SMM May 18: Metals market: As of the midday close, domestic base metals fell across the board. SHFE copper dropped 1.47%, SHFE aluminum fell 1.22%, SHFE lead declined 0.67%, SHFE zinc lost 0.91%, SHFE tin slid 3.26%, and SHFE nickel fell 1.17%. In addition, the most-traded casting aluminum alloy futures fell 1.1%, the most-traded alumina contract dropped 0.54%, the most-traded lithium carbonate contract rose 0.12%, the most-traded silicon metal contract fell 0.82%, and the most-traded polysilicon futures declined 0.98%. Ferrous metals mostly fell. Iron ore dropped 0.99%, rebar fell 1.02%, hot-rolled coil declined 0.89%, and stainless steel lost 1.41%. Coking coal and coke: the most-traded coking coal contract rose 0.12%, while the most-traded coke contract fell 0.74%. Overseas base metals: as of 11:41, LME metals declined across the board. LME copper fell 0.28%, LME aluminum dropped 0.63%, LME lead lost 0.2%, LME zinc declined 0.81%, LME tin slipped 0.05%, and LME nickel fell 0.35%. Precious metals: as of 11:41, COMEX gold fell 0.59%, hitting an intraday low of $4,483.5/oz; COMEX silver dropped 3.34%. Domestic precious metals: the most-traded SHFE gold contract fell 1.61%, and the most-traded SHFE silver contract declined 9.38%. In addition, as of the midday close, the most-traded platinum futures fell 2.36%, and the most-traded palladium futures dropped 1.92%. As of the midday close, the most-traded Europe containerized freight index contract rose 3.77% to 2,590 points. As of 11:41 on May 18, midday futures quotes for selected contracts: Spot Market and Fundamentals Copper: Today in Guangdong, #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at a premium of 260 yuan/mt, down 10 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 180 yuan/mt, down 20 yuan/mt from the previous trading day; SX-EW copper was quoted at a premium of 110 yuan/mt, down 20 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 104,235 yuan/mt, down 1,515 yuan/mt from the previous trading day, and the average price of SX-EW copper was 104,160 yuan/mt, down 1,485 yuan/mt from the previous trading day. Spot market: Guangdong inventory increased again today... Macro Front China: [NBS: Industrial value-added output of enterprises above designated size grew 5.6% in January-April; the national economy maintained a steady and progressive development trend] From January to April, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all regions and departments earnestly implemented the decisions and plans of the CPC Central Committee and the State Council, adhered to the general principle of seeking progress while maintaining stability, fully and faithfully applied the new development philosophy, accelerated the construction of a new development paradigm, effectively implemented more proactive and impactful macro policies, and focused on stabilizing employment, enterprises, markets, and expectations. Production and supply grew steadily, market sales continued to expand, foreign trade resilience remained evident, employment and prices were generally stable, new growth drivers strengthened, and high-quality development continued to advance toward new and better outcomes. Data from the National Bureau of Statistics (NBS) showed that from January to April, the value added of industrial enterprises above designated size nationwide grew 5.6% YoY. By three major categories, the value added of the mining industry grew 5.5% YoY, manufacturing grew 5.8%, and the production and supply of electricity, heat, gas, and water grew 4.5%. The value added of equipment manufacturing grew 8.7% YoY, and that of high-tech manufacturing grew 12.6%, which were 3.1 and 7.0 percentage points faster than the overall industrial value added above designated size, respectively. By economic type, the value added of state-owned holding enterprises grew 4.4% YoY; joint-stock enterprises grew 6.0%, foreign-invested and Hong Kong, Macao, and Taiwan-invested enterprises grew 3.9%; and private enterprises grew 5.2%. By product, the production of 3D printing equipment, lithium-ion batteries, and industrial robots grew 50.9%, 36.0%, and 25.7% YoY, respectively. In April, the value added of industrial enterprises above designated size nationwide grew 4.1% YoY, up 0.05% MoM. In April, the manufacturing PMI was 50.3%; the business production and