[SMM Aluminum Express] This week, the operating rate at China's downstream aluminum processing industry leaders fell 0.2 percentage points WoW to 60.1%, extending its downward trend for several consecutive weeks. Off-season characteristics continued to deepen, with operations across all sectors generally weakening or holding steady at low levels. The aluminum processing industry remained weak this week, pressured by both deepening off-season effects and rebounding aluminum prices, as export support faded and domestic demand recovery was slow. The overall operating rate in August is expected to remain on a weak trend.

Why the Regulation Matters For mining and mineral-processing projects in Indonesia, regulatory certainty extends beyond investment permits, construction costs and production capacity. Companies must also understand how export revenue can be managed and how much cash remains available for operations, financing and reinvestment. DHE SDA, or Devisa Hasil Ekspor Sumber Daya Alam , refers to foreign-exchange proceeds generated from the exploitation, management or processing of Indonesia’s natural resources. Its treatment can affect working-capital requirements, debt servicing and project returns. Rare-earth content checks recently delayed alumina and nickel-product exports even though Indonesia had not established limits governing rare-earth elements occurring as by-products in those shipments. The government subsequently moved to address the regulatory gap. Against this backdrop, Government Regulation No. 21 of 2026 introduces more flexible DHE SDA treatment for certain mining-sector exports. The regulation amended Article 18A and became effective on June 1, 2026. What PP No. 21 of 2026 Changes Under the general framework, exporters must repatriate 100% of their DHE SDA into Indonesia. Non-oil-and-gas exporters must generally retain the full amount for at least 12 months through Bank BUMN. PP No. 21 of 2026 provides different treatment for certain mining-sector DHE SDA connected with bilateral agreements, understandings or other intergovernmental arrangements concerning trade. Requirement General non-oil-and-gas rule Article 18A mining treatment Repatriation into Indonesia 100% 100% Minimum retention 100% 30% Minimum retention period 12 months 3 months Banking channel Bank BUMN A foreign-exchange bank designated under the framework, potentially including a non-BUMN bank The change is a relaxation rather than a complete exemption. Full repatriation remains mandatory, but the amount subject to retention may fall from 100% to 30%, while the minimum period declines from 12 months to three months. Qualifying exporters may also place or convert the proceeds through banks outside Bank BUMN, subject to Bank Indonesia’s designation. For every US$100 million in export proceeds, the minimum retained amount could consequently fall from US$100 million for 12 months to US$30 million for three months. The actual financial effect would depend on the exporter’s working-capital requirements, financing arrangements, banking costs and the permitted use of the retained funds. How the Framework Appears to Operate PP No. 21 of 2026 refers to mining trade conducted in the implementation of bilateral agreements or other recognised trade arrangements. Based on that wording, this analysis reads the framework as follows: A qualifying trade arrangement exists or is recognised → an exporter or transaction is linked to that arrangement → the Article 18A treatment may apply. This is an analytical reading of the regulation’s structure, not a procedure expressly prescribed in PP No. 21 of 2026. The underlying trade arrangement appears to provide the policy basis for the relaxation. However, the regulation does not explain how an individual exporter, contract, shipment or export receipt becomes formally connected to that arrangement. Exporter Qualification and Bank Designation Are Separate The framework appears to involve two separate determinations. First, the exporter or DHE SDA flow must qualify for the Article 18A treatment because the relevant mining trade is connected with a recognised bilateral or other trade arrangement. Second, qualifying proceeds must be handled through a foreign-exchange bank designated under the framework. This may include a non-BUMN bank, but exporters cannot automatically use any foreign-exchange or non-BUMN bank. The designation of a bank does not establish that every exporter or transaction processed through it qualifies for reduced retention. Similarly, an exporter that qualifies for Article 18A treatment must still use an authorised banking channel. The qualification of the exporter or transaction determines whether the relaxation applies; bank designation determines where the qualifying proceeds may be handled. Four