SMM News Release, July 3 Domestic molybdenum market saw a trend of correction at the start of June, rally in mid-month and narrow high-level fluctuations at month-end, with mainstream products posting modest gains throughout the month.

This week, the domestic iron ore concentrates market weakened slightly with regional divergence. Prices in Tangshan, Qian’an, and Qianxi of Hebei were basically stable; western Liaoning’s Chaoyang, Beipiao, and Jianping areas pulled back slightly by 5-10 yuan/mt; east China pulled back 10-15 yuan/mt. Looking ahead to next week, China’s iron ore supply tightness is expected to be hard to ease. Demand side, according to SMM tracking data, hot metal production of steel mill blast furnaces may pull back slightly, weakening support for iron ore concentrates. Steel mills’ desire to bargain down prices will remain dominant. The tug-of-war between sellers and buyers persists. Next week, the domestic iron ore market is expected to be in the doldrums overall. [SMM Steel]

Iron ore prices followed an initial rise and subsequent decline this week, with the price center shifting further lower. The core drivers were that after the ninth round of coke price cuts was implemented, steel mill losses widened further. Combined with expectations of environmental protection-driven production restrictions in some regions, blast furnace maintenance plans increased, hot metal production continued to pull back, and the demand side was clearly under pressure. In terms of supply, global iron ore shipments and China’s port arrivals both increased MoM, with supply-side pressure intensifying somewhat and further weighing on ore prices. During the week, market talk that benchmark negotiations might restrict low-grade ore port cargo pick-up pushed futures to a short-term rebound. However, the market broadly viewed the probability of this measure actually being implemented as low, and after sentiment was released, price logic returned to a demand-led mode. Affected by this, spot prices performed weaker than futures. In port spot cargoes, the weekly average of the MMI 61% index slipped 5 yuan/mt MoM. Chart: MMI 61% Port Spot Index Source: SMM The domestic iron ore concentrate market edged lower this week, with regional divergence in performance. Prices remained basically stable in Tangshan, Qian’an, and Qianxi in Hebei. Areas such as Chaoyang, Beipiao, and Jianping in western Liaoning edged down by 5-10 yuan/mt. East China saw a pullback of 10-15 yuan/mt. Overall domestic ore production remained steady, but the resource landscape diverged by region. Supply in Hebei remained somewhat tight; within this, the Chengde area saw a further contraction in resource supply due to a mining accident, which provided some support to local iron ore concentrate prices. On the demand side, hot metal production at steel mill blast furnaces remained at a high level, still offering support to iron ore concentrate demand. However, steel mill profits have narrowed significantly recently, and the overall desire to bargain down prices is strong, causing local iron ore concentrate prices to edge down slightly. Chart: Tight Domestic Ore Supply Supports Prices — Domestic vs. Imported Ore Price Spread to Widen Further Next Week Outlook for Next Week Looking ahead to next week, the probability of the 10th round of coke price increases being implemented is relatively high. Increasing steel mill maintenance resulting from losses will lead to a larger decline in hot metal production. Iron ore demand will continue to deteriorate. Meanwhile, mines will push shipments in June, and imported ore port arrivals still have upside room over the next two weeks, leading to a slight accumulation in port inventories. In addition, a new round of talks between the US and Iran is scheduled for mid-month, and crude oil prices still face downside expectations, so iron ore shipping costs will remain weak. Iron ore prices will remain under pressure. However, considering the disturbance from benchmark negotiation news, there may be opportunities for a price rebound. Overall, iron ore prices are expected to remain in the doldrums next week. Domestically, the tight iron ore supply situation is expected to be difficult to alleviate. But given that demand for iron ore concentrates has weakened somewhat, steel mills’ push for lower prices will continue to dominate. The game between sellers and buyers continues. Overall, the domestic iron ore market is expected to be in the doldrums next week, but the decline may be smaller than that for imported ore.

China's Sulphuric Acid Market Regional Divergence Intensifies, Index Continues to Strengthen [SMM Sulphuric Acid Weekly Review]

[SMM Magnesium Weekly Review: Entire Magnesium Industry Chain Weakens; Supply-Demand Weakness Keeps Market Under Pressure] This week, China's magnesium industry chain was in the doldrums across the board. Dolomite prices in Wutai, Shanxi, remained flat. Regional supply tightened, but national supply was ample, and only just-in-time procurement was insufficient to drive prices higher. Fugu and Shenmu 9990 magnesium ingot mainstream prices were 15,750-15,850 yuan/mt, down 200 yuan on the week. High in-factory inventory prompted producers to sell at lower margins, while downstream buyers stayed on the sidelines, making only small restocking purchases, resulting in slow destocking. The average FOB price of magnesium ingot at Tianjin port was $2,275/mt. Overseas demand was sluggish due to the summer break, foreign buyers pushed for lower prices, and new orders were scarce. Falling raw material prices dragged down magnesium powder and magnesium alloy prices. Small and medium-sized magnesium alloy plants cut production, but earlier stockpiles were ample. Two-wheeler demand weakened, putting processing fees under pressure. Both upstream and downstream demand softened simultaneously, and cost support was insufficient. In the short term, the entire magnesium product range is expected to remain in the doldrums.

