SMM Analysis: In H1 2026, the core operating logic of China’s copper anode market can be summarized as follows: overseas project startups drove a recovery in imports, but the tightening of domestic secondary copper policies rapidly shifted the supply-demand pattern from a surplus in Q1 to tightening in Q2...

In H1 2026, driven by the resonance of multiple demands from new energy, AI computing power, and consumer electronics, China's copper foil industry continued the high prosperity trend that began in Q4 2025. The overall industry presented a pattern of rising volumes and prices and supply-demand tightness. 1. Capacity utilization rate continued to rise, with a supply gap in high-end categories On the supply-demand side, in H1 the industry's operating rate operated at high levels overall, steadily climbing from 88.56% at the start of the year to over 91% by the end of Q2, consistently holding above the 90% mark. Demand for both lithium battery copper foil and electronic circuit copper foil strengthened simultaneously. Benefiting from the intensive roll-out of local energy storage subsidies and the rising penetration rate of NEVs in H1, power batteries maintained a high production schedule pace. Coupled with the concentrated installation rush before the "630" grid connection for energy storage, the incremental growth in demand for lithium battery copper foil was pronounced. Meanwhile, AI computing centers and 5G/6G communication equipment boosted the rapid volume growth in demand for high-end electronic copper foils such as RTF and HVLP series, driving the conversion of ordinary capacity to high-end. Consequently, a supply gap emerged in traditional electronic circuit copper foil. Moreover, against the backdrop of optimistic end-use demand and the fact that new capacity release still requires time, SMM expects that China's lithium battery copper foil supply and demand for the full year 2026 will present a slight shortage pattern. 2. Processing fees rose across the board, with the industry's profitability continuing to recover. On the price side, benefiting from supply-demand tightness, copper foil processing fees for all specifications climbed steadily. As of the end of June 2026, mainstream specification processing fees rose comprehensively compared to the start of the year: the 4.5μm lithium battery copper foil processing fee was raised by 1,000 yuan/mt to 27,000 yuan/mt; the 6μm lithium battery copper foil processing fee was raised by 2,000 yuan/mt to 21,000 yuan/mt; and the 18μm HTE copper foil processing fee rose by 3,000 yuan/mt to 21,000 yuan/mt. The rise in processing fees effectively offset cost pressure from raw material price fluctuations, strengthening the industry's profitability resilience. 3. Exports surged significantly, with the trade structure continuing to improve. Import and export, in H1 China's copper foil exports continued to surge. From January to May 2026, China's cumulative copper foil exports were 32,000 mt, surging 71.79% YoY, with new monthly highs set in March and April. The main export destinations were Thailand, South Korea, Malaysia, etc. On the import side, growth slowed down significantly; from January to May 2026, cumulative imports were 36,600 mt, up only 7.63% YoY, while imports in May fell both YoY and MoM. Domestic substitution for low and mid-end products continued to advance, but high-end HVLP series products still rely on imports from Taiwan, China, and Japan, leaving ample room for domestic substitution. The industry's trade deficit narrowed significantly from $103.14 million at the start of the year to $45.9 million in May. IV. H2 Market Outlook: The upcycle extends, with a tight supply-demand balance supporting high processing fees. Looking ahead to H2, high industry prosperity is expected to continue. On the demand side, policies supporting energy storage and digital infrastructure under the 15th Five-Year Plan will continue to be implemented, and, coupled with the advancement of renewable energy targets outside China, incremental growth potential remains. Meanwhile, the NEV penetration rate will keep rising, and seasonal strength in AI, 5G/6G, and consumer electronics will become more pronounced. On the supply side, most enterprises are currently running near full production schedules. If new capacity ramp-ups fall short of expectations, the supply-demand gap for lithium battery copper foil could widen further in Q3 and Q4, supporting processing fees at high levels. Regarding imports and exports, Japanese and Taiwan, China enterprises are accelerating their switch to high-end electronic copper foil capacity, providing Chinese domestic enterprises with ongoing export opportunities in the mid-end market. Annual exports are expected to hit a record high, and the trade deficit will continue its narrowing trend.