operation activity expectations index was 54.5%, up 1.1 percentage points from the previous month. From January to March, industrial enterprises above designated size nationwide achieved total profits of 1,696 billion yuan, up 15.5% YoY. [NBS: In April, new home selling prices in first-tier cities rose MoM, while declines in second- and third-tier cities narrowed or remained the same as the previous month] NBS: In April, new home selling prices in first-tier cities rose 0.1% MoM, with the increase pulling back 0.1 percentage points from the previous month. Among them, Shanghai, Guangzhou, and Shenzhen rose 0.4%, 0.1%, and 0.1% respectively, while Beijing fell 0.2%. New home selling prices in second-tier cities fell 0.1% MoM, with the decline narrowing 0.1 percentage points from the previous month. New home selling prices in third-tier cities fell 0.3% MoM, with the decline the same as the previous month. Among the 70 large and medium-sized cities, 21 cities saw new home selling prices rise or remain flat MoM, an increase of 5 from the previous month. [Shenzhen property market heat continues, housing provident fund loan share rises significantly] The latest statistics showed that after the new policy, the share of housing provident fund loans rose significantly, reflecting from one perspective that the new policy precisely released rigid and improvement-oriented housing demand, market confidence strengthened, and transaction heat continued. As of May 17, citywide first-hand and second-hand residential net signings totaled 5,526 units, up 39.2% YoY. (Shenzhen Release) US dollar: As of 11:41, the US dollar index was up 0.09% at 99.34. According to the UK's Financial Times, two US Fed officials nominated by US President Trump opposed allowing Powell to serve as interim Fed chairman "without a time limit." This underscores that political divisions within the central bank are deepening as the White House continues its attacks on the US Fed. Fed Chairman Powell's second term ended on Friday. Powell was appointed as interim chairman to carry out duties before his formal successor, Warsh, completes his inauguration. Milan and Bowman, nominated by Trump to join the US Fed's Board of Governors, said in a joint statement that they supported Powell serving temporarily as interim chairman, but because the arrangement was "without a time limit," they "could not support this action." Milan cast a dissenting vote, while Bowman chose to abstain. Milan and Bowman stated that Powell's arrangement as interim chairman "should be limited to a clear and finite timeframe, at least one week," but they "could support a maximum term of one month." DoubleLine Capital CEO Gundlach said investors would not see an interest rate cut at the next US Fed policy meeting. "Previously, expectations were for two interest rate cuts this year, but the inflation market is simply not cooperating," Gundlach said. "In my view, when the two-year Treasury yield is nearly 50 basis points above the federal funds rate, it is simply impossible to cut interest rates." Gundlach said Kevin Warsh, who was just confirmed as Fed Chairman, is taking office during a "difficult period." Gundlach said: "DoubleLine's model suggests that the leading digit of the next CPI reading will be '4'." In addition, according to the CME "FedWatch": the probability of the US Fed holding rates unchanged through June is 99.2%, with a 0.8% probability of a cumulative 25-basis-point interest rate cut. The probability of the US Fed holding rates unchanged through July is 95.0%, with a 0.7% probability of a cumulative 25-basis-point interest rate cut and a 4.2% probability of a cumulative 25-basis-point rate hike. (Jin10 Data) Ed Yardeni, president and chief investment strategist at Yardeni Research, said that as investors grow increasingly concerned about inflation, the US Fed needs to keep pace with the bond market or risk losing control over borrowing costs. He noted that given the current market environment is "no longer" suited for an easing stance, the US Fed should remove its easing bias at the June meeting. "If the US Fed fails to remove this bias, investors will conclude that the US Fed is falling behind the inflation curve and will demand a higher inflation risk premium," Yardeni said. "We expect the US Fed to hold rates unchanged at the June