As of July 30, China’s aluminum ingot inventory in major consumption areas stood at 953,000 mt. Cumulative destocking from the YTD high of 1.465 million mt in early May has reached 512,000 mt (-35%), with an additional accelerated destocking of 53,000 mt this week, breaking below the 1 million mt threshold as expected. However, the directional divergence between warehouse withdrawals and inventory has raised concerns...

As of July 30, China's major consumption regions reported aluminum ingot inventory of 953,000 mt, having cumulatively destocked 512,000 mt (-35%) from the year's high of 1.465 million mt in early May. Within the week, destocking accelerated further by 53,000 mt, as expected falling below the 1 million mt mark. However, the directional divergence between warehouse withdrawals and inventory drew attention: weekly warehouse withdrawals pulled back to 127,700 mt, losing the advantage of being at a high for the same period in the past four years. The core driving force of this destocking round has shifted from "demand and warehouse withdrawal boost" in June to "supply contraction + slowdown in shipment pace": the proportion of liquid aluminum rose to 78.3% in July, with casting ingot volume down 15.1% YoY; a sharp drop in arrivals in South China pushed Foshan's premium wider by 50 yuan/mt in a single week to 115 yuan/mt; SMM believes...

July 31, 2026 – The main alumina futures contract closed at 2,621 yuan/ton today, extending its recent weak performance. On the previous trading day (July 30), prices briefly touched an intraday low of 2,617 yuan/ton, plunging 1.37% in a single session and marking a fresh near-term trough. Under the combined bearish pressures of sustained supply expansion, intensifying import competition, and fading speculative sentiment, the alumina market is undergoing a fundamental-driven valuation correction. However, unlike the sharp downturn seen in late 2025, the current significantly higher feedstock costs are building a support floor that may prove difficult to break through decisively. On the supply front, domestic alumina operating capacity remains persistently elevated, with incremental pressure continuing to accumulate. In the Guangxi region, previously idled production lines from maintenance shutdowns are steadily resuming operations, gradually restoring regional supply capacity. Meanwhile, the southern region still faces nearly 3 million tonnes of new capacity slated for release in the coming months, further reinforcing market expectations of a loosening supply landscape. The fading excitement surrounding bauxite supply news has further undermined sentimental support for futures prices. Concerns over Guinean bauxite supply disruptions, which once rattled the market, have gradually receded from the spotlight as time passes. With speculative long positions exiting amid waning media attention, the market has lost its sentiment premium, and prices are reverting to supply-demand fundamentals. Overseas supply continues to weigh heavily on the domestic market. Alumina imports have surged significantly this year, with port inventories climbing to a lofty 940,000 tonnes. The persistent inflow of foreign alumina has not only supplemented domestic availability but also placed sustained downward pressure on spot quotations. Weakening spot prices have formed a negative feedback loop with the futures market, reinforcing the downward price spiral. Nevertheless, despite the layered bearish arguments, current prices are not without defense. Compared with the December 2025 selloff that bottomed at 2,437 yuan/ton, expectations for downside floors differ markedly this time. Back then, Guinean bauxite prices were quoted only around $60/ton, while current prices have climbed to the $70-75/ton range, driving the industry average fully-loaded cost to approximately 2,530 yuan/ton. This materially higher cost base implies that even with deeply bearish fundamentals, a repeat of the free-fall price rout is unlikely to materialize, as cost support effects will strengthen marginally as prices decline. The potential opening of export arbitrage remains one of the few upside catalysts on the horizon. Should overseas alumina prices continue to rise while domestic prices remain subdued, widening the price differential sufficiently to cover export costs, export channels could open periodically, providing a marginal outlet for excess domestic capacity. However, even if such a window materializes, the volumes that can be diverted are unlikely to offset the incremental pressure from new capacity additions in the southern region. Export opportunities are more likely to serve as short-term sentiment-driven rebound catalysts rather than a sufficient condition for a trend reversal. Taken together, alumina prices are expected to trade within a narrow range in the near term, caught between the bearish excess supply narrative and cost support. The core trading range is projected at 2,600-2,650 yuan/ton. Given that market fundamentals are expected to remain loose through August, futures prices could breach the key 2,600 yuan psychological level, though downside potential appears limited by rigid cost support on the mining side.

