SMM Jul 11 news: Metals market: Overnight, base metals on the overseas and China markets showed mixed performance. LME aluminum led the losses with a 2.07% decline, while SHFE nickel led the gains with a 0.78% increase. The % changes of other metals were all within 1%. The alumina main contract fell 0.4%, and the cast aluminum main contract fell 0.78%. Overnight, ferrous metals all fell except for stainless steel and iron ore. Stainless steel edged up 0.03%, iron ore rose 0.27%, and both hot-rolled coil and rebar edged down. For coking coal and coke, coking coal fell 1.03%, and coke fell 1.15%. Overnight in precious metals, COMEX gold fell 0.29%, with a weekly gain of 0.08%. COMEX silver fell 0.74%, with a weekly decline of 1.25%. In China, SHFE gold fell 0.56%, with a weekly decline of 0.83%. SHFE silver fell 0.58%, with a weekly decline of 2.63%. HSBC lowered its average gold price forecasts for 2026 and 2027, citing expectations for a hawkish shift in the US Fed's monetary policy and persistent pressure from a stronger US dollar. The bank cut its 2026 average price forecast to $4,560/oz from $4,864, and its 2027 forecast to $4,925 from $5,000. HSBC expects gold prices to fluctuate in a $3,800-$4,700 range for the rest of 2026 and settle near $4,750 at year-end. (Wall Street CN) Overnight closing prices as of 7:17 AM Jul 11: Macro Front China: [State Council Executive Meeting: Boost Scaled Development of Emerging Pillar Industries Along Entire Chain, Strengthen Basic Research and Key Software/Hardware R&D] According to CCTV, Premier Li Qiang presided over a State Council Executive Meeting to discuss work on cultivating emerging pillar industries. The meeting noted the need to boost the scaled development of emerging pillar industries along the entire chain, strengthen basic research and key software/hardware development, and accelerate technology iteration and ecosystem improvement. It also called for optimized regulatory models and guidance for local authorities to pursue differentiated development based on local conditions. (Jin10 Data App) [Ministry of Commerce, General Administration of Customs: Impose Temporary Export Prohibition on Helium] The Ministry of Commerce and the General Administration of Customs issued an announcement stating that, in accordance with the Foreign Trade Law of the People's Republic of China, they have decided to impose temporary export prohibition management on helium (Customs Commodity Code: 2804290010). This announcement took effect on the date of its issue, and subsequent adjustments will be announced separately. (Jin10 Data App) [National Electricity Load Hits Record High of 1.518 Billion kW] This year, continuous new-quality development of the national economy and steady improvement in end-user electrification levels, coupled with recent high-temperature weather across many parts of the country, have seen electricity loads climb rapidly. July 10, China’s nationwide electricity load hit a record high for the first time this year, reaching a peak of 1.518 billion kW, an increase of 10 million kW over the previous record. Since the start of summer, the power grid in south China, along with multiple provincial-level grids including Guangdong, Guangxi, Hainan, Ningxia, Gansu, Fujian, and Shaanxi, has collectively set new load records over 20 times. The repeated record highs in electricity demand this year have been jointly boosted by three main factors. First, industrial electricity consumption grew steadily. High-tech manufacturing and high-end equipment manufacturing flourished, while electricity use by emerging industries such as NEVs, energy storage, and computing equipment continued to expand. Second, electricity consumption in the service sector grew relatively quickly. Since the beginning of this year, electricity consumption growth rates for charging and battery swapping services and internet data services both exceeded 40%. Third, high temperatures drove up electricity loads. As living standards continue to improve, the proportion of air-conditioning cooling load nationwide approached 30%, exceeding 40% in some provinces. (National Development and Reform Commission (NDRC)) [National Energy Administration: Non-fossil energy consumption share to increase by an average of about 1 ppt annually by 2028] The National Energy Administration (NEA) issued the *Energy Sector Energy Conservation and Carbon Reduction Action Plan (2026–2028)*. The plan proposes that by 2028, the share of non-fossil energy consumption should increase by an average of about 1 percentage point annually; the coal consumption rate of coal-fired power units should be reasonably controlled, with the proportion of coal power capacity meeting current benchmark energy efficiency standards striving to increase by 15 percentage points; a batch of zero-carbon and low-carbon coal mining areas and oil zones should be established; support should be given to building a batch of zero-carbon industrial parks, achieving significant progress in energy conservation and carbon reduction in key industries, and continuously improving the level of green energy use. The plan also proposes vigorously promoting energy conservation and carbon reduction in thermal power. It will steadily and orderly shut down a batch of 300,000 kW class and below coal-fired power units that meet the conditions, and encourage the construction of replacement units that meet next-generation coal power standards ; promote the implementation of a batch of super (ultra) critical cross-generation upgrade retrofits for 600,000 kW class coal-fired power units. Support the implementation of zero-carbon and low-carbon fuel co-firing and Carbon Capture, Utilization and Storage (CCUS) retrofits for units that meet the conditions, with carbon emission levels per kWh after retrofitting expected to be reduced by about 10%. Implement a batch of coal power, gas power, and new energy integration projects, supporting coal power and new energy integration to achieve carbon reduction effects through methods such as coupling thermal storage for peak shaving and peak load supply, and integrated collection and transmission. (Jin10 Data APP) US Dollar Side: Overnight, the US dollar index edged up 0.03% to 