Countries Were Publicly Identified At separate press briefings on July 23, the United States, China, Australia and Canada were identified as countries associated with the exception. When explaining China’s inclusion, the finance minister referred to bilateral or multilateral arrangements, significant investment ties and the longstanding presence of Chinese banks in Indonesia. These considerations should not automatically be assumed to have been applied in the same way to all four countries. In this context, the term “exception” refers to the more flexible Article 18A treatment. It does not mean that export proceeds may remain overseas or that the minimum 30% retention requirement is removed. PP No. 21 of 2026 does not name the four countries and is drafted more broadly around bilateral agreements, understandings and other trade arrangements. They should therefore be treated as countries publicly identified by the government at that stage. The unresolved question is whether country-level recognition is sufficient or whether individual exporters and transactions must still pass a separate qualification process. What Remains Unclear The financial treatment is defined. The missing link is how a specific exporter or DHE SDA receipt is connected to a qualifying trade arrangement. Unresolved issue Practical question Buyer Must the contractual buyer be established in the partner country? Cargo destination Does the destination stated in the export declaration determine eligibility? Payment flow Does the country from which payment is received matter? Exporter affiliation Does this refer to foreign ownership, corporate control or another relationship? Contract Must the sales contract expressly fall under a recognised trade arrangement? Assessment level Is qualification determined by exporter, contract, shipment or individual payment? Verification Which authority confirms eligibility, and what documents are required? These questions are material because a mineral transaction may involve an Indonesian producer, a trader in Singapore, an end user in China and a foreign-linked bank operating in Indonesia. The available framework does not identify which connection would be decisive. Implications for Exporters and Investors The revised treatment could reduce the amount of cash tied up under the DHE SDA regime and lower short-term financing requirements for qualifying operations. This may be relevant to capital-intensive alumina refineries, aluminium smelters and other mineral-processing facilities. However, exporters may remain cautious about applying the 30%-for-three-month treatment until they can establish that their trade falls within the qualifying framework. The same uncertainty limits how confidently investors can include the relaxation in project cash-flow and financing models. Conclusion PP No. 21 of 2026 provides a measurable change for qualifying mining-sector DHE SDA. Full repatriation remains mandatory, but minimum retention may fall from 100% for 12 months to 30% for three months, with the proceeds handled through a foreign-exchange bank designated under the Bank Indonesia framework, potentially including a non-BUMN bank. The remaining uncertainty is how a bilateral or other recognised trade arrangement translates into eligibility for a particular exporter, contract, shipment or DHE SDA receipt. Until that connection is formally explained, the financial treatment and banking channel are identifiable, but access to the relaxation remains open to interpretation.

The price inversion pressure on cobalt salt was high, and this week nickel intermediate product payables were in the doldrums.

[India] Indian long steel prices registered a slight decline across major markets, with buying activity remaining cautious amid the monsoon season. Mandi Gobindgarh TMT held at 503.10 USD/tonne (47,900 INR/tonne), while primary producer offers remained at 525.15 USD/tonne (50,000 INR/tonne) ex-Durgapur. In the semis market, Mandi Gobindgarh billet was unchanged at 447.43 USD/tonne (42,600 INR/tonne), although billet prices in Durgapur and Raipur slipped by 4.20 USD/tonne (400 INR/tonne) and 1.05 USD/tonne (100 INR/tonne), respectively. Export sentiment remained subdued, with Indian HRC offers heard at 490 USD/tonne FOB to European buyers and 520 USD/tonne FOB to Middle Eastern buyers. But buyers were not interested in these levels amid the availability of lower-priced material from other regions. Domestic raw material prices softened in July, led by lower iron ore and manganese ore prices. NMDC reduced Baila lump (65.5%) prices by 4.4% month on month to 57.10 USD/tonne (5,450 INR/tonne) and Baila fines (64%) by 3.1% to 49.30 USD/tonne (4,700 INR/tonne), while MOIL's 37% Mn lump ore declined 5.0% to 194.20 USD/tonne (18,529 INR/tonne).

