HRC prices strengthened this week with recovering trading sentiment. In terms of supply, maintenance on rolling lines saw relatively small changes, and overall HRC production increased slightly. On the demand side, HRC apparent demand continued to deteriorate, with the off-season impact still evident. High temperatures and rainy weather remained the main bearish factors, and demand improvement awaits verification in early September. On inventory, SMM data showed social inventory of HRC across 86 national warehouses (large sample) stood at 4.4982 million mt this week, up 54,900 mt WoW, up 1.24% WoW. By region, markets in east China and north China saw inventory buildup, while markets in south China, central China and northeast China saw slight destocking. Looking ahead, the first round of coke price hikes is expected to be implemented next week, iron ore prices may consolidate with small fluctuations, and HRC cost support is expected to strengthen. However, the supply-demand imbalance is still accumulating, weighing on HRC prices with insufficient upward momentum. In summary, the most-traded HRC contract is expected to consolidate in the 3260-3360 range next week.

This week (8.14‑8.20), the weekly operating rate of SMM's copper billet sample enterprises was 48.74%, up 0.22 percentage points MoM and down 1.09 percentage points YoY . Domestic copper prices pulled back slightly this week, releasing some rigid demand orders from downstream, which drove a minor recovery in production at copper billet enterprises. However, the industry remained in the traditional consumption off-season overall, with no significant rebound in operating rates. On the raw material side, the tight supply situation of recycled brass has not fundamentally improved. Despite the pullback in copper prices, raw material prices stayed high. Days of raw material inventories at sample enterprises stood at 3.61 days, remaining at a low level. On the demand side, benefiting from lower copper prices, some downstream end-users conducted small-scale restocking at lower prices, releasing rigid demand orders and driving a slight reduction in finished product inventories. Days of finished product inventories at sample enterprises this week were 4.96 days, edging down MoM. However, overall end-use demand remained weak, and the traditional off-season environment remained unchanged, with limited growth in new orders. Looking ahead to next week (8.21‑8.27), the market will remain in the traditional consumption off-season, with a lack of strong drivers for order recovery at the terminal level. Although copper prices have pulled back, they remain at high levels overall. The tight supply of recycled brass raw materials continues, and high raw material costs keep squeezing processing enterprise profits, suppressing their production enthusiasm. SMM expects the operating rate of copper billet sample enterprises to edge down further to 48.58% next week, down 0.93 percentage points YoY.

In mid-to-late August, as the traditional industry peak season officially kicks off, the fundamentals of China’s full manganese compound industrial chain have achieved marginal improvement. The prolonged weak and volatile market trend during the off-season has come to an end. The overall sector has stepped out of its sluggish pattern and entered a stage of bottom consolidation, stabilization and gradual recovery.

[SMM Rare Earth Daily: Rare Earth Low-Price Sources Hard to Find, Prices Hold Up Overall] Overall, driven by large factory purchases and tightening low-price sources, rare earth prices hold up overall. However, downstream inquiry activity has decreased from yesterday, and actual trading follow-up on the metal side is limited. In the short term, driven by the recovery of market trading activity, prices of products such as Pr-Nd and dysprosium may maintain a drifting higher trend.