100.96, gaining 0.05% for the week. The US Fed’s semi-annual report showed that overall US economic activity maintained steady expansion in 2026, mainly driven by high-tech investment and government spending. Factory output grew strongly due to AI-related data center investment, with production capacity continuing to improve. However, the housing market stalled, and external economic growth was sluggish, weighed down by the Middle East conflict and tariffs. The labour market was generally stable, with both wages and productivity growing, but slowing immigration led to a decline in labour supply, and small businesses and households still faced relatively tight credit conditions. Inflation remained elevated and rose further in the spring, while asset prices were above historical norms. The financial system was sound overall, bank reserves were ample, and the private credit market operated normally despite some redemption pressures. Long-term inflation expectations were basically anchored near the 2% target, though uncertainty from the Iran conflict remained a major risk. (Jin10 Data APP) The report noted that the US Fed's preferred Personal Consumption Expenditures (PCE) price index remained about double the 2% target as of May this year. This is also the first monetary policy report released since the new Fed Chairman Warsh took office. Warsh will appear before House and Senate committees next Tuesday and Wednesday, respectively, for his semi-annual routine testimony review on monetary policy. (Wallstreetcn) According to CME "FedWatch": The probability of the US Fed keeping rates unchanged in July is 66.3%, while the probability of a cumulative 25 basis point rate hike is 33.7%. For September, the probability of keeping rates unchanged is 31.0%, a cumulative 25 basis point hike is 51.1%, and a cumulative 50 basis point hike is 18.0%. (Jin10 Data APP) Other Currencies: Reuters, citing three sources familiar with the Bank of Japan's thinking, reported that the BOJ plans to keep interest rates unchanged in July but will maintain its policy guidance, committing to continue the process of rate hikes. One source said, "Downside risks to the economy have diminished somewhat as oil prices fall. But elevated costs from past imports will continue to put upward pressure on prices." Two other sources voiced similar views. They also said the BOJ may revise up its economic growth forecast for fiscal 2026 in its July quarterly report and continue to watch for inflation overshoot risks, as cost increases from yen weakness and strong AI demand partially offset some of the impact from falling oil prices. (Jin10 Data APP) ING economists Marieke Blom and Amrita Naik Nimbalkar said in a report that if the Eurozone's savings rate were to fall to pre-pandemic levels, it could unleash demand for goods and services worth about 1% of GDP. In Q1 this year, household savings accounted for 14.3% of disposable income, higher than the pre-pandemic five-year average of 12.5%. In the US, the savings rate in the final quarter of 2025 was 10.2%, suggesting a similar level could boost Eurozone GDP by nearly 2%. Consumption is expected to remain weak, as higher mortgage rates, slowing credit growth, and precautionary savings weigh on spending. However, the shift from bank deposits to investments could lay the groundwork for stronger spending and domestic demand in the coming years, they said. (Jin10 Data APP) Macro Front: Next week in China, data releases will include China's June trade balance in dollar terms, trade balance in yuan terms, June import and export YoY rates, Q2 GDP YoY rate, June total retail sales of consumer goods YoY, June industrial value added of enterprises above designated size YoY, June total electricity consumption YoY, and June total electricity consumption. In the US, data due includes the US June unadjusted CPI YoY, seasonally adjusted CPI MoM, seasonally adjusted core CPI MoM, unadjusted core CPI YoY, June PPI YoY, June PPI MoM, July New York Fed Empire State Manufacturing Index, initial jobless claims for the week ending July 11, June retail sales MoM, July Philadelphia Fed Manufacturing Index, June NFIB Small Business Optimism Index, weekly change in ADP employment figures for the week ending June 27, July NAHB Housing Market Index, May business inventories MoM, June pending home sales index MoM, June annualized housing starts, June total building permits, June import price index MoM, June industrial production MoM, preliminary July one-year inflation expectations, and preliminary July University of Michigan consumer sentiment index. For the Eurozone, releases include May industrial production MoM, May seasonally adjusted trade balance, May seasonally adjusted current account, final June CPI YoY, and final June CPI MoM. For the UK, data includes the May three-month GDP MoM rate, May manufacturing output MoM, May seasonally adjusted goods trade balance, and May industrial production MoM. Canada's May wholesale sales MoM and the Bank of Canada's interest rate decision on July 15 will also be released. Furthermore, the State Council Information Office will hold a press conference on H1 2026 import and export situation; the National Bureau of Statistics (NBS) will release the monthly residential sales price report for 70 large and medium-sized cities; the State Council Information Office will hold a press conference on national economic performance; the NEA will release total electricity consumption data around the 15th of each month. A new round of domestic refined oil price adjustments will commence. Fed Governor Waller will speak; Fed Chairman Warsh will testify before the House Financial Services Committee at the hearing on the "US Fed's Semi-Annual Monetary Policy Report"; 2027 FOMC voting member and Chicago Fed President Goolsbee will participate in a fireside chat; FOMC permanent voting member and New York Fed President Williams will speak; Fed Chairman Warsh will testify before the Senate Banking, Housing, and Urban Affairs Committee at the hearing on the "US Fed's Semi-Annual Monetary Policy Report". On July 16, the US Fed will release its Beige Book on economic conditions; 2028 FOMC voting member and St. Louis Fed President Musalem will speak; 2026 FOMC voting