July 31, 2026 News: As of today, the most-traded alumina futures contract closed at 2,621 yuan/mt, continuing its recent weak trend. The previous day (July 30), prices briefly dipped to 2,617 yuan/mt intraday, with a single-day decline of 1.37%, hitting a new phase low. Under the weight of multiple bearish factors—sustained supply releases, intensifying import pressure, and fading speculative sentiment—the alumina market is undergoing a fundamentally driven valuation correction. However, unlike the deep decline at the end of 2025, the significantly higher ore-side costs are now building a floor that is hard to break through easily. Supply side, China’s operating alumina capacity remains high, and incremental pressure continues to mount. Enterprises in Guangxi that were previously under maintenance are steadily resuming production, with some production lines already restarted, gradually restoring regional supply capability. Meanwhile, south China still has nearly 3 million mt of new capacity planned for release in the coming months, further reinforcing market expectations of a loose supply pattern. The waning heat on the bauxite front further erodes futures sentiment support. Supply disruptions in Guinea that had previously sparked market concerns are gradually fading from view as time passes. After the news heat dissipated, speculative bull funds exited one after another, stripping the futures of sentiment premium as prices returned to supply-demand fundamentals. The impact of overseas resources continues to weigh on the Chinese market. This year, alumina imports have climbed sharply, with port inventories accumulating to a high of 940,000 mt. The continuous inflow of overseas alumina has not only effectively supplemented domestic supply but also exerted persistent downward pressure on spot quotations. The weakening spot price and futures are in a negative feedback loop, reinforcing the downward price spiral. However, despite bears advancing their logic step by step, current prices are not without resistance. Compared to the December 2025 sell-off to 2,437 yuan/mt, the expected bottom in this round of decline is significantly different. At that time, Guinea bauxite was quoted just over $60/mt, whereas ore prices have now jumped to the $70-75/mt range. The industry average full cost has consequently climbed to around 2,530 yuan/mt. This substantial upward shift in the cost center means that even if fundamentals turn fully bearish, a free-fall price collapse is unlikely to recur, and the cost support effect will strengthen marginally as prices decline. The opening of the export window is one of the few potential rebound variables in the current market. If overseas alumina prices continue rising while domestic prices remain low, and the price spread between Chinese and overseas markets widens enough to cover export costs, the export channel may periodically clear, offering a marginal absorption path for domestic surplus capacity. But rationally speaking, even if the export window opens, the total volume it can divert will still be insufficient to cover the incremental pressure from new capacity in south China. The improvement in exports is more of a short-term rebound catalyst at the sentiment repair level, rather than a sufficient condition for a trend reversal. Overall, in the short term, alumina prices will fluctuate narrowly between the surplus logic and cost support. The core price fluctuation range is expected to stay at 2,600-2,650 yuan/mt. Given that fundamentals will remain loose in August, futures prices may fall below the 2,600 yuan/mt mark, but due to the rigid constraint of ore-side costs, the downside room is relatively limited. (The above information is based on market collection and comprehensive assessment by the SMM research team. The information provided is for reference only. This article does not constitute direct investment advice. Clients should make decisions prudently and not replace their own independent judgment with this. Any decisions made by clients are not related to SMM.) Data source: SMM

[SMM Express] African Rainbow Minerals (ARM) has reaffirmed its commitment to long-term growth following board approval of the R15.2 billion Bokoni platinum project and the R753 million restart of the Nkomati nickel mine. Management described Bokoni as a high-grade, low-cost platinum group metals (PGMs) growth platform capable of producing 350,000–400,000 6E PGM ounces annually, supported by existing infrastructure, a 31-million-ounce measured resource and an expected post-tax net present value of R5.9 billion with a projected internal rate of return of 28%. The Nkomati restart is expected to re-establish South Africa's only primary nickel producer, targeting a 5.3-year payback period and a 28.4% internal rate of return. The investment announcement has, however, generated mixed market reactions. ARM shares have declined 21% this year, with some analysts expressing concerns over the timing and scale of the Bokoni investment and its potential impact on near-term cash flow. Others view the projects as a strategic response to tightening South African PGM supply and improving platinum market fundamentals, arguing that ARM's strong balance sheet and the projects' long-term economics could enhance production resilience and shareholder value through future commodity cycles.

