[SMM Analysis] Significant Accumulation of HRC in Ningbo After the Holiday, Slow Demand Recovery Drags on Transactions According to the SMM survey, in the first week after the holiday, the large-aperture inventory of SMM HRC in Ningbo was 492,000 mt (as of February 25), up 114,000 mt WoW from the week before the holiday. This week, HRC futures first rose and then fell, with spot prices falling by 10-30 yuan/mt WoW from the period before the holiday, and transaction performance was relatively poor during the week. As of the afternoon close on February 27, the most-traded HRC 2605 futures contract closed at 3,215 yuan/mt. Meanwhile, according to the SMM survey, in the Ningbo spot trading market this week, in terms of prices, as of the afternoon of February 27, spot offers closed at 3,230-3,240 yuan/mt, with prices falling by 10 yuan/mt WoW from February 13 during the week. In terms of transactions, the recovery pace of downstream procurement demand after the holiday fell short of expectations, with overall transactions being relatively poor. Even when futures rose mid-week, it was difficult to achieve transactions when spot prices followed the adjustment. In terms of arrivals, the shipping pace of mainstream resources was normal, with an increase in DDH arrivals, so the extent of inventory accumulation was slightly higher than expected. Looking ahead, with logistics returning to normal, inventories will gradually decline, but given the current slow recovery in demand, the decline is not expected to be overly optimistic, and it is anticipated to gradually expand over the next 2-3 weeks. This week, SMM released its weekly HRC balance data, showing an MoM increase in HRC production. This week, SMM statistics showed that the total social inventory of HRC in 86 warehouses (large sample) across the country was 5.3775 million mt, up 1.1404 million mt from the period before the holiday and up 31.57% YoY on the lunar calendar. By region, the markets with significant accumulation were in southern China, eastern China, and northern China. Copyright and Intellectual Property Statement: This report is independently created or compiled by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), and SMM legally enjoys complete copyright and related intellectual property rights. The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders. The above rights are strictly protected by relevant laws and regulations of the People's Republic of China, such as the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, and the Anti-Unfair Competition Law of the People's Republic of China, as well as applicable international treaties. Without prior written authorization from SMM, no institution or individual may: 1. Use all or part of this report in any form (including but not limited to reprinting, modifying, selling, transferring, displaying, translating, compiling, disseminating); 2. Disclose the content of this report to any third party; 3. License or authorize any third party to use the content of this report; 4. For any unauthorized use, SMM will legally pursue the legal responsibilities of the infringer, demanding that they bear legal responsibilities including but not limited to contractual breach liability, returning unjust enrichment, and compensating for direct and indirect economic losses. Data Source Statement: (Except for publicly available information, other data in this report are derived from publicly available information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, brokerage reports, data from the National Bureau of Statistics, customs import and export data, various data published by major associations and institutions, etc.), market exchanges, and comprehensive analysis and reasonable inferences made by the research team based on SMM's internal database models. This information is for reference only and does not constitute decision-making advice. SMM reserves the final interpretation right of the terms in this statement and the right to adjust and modify the content of the statement according to actual circumstances.