member and Dallas Fed President Logan will speak; Fed Vice Chairman Jefferson will speak on the economy and monetary policy. Bank of England Governor Bailey will speak; the Bank of Canada will announce its interest rate decision and monetary policy report, with Governor Macklem and Senior Deputy Governor Rogers holding a monetary policy press conference. Crude Oil Side: Overnight, oil prices on both sides of the Atlantic fell, with US crude down 0.79% and Brent crude down 1.42%. On a weekly basis, US crude rose 4.11% and Brent rose 4.3%, together snapping a four-week losing streak. The market is currently still pinning hopes on when navigation through the Strait of Hormuz can resume. Notably, after the escalation of the conflict between the US and Iran this week, the weekly crude oil price shook off the previous four-week losing streak, rising more than 4% for the week again. According to CCTV News, on Friday, July 10, local time, US President Trump posted on his social media platform "Truth Social" that Iran wants to continue "negotiations" with the US, and the US has agreed to continue negotiations. Trump also stated that the US has made it clear to Iran that the ceasefire is over. Subsequently, Xinhua News Agency, citing US media reports, said that a new round of US-Iran negotiations might be held in Switzerland next week. However, according to Iranian media Fars News, sources close to the Iranian negotiating team said claims that a new round of talks between Iran and the US would be held next week were untrue. According to CCTV, Iranian Foreign Ministry spokesperson Baghaei said on Friday that Iran has never requested negotiations with the US, but agreed to a visit by mediators to Iran. (Wallstreetcn) A head office reporter learned from Iranian sources that Iranian Foreign Minister Araghchi will lead a diplomatic delegation to visit Oman on the 11th. During the visit, the two sides plan to engage in dialogue and exchange views on bilateral relations and the regional situation, particularly the current state of the Strait of Hormuz. (CCTV) Data released by international market service agency Kepler on the 10th showed that on July 9, the number of vessels passing through the Strait of Hormuz area dropped to 22 from 30 the previous day, marking two consecutive days of declining traffic in the strait. Kepler said this data includes both commercial and non-commercial vessels, with commercial vessel traffic slightly higher than non-commercial. "The renewed escalation of the military confrontation between the US and Iran has weakened market confidence that diplomatic efforts can bring stability to the situation in the near term." (Xinhua News Agency) Barclays: Risks around our Brent crude oil price forecasts of $96 per barrel for 2026 and $85 for 2027 are fairly balanced. This week, OPEC will release its monthly oil market report (specific release time to be determined, generally published around 18:00-21:00 Beijing time).

H1 2026 silver saw a sharp spike to 30,900 yuan/kg in January, then plunged 55% to 13,816 yuan/kg by June, driven by squeezed spot liquidity and Fed policy reversal from easing to hawkish. Supply grew steadily; PV silver demand fell 21% YoY. H2 outlook: wait for inflation signals and Fed pivot, silver likely remains under pressure.

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.

[SMM Analysis: “Tight Resource Balance” Meets “Computing Power Revaluation”—2026 H1 Tin Price Deep Review and H2 Outlook] In 2026 H1, tin prices exhibited a wide-ranging tug-of-war pattern of “reaching record highs—pulling back to consolidate—rallying again—consolidating at highs.” The most-traded LME tin contract surged from about $42,000/mt at the beginning of the year to a record high of $59,000/mt, pulled back to $40,500 in March, rallied again to around $58,000 from April to May, and fell below $50,000 at end-June; the most-traded SHFE tin contract surged from 330,000 yuan/mt at the beginning of the year to a record high of 470,000 yuan/mt, dipped to 322,600 yuan/mt in March, touched 451,000 yuan/mt again in early June, and pulled back below 400,000 yuan/mt at month-end.

On the macro front , this week the market revolved around the US-Iran situation and US Fed policy expectations. At the start of the week, the US-Iran conflict escalated again, with rising crude oil driving inflation concerns higher. Coupled with the hawkish Fed meeting minutes, the US dollar and US bond yields strengthened, putting copper prices under pressure. Towards the end of the week, as oil prices pulled back and the possibility of progress in US-Iran talks remained, market sentiment partially recovered, and a weaker US dollar drove a rebound in copper prices. Overall, geopolitical tensions and expectations for Fed interest rate hikes repeatedly disrupted the market, with copper prices showing a pattern of first falling then rebounding, consolidating at highs. Fundamentals side , this week spot supply in China remained tight, arrivals of imported and domestic material were limited, and combined with the impact of weather and transportation, downstream users stockpiled in advance, leading to a significant decline in social inventory. As of July 9, SMM copper inventories in mainstream China regions fell by 34,900 mt WoW to 165,000 mt, while spot premiums and the price spread between futures contracts strengthened simultaneously. On the demand side, downstream purchases increased when copper prices pulled back, but trading weakened again after prices rebounded; overall, it remained dominated by restocking for immediate needs. Looking ahead to next week , on the macro front, the focus will be on US CPI, PPI, and retail sales data. If inflation remains strong, expectations for US Fed interest rate hikes heating up could weigh on copper prices; the US-Iran situation and transit through the Strait of Hormuz may still bring fluctuations. Fundamentals side, low inventories and tight supply will provide support for prices, but high copper prices will constrain demand improvement. Copper prices are expected to continue moving sideways at highs next week, with the center tilting slightly upward, while attention should be paid to import arrivals and inventory changes after delivery.