meeting and shift to a tightening policy stance."Yardeni added that the current economic backdrop no longer justified a dovish lean, let alone interest rate cuts. On the contrary, he believed that a more hawkish Warsh than the market expected could actually benefit Trump by helping to suppress long-term Treasury yields. (Jin10 Data) Data: The US May NAHB Housing Market Index and China's April total electricity consumption YoY (TBD) were scheduled for release today. Also noteworthy: the State Council Information Office held a press conference on the national economic performance; the National Energy Administration publishes total electricity consumption data around the 15th of each month; the G7 finance ministers and central bank governors meeting was held through May 19. Crude oil: As of 11:41, oil prices in both markets rose, with WTI up 2.21% and Brent up 1.83%. US-Iran tensions escalated again, as Netanyahu spoke with Trump to "discuss the possibility of resuming military operations against Iran." Trump warned, "Time is running out for Iran, they'd better act fast or they'll get nothing. Time is of the essence!" Brown Brothers Harriman's Global Head of Market Strategy Elias Haddad noted: "The Strait of Hormuz blockade will continue to be the dominant driver for markets, as there is no clear resolution in sight, and the global oil inventory buffer is shrinking rapidly. Therefore, crude oil prices face further upside risk, which will simultaneously weigh on global bond and equity markets." (Wallstreetcn) Iraq's new Oil Minister Basim Mohammed Khudair stated at a press conference on the 16th that the country exported approximately 10 million barrels of crude oil through the Strait of Hormuz in April, far below the roughly 93 million barrels per month before the US-Israel-Iran conflict broke out. Khudair said Iraq currently plans to increase the flow through the pipeline connecting Kirkuk in Iraq to the port of Ceyhan in Turkey to boost exports. However, unless the war ends, Iraq's crude oil exports cannot return to pre-war levels. Iraq plans to engage in dialogue and cooperation with the Organization of the Petroleum Exporting Countries (OPEC) to enhance the country's export capacity. (Jin10 Data) In addition, Ukraine's Security Service said Ukraine struck a refinery and two oil pumping stations in Russia's Moscow region. Meanwhile, a latest opinion poll in Japan showed that amid crude oil undersupply, 70% of Japanese citizens believed the government should call for energy-saving measures. Recently, Japan's crude oil imports plummeted, and the country has released strategic petroleum reserves twice, sparking widespread concern. Kyodo News conducted a telephone survey from the 16th to the 17th, asking the public about issues including the undersupply of crude oil and its derivatives. The survey released on the 17th showed that 70.5% of respondents believe the Japanese government should call for measures to conserve energy and resources. Regarding naphtha, a key raw material for plastic production, 70.6% of respondents said they "feel uneasy" about its undersupply. (Jin10 Data) Spot market overview: ► ► ► ► ► ► ► ► ► ► ►

[SMM Morning Meeting Minutes: International Macro Environment Presented a Mixed Bullish-Bearish Landscape, Tin Prices Expected to Continue Moving Sideways at High Levels This Week]

In April 2026, the secondary copper rod operating rate was 12.79%, higher than the expected 11.93%, down 1.46 percentage points MoM and 21.1 percentage points YoY. Looking back at the entire month of April, the secondary copper rod market, under the prevailing theme of copper prices fluctuating upward, was mired in structural contradictions triggered by industrial policies,...

SMM has been deeply engaged in the metal industry for decades, consistently upholding the principles of objectivity, neutrality, pragmatism, and rigor. By adhering to actual market transactions as the core pricing benchmark and leveraging its well-established price assessment methodology and comprehensive data system, SMM continues to deliver standardized market benchmarks for participants across the industry chain. This provides solid support for industry pricing standards, transaction settlements, and business decision-making, serving as a long-term partner in the steady development of the metal industry.

