​​​​​​​Falling nickel benchmarks, a fragmented overseas supply base and a Malaysian enforcement crackdown lift India's stainless scrap imports 11.4% while pushing the average import price down 6.6% in the 12 months to February 2026

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.

On July 31, the "15th Five-Year Plan for Industrial Green and Low-Carbon Development" was officially released. It mentions in the key industry green transformation project the promotion of high-proportion green electricity consumption in aluminum electrolysis and the promotion of green short-process smelting of aluminum, zinc, magnesium, and titanium.

【Imported Zinc Concentrate Market】The import arbitrage for zinc concentrate has deteriorated further amid a widening gap between domestic and overseas zinc prices, reducing the economic attractiveness of imported material. Smelters continue to prioritize domestic concentrate procurement. Spot trading activity for imported zinc concentrate remained relatively limited this week, while treatment charges (TCs) continued to hover at low levels.

【Zinc Concentrate Tender】According to SMM, a zinc mine in Southwest China recently concluded its August zinc concentrate ex-works tender at approximately RMB -1,600/metal tonne, down by around RMB 800/metal tonne from the previous month. SMM will continue to monitor subsequent changes in zinc concentrate treatment charges.

[SMM Silver Express] SMM July 31: SMM 1# silver ingot production stood at 1,556 tonnes in July 2026, down 0.38% month-on-month and 3.59% year-on-year, with cumulative growth of 5.3% in the first seven months. Producer inventories rose 22.2% month-on-month. The decline was mainly due to ongoing maintenance at copper, lead and zinc smelters, with some inventories reserved for processing trade exports.