In H1 2026, the manganese industry chain displayed a pattern of "strength first, then weakness, consolidating at highs," with the core of the market revolving around a two-way tug-of-war between high cost support and weak end-use demand. In H2, the manganese market will feature "cost support, weak demand recovery, and prices drifting higher but relatively limited": the overseas manganese ore market will be more likely to rise than fall, with high port inventory capping gains; SiMn alloy, under production cuts, destocking, and cost support, will see its price center shift upward, though the rebound height will be constrained by the strength of downstream demand recovery and the extent of supply reduction.

[SMM Analysis: Secondary aluminum operating rate saw a narrower MoM decline but a sharper YoY drop in June]

[SMM Analysis: H1 2026 Review of the Overseas Copper Scrap Market: Copper Prices Surge, Tight Raw Material Supply Supports Firm Discount] In Q1 2026, copper prices stayed high and consolidated around $13,000/mt. It was not until late Q1 that a short-term correction emerged, but prices resumed their uptrend in Q2 and continued to hit new record highs. Behind this, tight copper ore supply provided support on one hand; on the other, the siphon effect on global copper resources triggered by US tariff expectations further amplified market concerns over the supply side. At the same time, rapid growth in new copper-consuming sectors such as NEVs, new energy power, power grid construction, and data centers fueled rising expectations for copper demand. Against the backdrop of supply growth failing to match demand growth, copper prices received strong support. The tight supply of copper units also prompted enterprises to shift their focus from the ore side to supplementary sources beyond mine supply, with copper scrap gaining noticeably in importance. As copper prices continued to surge, copper scrap prices rose in tandem, while structural changes arising from copper resource scarcity began to alter the pricing logic of the copper scrap market, which had previously been dominated by consumption and price differentials.

[SMM Analysis] Indonesia's May Sulphur and Sulphuric Acid Import and Export Data

[SMM Analysis: Secondary Aluminum Operating Rate in June Sees Narrower MoM Decline and Deep YoY Pullback; Attention on Production Flexibility Driven by Price Spreads] According to the SMM survey, in June 2026, the operating rate of the secondary aluminum industry fell 0.9 percentage points MoM from May to 33.3%, and fell 7.6 percentage points YoY.

[SMM Analysis: Samsung SDI’s “Contrarian Big Bet” — 25 Trillion Won Staked on Next-Generation Batteries Could Rewrite Global Energy Landscape] Samsung SDI disclosed a regulatory filing on July 3, announcing an investment of approximately 16 trillion won (about 88 billion yuan) into its Ulsan plant by 2040, to build large-scale production sites for all-solid-state batteries, LFP batteries for ESS, and sodium-ion batteries. A day earlier (July 2), the company had announced an investment of 9 trillion won into its Cheonan plant, for setting up a mother production line for next-generation battery technology verification and R&D facilities. Combined, the two investments total 25 trillion won, spanning a period of 14 years and lasting until 2040.

In May 2026, Indonesia's monthly total sulphur imports stood at 277,834.30 mt in physical content, up 3.9% MoM and down 55.80% YoY, with the main importing countries being China, Vietnam, the UK, India, Singapore, Spain, Turkmenistan, Turkey, Saudi Arabia and Japan; Indonesia's monthly total sulphur exports reached 24.08 mt in physical content, with the main export destinations being Germany, Hong Kong, China and the US; Indonesia's monthly total sulphuric acid imports amounted to 55,296.994 mt in physical content, down 68.1% MoM and up 236.6% YoY, mainly from China, India and South Korea; Indonesia's monthly total sulphuric acid exports were 0.

In H1 2026, China's enamelled wire industry overall exhibited a phased pattern of 'post-holiday rebound and surge, followed by a steady pullback in Q2,' with its operational characteristics heavily focused on structural differentiation.