SMM, July 31 – Sentiment on A-share semiconductor industry chain futures recovered, and the improved industry chain prosperity transmitted upstream, driving a sharp rally in the strategic minor metal sector. As of the close on July 31, the minor metal sector had risen 2.96%. Among individual stocks, Yunnan Tin and Yunnan Germanium both surged over 8%, while Orient Tantalum, Zhongxi Nonferrous, Xiamen Tungsten, Haotong Technology, Western Metal Materials, Zhangyuan Tungsten, Huaxi Nonferrous, and Shenghe Resources led the gains. This round of minor metal strength was driven by the resonance of multiple industrial dynamics. On one hand, the semiconductor and AI computing track regained heat, with expectations for demand expansion in high-speed optical modules, AI servers, and other fields improving. Germanium and tantalum, as core raw materials for semiconductor optoelectronic devices and high-end tantalum capacitors, are seeing steadily strengthened demand support from downstream emerging industries. On the other hand, germanium and tantalum are strategic dispersed metals with concentrated global supply. Coupled with overseas geopolitical disruptions and expectations of supply tightening from domestic resource controls, while the ongoing localisation of related high-end semiconductor materials continued to advance, this further boosted market allocation sentiment and pushed the sector higher. News [Yunnan Germanium: Subsidiary Signs Major Indium Phosphide Wafer Supply Order Worth RMB 570–855 Million, H1 Net Profit Expected to Increase YoY] Yunnan Germanium announced on July 24 that its controlled subsidiary Yunnan Xinyao recently signed a supply agreement with a client for the sale of indium phosphide wafers (substrates). The total estimated contract value ranges from RMB 570.08 million to RMB 855.12 million (tax inclusive), accounting for 53.48% to 80.23% of the company’s audited revenue for 2025. The contract term runs from August 1, 2026, to December 31, 2027. Regarding the contract’s impact on the listed company, Yunnan Germanium stated that if the contract is fulfilled smoothly, it is expected to have a positive impact on the company’s operating results for the performance years. The specific amount and reporting periods affected will depend on the actual performance of the contract and will be based on the company’s audited revenue. [Orient Tantalum: Domestic Demand for High-Value-Added Products Such as Superalloys and Semiconductor Tantalum Targets Is Gradually Rising] Orient Tantalum stated during an institutional survey on July 23 that, with the continuous development of China’s high-tech and new infrastructure sectors, domestic demand for high-value-added products such as superalloys, semiconductor tantalum targets, and high-purity niobium materials is gradually rising. In recent years, the company has vigorously promoted technical transformation and capacity expansion projects, organized production rationally, and gradually released new capacity. Under the guidance of the strategy for autonomous and controllable industry chains, the localisation substitution process has evolved from breakthroughs in individual products to systematic solutions, laying a solid foundation for the growth of tantalum, niobium, and their alloy products. [Yunnan Tin: Expects H1 2026 Net Profit of 1.47–1.57 Billion Yuan, Up 38.43%–47.85% YoY] Yunnan Tin disclosed an earnings forecast on the evening of July 14, expecting attributable net profit in H1 2026 to be 1.47 billion to 1.57 billion yuan, up 38.43%–47.85% YoY; and recurring net profit is expected to be 1.88 billion to 1.98 billion yuan, up 44.23%–51.91% YoY. Spot Market Tin Overnight, some US chip stocks rebounded, and the Philadelphia Semiconductor Index surged, boosting the performance of tin, known as the “computing metal.” SHFE tin opened higher on July 31, lifting spot prices. In the tin spot market: On July 31, the average price of SMM 1# tin was 425,850 yuan/mt, up 1.51% from the previous trading day. As tin prices rose, spot market trading was sluggish. Fundamentals: (1) Supply: Tight ore and ingot supply, low inventory, amplifying elasticity. Myanmar’s rainy season extends through end-August, with mine flooding and logistics disruptions; Wa State’s June tin ore output was only 6,392 mt in physical content. China’s tin ore imports in July are expected to be basically flat MoM. The slow pace of production resumptions in Wa State has been priced in ahead of time, with no major shutdowns in the near term, but supply contraction expectations during the rainy season have yet to fully materialize. Indonesia’s tin ingot imports in July are expected to show some recovery MoM. (2) Demand: Improved solder operating rates, but acceptance of high prices needs to be tested. The operating rate at solder enterprises was 78.8% in June, up 4.6 percentage points from May; however, after the sharp spot price rally on July 30, downstream users were cautious and stayed on the sidelines, and whether high-priced spot cargoes can be absorbed still requires verification. Stockpiling for new Apple/Huawei models in late August is the next demand trigger point. Institutional Views A research report from Minmetals Securities points out: Germanium accounts for 60% of applications in