SMM, August 21 – Metal Market: By the midday close, base metals in the domestic market broadly gained. SHFE copper rose 0.36%, SHFE aluminum rose 0.11%. SHFE lead rose 1.22%. SHFE zinc rose 1.38%. SHFE tin rose 0.92%. SHFE nickel fell 0.67%. In addition, the most-traded aluminum alloy futures rose 0.17%, the most-traded alumina futures rose 0.82%. The most-traded lithium carbonate futures rose 3.61%. The most-traded silicon metal futures rose 0.23%. The most-traded polysilicon futures rose 2.28%. Ferrous metals showed mixed performance. Iron ore edged down, rebar rose 0.43%, hot-rolled coil rose 0.18%. Stainless steel fell 1.18%. On coking coal and coke: the most-traded coking coal contract fell 0.35%, the most-traded coke contract rose 1.57%. On base metals in overseas markets, as of 11:40, LME metals all rose. LME copper rose 0.51%, LME aluminum rose 0.64%. LME lead rose0.29%, LME zinc rose0.8%. LME tin rose0.36%. LME nickel edged up. On precious metals, as of 11:40, COMEX gold rose 0.34%, hitting a new high since May at $4,600.3/oz during the session; COMEX silver rose 1.06%. In domestic precious metals: SHFE gold rose 1.22%, the most-traded SHFE silver contract rose 4.07%. Also, by the midday close, the most-traded platinum futures rose 3.58%, the most-traded palladium futures rose 1.79%. By the midday close, the most-traded Europe route container shipping futures contract rose 8.96%, at 1,910 points. As of 11:40 on August 21, partial futures midday quotations: Spot Market and Fundamentals Silver: The US Treasury's expansion of long-term bond buyback scale pushed the US dollar weaker, silver prices rebounded, but rising US Treasury yields and hawkish signals limited the gains. High silver prices continued to suppress demand in the spot market, with trading sluggish... Macro Front China: [Ministry of Finance: The ministry will promptly plan and introduce pragmatic and effective incremental policies in H2] Liao Min, Vice Minister of Finance, stated at a press conference on August 21 of the "Starting the 15th Five-Year Plan" series hosted by the State Council Information Office that since the beginning of this year, the Ministry has adopted multiple measures to continue supporting and encouraging consumption. It allocated 187.5 billion yuan for consumer goods trade-in, driving approximately 1.32 trillion yuan in sales of related goods, benefiting 178 million person-times. It innovatively launched a package of fiscal-financial coordination policies to boost domestic demand, targeting resident consumption and consumer industry operators, leveraging both the supply and demand sides. This policy has already benefited 113 million person-times. In 50 pilot cities, a receipt lottery campaign was launched, driving sales in related sectors to exceed 370 billion yuan. In H2, fiscal policy will continue to focus on accelerating fund utilization, boosting domestic demand, and strengthening fiscal reform and management to deliver tangible results. Regarding incremental policies, the Ministry of Finance will promptly formulate and introduce practical and effective incremental policies based on the macroeconomic conditions in H2, providing strong support for achieving an effective improvement in economic quality and a reasonable growth in quantity. (Xinhua News Agency) [National Energy Administration: China's total electricity consumption up 4.7% YoY in January-July 2026] On August 21, the National Energy Administration released data on total electricity consumption for July and the first seven months. From January to July, total electricity consumption reached 6,139.9 billion kWh, up 4.7% YoY. By sector, primary industry consumption was 87.7 billion kWh, up 3.5% YoY. Secondary industry consumption was 3,917.3 billion kWh, up 4.7% YoY, with industrial consumption at 3,881.5 billion kWh (up 4.9% YoY) and high-tech and equipment manufacturing consumption at 722.8 billion kWh (up 9.7% YoY). Tertiary industry consumption was 1,210 billion kWh, up 7.4% YoY, of which charging and battery swapping services and internet data services consumed 97.4 billion kWh and 59.3 billion kWh respectively, with growth rates of 55.8% and 43.3%. Urban and rural residential consumption was 924.9 billion kWh, up 1.3% YoY. (National Energy Administration) [PBOC conducts reverse repo operations, posting net injection of 95 billion yuan today and net withdrawal of 272 billion yuan this week] The PBOC conducted 95 billion yuan in overnight reverse repos today, with no reverse repos maturing, resulting in a net injection of 95 billion yuan. This week, the PBOC conducted a total of 1,457.6 billion yuan in reverse repo operations. With 18 billion yuan in 7-day reverse repos and 1,711.6 billion yuan in overnight reverse repos maturing this week, the net withdrawal was 212 billion yuan. (Jin10 Data APP) On the US dollar front: As of 11:40, the US dollar index fell 0.11% to 98.76. Citigroup's foreign exchange strategists turned bearish on the US dollar's short-term outlook, as the market prepares for a more dovish US Fed, the US midterm elections, and a further expansion of US Treasury buyback scale by the US Treasury. The Citigroup strategist team led by Daniel Tobon said they had lowered their US dollar index forecast for the next three months from 102.12 to 98.34. Citigroup had previously noted that US Treasury Secretary Bessent's recent move to lower long-term borrowing costs by expanding the buyback of US