Xingye Silver&Tin released a progress announcement on July 31 regarding a safety incident at a subsidiary, showing that: On July 30, 2026, Yinman Mining received the On-site Treatment Measures Decision Letter (No. 260 [West] Emergency Decision [2026]) issued by the Xiwu Banner Emergency Management Bureau, requiring the synchronous suspension of Yinman Mining's mineral processing tailings system. As of the disclosure of this announcement, both the mining system and the mineral processing tailings system of Yinman Mining have been suspended. The details of this accident as announced by Xingye Silver&Tin show that: At around 3:30 PM on July 26, 2026, an accident occurred during underground production construction at the mine of the company's wholly-owned subsidiary, Xiwuzhumuqin Banner Yinman Mining Co., Ltd., resulting in 1 fatality and no injuries. After the accident, Yinman Mining, in accordance with the On-site Treatment Measures Decision Letter (No. 257 [West] Emergency Decision [2026]) issued by the Xiwuzhumuqin Banner Emergency Management Bureau, suspended the underground mining area. Regarding the impact on the company's production, operations, and performance: Yinman Mining is primarily engaged in the mining, processing, and sales of non-ferrous metals such as silver, tin, copper, lead, and zinc, with a production capacity of 1.65 million mt/year. In 2025, Yinman Mining recorded operating revenue of RMB3,062.0434 million, accounting for 55.12% of the company's total consolidated operating revenue, and achieved net profit of RMB1,346.2785 million. In Q1 2026, it recorded operating revenue of RMB961.5985 million, representing 45.15% of the total, with net profit of RMB474.7488 million. Currently, the cause of the accident and the reason for the fatality are still under investigation. Yinman Mining will fully cooperate with the accident investigation and subsequent work. Since the duration of the suspension at Yinman Mining cannot be determined at this time, the impact of this production halt on the company's current and full-year performance cannot be accurately estimated for now. The company will, in accordance with relevant regulations, fulfill its information disclosure obligations in a timely manner based on the progress of the accident investigation. Investors are advised to be cautious about investment risks. Performance: Xingye Silver&Tin's 2025 annual report shows that in 2025, the company realized operating revenue of RMB5,555.2536 million, a YoY increase of 30.09%; total profit of RMB2,096.237 million, up 18.75% YoY; and net profit attributable to shareholders of the publicly listed company of RMB1,704.2393 million, rising 11.40% YoY. Xingye Silver&Tin's announcement shows that in 2025, the breakdown of operating revenue from the company's main mineral products as a share of overall operating revenue was as follows: ore-derived silver (RMB2,175.7825 million, 39.17%); ore-derived tin (RMB1,649.6398 million, 29.70%); ore-derived zinc (RMB975.8673 million, 17.57%); ore-derived lead (RMB220.945 million, 3.98%); ore-derived iron (RMB180.3799 million, 3.25%); ore-derived copper (RMB133.0043 million, 2.39%); ore-derived antimony (RMB100.3568 million, 1.81%); ore-derived gold (RMB82.3402 million, 1.48%); and ore-derived bismuth (RMB16.6744 million, 0.30%). Among these, the combined operating revenue from ore-derived tin and ore-derived silver accounted for 68.86%. Regarding the company's main business and key performance drivers, Xingye Silver&Tin stated in its 2025 annual report: The company is a large mining group primarily engaged in the exploration, mining, and processing of non-ferrous metals and precious metals. As of the disclosure date of this report, the company has over 20 subsidiaries, including 8 producing mining companies: Yinman Mining, Qianjinda Mining, Yubang Mining, Rongguan Mining, Xilin Mining, Rongbang Mining, Ruineng Mining, and Bosheng Mining; Atlantic Tin's Achmmach tin mine under AtlasTinSAS is in the construction phase; Tanghe Era Mining is in suspension; Yitong Mining and Yunnan Xigui are in the exploration stage. Hainan Fund is mainly engaged in equity investment management; Xingye Gold (Hong Kong) focuses on metal and mining trade, corporate mergers and acquisitions, and is responsible for expanding markets outside China and acquiring high-quality overseas mineral resources; Hainan Guomao and Tianjin Guomao mainly handle the sales of non-ferrous metal mineral products and the procurement of some raw materials; Xingye Ruijin conducts process research, technology R&D, and upgrading in areas such as exploration, mining and processing, and comprehensive tailings recycling. Tibet Shannan Antimony-Gold, Tibet Xinda Mining, and Xing'an Meng Fuxingtun Mining serve as the company's regional resource integration platforms. During the reporting period, the company successfully acquired an 85% equity stake in Yubang Mining. According to data from the World Silver Institute as of the end of 2023, Yubang Mining's single silver mine ranks first in Asia and fifth globally. This acquisition further strengthened the company's resource advantages, laying a solid resource foundation for sustainable development. Meanwhile, through its subsidiary Xingye Gold (Hong Kong), the company increased investment in overseas mineral resources, successfully acquiring a 100% equity interest in Atlantic Tin. This acquisition was a key step in implementing the company's 'going global' strategy. Based on the tin mine classification criteria for large mines in the Standard for Classification of Mineral Resource/Reserve Scales (DZ/T0400-2022), the Achmmach tin mine owned by Atlantic Tin is now equivalent to five large deposits. Through this integration of overseas tin resources, the company has further perfected its international tin layout and secured important strategic resources for long-term development. The company's main performance is derived from non-ferrous metal mining and processing operations. During the reporting period, revenue from this sector accounted for 99.64% of total 2025 operating revenue. Key factors influencing the performance of the mining and processing segment include production and sales volumes of main products, market prices, and the cost of non-ferrous metal and precious metal mining and processing operations. For the business plan, Xingye Silver&Tin stated in its 2025 annual report: 2026 is the final year of the company's '23' plan. The board of directors will closely follow the theme of high-quality development, fully implement the set work targets, continuously deepen the concept of 'trust and synergy,' and go all out to achieve the closing goals of the '23' plan. Key tasks are as follows: 1. Uphold safety and environmental protection bottom lines, use 2026, the 'Year of Safety Management Implementation,' as a lever to fully consolidate safety responsibilities, reinforce the achievements of the 'Year of Collective Safety Calm,' enhance risk anticipation and process control, and strictly prevent safety and environmental accidents to achieve safe, stable, green, and low-carbon development. 