On August 7, the SMM Imported Copper Concentrate Index (weekly) was reported at -$173.91/dmt, down $14.54/dmt from the previous -$159.37/dmt. The payable indicator for domestic trade ore with 20% grade stood at 98.5%-99.5%. This week, spot market transactions were relatively active, but transaction prices declined further. In spot trading, a trader sold 30,000-50,000 mt of bundled ore for delivery from Q4 2026 to Q1 2027 to a smelter at -$170/dmt, QP: M+1/M+5; another trader sold 10,000 mt of clean ore at -$183/dmt to a smelter, with shipment in August/September, QP: M+1/M+5; a trader sold 40,000-60,000 mt of bundled ore for Q4 delivery at -$170/dmt to -$175/dmt to a smelter, QP: M+1/M+5; a trader sold 20,000 mt of bundled ore at -$174/dmt to -$175/dmt and also sold 10,000 mt of high-arsenic ore at around -$100/dmt to smelters, with shipment in Q4, QP: M+1/M+4; a trader sold 70,000 mt of bundled ore to smelters at an index minus $18/dmt, with shipment in Q4; a trader sold 10,000 mt of bundled ore for August/September shipment at an index minus $22/dmt to $23/dmt to smelters; a trader offered 10,000 mt of South American clean ore at an index minus $20/dmt. In mine tenders, on the trader side, the winning bid price for 10,000 mt of BISHA ore, September-October shipment, was -$240/dmt to -$230/dmt; the winning bid result for Chuquicamata was below -$200/dmt. Overall, fixed-price transactions increased in the spot market this week. Due to weather-related shipment delays from some mines in Chile and Peru, there was restocking demand. Coupled with rigid restocking needs from new smelting capacity, spot TC continued to deteriorate, and smelter profit margins kept narrowing. However, smelters had limited acceptance of low-priced supply. Downward pressure remained but downside room was limited. According to foreign media reports, the DRC government signed a decree on June 29 to ban the export of copper and cobalt concentrates, effective immediately. Under "strategic" conditions, the Minister of Mines may still grant an export exemption for a period of one year. It should be noted that the DRC had already imposed strict controls on copper and cobalt concentrate exports. Under current policy, such exports are prohibited in principle, and enterprises must obtain government-approved export quotas or exemptions before shipping. Therefore, this policy is more about reaffirming and further tightening the existing management framework, rather than a sudden complete halt to copper concentrate exports. The additional impact of the ban on short-term global copper concentrate trade is likely to be relatively limited. What is more noteworthy is the policy signal it sends: As the strategic importance of critical minerals grows, resource-rich countries are using export restrictions, local processing mandates, and tax policies to capture a greater share of the industry chain and resource value added at home. Resource nationalism is increasingly disrupting global copper raw material flows and the supply landscape. On August 4, Codelco announced that it had temporarily suspended the development and construction activities of the Andes Norte project at its El Teniente mine, due to a potential new-type seismic risk in the deep areas of the project. This measure only applies to the Andes Norte project and does not mean a full stoppage at the El Teniente mine. Other production areas at the mine continue to operate, with seismic monitoring and related safety measures in place. According to the latest data from China Customs, China's copper concentrate imports in July 2026 totaled 2.379 million mt, up 1.88% MoM and down 6.93% YoY. From January to July 2026, cumulative copper concentrate imports amounted to 16.985 million mt, representing a cumulative YoY decline of 1.8%. On August 6, 2026, SMM recorded copper concentrate inventories at eleven ports of 692,000 mt in physical content, up 27,600 mt in physical content from July 31. The main increase came from Fangchenggang Port and Qinzhou Port, up MoM by 20,000 mt and 29,000 mt respectively; the main decrease was from Yantai Port and Qingdao Port, down MoM by 22,400 mt and 20,000 mt respectively.