optical communication and satellite PV fields, making it a metal for “AI computing power + space energy.” With its excellent refractive index tuning capability and radiation resistance, germanium has become a key material for AI data center optical interconnects and low-earth-orbit satellite PV systems. Looking at changes in demand structure, from 2020 to 2026, downstream germanium consumption grew from 160 mt to 240 mt, with optical communication’s share rising to 40% and satellite PV’s share to 20%, together accounting for 60% of total downstream demand. It expects that 90% of the demand growth in 2027 will come from two high-growth sectors: AI hardware and satellite PV. A research report from Caitong Securities shows: As AI computing power demand explodes, the market size of indium phosphide, used as a chip substrate material, will continue to expand. Indium resources are scarce and subject to policy restrictions, and product prices are entering an uptrend. High-purity red phosphorus is a very important semiconductor base material, with high purification technology barriers. Against the backdrop of accelerated AI application deployment driving related infrastructure construction, the indium phosphide substrate industry chain is expected to see dual opportunities from demand growth and domestic substitution. It is recommended to focus on enterprises with resource and technological advantages in the links of indium phosphide, indium, and high-purity red phosphorus. A research report from Datong Securities shows that minor metals have staged an independent rally, with tightened supply combined with strategic attributes leading to a value revaluation. The rare earth sector is preemptively pricing in new regulatory controls, with Myanmar ore imports disrupted, tight spot supply of Pr-Nd oxide driving prices sharply higher; tungsten and antimony ore grades are declining along with environmental protection-driven production restrictions, widening the supply gap, while PV and hard alloy demand remains firm during the off-season, and inventories are at low levels. AI computing power and communications sectors are boosting demand for gallium and germanium, and coupled with export control policies, concentrated stockpiling outside China is widening the price spread between Chinese and overseas markets. Scarce resources are resonating with financial attributes, and the sector continues to be favoured by capital. Recommended Reads:

I. Import & Export Data: Volumes Are Rising According to customs data, China imported 4,400 tonnes of lithium hydroxide in June 2026, up 12% month-on-month and nearly triple year-on-year. Of this, 1,159 tonnes came from South Korea, accounting for 26% of the month's total imports; Chile ranked second with 993 tonnes; while imports from Indonesia remained low, with 774 tonnes arriving in June. On the export front, China exported 6,018 tonnes of lithium hydroxide in June, up 70% month-on-month, driven primarily by quarter-end shipment concentration and a modest recovery in overseas demand. Of this, 5,032 tonnes were exported to South Korea and 679 tonnes to Japan. Since 2026, China has shifted from a net exporter to a net importer of lithium hydroxide. Cumulative data shows that total imports for January–June reached 31,700 tonnes, a nearly threefold increase from the 8,000 tonnes imported during the same period last year, reflecting a certain degree of resilience in domestic demand. The surge in imports is now an established fact. Behind it lie both the cyclical advantage of domestic demand and prices over overseas markets, as well as traders' strategic moves to establish a foothold ahead of potential exchange listings. Yet regardless of the driving factors, a more practical question emerges — with import volumes climbing to record highs, can importers sustain profitability? Below, we assess the profit margins of imported lithium hydroxide through two pathways: direct resale and carbonation processing. II. Profitability of Direct Resale of Imported Lithium Hydroxide The following profit calculations are based on a comparison between the imported CIF cost (including tariffs, VAT, and port & agency fees) and the domestic SMM battery-grade lithium hydroxide spot price. A phased breakdown is provided below. January–May (First Half) : Import profits were generally substantial, with margins reaching as high as RMB 25,000/tonne or more. During this period, domestic lithium hydroxide prices were on an upward trajectory, while overseas demand remained sluggish and price increases lagged noticeably. Coupled with high overseas inventory levels, foreign holders showed a strong willingness to offload amid the elevated domestic prices, offering certain discounts on actual transactions, which allowed domestic buyers to enjoy margins better than theoretical estimates. June–July : Profitability narrowed significantly. By mid-to-late July, even imports from zero-tariff sources such as South Korea and Australia were hovering around the breakeven point. During this phase, domestic lithium hydroxide prices entered a downward channel, while overseas price declines lagged behind in tandem. At the same time, overseas demand picked up modestly, and holders — having largely cleared their earlier inventories — turned more reluctant to release cargoes, with widespread stockpiling behavior. As a result, the price drop overseas did not keep pace with the decline in China, compressing import margins further toward breakeven. It should also be noted that the above margin calculations implicitly rely on a key assumption: that imported lithium hydroxide can clear customs within a short storage timeframe and be sold at the SMM battery-grade lithium hydroxide (coarse particle) spot price. In practice, however, this assumption may not hold across all scenarios. The realities facing traders when importing lithium hydroxide into the Chinese market are twofold. On the one hand, major domestic cathode material manufacturers have long-standing relationships with leading domestic brands, with well-established supplier qualification systems and process parameters — replacing an imported brand requires a lengthy requalification cycle and faces limited downstream acceptance. On the other hand, lithium hydroxide from different source countries varies in particle size distribution, magnetic material content, and impurity profiles, making it not a straightforward "drop-in" substitute. These factors mean that imported lithium hydroxide often struggles to transact directly at domestic hydroxide spot prices in practice. Instead, it must be sold at a discount — either through an outright price reduction or by pricing reference to the main carbonate futures contract. This implies that actual profits are not as generous as the apparent figures would suggest. III. Profitability of Carbonation Processing of Imported Lithium Hydroxide Core assumptions are as follows: imported material is purchased at a 94%–98% discount to the SMM battery-grade lithium hydroxide spot price, and the carbonation process recovery rate is estimated at 95%–98%. Under these conditions, after the imported lithium hydroxide is carbonated into lithium carbonate, profitable opportunities emerge only in isolated months, with overall margins remaining fairly narrow. Summary Import volumes are growing, and for most of the first half of the year profitable import windows were available (notably in March and May). However, from June onward, apparent profits have narrowed rapidly toward the breakeven point. When further factoring in the discount required for direct resale or the margin compression from carbonation processing, the actual profitability of lithium hydroxide imports in recent months becomes even more limited. For importers aiming to sustain profitability in this space going forward, relying on simple price arbitrage will no longer suffice. Instead, competitive advantages must be built through downstream channel partnerships, quality premiums, and exchange rate risk management. Note: The import margin calculations in this report are based on a specific CIF benchmark. Actual transaction prices may vary by source country, brand, and purchase volume, while discount levels and carbonation costs are market-based estimates and are provided for reference purposes only. Data source: SMM & China Customs

Executive Summary Australia is a major supplier of feedstock to the Asia-Pacific zinc smelting system, but its supply structure is shifting from dominance by a small number of mature mines to a mix of mine closures, volatility at existing operations and ramp-ups at new projects. Glencore's Mount Isa zinc-lead business includes George Fisher and the nearby Lady Loretta mine, which reached the end of its mine life in late 2025. Meanwhile, Dugald River, McArthur River, Rosebery, Century, Cannington and Golden Grove remain the core of zinc concentrate supply from Australia, while newly commissioned or restarted projects such as Federation, Woodlawn and Endeavor have begun contributing incremental output. Zinc mine supply in Australia fell sharply in 2024 due to extreme weather, difficult underground mining conditions and changes in ore sequencing. It recovered in 2025 as McArthur River returned to normal and Dugald River delivered record production. In H1 2026, Glencore's operations in Australia produced 218 kt of zinc in concentrate, down 54 kt year on year, with roughly 51 kt of the reduction attributable to Lady Loretta's closure. Dugald River produced 87.2 kt of zinc in concentrate over the same period, indicating that the overall decline was driven primarily by the exit of a specific mature mine rather than by simultaneous cuts across all core operations. Supply from Australia should therefore be assessed on three horizons. In the short term, the focus is on wet-season disruptions to railways, ports and vessel schedules. Over the medium term, the key issues are the permanent loss of Lady Loretta, Century's approaching tailings-resource limit around 2027 and Cannington's lower operating rates, alongside the ramp-up of Federation, Woodlawn, Endeavor and the Gossan Valley mining front at Golden Grove. Changes in supply from Australia will affect arrivals in China and spot TCs, but the final assessment must also account for global net mine-supply growth and feedstock demand from smelters in China and overseas. I. Zinc Mine Supply in Australia: Mine Closures and New Capacity Ramp-Ups Australia's main zinc mines are located in Queensland, the Northern Territory, Tasmania, New