Nickel prices continued to consolidate at lows this week. Early week, boosted by weaker-than-expected US June non-farm payrolls data and a weaker US dollar, SHFE nickel once surged to around 128,000 yuan/mt. Mid-week, the US dollar index rebounded, weighing on nickel prices and causing a pullback. Late week, driven by a marginal recovery in macro sentiment, SHFE and LME nickel prices rebounded in tandem. Over the whole week, the nickel price center edged up slightly WoW but failed to achieve an effective breakout. In the spot market, the average price of SMM #1 refined nickel was 127,770 yuan/mt, up 500 yuan/mt WoW. The Jinchuan nickel premium remained stable at 2,300 yuan/mt this week, while discounts for mainstream electrodeposited nickel were in the range of -400 to 400 yuan/mt. Spot trading was relatively active as prices continued to consolidate at low levels, with strong downstream sentiment for point-price purchases. On the macro front, US June non-farm payrolls data significantly missed expectations, which cooled market expectations for US Fed interest rate hikes and weakened the US dollar. Subsequently, the market entered a wait-and-see period ahead of the Fed's July FOMC meeting, with limited willingness for capital participation, preventing nickel prices from achieving an effective breakout. Geopolitically, US-Iran tensions escalated again this week. US officials stated that Iran recently fired on three commercial ships in the Strait of Hormuz, the US Treasury revoked exemptions for Iranian oil sales, and the US military launched strong strikes against Iran. Navigation risks in Hormuz increased again, and Iran was reported to have shipped out over 10 million barrels of crude oil within 24 hours. Although Trump stated he did not believe war would break out again, the conflict continued to spill over. On the inventory front, Shanghai bonded zone inventory stood at around 1,700 mt this week, destocking 1,000 mt WoW. Social inventory in China was about 126,000 mt, destocking roughly 4,000 mt WoW. Given the sustained drop in nickel prices recently, a sentiment-driven repair rebound is expected next week. However, market expectations for quota replenishment in H2 continue to brew, limiting upside room. The most-traded SHFE nickel contract is expected to trade in a core range of 127,000-133,000 yuan/mt next week.

I. Key Points In H1 2026, nickel prices exhibited wide fluctuations characterized by a “rebound from lows—consolidation at highs—pullback and consolidation” pattern. The most-traded LME nickel contract surged from $14,000/mt at the beginning of the year to near $20,000 in May, before pulling back to $16,000-17,000 in July; the most-traded SHFE nickel contract climbed from 110,000 yuan/mt to above 150,000 yuan/mt, and then retreated to 125,000-130,000 yuan/mt. The driving logic of this market move was the intertwined resonance of three main themes: a shift in Indonesia’s resource policies, repeated fluctuations in global macro liquidity expectations, and the impact of geopolitical conflicts on raw material costs. The center of nickel prices did rise compared to 2025, but the “shadow of surplus” has not dissipated. In H2 2026, the key variables for tracking nickel prices are as follows: First, the approval results of Indonesia’s RKAB quota revision in July. A significant increase in the quota would substantially narrow the supply deficit and weigh on nickel prices. Second, the Fed’s policy path — whether the hawkish signal from the June dot plot will persist — which affects the US dollar index and the valuation center of commodities. Third, sulphur supply and the situation in the Strait of Hormuz, which determines the cost support strength along the MHP–nickel sulphate–refined nickel chain. Fourth, demand from stainless steel and NEV ternary power batteries. Fifth, the pace of global visible inventory destocking. Sustained destocking would serve as a real support signal, while high inventories would limit price elasticity. Under a neutral scenario, LME nickel prices are expected to trade in the range of $15,500-17,500/mt in H2. II. Macro Environment – Reversal of Liquidity Expectations, Substantial Impact of Geopolitical Costs, and the ‘Dual Strength’ Pattern of the RMB 1. Fed Policy Path: ‘From Dovish to Hawkish’ At the beginning of the year, the market widely expected 50-100 bp of rate cuts in H1 2026, and the US dollar index fell below 97 at one point, creating a relatively loose liquidity environment. However, mid-year, new Fed Chair Kevin Warsh’s hawkish stance surprised the market. The June meeting kept rates unchanged and the dot plot signaled a bias toward rate hikes, leading to a systematic revision of the previously priced “dovish delivery” logic. This directly weighed on the valuation of industrial metals such as nickel, serving as a key macro trigger for the nickel price decline in June. 2. Geopolitical Conflicts Expanded from ‘Safe-Haven Trades’ to ‘Real Cost Shocks’ The Middle East situation (tensions among the US, Israel and Iran, and disturbances in the Strait of Hormuz) not only pushed up energy and safe-haven premiums, but also, through the critical link of sulphur supply, directly raised the production cost of Indonesia’s MHP (each mt of MHP in metal content consumes about 10 mt of sulphur), forming the core driver of the pulse-like surge in nickel prices in May. After a ceasefire agreement was reached between the US and Iran in mid-June, energy and safe-haven premiums receded, leading to a peak and subsequent pullback in commodities, confirming the dual impact of geopolitical variables on nickel prices. 