Treasuries with maturities from 10 to 30 years could come at the expense of the US dollar. The US dollar index, after falling to its lowest level since May on Wednesday, was basically flat near 98.9 on Thursday. Citigroup's team stated that their view on the dollar has been "relatively neutral" in recent months, but they have warned that risks to the dollar in the coming months could increase. US Treasury Secretary Bessent said on bond buybacks that the scale of a single buyback (upper limit) could exceed $4 billion, partly to send a signal. He said, "We want to show that yields do not reflect fundamentals." Meanwhile, he said the government may announce increased fiscal consolidation efforts, and it is highly likely that the deficit peak has already been seen. Regarding the debt figures, the $40 trillion debt number has no special meaning. The market is a bit too hasty. If there are any changes to the balance sheet, the Treasury and the Fed will cooperate. It needs to be clear that interest rates are unrelated to the buyback decision. On the inflation outlook, Bessent said market indicators point to lower inflation ahead. Regarding economic sanctions on Iran, Bessent said a press conference will be held next Monday to discuss related actions. The use of the Federal Reserve's reverse repo facility (RRP), open to foreign central banks and other monetary authorities, has continued to climb, with the balance growing for two consecutive weeks, reflecting that foreign official institutions are continuing to increase their US dollar cash reserves. As of August 19, the amount of foreign entities' funds parked in the Fed's reverse repo pool rose to $373 billion, up from $357 billion a week earlier. Since August 5, the facility's usage has increased by approximately $56 billion in total, the largest two-week increase since October 2022. The market is closely watching changes in foreign RRP balances for signs of whether Japan, after intervening in the foreign exchange market to support the yen last month, is re-accumulating US dollar liquidity. According to the CME "FedWatch": The probability of the Fed holding rates unchanged in September is 63.8%, and the probability of a cumulative 25-basis-point rate hike is 36.2%. The probability of the Fed holding rates unchanged in October is 51.8%, the probability of a cumulative 25-basis-point rate hike is 41.4%, and the probability of a cumulative 50-basis-point rate hike is 6.8%. (Jin Shi Data APP) Data side: Today's releases include the UK July public sector net borrowing, UK July retail sales month-on-month (seasonally adjusted), France August manufacturing PMI preliminary, Germany August manufacturing PMI preliminary, Eurozone August manufacturing PMI preliminary, UK August manufacturing PMI preliminary, UK August services PMI preliminary, Canada June retail sales month-on-month, US August S&P Global manufacturing PMI preliminary, global services PMI preliminary, Eurozone August consumer confidence index preliminary, China July total social electricity consumption YoY, and China July installed power generation capacity year-to-date. In addition, note: Hang Seng Indexes Company announced the review results of the Hang Seng Index Series for Q2 2026. Crude oil: As of 11:40, oil prices in both markets edged down, with WTI down 0.43% and Brent down 0.27%. As the US-Iran peace talks remained stalled, the security situation in the Middle East grew increasingly severe, and vessel traffic through the Strait of Hormuz on Thursday declined from the previous day. Preliminary data from vessel-tracking company Kpler showed that a total of seven cargo ships transited the Strait of Hormuz on Thursday, below 14 on Wednesday; among them, four vessels entered the strait and three exited. The data showed that no Very Large Crude Carriers (VLCCs) or liquefied natural gas (LNG) carriers passed through this narrow sea lane on Thursday. However, a very large gas carrier transporting propane and butane exited the strait via an Iranian route. (Jin10 Data APP) Spot market snapshot: ► ► ► ► ► ► ► ► ► ► ► ► ► ► ►

SMM Nickel News on August 21: Macro and Market News: (1) The Trump administration announced a new round of the "most severe" economic sanctions on Iran and threatened economic actions against any country that has commercial dealings with Iran. (2) US Treasury Secretary Bessent said he is prepared to further expand the scope of repurchases of debt with higher financing costs, while the Trump administration will introduce a new fiscal measure to address borrowing costs that have reached multi-year highs. Spot Market: On August 21, the average price of SMM #1 refined nickel was 129,600 yuan/mt, down 650 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 1,550 yuan/mt, flat from the previous trading day, and the range for mainstream domestic brands of electrodeposited nickel was -100 to 500 yuan/mt. Futures Market: The most-traded SHFE nickel 2609 contract plunged in the night session and rebounded slightly in the morning session, closing at 128,860 yuan/mt at the end of the morning session, down 0.67%. Currently, the US is expanding the scale of Treasury bond repurchases, which is a positive macro environment for base metals. However, LME and China's inventories maintain an accumulation trend, with visible inventory at historically high levels. In the short term, the price range for the most-traded SHFE nickel contract is 125,000-130,000 yuan/mt.