South Wales and Western Australia. Major existing operations include Glencore's Mount Isa zinc-lead business and McArthur River, MMG's Dugald River and Rosebery, Sibanye-Stillwater's Century, South32's Cannington, and 29Metals' Golden Grove. Newly commissioned or restarted projects such as Federation, Woodlawn and Endeavor mean that supply from Australia is no longer determined solely by Mount Isa and Dugald River. The chart shows that Australia's zinc concentrate production has remained relatively high in recent years, although year-to-year volatility has been significant. In 2024, extreme weather at McArthur River and increasingly complex underground mining conditions at Cannington caused a marked decline in supply. McArthur River's recovery and higher production at Dugald River drove a rebound in 2025, before Lady Loretta's closure weighed on output again in 2026. Supply from Australia is therefore not static; it reflects the combined effects of recoveries, declines and additions across individual mines. Performance among existing assets has diverged markedly. Dugald River produced 183.5 kt of zinc in concentrate in 2025, up 12% year on year and a record annual result. MMG's Rosebery produced approximately 48.6 kt over the same period. Century's tailings reprocessing operation produced about 101 kt of payable zinc in concentrate in 2025, although the existing tailings project is approaching a mine-life milestone around 2027. Cannington produced approximately 44.5 kt of payable zinc in FY2025, with guidance of about 40 kt for FY2026 and 43 kt for FY2027, indicating a relatively stable but lower production profile. Lady Loretta's closure has created a confirmed supply loss. Glencore data show that zinc concentrate production in Australia fell 20% year on year in H1 2026, with most of the decline attributable to the mine reaching the end of its life in late 2025. Looking ahead to 2027–2030, supply from Australia will be shaped by offsets between losses and additions. Century faces the gradual depletion of its tailings resource, while Cannington is constrained by more complex underground mining conditions. On the upside, Federation continues to ramp up, Woodlawn has returned to stable production, the Gossan Valley mining front at Golden Grove is expected to deliver first ore in H2 2026, and Endeavor's restart will add supply. Australia's medium-term supply outlook is therefore not a one-way contraction, but rather a period in which retiring mines hand over to new sources of production. II. China's Imports from Australia: Monthly Volatility Does Not Necessarily Signal Mine-Supply Cuts The chart shows that China's imports of zinc concentrate from Australia are highly seasonal and sensitive to shipment schedules. A monthly decline may reflect lower mine output, but it may also result from rail disruptions, delayed port loading, ocean transit times, customs-clearance timing or changes in smelter procurement. A subsequent spike may simply represent delayed cargoes arriving in a later month. Import data should therefore be assessed against at least three sets of information: the gap between miners' production and sales, operating conditions on railways and at ports in northern Australia, and arrival patterns at China's major ports. The low readings in 2024 should not automatically be equated with a lasting production decline. Likewise, the 2026 trend should be assessed primarily on the basis of cumulative imports rather than exaggerated moves in individual months. III. Why Does the Wet Season Affect Zinc Concentrate Exports from Australia? The wet season in northern Australia typically runs from October to April, while the tropical cyclone season lasts from November to April. The 2025–2026 northern wet season was the seventh-wettest on record, with average rainfall of about 684 mm, 44% above the long-term average. Eleven tropical cyclones occurred in the region surrounding Australia during the season. Many zinc mines in Australia are located inland, requiring concentrate to be transported over long distances to port. For example, the Mount Isa mining complex relies on rail links to the Port of Townsville; McArthur River ships through the Bing Bong loading facility; and Century is connected by slurry pipeline to the Port of Karumba. Zinc concentrate from Australia is shipped not only to China but also to South Korea and other overseas smelters. Weather disruptions therefore first affect individual transport corridors before feeding through to the Asia-Pacific spot market. Heavy rainfall and flooding generally affect the market through the following chain: Flooding or cyclones → rail and road disruptions → delayed port loading and vessel schedules → inventory accumulation at mines → delayed and lower arrivals in China In Q1 2026, Dugald River still produced 41.1 kt of zinc concentrate despite flooding and rail disruptions. However, logistics constraints caused concentrate sales to fall short of production, leaving some inventory temporarily stockpiled at the mine. This shows that extreme weather often affects transportation and shipment timing rather than directly impairing mine capacity. Once rail and port operations resume, accumulated concentrate may be shipped in a concentrated wave, allowing China's