In July, the sodium-ion battery materials market sustained strong momentum, with both cathode and anode segments showing clear signs of “robust demand, strained capacity.” Orders from downstream battery cell manufacturers continued to surge, particularly as the penetration rate of the polyanion route in energy storage applications accelerated, pushing upstream material enterprises to near-full-capacity operations.

Since July, demand across the LFP industry chain has continued to rise, but the supply-side response has lagged. The most notable feature of the current market is that supply tightness is rapidly transmitting from downstream to upstream, creating a cascading inversion of "battery cell production schedule > LFP cathode production schedule > iron phosphate production schedule."

[SMM Analysis] The demand along the LFP industry chain continues to rise, but the response from the supply side is significantly lagging. The most notable feature of the current market is that supply tightness is rapidly transmitting from the bottom up, forming a cascading inversion of "battery cell production schedule > LFP cathode production schedule > iron phosphate production schedule," with the slow release of LFP capacity and the iron phosphate industry segment having become the most prominent bottleneck in the entire chain.

[SMM Molybdenum Analysis: Supply-side supported a strong molybdenum market in July; supply-demand support logic persists in August] SMM July 31 report: In July, China’s molybdenum market maintained a pattern of strong concentrates and weak ferro-molybdenum, with the overall market consolidating at highs. Industry chain profits continued to concentrate upstream. In July, China’s molybdenum concentrates market faced many supply disruptions in China and overseas. Coupled with downstream ferro-molybdenum steel tender volumes strengthening both YoY and MoM, and robust demand, these bullish supply-demand fundamentals drove prices of molybdenum concentrates and ferro-molybdenum to repeatedly hit three-year highs, challenging previous highs.

Outokumpu reported Q2 2026 sales revenue up 6.5% YoY to €1.58 billion, with adjusted EBITDA rising 33.3% to €100 million, driven by improved European performance and continued strong Americas results. The company posted a net profit of €25 million, reversing a net loss of €19 million in Q2 2025. Stainless steel deliveries rose 5% QoQ and 1% YoY to 488,000mt, while ferrochrome deliveries increased 4% QoQ and 12.9% YoY to 114,000mt on robust demand for low-emission European ferrochrome. For H1 2026, sales revenue edged up 0.8% YoY to €3.03 billion, adjusted EBITDA grew 32.3% to €164 million, and net profit reached €18 million versus a net loss of €37 million in H1 2025. Under its EVOLVE strategy, Outokumpu will launch a €30 million first-phase investment at its Avesta plant in Sweden to expand into high-nickel alloys, with total investment estimated at €150 million. For Q3, stainless steel deliveries are expected to decline up to 10% QoQ due to seasonal factors, with adjusted EBITDA forecast to remain broadly stable.

The first half of 2026 is already in the past. At the start of H2, industry chain enterprises have begun to release their H1 2026 performance forecasts collectively. Notably, against the backdrop of a significantly higher YoY lithium price center, stable demand in the NEV industry, and a continuously booming energy storage sector, most enterprises in the lithium industry chain expect varying degrees of performance improvement. SMM has compiled the performance forecast situations of some enterprises in the industry chain, as follows:

According to the latest customs data, China exported a total of 6.7066 million mt of galvanized steel sheet during January–June 2026, down 3.13% YoY, while imports totaled 327,500 mt, a 14.78% YoY decline. Overall, although exports softened compared with the same period last year, the decline remained relatively limited, demonstrating the resilience of China's galvanized steel sheet exports.

[SMM Analysis: June Aluminum Plate/Sheet, Strip Exports Hit New Monthly High for the Year; Transfer Order Recall and Potential Pullback Pressure in H2] In June 2026, China's exports of aluminum plate/sheet and strip reached 354,000 mt, up 10.6% MoM, setting a new monthly high for H1 2026. In H1, total exports amounted to 1.7891 million mt. By destination, Mexico topped the list with 45,300 mt, surging 46.4% MoM; US exports pulled back 29.2% MoM to 26,100 mt. By exporting province, Henan and Shandong together accounted for over 43%, continuing to lead the nation. In terms of product mix, exports of 0.2-0.28 mm aluminum alloy sheet (mainly can stock) reached 153,700 mt, accounting for 43.5%, continuing to dominate the export market. Notably, the production line of a leading North American rolling mill began to resume in June, and transfer orders have been gradually recalled. The high export activity driven by the order transfer effect in H1 is expected to face significant pullback pressure in H2.