In the short term, high raw material prices provide solid cost support for aluminum fluoride, but bearish constraints from weak downstream fluorine chemicals and the decline in long-term hydrofluoric acid contracts are also in play. Amid the tug-of-war, aluminum fluoride prices in July have little room for significant rise or fall, and the market will continue to consolidate at highs within a range.

As of Thursday, June 25, social copper inventories in major regions of China increased by 11,700 mt WoW to 206,000 mt, while regional inventory trends diverged significantly. Copper price pullbacks have spurred a recovery in downstream purchasing demand, and coupled with ongoing adjustments in the market's supply-demand pattern, inventory performance varied across regions. By region, inventory trends in China's key copper consumption areas showed pronounced divergence. In Shanghai and Jiangsu, the two core markets, inventories pulled back in tandem, signaling a notable recovery in demand. Recently, domestic copper prices fell sharply, with lower prices effectively stimulating downstream enterprises' restocking willingness. In Shanghai, buoyed by favorable prices, downstream purchasing activity increased significantly, continuously drawing down spot inventories; meanwhile, combined with relatively low regional arrivals in the prior period, the market maintained a destocking pattern. Jiangsu's market situation was largely in line with Shanghai's—falling copper prices prompted end-users to concentrate on pricing and purchasing, with rigid-demand orders released intensively, effectively driving steady destocking of regional inventories and markedly improving spot market liquidity. In stark contrast to Shanghai and Jiangsu, inventories in Guangdong continued to climb, becoming the main drag on the national inventory increase. According to market analysis, as the year entered the mid-year phase, consumption by downstream copper semis enterprises in Guangdong gradually slowed, end-user order growth pulled back, and overall willingness to purchase remained weak. Meanwhile, domestic smelters accelerated their shipment pace, concentrating deliveries into Guangdong warehouses, driving a significant increase in regional arrivals. Under the dual impact of weakening downstream consumption and concentrated inflows of upstream supply, copper inventories in Guangdong continued to accumulate. Looking ahead, China's copper market will see structural adjustments on both supply and demand sides in the short term, with a destocking trend essentially in place. On the supply side, the domestic copper cathode market has recently seen somewhat looser supply, with port arrivals of imported cathode steadily rising. Meanwhile, domestic smelters have maintained steady production and shipment pace, with domestic supply arrivals continuing to increase, resulting in ample overall spot supply. The outlook for demand improvement is more definitive. After this round of sharp copper price declines, downstream enterprises' cost pressure has eased significantly. Coupled with previously accumulated orders on hand awaiting execution, market stockpiling sentiment continues to recover, and end-user restocking demand for rigid needs is set to be released intensively, continuously consuming spot cargo circulating in the market. Overall, the current domestic copper spot market is characterized by a favorable pattern of "ample supply and recovering demand," with downstream restocking momentum sufficient to offset pressure from short-term new supply. SMM expects that next week, national copper social inventories will shift to a destocking pace, and overall inventories are likely to pull back steadily. Going forward, the market should closely monitor the magnitude of copper price fluctuations, the sustainability of downstream purchasing intensity, and the pace of imported supply arrivals.

[SMM Silicon-Based PV Morning Meeting Summary] Silicon metal: SMM oxygen-blown #553 silicon in east China was at 9,100-9,200 yuan/mt yesterday, and #441 silicon was at 9,300-9,400 yuan/mt. The most-traded futures contract hovered around 8,500 yuan/mt. Silicon metal prices continued to move sideways in a narrow range. In recent days, the market has seen no new news disruptions, leading to a stalemate in price changes. Increasing supply put prices under pressure in the short term. Wafer: Market prices for 18X wafers were 0.86-0.9 yuan/piece, 210RN wafers were 0.96-1.00 yuan/piece, and 210N wafers were 1.16-1.2 yuan/piece. Smaller factories have already begun to see transactions at lower prices. 18X wafers are under the most severe pressure, and the high end of the overall price range is trending further downward.

This week, the copper scrap market operated under the interweaving influences of fluctuating copper prices, the approaching Dragon Boat Festival holiday, and ongoing compliance inspections on "reverse invoicing," presenting structural characteristics of "regional divergence in supply, essential demand-driven procurement, and transactions driven by invoices rather than prices

[SMM Magnesium Weekly Inventory Brief] This week, social inventories decreased by 3.00% month-on-month, showing a regional divergence. In major production areas, inventory reduction was more pronounced due to the progress of long-term contract deliveries and production cuts by some manufacturers. Meanwhile, Tianjin Port experienced slight inventory accumulation as low-priced resources stimulated traders' stockpiling. Overall, the inventory reduction in production areas provided some bottom support for magnesium prices, but the port inventory accumulation reflects persistent export difficulties, with short-term supply-demand imbalances still awaiting resolution.