This week, iron ore prices continued to drift higher, with the most-traded contract I2701 peaking at 721 yuan/mt during the week. The main driver of this rise remained from the news front — the labor negotiation deadlock at BHP's Port Hedland mine sparked concerns over tight supply of medium-grade iron ore. On the fundamentals side, the supply side showed mixed bullish and bearish factors: shipments from ex-China mines rebounded as expected, but due to typhoon weather, port arrivals plunged 37% this week, port inventory edged down, and supply pressure eased temporarily. The demand side showed mild recovery, with hot metal production edging up this week, coupled with improved steel orders in some regions, which drove marginal improvement in spot purchase willingness. Overall demand for iron ore edged up, and trading volume expanded, lending some support to ore prices. Chart: MMI 61% Port Spot Cargo Index Source: SMM This week, domestic iron ore concentrate prices showed mixed performance across regions. By region, prices in Tangshan, Qian'an, and Qianxi in Hebei edged down 1-5 yuan/mt; Chaoyang, Beipiao, and Jianping in western Liaoning were basically stable; east China saw an increase of 5-10 yuan/mt. The 66% grade iron ore concentrate EXW price (dry basis, including tax) in Tangshan closed at 960-965 yuan/mt. Currently, resources at mines and beneficiation plants were generally tight, but steel mills had a strong desire to bargain down prices. Meanwhile, there was still a price spread between imported ore and domestic ore, so steel mills' purchase willingness for domestic iron ore concentrates was not high. Other regions were similar, with most mines and beneficiation plants maintaining normal production as planned. Overall, domestic concentrate prices were in the doldrums this week. Chart: This week, the price spread between imported ore and domestic ore narrowed slightly; it is expected to be stable next week. Outlook for Next Week Imported Ore: Outlook for next week, iron ore prices are expected to move sideways in a narrow range. Fundamentals will be under pressure: ex-China mine shipments will maintain slight growth, and after the typhoon disruption subsides, previously delayed vessels will concentrate arrivals, so port arrivals are expected to rebound sharply. Meanwhile, end-users have not yet entered the peak season, so hot metal production is unlikely to see significant growth. With supply strong and demand weak, ore prices will face downward pressure. In addition, coke prices are expected to increase next week, which may temporarily raise steel mills' cost pressure and curb their purchase willingness for iron ore. However, there are also supporting factors: the risk of worker strikes at BHP's Port Hedland and the unresolved long-term contract negotiations still raise concerns over limited circulation of medium-grade resources. Moreover, as the National Day holiday approaches, trading in USD-denominated forward spot cargoes may improve, lending some support to offshore futures prices. With bullish and bearish factors intertwined, ore prices have support on the downside and pressure on the upside; they are expected to move sideways in a range next week. Domestic ore: Looking ahead to next week, domestic iron ore remains at a cost disadvantage, and under the control of steel mills, the price spread between China's domestic and imported ore is expected to continue narrowing. The willingness to hold prices firm on the supply side has loosened somewhat, and the market is gradually shifting to a buyer-dominated position. On balance, local domestic concentrate prices may be in the doldrums.