3. China’s Macroeconomy and RMB ‘Dual Strength’ Provide a Unique Offset Against a generally stronger US dollar, the onshore RMB bucked the trend, appreciating from 6.98 to 6.79 (a gain of about 2.9%). The relative strength of the RMB, with the exchange rate declining (USD/CNY fell), caused import costs to drop sharply, opening the import window and generating arbitrage profits. However, as large volumes of imported nickel flowed into the domestic market, the spot supply of nickel plates in China increased, accelerating the pace of inventory buildup and weighing on domestic prices. At the same time, LME nickel inventories decreased, leading to a repair of the SHFE/LME nickel price ratio, and the import window closed again in May. III. Indonesia's Industrial Policy—Systemic Transformation from "Expanding Capacity" to "Controlling the Chain to Raise Prices" In H1 2026, Indonesia's nickel industry policy completed a strategic shift, systematically deploying a policy package centered on "controlling supply, stabilizing prices, and enhancing resource added value," which became the core fundamental variable driving wide fluctuations in nickel prices. 1. Significant tightening of total RKAB quotas and tilted allocation structure At the beginning of the year, Indonesia's ESDM announced that the 2026 nickel ore quota would be drastically cut from 379 million wmt in 2025 to 270 million wmt. The world's largest single nickel mine project, WBN, saw its 2026 quota suffer a "cliff-like" reduction; its quota was exhausted in May, leading to full-scale production cuts and shutdowns, stoking persistent concerns over tight supply in H1. The Indonesian authorities have clarified that July 1 to 31, 2026 will be the mid-year application period for supplementary RKAB quotas, prioritizing compliant miners with integrated domestic downstream smelting capacity (such as supporting NPI or HPAL projects). The mid-year policy game over RKAB quotas is intensifying. 2. HPM pricing formula reform shifts from single nickel pricing to multi-element comprehensive pricing The new formula effective April 15 incorporates associated elements such as iron, cobalt, and chromium into the value component for the first time. Indonesia sought to recapture the undervalued value of associated resources into the pricing system, raising benchmark prices for nickel ore and intermediate products across the cost side. However, this reform met strong opposition from the domestic smelting industry, which argued that it would further squeeze smelting profits amid already surging sulfur and energy costs. 3. Indonesian government officially releases new export control regulations for ferronickel (FeNi) and NPI In July, Indonesia further strengthened export supervision of high-value-added nickel products under Finance Minister Regulation (KMK) No.32/MK/BC/2026 (implementing Trade Minister Regulation No.17/2026). The new regulation targets products under HS Code Ex.7202.60.00, including ferronickel (FeNi) ingots and lumps with nickel content ≥8%, sponge ferronickel (Sponge FeNi) and granular ferronickel (Nugget FeNi) with nickel content ≥4%, as well as low-grade ferronickel products with 2% ≤ Ni <4% and iron content ≥75% (covering some NPI products). Export requires a surveyor's report (LS) and relevant export licenses; from January 1, 2027, export will generally only be allowed through state-owned export enterprises (BUMN Ekspor), with exemptions under specific circumstances. Overall, Indonesia is currently tightening quotas, raising taxes and fees, and imposing export controls to elevate resource value, seeking to keep nickel prices within its officially recognized desired range ($19,000-20,000/mt) over the long term. On the other hand, it must balance stability of the industry chain and foreign investor confidence in actual implementation, thus exhibiting a game-like characteristic of "tight first then loose, adjusting while implementing."The extreme policy uncertainty was one of the core reasons behind the wide fluctuations in nickel prices in H1. IV. Changes in Nickel Intermediate Product Raw Materials: Restructuring of the Cost Transmission Chain 1. MHP and High-Grade Nickel Matte: A Dynamic Game Dominated by "Auxiliary Material Costs" There are three main production routes for nickel sulphate raw materials: MHP (hydrometallurgy): the dominant route with the largest long-term growth, but highly dependent on sulphur; high-grade nickel matte (pyrometallurgy RKEF conversion / oxygen-enriched side-blowing route): an alternative route with low dependence on sulphur and relatively stable cost elasticity; nickel briquette dissolution: the least economical, feasible only within specific price spread windows. The sharp fluctuations in sulphur prices in H1 reshaped the cost structure of the entire nickel industry chain. Producing one mt in metal content of MHP requires approximately 10 mt of sulphur, while tensions in the Strait of Hormuz disrupted Indonesia’s sulphur import channels, forcing Huayou Cobalt’s Huafei Nickel-Cobalt to cut production on some lines starting in May. Sulphur prices surged, with the SMM sulphur CIF Indonesia price peaking at $1,300/mt, and the cost shock was transmitted step by step along the “sulphur—MHP—nickel sulphate—electrodeposited nickel” chain, becoming one of the core drivers behind the rapid nickel price rise in May. The high-grade nickel matte route, relying on pyrometallurgy, is far less dependent on sulphur than MHP. Consequently, during the sulphur price spike, high-grade nickel matte’s cost advantage over MHP widened significantly, creating direct substitution pressure on MHP’s market share. In terms of production trends, Indonesia’s MHP production edged up about 0.02% YoY to 206,000 mt in metal content in January-June 2026. Over the same period, high-grade nickel matte posted the most impressive growth, with production up about 123% YoY to 185,000 mt in metal content, strengthening its position in the competition for nickel sulphate raw materials. In the medium and long term, however, once sulphur supply normalizes and MHP costs pull back, the MHP route, with its scale effects and relatively mature cost curve, will reclaim its dominant share of the nickel sulphate raw material market; after all, MHP projects’ capacity base is far larger than that of high-grade nickel matte, and its cobalt by-product also provides a substantial marginal revenue contribution (about $4,500/mt Ni). 