On May 29, at the 2025 SMM (2nd) Rare Earth Industry Forum hosted by SMM Information & Technology Co., Ltd., Gao Yazhou, Director of the Motor Technology Department at the R&D Center of Goldwind Science&Technology Co., Ltd., shared the topic of "Rare Earths & Wind Power: Empowering Carbon Neutrality" with the attendees. Development Trends in the Wind Power Industry [Wind Power Industry Trends] The Global Wind Power Industry Looks to China, Stepping Boldly into the Carbon Neutrality Era • With clear "dual carbon" goals, the wind power market is entering a period of historic opportunities. The cumulative new installations during the "14th Five-Year Plan" period will reach 250-300 million kW, an 80% increase compared to the "13th Five-Year Plan" period, with an average annual installation of 50-60 GW. • By 2030, installations will reach at least 800 million kW, and by 2060, at least 3 billion kW, indicating that wind power will maintain rapid and sustained development over the next 40 years! [Wind Power Industry Trends] In China, Wind and Solar Installations Surpass Thermal Power In Q1 2025, China's combined new installations of wind and PV power reached 74.33 million kW, with cumulative installations reaching 1.482 billion kW (including 536 million kW of wind power and 946 million kW of PV power), surpassing thermal power installations (1.451 billion kW) for the first time. In the future, as new installations of wind and PV power continue to grow rapidly, it will become the norm for wind and PV installations to exceed thermal power installations. In Q1, the combined power generation from wind and PV reached 536.4 billion kWh, accounting for 22.5% of the total electricity consumption in society, with non-fossil energy power generation accounting for 39.8%. In Q1, the combined power generation from wind and PV increased by 111 billion kWh compared to the same period last year, significantly exceeding the increase in total electricity consumption in society (58.2 billion kWh). [Wind Power Industry Trends] Wind Power is Playing a Pivotal Role in the Social Economy Annual output value is approximately 600 billion yuan, with an employment base of about 2.5 million people. Complete industry chain: covering wind resource assessment, wind farm development and construction, equipment manufacturing, technical services, testing and certification, investment and financing services, etc. Feeding back into related industries: driving progress and breakthroughs in materials technology, testing and inspection, heavy-haul transportation, and other sectors. [Wind Power Industry Trends] China has Become the World's Largest Wind Power Equipment Manufacturing Base China accounts for 50% of the global market share in the production of wind turbine parts and complete machines; key components and castings and forgings account for 70% of global market production (e.g., generators, wheel hubs, frames, blades, gearboxes, bearings, etc.). [Wind Power Industry Trends] Innovation in Materials, Technology, Standards, and Models is Becoming Normalized With the further reduction in the price of wind turbines, the industry is building a new technological system through technological advancements in new theories, materials, processes, core components, and architectures across the four areas of "wind"-"turbine"-"farm"-"grid". "Trends in the Wind Power Industry" Major Trends in Wind Turbines: Larger Rotors, Higher Capacity • Major Trend - Larger Rotors and Higher Capacity: As the scope of wind energy resource development and utilization in China continues to expand, the development of low-wind-speed resources in southeastern China has become a significant trend. The technological development of wind turbines is also gradually aligning with this demand, showing a trend towards larger rotors and higher capacity. • In 2024, the world's longest GW147-meter blade passed static testing in one go. From 2022 to 2024, the unit capacity of wind turbines has increased from 16 MW to 26 MW, with Goldwind's 16 MW turbines already achieving mass offshore operation. "Trends in the Wind Power Industry" Major Trends in Wind Turbines: Taller Towers • Major Trend - Larger Rotors and Taller Towers: As the scope of wind energy resource development and utilization in China continues to expand, the development of low-wind-speed resources in southeastern China has become a significant trend. The technological development of wind turbines is also gradually aligning with this demand, showing a trend towards larger rotors and taller towers. In terms of tower