World’s First Mass-Produced Amorphous Alloy Electric Drive Launched; Amorphous Alloys Open Window for Replacing New Energy Silicon Steel GAC Aion recently officially launched the 2027 RT model. The new vehicle is equipped with the world’s first mass-produced amorphous alloy electric drive system, comes standard with CATL power batteries across all trims, and is available in four configuration versions. It delivers a maximum CLTC range of 710 km and power consumption as low as 8.571 kWh per 100 km. This three-electric powertrain combination, previously only fitted in high-end models priced above 300,000 yuan, has now expanded to lower market segments, marking that amorphous alloys have officially launched an industry-level challenge to replace new energy non-oriented silicon steel — the mainstream core material for new energy vehicle drive motors. Range and energy consumption have long been core pain points for new energy vehicle consumers. In the past, nearly all domestic new energy traction motors adopted new energy-specific non-oriented silicon steel as the stator core material, with mainstream thin-gauge grades of 0.20–0.35 mm such as B25AV1300 and B30AV1500. The industry has been driving down iron loss by continuously thinning strip steel and optimizing smelting and annealing processes, pushing motor efficiency toward the theoretical ceiling of silicon steel materials. Nevertheless, iron loss and heat generation under high-frequency, high-speed operating conditions remain difficult to fully eliminate, and every 0.5% gain in energy efficiency comes with enormous R&D costs. The amorphous alloy electric drive on the 2027 Aion RT uses a core made of aerospace-derived amorphous alloy strip, commonly known as "hand-tearable steel". With a thickness of only 0.025 mm — one-tenth that of mainstream 0.2–0.35 mm new energy non-oriented silicon steel laminations — and paired with a carbon fiber rotor, it cuts core loss by 75%, achieves a peak motor efficiency of 99%, and raises overall vehicle energy efficiency by one additional kilometer of driving range per kilowatt-hour of electricity. Core Comparison: Amorphous Alloys vs. High-Grade New Energy Non-Oriented Silicon Steel Data source: Compiled from public data In terms of performance, new energy non-oriented silicon steel excels in higher saturation magnetic induction, mature lamination fabrication, and easier scaling of power density, making it the undisputed mainstream for current new energy motors. The greatest strength of amorphous alloys is concentrated in the high-frequency, high-speed operating range of motors: they substantially reduce iron loss and significantly lower motor heat buildup, directly improving real-world high-speed range attainment. However, limited by saturation magnetic flux density and stacking factor, power density is compromised at equal volume, and their processing difficulty is far higher than that of non-oriented silicon steel. Historically, amorphous alloys were widely deployed in the distribution transformer sector. Hampered by technical barriers in the complete set of core cutting, stacking and annealing processes, they have long failed to achieve large-scale mass production for automotive traction motors, remaining largely at the laboratory and prototype stage. GAC Aion’s mass production breakthrough has completed the full industrial chain of amorphous alloy motors from raw materials to finished vehicles. In the short term, however, amorphous alloys will not fully replace non-oriented silicon steel, but will form a technologically complementary relationship: amorphous alloys hold prominent advantages in high-frequency, high-speed scenarios where low energy consumption is prioritized, while high-grade non-oriented silicon steel will retain its dominant position in high-overload, high-power-density applications. The energy efficiency competition for new energy motors has shifted from structural design to rivalry at the fundamental material level. For years the industry has continuously rolled out higher-grade, thinner-gauge non-oriented silicon steel to tap the limits of the silicon steel system; the mass production and vehicle integration of amorphous alloys opens up a second technological route. Looking forward, if production capacity is scaled up and the manufacturing cost of amorphous alloy cores continues to fall, amorphous alloys will gradually bring about partial replacement of thin-gauge new energy non-oriented silicon steel, reshaping the downstream demand structure for non-oriented silicon steel. For the domestic industrial chain, this marks the opening of an entirely new competitive dimension in the soft magnetic materials track, providing a fresh pathway for further breakthroughs in China ’s three-electric (battery, motor, electric control) technology. Data source statement: (Data in this report other than public information are all sourced from public information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, broker reports, National Bureau of Statistics data, customs import and export data, and various data published by major associations and institutions), market communication, and SMM's internal database models, and are produced by the research team through comprehensive analysis and reasonable inference; they are for reference only and do not constitute decision-making advice.) SMM reserves the final right of interpretation of the terms of this statement and the right to adjust and amend the content of the statement according to actual circumstances.