2. Production Capacity Switching Game Between High-Grade Nickel Matte and NPI High-grade nickel matte and NPI share the same RKEF production lines and laterite nickel ore resources, differing only in whether a sulphidation conversion stage is added at the end. The conversion decision is essentially a profit-maximization problem: when the marginal revenue of high-grade nickel matte relative to NPI covers the additional equipment and process losses of sulphidation conversion, lines switch to high-grade nickel matte; otherwise, they tend toward NPI. The conversion profit chart shows that profit for NPI-to-high-grade-nickel-matte conversion appeared only in April-May. After MHP production cuts in May, the monthly nickel sulphate raw material deficit was about 8,000 mt Ni, theoretically requiring increased high-grade nickel matte production to fill. However, due to RKAB quota constraints and the continued decline in NPI feed grade, integrated enterprises prioritized supplying stainless steel, making it difficult for high-grade nickel matte to offset the MHP raw material shortfall. This was a key reason why nickel sulphate prices remained firm even after refined nickel prices fell sharply in May. 5. Refined Nickel Supply-Demand Pattern: High Inventory vs. Structural Tightness Expectations 1. Supply Side: Electrodeposited Nickel Capacity Continues to Expand, Production Hits Repeated Records The most certain trend on the supply side is the sustained release of electrodeposited nickel capacity and production in China and Indonesia. According to SMM data, from January to June 2026, China’s refined nickel production was 215,000 mt, a YoY growth rate of 9%; Indonesia’s refined nickel production was 56,000 mt, a YoY growth rate of 97%. Meanwhile, at the beginning of 2026, China’s refined nickel trade pattern underwent a temporary reversal. Previously, benefiting from the explosion in electrodeposited nickel capacity, China had once been expanding its net exports of refined nickel. However, entering Q1 2026, as the price spread between Chinese and overseas markets opened up and the import arbitrage window was activated, China turned back into a net importer of refined nickel, with net imports exceeding 80,000 mt in January-April. 2. Demand Side: New Energy Recovery, Stainless Steel Support, and Steady Alloy & Special Steel In H1 2026, stainless steel, the largest downstream application of nickel, maintained mild growth. Total stainless steel production in China and Indonesia from January to June was approximately 23 million mt, up about 2% YoY. Steel mills maintained relatively high operating rates throughout H1, with stable apparent consumption. In the new energy (ternary battery) sector, nickel demand saw a strong recovery. From January to June, China’s ternary cathode precursor production was 528,000 mt, up 32% YoY; ternary cathode material production was 493,000 mt, up 40% YoY. Alloy & special steel and electroplating, although accounting for a relatively low share of total primary nickel consumption, played a critical role in refined nickel demand in H1 due to their irreplaceability. From January to June, China’s total refined nickel demand was approximately 140,000 mt, up 9% YoY. Military and aerospace demand strengthened, while high-end manufacturing demand remained steady with moderate growth. 3. Inventory Side: Global Visible Inventory Remains at Historical Highs Despite wild swings in nickel prices in H1, global visible nickel inventory remained at relatively high historical levels. LME nickel inventory fluctuated in the range of 270,000-280,000 mt for an extended period. China’s social inventory and exchange warrants experienced significant buildup. As of July, SMM refined nickel social inventory reached 130,000 mt, with total global inventory hitting a high of 497,000 mt. High visible inventory posed a significant constraint on nickel price rises. In June, after digesting supply disruption narratives, the market refocused on the fundamental reality of “high inventory and lackluster demand,” and nickel prices pulled back from a temporary high to around $16,100/mt. 6. H2 2026 Risk Alerts and Nickel Price Forecasts Based on the logic of H1, nickel price trends in H2 are expected to maintain a fundamental pattern dominated by policy gaming, with macro factors amplifying volatility. The following variables merit close monitoring: 1. The final outcome of the RKAB quota revision approval in Indonesia in July; 2. whether the US Fed's policy path in H2 will continue its hawkish stance; 3. whether sulfur supply can substantially return to normal, and whether there is a risk of repeated disruptions in the Strait of Hormuz situation; 4. whether end-use demand from stainless steel and new energy sectors can show a substantial improvement; 5. the destocking pace of global visible inventory. Based on the above price influencing factors, a scenario analysis for nickel prices is conducted: Bearish scenario (quotas being more accommodative than expected): quota increase ≥30% + sulfur pullback + high inventory pressure → LME nickel $14,000—$16,000/mt. Neutral scenario (highest probability): quota slightly increased but still tight + sulfur consolidates at highs → LME nickel $15,500—$17,500/mt. Bullish scenario (tight quotas + secondary cost surge): quotas continue to tighten + export controls + repeated geopolitical tensions push up sulfur → LME nickel $17,000—$19,000/mt.