height, since Goldwind began experimenting with steel-concrete hybrid tower structures in 2013, the technology for tall flexible steel towers and hybrid towers has continuously pushed the height of tower bases, with the benchmark height of domestic towers increasing from 120 meters (steel-flexible tower) in 2015 to 185 meters (steel-concrete hybrid tower) in 2024. "Trends in the Wind Power Industry" Broad Prospects for the Retrofitting and Replacement Market • Market Size Forecast for After-Sales Services: The after-sales service market for wind power is expected to enter a golden period of rapid growth in out-of-warranty capacity over the next three years. With the accelerated pace of wind power technology upgrades, there is a significant demand for retrofitting and replacing aging turbines, indicating broad prospects. It is estimated that by 2024, the cumulative out-of-warranty capacity will reach 229 GW, with the overall market size of after-sales services being approximately 31 billion yuan. Calculating at a 25% openness rate for operation and maintenance in 2024, the effectively open market size will be approximately 20 billion yuan. • Policy Support: The National Energy Administration has released a draft for public comment on the "Administrative Measures for the Retrofitting, Upgrading, and Decommissioning of Wind Farms," officially providing clear and traceable policy support for the technological retrofitting and upgrading of aging wind turbines. It encourages the systematic upgrading and optimization of wind farms with unit capacities less than 1.5 megawatts (MW) or that have been in operation for more than 15 years. Challenges and Demands "Challenges and Demands" Continuous Decline in Wind Turbine Bid Prices and Soaring Prices of Rare Earths • Market Price Trends of Wind Turbines: Since 2021, China's onshore wind power market has gradually entered a phase of low-price competition. As of November 2024, the lowest market price for onshore wind turbines (including towers) was 1,355 yuan/kW (data source: Fengmang Energy). • Price Trends of Pr-Nd Metal Oxides: The nearly threefold price surge from 2021 to 2022 has imposed significant cost pressure on direct-drive permanent magnet wind power technology, promoting a rapid transition towards medium-speed permanent magnet wind power and high-speed doubly-fed induction generator (DFIG) wind power technology routes. Although there was a pullback in 2024, due to the medium-speed industry chain and the cycle of delivery rhythm, it is difficult for the direct-drive technology route to reverse course in the short term. "Challenges and Requirements" - Suitable Scenarios for Different Wind Power Technology Routes • Low-speed motors without gearboxes: Permanent Magnet Synchronous Generators (PMSGs) and Electrically Excited Generators (EEGs), with rated speeds ranging from 7.5rpm to 15rpm. • PMSGs matched with low transmission ratio (40-80) gearboxes, with rated speeds ranging from 200rpm to 600rpm. • Motors matched with high transmission ratio (100-150) gearboxes: Doubly-Fed Induction Generators (DFIGs), Squirrel Cage Induction Generators (SCIGs), and PMSGs, with rated speeds ranging from 1700rpm to 1800rpm. • DFIG is currently the most economical technology route for onshore wind power; medium-speed PMSG is the most suitable technology route for offshore wind power at present; and direct-drive PMSG is the most reliable technology route (Siemens offshore units). "Challenges and Requirements" - Business Model Innovation and Value Potential of Direct-Drive Motors • Comparing the residual values of 5.2MW direct-drive and 5.3MW semi-direct-drive motors, and considering the direct sales and scrap market disposal models, as well as the costs of tower dismantling and transportation, the recoverable revenue for direct-drive motors is 520,000 yuan, while for semi-direct-drive motors, it is -440,000 yuan. Copper and rare earth materials account for the largest portion of the residual value, exceeding 80%. • Rare earths are non-renewable elements with significant market value and application prospects. Disposing of them as processed Pr-Nd alloy products will yield an additional gain of over 70,000 yuan per unit. • Innovative business models, such as a professional wind turbine motor recycling industry chain and contractualized motor recycling value, need to be cultivated and guided within the industry. In addition, it provides a detailed discussion on Goldwind's permanent magnet motors. 》Click to view the special report on the 2025 SMM (2nd) Rare Earth Industry Forum