Since last year, influenced by multiple intersecting factors, the price spreads between iron ore varieties have continued to widen, with some grades diverging from market trends and forming independent movements, particularly evident in lump premiums, pellet premiums, and high-grade fines . Specifically: 1.1 Lump Premium: From Historical Lows to a Seven-Year High in a "V-Shaped" Reversal At the beginning of 2026, the iron ore lump premium hit a year-low of $0.04/dmtu, while the price spread between PB lumps and PB fines narrowed to 65 yuan/mt, both at historically extreme lows. This extreme scenario was primarily driven by two overlapping factors: first, the sustained decline in premiums since H2 2024 prompted major mines to proactively reduce lump production; second, steel mill profits remained under pressure, lowering their usage ratio of lumps. The simultaneous contraction in both supply and demand jointly depressed the premium level. However, entering 2026, the market landscape reversed, and the lump premium began a rapid rebound. As of March 9, the US dollar lump premium had rebounded to $0.2/dmtu, up 280% from the year's low; by August 18, the 62.5% grade lump premium further climbed to $0.271/dmtu, surging 442% from the early-year low, forming a sharp "V-shaped" reversal. The price spread between PB lumps and PB fines is the most direct spot indicator for measuring the relative lump premium. Historically, this spread has operated within a range of approximately 80-500 yuan/mt: in H1 2021, when steel mill profits were high, the spread once approached a historical extreme of 500 yuan/mt; in 2025, it pulled back to a range of 70-220 yuan/mt, with a full-year average of around 128 yuan/mt. Entering 2026, port inventory of PB lumps climbed to a multi-year high at the beginning of the year, coupled with poor profitability at steel mills, the Qingdao Port PB lump-PB fines spread once dipped to a historical low of 65 yuan/mt. Thereafter, as steel mills gradually resumed production and hot metal output rebounded, lumps—benefiting from higher cost-effectiveness—saw a significant increase in demand. Meanwhile, adverse weather conditions in Australia during Q1 disrupted shipments, leading to a continuous drawdown in port lump inventory. Both supply and demand factors jointly drove lump premiums higher, and the lump-fines spread continued to widen. As of June 26, the PB lump-PB fines spread had expanded to 171 yuan/mt, up 105 yuan/mt from the year's low, an increase of 159%; by mid-August, the spread remained at a high range above 150 yuan/mt. 1.2 Pellet Premium: Second-Highest Increase, Remaining Strong Similar to the lump premium, the pellet premium has also shown strong performance since H2 2025, with a notably steeper upward slope especially after March 2026, though its increase was slightly less pronounced than that of the lump premium. Based on the low point of $11.64/mt in mid-2025, pellet premiums have continued to rebound driven by structural supply contraction, rising to around $23.8/mt by August, up about 35% from the beginning of the year and 104% from the 2025 low. The core driving force behind this round of premium rise stems from the deep resonance of triple supply shocks and low inventory patterns. On the supply side: ① The Middle East geopolitical conflict has caused the export volume of Middle East pellets to basically stagnate; ② Ukraine's Ferrexpo still operates only one production line, with H1 pellet production down 36% YoY; ③ India's pellet exports to China fell 33% YoY. Meanwhile, on the inventory side, pellet inventory at 47 ports was at the lowest level for the same period in nearly five years (3.78 million mt, down 700,000 mt YoY), providing solid bottom support for the premium center. 1.3 Concentrate Prices: Price Spread Between Domestic and Imported Ore Widens, Domestic Concentrate Remains Firm High-grade concentrate is the third variety with firm price performance, and its strength is mainly reflected in the simultaneous widening of the price spread between domestic and imported ore and the price difference between high and medium-grade ore. The price spread between the SMM domestic ore price index and the imported ore price index continuously expanded from 60 yuan/mt at the beginning of the year to 189 yuan/mt, and currently remains at around 150 yuan/mt; the price spread between Ukrainian concentrate and PB fines also widened from about 80 yuan/mt at the