Recently, China’s domestic rhenium market has seen a mild price correction, with prices of raw materials and metal products weakening in tandem. In contrast, overseas rhenium prices have moved higher against the domestic trend, highlighting a clear divergence between domestic and overseas markets. At present, the industrial chain remains in an obvious price game. Upstream sellers hold a cautious shipping attitude and mainly conclude small-volume rigid-demand deals, while downstream buyers stay on the sidelines with a strong willingness to press prices and test the bottom. Overall market trading activity is sluggish, and rhenium prices are expected to move in a range-bound consolidation in the short term. Differing from the downward trend in the domestic market, the overseas rhenium market has maintained a steady upward momentum with continuous gains in overseas quotations. Currently, the overseas price of ammonium rhenate has climbed to around USD 5,300, and the overseas price of rhenium pellets has risen synchronously to USD 375 per troy ounce. Supported by relatively resilient overseas demand and tight supply circulation overseas, rhenium product prices have kept advancing. A stark contrast has formed between domestic and overseas market trends, and the price spread pattern has also changed accordingly. From the perspective of industrial chain fundamentals, the price game atmosphere in the rhenium market remains intense, presenting a two-sided pattern of cautious holding by sellers and price bottom-hunting by buyers. Domestic copper and molybdenum producers are generally prudent in shipments, holding positive expectations for future prices and reluctant to release large volumes of goods at blindly low prices. Most players adopt a strategy of small-batch and demand-based partial shipments, with overall supply release remaining restrained. Downstream metal processors and end-user enterprises hold a low-price procurement mentality. Amid the market correction, their wait-and-see sentiment has intensified, and they are unwilling to build large inventories. Buyers continue to test sellers’ room for price concessions, and purchase-on-demand has become the mainstream market pattern. Overall, the domestic rhenium market lacks major positive catalysts at this stage, leaving raw material and product prices room for weak range-bound volatility in the short term. High overseas market prices offer limited support to domestic prices. The upstream-downstream price game is unlikely to ease in the near term. Without the concentrated release of new rigid demand and price support from the raw material end, domestic rhenium prices are projected to maintain a weak range-bound trend. Market transactions will continue to be dominated by small rigid-demand orders. It is necessary to keep track of the transaction rhythm between upstream and downstream players, changes in raw material inventories, and the transmission impact of overseas price movements on the domestic market. Looking at the domestic raw material market, the price center of rhenium raw materials has moved down recently. Major domestic copper-molybdenum smelters offer rhenium products mainly at CNY 26,000–27,000 per kilogram, with most market transactions settled within this range. Meanwhile, market supply structure has become differentiated. Some small and medium-sized producers adopt low-price shipments to capital 回收，with actual transaction prices falling to CNY 24,000–25,000 per kilogram. The circulation of low-price supplies has dragged down spot market prices and further deepened the correction of raw material prices. The metallic rhenium market adjusted in line with raw material trends. Rhenium pellet prices edged down alongside raw materials, with mainstream current transaction prices standing at around CNY 46,000 per kilogram. On the whole, the metal end shows a strong correlation with raw material price movements. In the absence of major positive drivers, downstream consumption is confined to industrial rigid demand, which is insufficient to drive a steady rebound in product prices. Market quotations adjust flexibly following spot trading sentiment.

Xinbo Shares (003038.SZ) announced that its subsidiary Anhui Xinbo New Energy Vehicle Parts Co., Ltd. plans to carry out the investment and construction of the "New Energy Annual Production of One Million Sets of Lightweight High-end Aluminum Parts Project." The project has a total investment of approximately 100 million yuan, with funding to be sourced through the company's own funds or self-raised capital. The project primarily serves internationally renowned automobile OEMs, with a construction period of six months. Upon completion, the project will help the company further expand the NEV parts market and cultivate new profit growth drivers.

[SMM Cast Aluminum Alloy Morning Comment: Dual Pressure from Policy and Demand, Secondary Aluminum Weekly Operating Rate Pulls Back] ADC12 prices are expected to move sideways in the short term. On the cost side, high-level support, combined with the tightening of reverse invoicing and expectations for production cuts at some enterprises, limits the downside room for prices; however, demand is unlikely to see significant improvement in the short term, and inventory remains in an accumulation cycle, which will continue to suppress upside room for prices. Going forward, key attention should be paid to the recovery of end-use consumption and the further impact of policies on the scale of production cuts on the supply side.