This week (Aug. 3 – Aug. 7), the weekly average warrant transaction price range for Yangshan copper premiums was $101–$112/mt, QP August, with an average of $106/mt; the weekly average B/L transaction price range was $96–$107/mt, QP September, with an average of $102/mt; and EQ copper CIF B/L prices were $64–$73/mt, QP September, with an average of $69/mt. As of Aug. 7, the ex-exchange rate SHFE/LME copper price ratio for the SHFE copper 2608 contract against LME copper was 1.1247, with an import loss of around 1,385.43 yuan/mt, expanding by about 857 yuan/mt WoW. As of Friday, the backwardation structure for the August LME copper date widened WoW, with the carry spread between the August and September dates at −$61.53/mt. Currently, mainstream offer prices for ER registered copper B/L have dropped to double-digit levels; mainstream warrant offer prices for registered copper were near $100/mt. This week, Yangshan copper premiums pulled back from high levels, mainly because the SHFE/LME price ratio continued to deteriorate, compounded by the widening backwardation structure of nearby LME contracts, which increased suppliers' willingness to offer cargo. Meanwhile, as copper prices surged, downstream consumption demand was poor. Additionally, high premiums in the domestic market previously attracted cancelled warrants from LME Asian warehouses, which gradually arrived in China, causing temporary congestion at Shanghai Port. Together with some export cargo pressuring prices, market spot premiums weakened. According to SMM data, China's bonded zone copper inventories as of Thursday this week (Aug. 6) decreased by about 6,000 mt WoW from the previous period (Jul. 30) to 31,100 mt. Specifically, Shanghai bonded inventory decreased by 6,500 mt WoW to 26,900 mt, while Guangdong bonded inventory increased by 500 mt WoW to 4,200 mt. The weekly bonded zone inventory decline was mainly because of reports that cargo ships were heading to the US. Additionally, the slight opening of the export window led to small-scale exports by some smelters to the bonded zone. Looking ahead, the siphoning effect from North America continues, so the logic of overall supply constraints in the market remains. However, with the SHFE/LME price ratio significantly inverted, consumption demand suppressed by high copper prices, and expectations of concentrated cargo arrivals at ports, traders' psychological price expectations for spot cargo are rapidly declining, and imported copper premiums are expected to see a temporary pullback. Additionally, with the export window slightly open, smelters have export expectations. According to SMM, export volumes in the first week of August up to now have been relatively limited, and future export volumes need continued monitoring.

This week, industry chain prices diverged. Lithium ore edged down alongside lithium carbonate, but mines continued to hold prices firm, making profit distribution across the industry chain a market focus. Supported by maintenance and tight spot order supply, lithium carbonate prices consolidated on a subdued note, while lithium hydroxide prices initially fell before rebounding. The cobalt industry chain remained generally under pressure—with weakening overseas quotations and sluggish off-season demand, refined cobalt, intermediate products, and cobalt salt prices continued to weaken, and the price spread between buyers and sellers widened. Nickel sulphate edged down, with the market still primarily focused on destocking; ternary cathode precursor prices declined due to weaker nickel and cobalt salt prices, while ternary cathode material prices remained basically stable. LFP prices proved resilient, supported by rising processing fees, with August production schedules continuing to grow and high-quality capacity remaining tight. Artificial graphite prices rose, the supply-demand balance for separators stayed in tight balance, and electrolyte prices were pushed up by raw material cost transmission. Supply of key materials for sodium-ion batteries remained tight, while recycling-side transactions were subdued. On the terminal side, EV and ESS demand maintained resilience, though the consumer market recovery remained limited. Looking ahead, the focus will be on peak season stockpiling and demand realization.

[SHFE/LME Price Ratio Consolidates Around 6.8]: This week, the SHFE/LME price ratio pulled back to consolidate around 6.8, with the zinc ingot import window remaining closed. Outside China, the US ADP employment data fell short of expectations, while the US dollar index and US Treasury yields consolidated. LME inventory dropped below 100,000 mt, and the cash-to-three-month backwardation structure held at a high of around $60/mt, extending the tightness in the spot market outside China, driving LME zinc to a multi-year high.