beginning of the year, reaching a maximum of 190 yuan/mt. The core driver of the upward shift in the price center of high-grade concentrate lies in the multiple contractions on the supply side. Specifically: ① Disruption of Middle East concentrate supply. Affected by the Middle East geopolitical conflict, the Strait of Hormuz was closed, and Middle East concentrate exports to China basically stalled. ② Phase tightening of domestic ore supply. After the Shanxi coal mine accident in late May, the national emergency management efforts were tightened, coupled with the nationwide environmental protection checks, some regions with concentrated small private mines (such as Liaoning, Hebei and parts of Shandong) saw significant production suspensions and reductions. In July, heavy rain and strict overloading checks further suppressed domestic ore production. ③ Simultaneous contraction of Ukrainian concentrate supply. In July, the Russia-Ukraine conflict intensified, and shipments of Ukrainian concentrate were also significantly affected. Under the resonance of triple supply shocks, both domestic and imported concentrate supply declined significantly, and port concentrate inventory continued to decrease to low levels, providing strong support for concentrate prices. Outlook for the Next Four Months and Supporting Views 1. High Probability of Peak in Lump Ore and Pellet Premiums, but Resilience Divergence In the short term, port inventories of lump ore and pellets are at low levels for the same period in nearly three years, and the supply side is unlikely to improve significantly in the short term; on the demand side, it is in the transition from off-season to peak season for end-users, and steel mills have expectations of growth in overall iron ore demand. Under the dual support of supply and demand, the premiums for lump ore and pellets still have strong bottom support in the short term. However, both premiums have already climbed to historically high percentiles, significantly weakening their cost-effectiveness. If the fundamentals marginally weaken, further upside room will be constrained. Looking ahead to Q4 , supply side is expected to see marginal growth. Starting from September, mines outside China will enter the push-for-target-at-quarter-end cycle, with shipments expected to rebound significantly. Coupled with the conclusion of annual long-term contract negotiations, lump ore supply is likely to become looser. On the demand side, it faces seasonal pullback pressure. Although there will be phased environmental protection-driven production restrictions in north China in November, end-use demand is also expected to weaken simultaneously, and hot metal production is expected to decline notably. The boost from environmental protection production restrictions to prices is expected to be limited. In summary, lump ore and pellet premiums still have some room to edge up in the short term, but the risk of retreating from highs in Q4 cannot be ignored. 2. Concentrate Prices: Supply Rigidity Persists, Medium and Long-Term Price Spread Under Pressure On the supply side, due to the continued impact of policies such as stricter emergency management, safety and environmental protection inspections, and severe crackdowns on overloading, domestic concentrate production is unlikely to see significant growth in the short term and is expected to remain stable over the next four months. For imported concentrate, the geopolitical conflicts in the Middle East and Russia-Ukraine are unlikely to ease in the short term, keeping imported concentrate supply in a tight pattern. With both domestic and outside China supply constrained, concentrate prices still have bottom support. However, the upside room is limited. On one hand, coke prices are about to increase, squeezing steel mill profits and potentially weakening their purchase willingness for high-grade concentrate under cost control pressure. On the other hand, with the gradual release of high-grade iron ore supply from Simandou, the price spread between domestic and imported ore faces a retreat risk over the medium and long term. In summary, concentrate prices are expected to consolidate on a subdued note at highs in Q4, with the price spread between domestic and imported ore likely to narrow gradually.

NALCO is expanding beyond aluminium production by developing technologies to recover critical minerals and value-added products from industrial waste.