SMM, July 10: Metals market: As of midday close, domestic base metals nearly all rose, with SHFE copper up 1.67%, SHFE aluminum up 0.63%, SHFE lead edging down, SHFE zinc up 1.34%, SHFE tin up 2.18%, and SHFE nickel up 1.1%. Additionally, the most-traded cast aluminum futures contract rose 0.57%, the most-traded alumina futures rose 0.37%, the most-traded lithium carbonate futures fell 1.67%, the most-traded silicon metal futures rose 2.74%, and the most-traded polysilicon futures contract rose 2.28%. Ferrous metals mostly fell. Iron ore rose 0.74%, rebar edged up, and hot-rolled coil edged down. Stainless steel fell 0.49%. Coking coal and coke: the most-traded coking coal contract fell 2.09%, and the most-traded coke contract fell 1.51%. On the overseas base metals front, as of 11:41, LME metals mostly rose. LME copper rose 0.38%, LME aluminum rose 0.28%, LME lead fell 0.18%, LME zinc rose 0.39%, LME tin rose 0.7%, and LME nickel rose 0.18%. Precious metals, as of 11:41, COMEX gold fell 0.12% and COMEX silver rose 0.16%. Domestic precious metals: SHFE gold rose 1.15%; the most-traded SHFE silver futures contract rose 3.48%. Additionally, by midday close, the most-traded platinum futures contract rose 2.53%, and the most-traded palladium futures contract rose 3.65%. As of midday close, the most-traded container shipping (Europe route) futures contract rose 1.09% to 2,415 points. As of 11:41 on July 10, midday futures overview: Spot and Fundamentals Zinc: In the Tianjin market, #0 zinc ingot mainly traded at 24,420-24,910 yuan/mt, Zijin traded at 24,540-24,970 yuan/mt, #1 zinc ingot traded around 24,430-24,860 yuan/mt, Zijin was quoted at a discount of 0-10 yuan/mt against the 2608 contract, Huxin was quoted at 26,010 yuan/mt, #0 zinc ingot was quoted at a discount of 60-130 yuan/mt against the 2608 contract, and the Tianjin market was quoted at a discount of around 50 yuan/mt against the Shanghai market... Macro Front Domestic: [National Energy Administration: By 2028, Non-Fossil Energy Consumption Share to Increase by About 1 Percentage Point Annually] The National Energy Administration issued the "Energy Sector Energy Conservation and Carbon Reduction Action Plan (2026-2028)." It proposes that by 2028, the non-fossil energy consumption share will increase by an average of about 1 percentage point annually; reasonably control coal consumption of coal-fired power units, striving to raise the proportion of coal power capacity meeting current energy efficiency benchmark standards by 15 percentage points; build a number of zero-carbon and low-carbon coal mining and oil areas; support the construction of a number of zero-carbon parks, achieve significant progress in energy conservation and carbon reduction in key industries, and continuously improve green energy use. It proposed vigorously promoting energy conservation and carbon reduction in thermal power. A batch of eligible coal-fired power units of 300,000 kW and below will be shut down in a prudent and orderly manner, and the construction of replacement units is encouraged according to the requirements of new-generation coal-fired power ; a batch of 600,000 kW coal-fired power units will undergo ultra-supercritical cross-generation upgrading and retrofitting. Support will be given to eligible units for the co-firing of zero-carbon and low-carbon fuels and the retrofitting and construction of carbon capture, utilization and storage (CCUS). After retrofitting and construction, the carbon emission level per kilowatt-hour should be reduced by about 10%. A number of projects integrating coal-fired power, gas-fired power and new energy will be implemented, supporting the coupling of coal-fired power and new energy through thermal energy storage and other energy storage for peak shaving and peak support, integrated collection and transmission, thereby achieving the effect of integrated carbon reduction. (Jin10 Data APP) [China’s Road Transport Capacity Continues to Expand, New Energy Truck Penetration Rate Exceeds 40%] The China Federation of Logistics and Purchasing released the "2026 China Road Transport Capacity Development Report" today (the 10th). According to the report, the road transport market underwent continuous adjustment and optimization in 2025, with the capacity structure accelerating its upgrade towards scale, specialization, and green development; enterprises saw improvements in their risk resilience and operational resilience. Survey data shows that in the current road freight transport capacity structure, internal combustion engine vehicles remain dominant, accounting for about 50%, but new energy vehicles have already formed an irreversible substitution trend in specific scenarios. Among the surveyed enterprises, the penetration rate of new energy trucks was 44.4%. Among enterprises that have already purchased new energy vehicles, 37.5% chose to "continue expanding the new energy fleet," and 37.5% chose to "maintain the current scale." (CCTV News) [New Breakthrough in Green Hydrogen: China Achieves Minute-Level Preparation of Platinum Group Metal Catalysts] Platinum group metal catalysts are core key materials supporting modern industries such as energy, chemical, and environmental sectors. Recently, a team led by Professor Hu Wenbin from Tianjin University proposed a "transient assembly" strategy, developing a millisecond-scale periodic heat pulse technology that achieved ultra-fast synthesis and precise regulation of platinum group metal core-shell structure catalysts, opening up a completely new technical pathway for the atomically precise preparation of platinum group catalysts. The related results were published online in the international academic journal *Science* on July 10, Beijing time. (Xinhua News Agency) [Guangdong: Plans to Accelerate Technological Breakthroughs in Key Frontier Fields Including 6G, Optical Communications, and Satellite Communications] Recently, the "Guangdong Province Information and Communication Industry 15th Five-Year Plan (Draft for Public Comments)" was released to solicit public opinions. It mentioned supporting basic telecommunications enterprises in actively participating in provincial key R&D programs, leveraging strategic scientific and technological forces such as the Pengcheng National Laboratory and industry leaders to help Guangdong’s information and communication industry establish a sound whole-process innovation ecosystem, accelerating technological breakthroughs in key frontier fields including 6G, optical communications, satellite communications, quantum