2. Comprehensively advance the construction of key projects, strengthen whole-process management of project budgeting, progress, and quality, and coordinate the implementation of projects such as Yinman Mining's 2.97 million mt expansion, Yubang Mining's 8.25 million mt expansion, the Morocco project, and the Budunyin'gen Mining (managed) project to ensure timely completion and full production, releasing capacity benefits. 3. Continuously intensify exploration and reserve expansion efforts, balance production operations with geological exploration, steadily advance exploration at existing mines and surrounding areas, accelerate resource upgrade to reserves, and constantly consolidate the resource base. 4. Deepen industrial synergy and resource integration, leveraging Inner Mongolia's core regional advantages to gradually expand overseas resource deployment; persist in focusing on silver and tin as main business directions, enriching and optimizing resource varieties. Steadily advance subsequent acquisitions and integration of Weiling Co., actively track high-quality mineral project opportunities in China and overseas, and enhance overall competitiveness through synergistic industrial mergers and acquisitions. 5. Further strengthen institutional enforcement and internal control management, ensure that all systems, processes, and management requirements are implemented effectively, and improve the company's refined management level; strengthen enforcement capacity, ensure that production plans, comprehensive budgets, and work deployments are fully carried out, and promote deep integration of corporate culture with business management. 6. Fully promote preparations for Hong Kong stock listing, accelerate the establishment of dual capital market platforms at home and abroad, enhance cross-border capital operation capabilities, provide stronger financial support for resource integration and strategy implementation, and elevate the company's high-quality sustainable development to a new level. Xingye Silver&Tin's Q1 report for this year disclosed that in January-March 2026, the company realized operating revenue of RMB2,129.8691 million, an 85.32% YoY increase; net profit attributable to shareholders reached RMB1,337.6722 million, up 257.32% YoY. As of March 31, 2026, total assets were RMB19,688.8316 million, with net assets attributable to shareholders at RMB10,825.4666 million. Revenue breakdown: In January-March 2026, the revenue share of the company's main mineral products was as follows: ore-derived silver (RMB1,410.1104 million, 66.21%); ore-derived tin (RMB234.0354 million, 10.99%); ore-derived zinc (RMB228.1249 million, 10.71%); ore-derived lead (RMB71.8509 million, 3.37%); ore-derived antimony (RMB53.1029 million, 2.49%); ore-derived gold (RMB51.0181 million, 2.40%); ore-derived iron (RMB44.1733 million, 2.07%); ore-derived copper (RMB35.6489 million, 1.67%); and ore-derived indium (RMB524,100, 0.02%). Among these, the combined revenue from ore-derived tin and ore-derived silver accounted for 77.19%. Xingye Silver&Tin's Q1 report announcement stated: Operating profit for the current period increased by 238.16% compared to the previous period, total profit was up by 236.36%, and net profit attributable to the parent company's owners rose by 257.32%. The main reasons: In the reporting period, selling prices of the company's main mineral products such as silver and tin rose YoY; Yubang Mining's capacity gradually released, with a significant YoY increase in the production and sales of ore-derived silver; and a gain of RMB321 million was realized from the transfer of a 60% equity stake in Shuangyuan Nonferrous. Huaxi Securities' July 25 research report believed that: Silver's macro logic is similar to that of gold, while also possessing stronger industrial attributes, and its price is driven by a resonance of fundamental, policy, and market factors. From the core support perspective, silver's inclusion in the US 'critical minerals' list has triggered sustained capital attention and hoarding effects, becoming a key policy catalyst for price increases. Although short-term demand has pulled back, the supply-side gap remains prominent, serving as the core fundamental support for silver prices. It is expected that in the coming years, the silver supply-demand gap will continue to widen. Combined with industrial recovery demand amid an easing cycle, silver's price elasticity is significantly higher than gold's, and it is likely to rise given the resonance of a loose environment and industrial demand, with a bullish long-term outlook on silver prices. The current silver sector is in a phase of pulling back and consolidating at lows; although weighed down in the short term by US dollar strength and delayed rate cut expectations, it still offers value for medium and long-term positioning. Beneficiary stocks of silver: [Shengda Resources], [Xingye Silver&Tin].

[End-Use Consumption Lacking Sufficient Support, Guangdong Zinc Premiums Move Sideways] This week, Guangdong premiums were up around 15 yuan/mt WoW. As of this Friday, mainstream #0 zinc in Guangdong was quoted at a discount of 75-120 yuan/mt against the market...

[More Frequent Production Control and Cuts Among Enterprises; Die-casting Zinc Alloy Operating Rates Decline] The decline in operating rates was mainly due to weakening end-use demand, with sluggish shipments at alloy plants leading to production control and cuts. Demand side, end-use consumption was in the traditional off-season, with orders across downstream sectors generally weak...

[Frequent disruptions in China’s supply side; TCs fell in many regions of China in August]: On a weekly basis, the SMM Zn50 domestic weekly average TC fell 400 yuan/mt Zn WoW to -1,150 yuan/mt Zn, and the SMM Imported Zinc Concentrate Index fell $3.5/dmt WoW to -$98.13/dmt. On a monthly basis, the SMM Imported Zinc Concentrate Index fell $17.01/dmt MoM in July to -$89.81/dmt....