Influenced by the slight increase in electricity prices in the power grids of Beijing, Shanghai, Guangzhou, Shenzhen, and eastern China, the cost of hydrogen production through water electrolysis rose slightly this week. Electricity prices in north-west China remained stable, with no significant fluctuations observed. In April, electricity prices in the power grids of Beijing, Shanghai, Guangzhou, Shenzhen, and eastern China generally increased, mostly by over 0.6 yuan/kwh, driving up the cost of hydrogen production through water electrolysis by 0.05-0.1 yuan. Electricity prices in the power grids of north-west China remained stable, with no significant changes in the cost of hydrogen production through water electrolysis. Based on this, the cost of hydrogen production through water electrolysis was generally 6 yuan/m³ in June, and in regions where electricity prices were below 0.4 yuan/kwh in western China, the cost was 4.5 yuan/m³. In the hydrogen trading market, the circulation volume of hydrogen produced through water electrolysis was relatively low, and the delivery price remained unchanged. According to first-hand survey data, the price range for hydrogen produced through water electrolysis in Beijing (including subsidies and freight) was 9.5 to 12.5 yuan/m³, while in Yunnan, the price was 8.0 to 9.2 yuan/m³ (also including freight), with freight accounting for approximately 25% to 30% of the total cost.

[SMM Steel Morning Meeting Summary] In terms of supply, coke producers are maintaining slight profitability, with an overall moderate production enthusiasm and operating rates remaining high. However, the shipment pace of some coke producers has slowed down somewhat, leading to increased shipment pressure. On the demand side, steel mills' rigid demand for coke persists. Coupled with the fact that steel mills' coke inventories are within a reasonable range, some steel mills have begun to control coke arrivals. Overall, the imbalance in the coke fundamentals is relatively small. However, the market outlook for finished steel products is relatively pessimistic. Additionally, the cost support for coke has weakened recently, and market sentiment has turned bearish. The coke market may operate in the doldrums, with expectations of price reductions.

In January 2025, the registration volume of domestically produced passenger vehicles on the Chinese Mainland reached 1,790,206 units, marking a year-on-year (YoY) decrease of 17% and also a month-on-m...

In January 2025, China's passenger vehicle (PV) retail sales totaled 1.794 million units, marking a 12.1% year-on-year decline and a 31.9% month-on-month drop, according to data from the China Passeng...

[SMM Steel Market Morning News: Preview: The State Council Information Office to Hold a Regular Policy Briefing to Introduce the Implementation of the "Program of Large-Scale Equipment Upgrades and Consumer Goods Trade-Ins"] The State Council Information Office is scheduled to hold a regular policy briefing at 10:00 a.m. on Wednesday, January 8, 2025. Zhao Chenxin, Deputy Director of the National Development and Reform Commission (NDRC), along with officials from the Ministry of Finance, the Ministry of Commerce, the People's Bank of China, and the State Administration for Market Regulation, will introduce the implementation and expansion of the "Program of Large-Scale Equipment Upgrades and Consumer Goods Trade-Ins" and answer questions from the press...

[SMM Daily Review of Rebar: Steel Prices Fluctuate Downwards Amid Growing Market Wait-and-See Sentiment] Today, the rebar futures market experienced fluctuations and fell by 0.32%, closing at 3098. The spot market saw adjustments in early trading, and prices softened somewhat in the afternoon as the futures declined. Market transactions were average, with traders adopting a more cautious wait-and-see attitude. On the macro level, the Fed's interest rate cut this week may open up room for further easing of domestic monetary policy, and subsequent interest rate cuts and reserve ratio reductions are worth anticipating. Fundamentally, with the completion of maintenance at some steel plants, construction material output has rebounded, but traders remain cautious in taking delivery. This week, inventory at steel plants increased slightly, while the destocking speed at social warehouses slowed down. Upcoming typhoons and heavy rains in eastern China may affect pre-holiday demand release, restraining the upside potential of steel prices. It is expected that steel prices will continue to fluctuate.

On the supply side of remelted rods, constrained by factors such as policy changes, high costs of using scrap, limited scrap aluminum supply, and safety inspections in some regions of eastern China, the July output of SMM's China remelted rod sample decreased by 35,000 tonnes from the previous month to 139,600 tonnes, a decrease of nearly 20%; the operating rate fell by 8 percentage points from the previous month to 32%. Overall, as we enter August, with the traditional peak season of "Golden September and Silver October" approaching, downstream demand has slightly improved, and it is expected that there will be room for resumption of production in rod plants in northwest regions such as Xinjiang and Qinghai. Subsequently, the operating rate of domestic aluminum billet will rebound. SMM predicts that...

[SMM News Flash on Nickel Pig Iron Market Transactions] According to SMM on August 22nd, it is learned from market sources that a steel mill in eastern China completed a transaction for high-nickel pig iron, specifically Indonesian iron, at a price of 1010 yuan per nickel point (including tax at the ship's hold). The transaction volume reached tens of thousands of tons, with the delivery scheduled for the end of September.