The domestic EV market is currently in a phase of concentrated stockpiling for new models, with orders rebounding notably.

[SMM Analysis]Policy Intensified Supply Contraction Supporting ADC12 Price Rebound, but Weak Demand Capped Upside Potential

At the hosted by SMM, Ouyang Yichang, SMM secondary copper industry research analyst, shared insights on the topic of "Analysis of Japan's Secondary Copper Market." He noted that, according to SMM, Japan's copper scrap market is gradually transitioning toward a fiercely competitive "seller ecosystem." Trade models that rely solely on spot cargo procurement are increasingly exposed to the risk of supply disruptions. To secure long-term resource supply, ex-China purchasing enterprises need to move beyond the traditional spot trading mindset and establish structural partnerships through deep-binding approaches such as signing long-term contracts and equity cooperation, in order to adapt to the persistently tight market landscape. Global Positioning of Japan's Copper Scrap Market Global Positioning of Japan's Copper Scrap Market Key Drivers Behind Japan's Leading Position in Asia 1 Precision Sorting: Exceptional classification accuracy ensures high-quality scrap output. 2 Well-Established Infrastructure: A mature "urban mine" system and advanced logistics provide a highly reliable supply foundation. 3 Strategic Geographical Advantage: Proximity to China (accelerating capital turnover), while serving as a key trans-Pacific logistics hub connecting the Americas and Asia. 4 Favorable Trade and Tax Policies: Zero export tariffs and transparent regulations ensure seamless global operations. 5 Commercial Reliability: High standards of packaging and business ethics minimize quality claims. Japan's Average Unit Price of Copper Scrap Significantly Leads the Top Five Global Exporters In 2025, Japan and Thailand each accounted for approximately 7% of global copper scrap exports. However, Japan commanded the highest average export price among major peers ($8,112/mt), thanks to a substantial quality premium. This price spread revealed fundamental differences in product mix. Thailand primarily served as a processing hub, with limited high-grade copper scrap output domestically. In contrast, Japan was organically driven by its mature "urban mine" ecosystem, consistently producing high-purity, high-grade materials. Flow of Japan's Copper Scrap Flow of Japan's Copper Scrap Rising Trade Volume and Shrinking Net Exports: A Shift Toward Domestic Retention Smelters Drove Copper Scrap Consumption Growth While Downstream Processing Enterprises Saw Declining Usage According to SMM, compared with 2021, processing enterprises' copper scrap usage declined by 8% in 2025. Processing enterprises: Weak downstream demand (automotive, construction) and fierce global competition for high-quality copper scrap severely squeezed domestic processing enterprises, resulting in a sustained 8% decline in their absolute usage. Smelters: Tightened environmental protection and export policies implemented since 2023 restricted the outflow of copper scrap, significantly accelerating this structural "reflux" toward smelters. Combined with the plunge in TC/RC, Japanese smelters were forced to rely on these raw materials to maintain production. Consequently, the share of copper scrap consumed by the smelting segment has maintained an overall upward trend in recent years. Japan's overall scrap supply is contracting; despite robust growth in domestic consumption, the structural decline in net exports is the primary driver. Since the 2021 peak, Japan's total apparent supply of copper scrap has been on an overall downward trend. This indicates structural tightening in domestic scrap generation and social recovery rates, with increasingly scarce available resources. Despite the overall supply contraction, domestic apparent consumption demonstrated strong resilience, as Japanese smelters actively secured local raw materials to maintain production amid plunging TC. This robust local demand is significantly squeezing exports. Net exports have consequently declined structurally to low levels. Japan is shifting from a "resource overflow" model to an "internal absorption" model, which will severely exacerbate raw material shortages for Southeast Asian and Chinese buyers. Bare bright copper payable indicator stays high: supply tightness and China's tax-driven demand outweigh the impact of recent copper price rebound Since early 2026, market copper prices have risen steadily overall; in March, copper