SMM August 7 News: Metal market: As of midday close, domestic market base metals nearly all rose. SHFE copper added 0.56%, SHFE aluminum rose 0.86%, SHFE lead gained 0.48%, SHFE zinc advanced 1.35%, SHFE tin fell 0.3%, and SHFE nickel edged up 0.44%. Additionally, the most-traded cast aluminum futures contract edged up 0.32, while the most-traded alumina contract slipped 0.33%. Lithium carbonate most-traded contract rose 1.23%. Silicon metal most-traded contract surged 2.21%. Polysilicon most-traded futures contract jumped 5.03%. Ferrous metals all rose. Iron ore futures gained 0.28%, rebar edged higher, and hot-rolled coil rose 0.43%. Stainless steel advanced 1.39%. For coking coal and coke: the most-traded coking coal contract rose 2.6%, and the most-traded coke contract jumped 3.22%. In the overseas market, as of 11:40 AM, LME base metals rallied across the board. LME copper gained 0.69%, LME aluminum edged up 0.31%, LME lead rose 0.4%, LME zinc advanced 0.44%, LME tin added 0.42%, and LME nickel surged 1.61%. In the precious metals space, as of 11:40 AM, COMEX gold rose 0.43% and COMEX silver gained 1.45%. For domestic precious metals: SHFE gold edged up 0.28%, and the SHFE silver most-traded contract added 0.11%. Additionally, as of midday close, the most-traded platinum futures contract fell 1.71%, and the most-traded palladium futures contract dropped 1.55%. As of midday close, the most-traded European container shipping futures contract rose 1.79% to 1,682 points. As of 11:40 AM on August 7, here are some futures midday quotes: Spot and fundamentals Copper: Today, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was quoted at 160 yuan/mt, up 70 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 60 yuan/mt, up 50 yuan/mt from the previous trading day; SX-EW copper was quoted at 0 yuan/mt, up 30 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 108,355 yuan/mt, up 455 yuan/mt from the previous trading day; the average price of SX-EW copper was 108,245 yuan/mt, up 425 yuan/mt from the previous trading day... Macro front Domestic side: [Over 30 trillion yuan! China's goods trade imports and exports continued to grow in the first seven months this year] The General Administration of Customs announced today that in the first seven months, China's goods trade imports and exports totaled 30.13 trillion yuan, up 17.3% YoY, extending a solid growth momentum. Exports were 17.44 trillion yuan, up 14%, while imports were 12.69 trillion yuan, up 22%. In July alone, imports and exports amounted to 4.66 trillion yuan, up 19.2% YoY. Of which, exports reached 2.71 trillion yuan, up 17.8%, while imports reached 1.95 trillion yuan, up 21.2%. [National Energy Administration: Intensify Independent R&D of Key Power Equipment, Promote Breakthroughs in Key Technologies such as Power Chips and UHV Components] The National Energy Administration issued the "Action Plan for Electric Power Safety Production during the 15th Five-Year Plan Period." It mentioned strengthening "AI+" safety governance, innovating high-precision equipment fault prediction and health management methods, promoting the embedding of AI technology into intelligent safety tools, and researching power safety production auxiliary decision-making technology based on large-scale AI models. Intensify independent R&D of key power equipment, strengthen R&D of new-type protective materials, set up special plans for tackling technical problems of core components of power equipment, and promote breakthroughs in key technologies such as power chips and UHV components. Promote innovation in safety and quality control technology for power construction projects, research and build an intelligent supervision system for power construction projects, and use AI, big data, and other means to strengthen off-site supervision and quality supervision of key power projects. (National Energy Administration) [General Administration of Customs: Cumulative Exports of Integrated Circuits Up 99.5% YoY, January-July] Data released by the General Administration of Customs showed that China's integrated circuit exports reached $38.74 billion in July, and cumulative exports from January to July reached $216 billion, up 99.5% YoY. (Jinshi Data APP) [PBOC Open Market Operations Net Drain of 133 Billion Yuan on the Day, 1,225.5 Billion Yuan This Week] The PBOC conducted 1 billion yuan of 7-day reverse repo operations today. With 134 billion yuan of reverse repos maturing today, a net drain of 133 billion yuan was achieved on the day. This week, the PBOC conducted 176.5 billion yuan of 7-day reverse repo operations, 300 billion yuan of overnight reverse repo operations, and 500 billion yuan of outright reverse repo operations. With 116.5 billion yuan of 7-day reverse repos and 900 billion yuan of overnight reverse repos maturing this week, a net drain of 1,225.5 billion yuan was achieved this week. (Jinshi Data APP) On the US dollar front: As of 11:40, the US dollar index rose 0.02% to 99.96. The market focused on US non-farm payrolls data for clues on the interest rate outlook. According to the CME "FedWatch": The probability of the Fed keeping rates unchanged in September is 45%, and the probability of a cumulative 25 bps hike is 55%. For October, the probability of keeping rates unchanged