainstream battery cell enterprises remained generally manageable. However, as the industry was still in a price war, involution kept the overall gross margin of the industry at a relatively low level. H2 Outlook Looking ahead to H2 2026, the power battery cell industry is expected to sustain the growth momentum seen in H1, as recovering domestic demand and strong export performance reinforce each other, with the full-year trajectory trending lower in H1 and higher in H2. Sales side, the auto market is likely to stabilize in Q3, followed by the traditional peak season in Q4. Alongside the gradual absorption of the pull-forward effect from 2025, the decline in domestic sales is expected to continue narrowing. On the export front, although tariff policy uncertainty persists, the product competitiveness of Chinese NEVs in markets outside China has become entrenched. Demand in emerging markets such as Southeast Asia, Latin America, and the Middle East continues to accelerate, and proactive restocking by overseas dealers points to a high probability that strong export growth will persist in H2. Installations side, although the growth rate has come down significantly from 2025 levels, absolute incremental volume remains substantial, supported by both rising vehicle battery capacity and the ramp-up of commercial vehicle volumes. H2 installations are projected to rebound markedly from H1, and the structure—passenger vehicles providing the base and commercial vehicles contributing incremental elasticity—will remain unchanged. Notably, the inventory buffer built up from production significantly outpacing installations in H1 will gradually flow into installations in H2, offering additional support to H2 data. Overall, the power battery cell industry in 2026 has left behind the era of systemic growth dividends and officially entered a phase of deep divergence. Sustained high export growth opens new growth avenues for Chinese battery enterprises, but the decisive factor in the second half of the competition will be whether they can truly seize the window of opportunity in overseas markets and secure a firm foothold in the global supply chain.