prices experienced a periodic pullback, and copper scrap sellers held prices firm with strong willingness to defend price floors, directly driving the bare bright copper payable indicator passively higher. Entering April, futures copper prices rebounded and stabilized at highs, but the copper scrap payment ratio deviated from conventional pricing logic and did not pull back accordingly, remaining firmly in the 98.5%-99.0% range. The core supporting logic lies in: continued tightening of domestic tax regulation, with China's downstream processing enterprises increasingly relying on imported copper scrap to obtain compliant input tax deductions, forming rigid procurement demand; coupled with tight spot copper scrap supply, the dual support of supply and demand underpins the copper scrap payment ratio to stay high. Japan's Scrap Policies Japan's Scrap Policies Regulatory Shift: Building an "Invisible Wall" Although Japan has not explicitly imposed export bans, it strengthens its domestic closed-loop system through a strategic policy combination. For global buyers, this signals a structural shift in the Japanese market going forward: intensified competition, soaring procurement costs, and increasing difficulty in accessing high-quality scrap. Regulatory maturity and standardized transparency are the primary drivers of the "Japan premium." Policy Lag vs. Market Reality: Although the EU Waste Shipment Regulation and potential US export restrictions have not yet been formally enacted, the market has already priced in expectations of future supply contraction, compelling downstream buyers to proactively pivot toward trade hubs with higher compliance and transparency. "Reliability Premium" Logic Emerges: As a pioneer in industry compliance and market transparency, Japan can effectively hedge against risks prevalent in other regions, such as insufficient information transparency and origin rerouting, providing the market with an important safe-haven and pricing anchor function. Outlook and Forecast Strategic Outlook and Forecast Driven by aggressive development targets at both enterprise and national levels, scrap consumption by domestic smelters in Japan is set to experience significant structural growth. According to SMM, the climb in scrap consumption by Japanese smelters is not a short-term cyclical response triggered by declining mine TCs, but rather a fundamental structural transformation underpinned by strong capital strength and long-term commitment. As 2030 ESG-related targets continue to materialize, the trend of retaining domestic scrap for internal use in Japan will deepen further, structurally tightening global circulating scrap supply over the long term and continuously compressing the available sourcing volume for ex-China buyers. Response Logic for the "New Normal" in Japan's Copper Scrap Market Volume and Flow Direction: Steady Decline Net exports of copper scrap will not plunge to zero abruptly, but rather exhibit a sustained structural decline trend. As domestically subsidized capacity comes fully online, exports of high-grade secondary copper such as bare bright copper and No.1 copper will enter a steady contraction trajectory. Pricing Logic: The traditional medium and long-term linkage of "rising copper prices, declining scrap payment ratios" has been structurally reshaped. Under the dual effects of persistently tight copper concentrates supply and China's rigid tax-driven procurement demand providing a floor, the payment ratio for Japan's high-quality copper scrap is expected to establish a long-term upward baseline. Strategic Pivot: Constrained by the upper limit of domestic secondary copper output and tight labor supply, Japanese recycling industry alliances will accelerate their expansion into markets outside China. Japanese enterprises will invest in overseas joint venture projects to solidify downstream processing capacity deployment while maintaining Japanese-led control over raw material supply chains. According to SMM analysis, the current Japanese copper scrap market is gradually transitioning toward a fiercely competitive "seller ecosystem." Trade models that rely solely on spot purchases are increasingly exposed to the risk of supply disruptions. To secure long-term resource supply, ex-China purchasing enterprises need to move beyond the traditional spot trading mindset and establish structural partnerships through deep-binding approaches such as signing long-term contracts and equity cooperation, thereby adapting to the persistently tight market landscape.