is 31%, a cumulative 25 bps hike is 51.9%, and a 50 bps hike is 17.1%. (Jinshi Data App) US Fed’s Musalem: The current inflation rate remains well above the US Fed’s 2% target. Monetary policy must effectively curb underlying inflation rather than tolerate current high inflation in hopes of future productivity gains. US Q2 labour productivity increased faster than expected, mainly because enterprises sought to ease pressures from rising costs. Data released on Thursday showed Q2 nonfarm productivity grew at an annualised rate of 1.4%, above the upwardly revised 0.8% increase in Q1, and also exceeded market expectations. Meanwhile, unit labour costs rose 1.3%, below expectations. US Fed officials, investors, and economists have been looking for signs that hundreds of billions of dollars in AI investment are boosting labour productivity. However, since official data fluctuates greatly from quarter to quarter, it will still take time to observe clear trends. Labour costs are one of the largest expenditure items for many enterprises, and efficiency gains can allow wages to rise without fuelling inflation. In the long term, higher productivity helps improve living standards, but some economists worry that if AI-driven productivity growth persists, some enterprises may delay hiring or even cut staff. Q2 productivity growth was supported by the strongest output expansion since Q3 2025, while the increase in hours worked was more moderate. (Jinshi Data App) Data: Today will see the release of France’s Q2 ILO unemployment rate, Germany’s June seasonally adjusted industrial output m/m, Germany’s June seasonally adjusted trade balance, the UK’s July Halifax seasonally adjusted house price index m/m, France’s June trade balance, Switzerland’s July consumer sentiment index, Canada’s July employment change, the US July unemployment rate, the US July seasonally adjusted nonfarm payrolls, the US July average hourly earnings y/y, the US July average hourly earnings m/m, the US July New York Fed 1-year inflation expectations, China’s July US dollar-denominated trade balance, China’s July foreign exchange reserves, and China’s July trade balance. Watch for: 2028 FOMC voter and St. Louis Fed President Musalem speaks on the US economy and monetary policy; 2027 FOMC voter and Richmond Fed President Barkin speaks. Crude oil: As of 11:40, both oil prices rose, with WTI up 1.01% and Brent up 1.06%. Market concerns over the shipping outlook through the Strait of Hormuz supported prices. According to preliminary US government data, US crude oil imports from Saudi Arabia fell to zero in July this year, the first time since 1985 that there were no Saudi crude imports for an entire month. Data released by the US Department of Energy (DOE) on Wednesday local time showed that Saudi crude oil shipments to the US had completely halted in July. Considering that US refineries had been purchasing more than 800,000 barrels per day of Saudi crude earlier this year, this drop was significant. As the closure of the Strait of Hormuz and other war-related supply disruptions pushed up crude prices linked to the global benchmark, US refineries had been seeking alternative supplies to Saudi crude. Saudi crude deliveries to the US had historically dropped to zero in isolated weeks, but July was the first time in over 40 years that the entire month fell to a minimum level. According to Kpler data, US crude oil imports from Saudi Arabia are expected to recover to around 300,000 barrels per day this month, in line with recent historical norms. (Jin10 Data APP) Saudi Arabia lowered its main crude prices for Asia, while negotiations were underway on a deal aimed at easing shipping pressures in the Strait of Hormuz. Despite Houthi threats jeopardizing an alternative route for eastbound crude shipments via the Red Sea, Saudi Arabia still lowered prices. A price list showed that Saudi Aramco cut the price of Arab Light crude for delivery to Asian clients next month by 50¢ per barrel, to $2 per barrel below the regional benchmark. A previous survey showed that traders had expected Saudi Aramco to keep its flagship crude prices unchanged. This week, global benchmark Brent crude prices fell sharply, currently trading near $80 a barrel. (Jin10 Data APP) Spot Market Overview: ► ► ► ► ► ► ► ► ► ► ► ► ► ► ►

Vietnam’s 10 largest steel and building-material enterprises are expected to contribute a combined VND 19.04 trillion to the 2025 state budget, down 2.9% year on year but up 40.6% from 2023. Hoa Phat Group leads with VND 12.95 trillion, accounting for about 68% of the Top 10 total, followed by Hoa Sen Group at VND 1.23 trillion, VICEM at VND 1.11 trillion and VNSTEEL at VND 927 billion. Steelmakers accounted for 85.5% of the total, with VAT on imported goods representing a major source of payments for several companies. In contrast, resource taxes, land-related payments and environmental fees made up a significant share of VICEM’s contribution. The figures also reflect diverging market conditions across steel segments: Vietnam’s finished steel output rose 9.6% in 2025, while sales increased 8.7%, supported mainly by domestic demand. Construction steel sales grew 12% and HRC sales rose 28%, while galvanized and cold-rolled steel remained under pressure from weaker exports.