imports to rebound. Flood impacts are therefore usually temporary and should not automatically be treated as a permanent loss of mine supply from Australia. IV. Why Do Changes in Supply from Australia Affect TCs? Zinc concentrate treatment charges (TCs) are fees paid by miners or concentrate sellers to smelters for processing. They essentially reflect the balance between concentrate supply and smelter demand over a given period. Changes in mine supply and logistics in Australia can alter regional spot-market tightness, but the direction of TCs is not determined by any single country. In general: Ample zinc concentrate supply gives smelters more feedstock options and generally pushes TCs higher; Tight zinc concentrate supply intensifies competition for feedstock and generally pushes TCs lower. Australia is an important source of zinc concentrate for the Asia-Pacific region and the global market. When shipments from Australia are delayed and arrivals in China decline while domestic smelters maintain strong feedstock demand, competition for spot concentrate may intensify and spot TCs may come under short-term pressure. If delayed cargoes subsequently arrive in a concentrated wave, or incremental supply from other regions becomes available in time, the impact may dissipate relatively quickly. At the global mine-supply level, the outlook for 2026 is not a one-way contraction. Kipushi in the Democratic Republic of the Congo produced 70.2 kt of contained zinc in concentrate in Q2, marking a seventh consecutive quarter-on-quarter increase. In Australia, Woodlawn returned to stable production, Federation continued to ramp up and Endeavor's restart added new supply. These gains are being offset by the closure of Lady Loretta, Antamina's shift to a copper-rich, zinc-poor ore sequence, feedstock-blending constraints at Kazzinc and the potential depletion of Century's tailings resource around 2027. Global mine supply is therefore increasingly characterised by simultaneous growth at new mines and declines at mature assets. TC assessments should therefore focus on whether annual net additions are sufficient to offset losses, as well as changes in smelter operating rates in China and overseas. In the short term, the key variables are rail and port conditions in Australia and arrivals in China. Over the medium term, additions from Kipushi, Woodlawn and Federation should be weighed against reductions at Lady Loretta, Antamina and Century. Only by assessing the global mine balance alongside smelter demand can the market determine whether pressure on TCs is temporary or structural. Conclusion Australia's zinc mine supply is moving through a handover between mature and emerging assets. Lady Loretta's closure represents a confirmed loss, while established operations such as Mount Isa's zinc-lead business and McArthur River are expected to focus on stable production. Dugald River remains resilient, and Rosebery, Century, Cannington and Golden Grove continue to underpin existing supply. Meanwhile, newly commissioned and restarted projects are beginning to add incremental tonnes. In the short term, the wet season and flooding mainly affect the timing of China's imports through disruptions to railways, ports and vessel schedules, rather than causing permanent capacity losses. Over the medium term, supply from Australia in 2027–2030 will depend on the balance between potential declines—such as the depletion of Century's resource and Cannington's lower operating rates—and growth from the ramp-up of Federation, Woodlawn, Endeavor and the Gossan Valley mining front at Golden Grove. For TCs, fluctuations in supply from Australia can affect the Asia-Pacific spot market but cannot by themselves determine the long-term global zinc concentrate balance. The market should track mine production and sales in Australia, logistics in northern Australia, China's cumulative imports, developments at overseas mines such as Kipushi, Antamina and Kazzinc, and smelter operating rates in China and overseas. Only if global net mine-supply growth remains insufficient while smelter demand stays high will supply losses in Australia translate into sustained downward pressure on TCs.

As of this Friday, SiMn 6517 (cash) was 5,650-5,700 yuan/mt in north China, flat WoW; in south China, SiMn 6517 (cash) was 5,700-5,750 yuan/mt, unchanged WoW from last Friday; south China SiMn 6014 (cash) was 5,350-5,400 yuan/mt, flat WoW. Recently, SiMn futures moved sideways in a weak trend, market sentiment was heavily cautious, prices fell, and futures prices were basically in sync with spot prices.

July 31 report: North China ports: 46% Australian lumps 40.5-41 yuan/mtu, down WoW; South African semi-carbonate 33.5-34 yuan/mtu, down WoW; Gabonese 38.3-38.7 yuan/mtu, down WoW; South African high-iron 28.8-29.3 yuan/mtu, down WoW; South African medium-iron 36-36.5 yuan/mtu, flat WoW. South China ports: 46% Australian lumps 42.9-43.4 yuan/mtu, flat WoW; South African semi-carbonate 36.5-37 yuan/mtu, down WoW; Gabonese 41.1-41.6 yuan/mtu, up WoW; South African high-iron 31.2-31.7 yuan/mtu, down WoW; South African medium-iron 38-38.5 yuan/mtu, flat WoW. Manganese ore prices continue to grind lower, end-use demand remains weak, and it is common for traders to sell at lower prices.