communications, and agentic communications, and strengthening research on new network architectures such as integrated space-ground networks and integrated communication-sensing-computing networks. Focus on cultivating and developing the new 6G track, vigorously promoting the R&D and industrialisation of core components such as next-generation digital baseband chips, RF front-end chips, and 6G modules, as well as next-generation network communication equipment. Conduct application technology research on the integration of quantum encryption with information communication networks and the convergence of quantum computing with classical computing, and achieve breakthroughs in key technologies such as quantum computing, quantum materials, quantum precision measurement, quantum security, and critical core equipment. (Jin10 Data APP) [PBOC reverse repo operations led to a net withdrawal of 43 billion yuan on the day, and a net withdrawal of 416.5 billion yuan for the week] The PBOC conducted 20 billion yuan of 7-day reverse repo operations today, and with 63 billion yuan of 7-day reverse repos maturing, the net withdrawal for the day was 43 billion yuan. During the week, the PBOC conducted 62 billion yuan of 7-day reverse repo and 1,000 billion yuan of outright reverse repo operations. With 678.5 billion yuan of 7-day reverse repos and 800 billion yuan of outright reverse repos maturing, the net withdrawal for the week was 416.5 billion yuan. US dollar side: As of 11:41, the US dollar index fell 0.28% to 100.66. According to CME "FedWatch": The probability that the Fed keeps interest rates unchanged in July is 74.9%, while the probability of a cumulative 25-basis-point rate hike is 25.1%. For September, the probability of rates remaining unchanged is 35.7%, the probability of a cumulative 25-bp hike is 51.1%, and the probability of a cumulative 50-bp hike is 13.1%. (Jin10 Data APP) Perli, manager of the New York Fed’s Open Market Account, said that the reserve management purchase operations have no preset course, and the New York Fed’s Open Market Trading Desk may raise or lower purchase amounts depending on money market conditions. Additionally, Perli said that as Fed Chairman Warsh appoints a working group on the Fed’s balance sheet, the trading desk is ready to implement any changes and interest-rate control frameworks the committee may decide to pursue. The Fed began reserve management purchase operations last December, anticipating a rapid drain in reserves in April as tax payments flowed into the Treasury General Account. When the Treasury’s account balance at the Fed increases, reserves in the banking system decline. (Jin10 Data APP) Dallas Fed President Logan said that if the Federal Open Market Committee conducts open market operations through a voluntary central clearing mechanism, it would help improve the efficiency and effectiveness of operations and enhance the stability of US financial markets. Logan noted that such arrangements could improve the use of the Fed’s tools, such as the Standing Repo Facility. The facility is designed to provide liquidity to eligible financial institutions, but market usage remains low. Some believe that streamlining the clearing process could enhance its appeal. She also noted that market leverage levels need to be carefully managed and that financial markets must strike an appropriate balance between the returns and risks of leverage, as well as between leverage and liquidity. (Jinshi Data APP) The latest data showed that for the week ending July 4, which included the US Independence Day holiday, initial jobless claims fell by 2,000 to 215,000, below market expectations of 217,000 and persisting near historic lows. However, continuing claims, which reflect the state of re-employment among the unemployed, rose to 1.81 million, hitting a new high since March. Persistently low initial jobless claims, together with recent non-farm payrolls data, paint a picture of a US labour market characterised by shrinking layoffs and a slowdown in hiring. (Wall Street CN) Data-wise: Today will see the release of figures including Germany's final CPI MoM for June, France's final CPI MoM for June, Switzerland's June consumer confidence index, Canada's June employment numbers, China's June M2 money supply YoY, China's new RMB loans for the first half of the year, and China's total social financing growth for the first half of the year. Also in focus: a speech by 2026 FOMC voter and Dallas Fed President Lorie Logan; and the provisional listing of SK Hynix's American Depositary Receipts (ADRs) on the Nasdaq on July 10. Crude oil: As of 11:41, oil prices for both benchmarks edged up, with WTI crude rising 0.25% and Brent crude gaining 0.21%. Technical-level talks between the US and Iran are ongoing, with the market closely watching how the US-Iran situation unfolds. According to Fox News, US Commerce Secretary Howard Lutnick stated that Trump believes oil prices will remain at low levels in the future. India's state-owned Oil and Natural Gas Corporation (ONGC) has approved an expansion of the country's strategic petroleum reserves, highlighting efforts to strengthen energy resilience following the shock of the Iran conflict. According to a document, the board of India's largest oil and gas producer has approved the addition of 1.75 million mt of national crude oil reserve capacity in Mangalore, Karnataka. Specific costs and a timetable have yet to be announced. Upon completion, the project will increase the reserves managed by the Indian Strategic Petroleum Reserves Ltd. The company currently operates underground storage facilities at three locations on the east and west coasts with a total capacity of 5.33 million mt. In addition, two new sites are under construction that will add 6.5 million mt of storage space. ONGC stated in Friday's filing that the project is of "national importance" and that related supporting facilities will be developed under the directive of the Ministry of Petroleum and Natural Gas. (Jin10 Data APP) Spot Market Overview: ► ► ► ► ► ► ►] ► ► ► ► ►

[SMM Tin Midday Review: Tightening expectations outside China are weakening, the most-traded SHFE tin contract consolidates near 416,000]

[SMM Daily Review: US-Iran Talks May Resume, Silver Price Undergoes Minor Recovery] SMM, July 10 - The prospect of US-Iran negotiations resuming and a pullback in the US dollar led to a technical recovery in precious metals. In the spot market, premiums continued to edge lower, with transactions near parity and demand remaining sluggish.