Latest data released by the China Association of Automobile Manufacturers (CAAM) shows that China’s fuel cell vehicle (FCV) market posted a distinct pattern of “strong start followed by a steep decline, with both supply and demand contracting” in the first half of 2026. After a rush of deliveries at the end of 2025, production and sales volumes slumped sharply in H1, sending the industry into a phase of profound adjustment. Beneath the disappointing headline figures, however, this cooling-off period marks a pivotal turning point for the sector to deflate speculative bubbles and solidify its fundamentals. I. H1 Production & Sales Data: Multiple Signals Behind the Sharp Downturn Plunging Overall Volumes: A Grim Market Reality Production: Cumulative output from January to June 2026 stood at only 401 units, averaging fewer than 70 units per month, representing a precipitous 71.8% year-on-year drop from H1 2025 — nearly a three-quarters decline. Sales: Total sales reached 550 units, falling 63.5% year-on-year. The once sky-high growth trajectory has stalled abruptly, with market sentiment cooling markedly. Monthly Volatility: Wildly Contrasting Market Dynamics Rock-bottom start in January: Production and sales hit a trough, weighed down by the Spring Festival holiday and widespread market wait-and-see sentiment. Anomalous rebound in February: Sales surged to 300 units, nearly four times the month’s production. This surge was likely driven by concentrated deliveries of backlogged orders carried over from late 2025 or bulk purchases by major regional corporate clients, creating a false impression of robust demand. Prolonged slump from March to June: Both production and sales retreated to sub-100-unit monthly ranges. June saw output hold steady at 100 units, while sales dwindled to merely 50 units, building up mounting inventory pressure. Year-on-Year Disparity: Double Headwinds of High Comparative Base and Policy Void The late half of 2025, particularly Q4, saw monthly production and sales exceed 3,000 units at peak frenzy, creating an inflated comparative base for 2026. Compounding this headwind, subsidy incentives have been phased down, while detailed implementation rules for the new round of demonstration city cluster evaluations remain unclarified. Manufacturers have adopted conservative production schedules, and end-users have held off purchases pending new supportive policies, locking the market in a policy-driven stalemate. II. Industry Growing Pains: Concentration of Structural Bottlenecks Misalignment between Policy Cycles and Local Fiscal Timelines The fuel cell vehicle sector remains heavily reliant on policy financial support. The year-end rush to claim subsidies in 2025 drained short-term demand. In 2026, local governments have slowed the disbursement of subsidy funds. Manufacturers hesitate to ramp up production, while buyers delay purchases in anticipation of updated policy frameworks, trapping the market in a standoff. Lagging Hydrogen Refueling Infrastructure Restricts Overall Expansion Vehicle technologies have matured considerably, yet the rollout of hydrogen refueling stations has failed to keep pace with market demand. The February sales spike was largely confined to designated demonstration cities, creating isolated hotspots. Regions outside these pilot zones face limited refueling access, stifling wider adoption and fragmenting the national market geographically. Seasonal and One-off Distortions The Spring Festival holiday suppressed manufacturing output in January and February, yet February’s counterintuitive sales surge underscores that short-term market performance is dominated by irregular factors such as ad-hoc bulk corporate orders. The subsequent months’ return to subdued volumes reveals a lack of sustained organic market demand. Cost and Operational Economic Viability Crunch Slower-than-expected cost reductions for fuel cell systems, paired with volatile hydrogen fuel prices, weigh heavily on commercial fleet operators highly sensitive to running costs. Weak economic returns have dampened corporate purchasing appetite and constrained demand growth. III. H2 2026 Outlook: The Downturn Nears Its End, Recovery on the Horizon Based on weak H1 performance and historical market patterns, the second half is projected to follow a trajectory of “muted early months followed by mild recovery” Q3: A lull phase focused on inventory destocking and policy waiting: Monthly production and sales are expected to hover between 100 and 200 units, as manufacturers hold back output pending formal policy rollouts or new demonstration project launches. Q4: Restorative rebound amid traditional peak season and policy windows: While volumes will unlikely match the late 2025 monthly peak of 3,000 units, monthly output and sales are highly likely to recover to a range of 500–1,000 units, reigniting industry growth momentum. SMM’s analysis concludes that the bleak H1 2026 data represents an inevitable rationalization phase for the industry to move past speculative overheating. Once speculative bubbles are squeezed out, genuine competitiveness will be rooted in technological upgrades, expanded hydrogen infrastructure and optimized real-world commercial deployment. In H2, as supportive policy frameworks take shape and infrastructure gaps narrow, the market is set to stabilize by late Q3, with tangible recovery emerging in the fourth quarter.

[SMM Lithium Battery] Hunan Yuneng stated that since March 2026, affected by multiple factors including global geopolitical fluctuations and supply chain circulation disruptions, core raw material prices for LFP such as sulphur, phosphoric acid, and ferrous sulphate have continued to rise. Iron phosphate prices have surged from about 10,000 yuan/mt at the start of the year to 15,000 yuan/mt, an increase of over 50%.