SMM, July 31 – Sentiment on A-share semiconductor industry chain futures recovered, and the improved industry chain prosperity transmitted upstream, driving a sharp rally in the strategic minor metal sector. As of the close on July 31, the minor metal sector had risen 2.96%. Among individual stocks, Yunnan Tin and Yunnan Germanium both surged over 8%, while Orient Tantalum, Zhongxi Nonferrous, Xiamen Tungsten, Haotong Technology, Western Metal Materials, Zhangyuan Tungsten, Huaxi Nonferrous, and Shenghe Resources led the gains. This round of minor metal strength was driven by the resonance of multiple industrial dynamics. On one hand, the semiconductor and AI computing track regained heat, with expectations for demand expansion in high-speed optical modules, AI servers, and other fields improving. Germanium and tantalum, as core raw materials for semiconductor optoelectronic devices and high-end tantalum capacitors, are seeing steadily strengthened demand support from downstream emerging industries. On the other hand, germanium and tantalum are strategic dispersed metals with concentrated global supply. Coupled with overseas geopolitical disruptions and expectations of supply tightening from domestic resource controls, while the ongoing localisation of related high-end semiconductor materials continued to advance, this further boosted market allocation sentiment and pushed the sector higher. News [Yunnan Germanium: Subsidiary Signs Major Indium Phosphide Wafer Supply Order Worth RMB 570–855 Million, H1 Net Profit Expected to Increase YoY] Yunnan Germanium announced on July 24 that its controlled subsidiary Yunnan Xinyao recently signed a supply agreement with a client for the sale of indium phosphide wafers (substrates). The total estimated contract value ranges from RMB 570.08 million to RMB 855.12 million (tax inclusive), accounting for 53.48% to 80.23% of the company’s audited revenue for 2025. The contract term runs from August 1, 2026, to December 31, 2027. Regarding the contract’s impact on the listed company, Yunnan Germanium stated that if the contract is fulfilled smoothly, it is expected to have a positive impact on the company’s operating results for the performance years. The specific amount and reporting periods affected will depend on the actual performance of the contract and will be based on the company’s audited revenue. [Orient Tantalum: Domestic Demand for High-Value-Added Products Such as Superalloys and Semiconductor Tantalum Targets Is Gradually Rising] Orient Tantalum stated during an institutional survey on July 23 that, with the continuous development of China’s high-tech and new infrastructure sectors, domestic demand for high-value-added products such as superalloys, semiconductor tantalum targets, and high-purity niobium materials is gradually rising. In recent years, the company has vigorously promoted technical transformation and capacity expansion projects, organized production rationally, and gradually released new capacity. Under the guidance of the strategy for autonomous and controllable industry chains, the localisation substitution process has evolved from breakthroughs in individual products to systematic solutions, laying a solid foundation for the growth of tantalum, niobium, and their alloy products. [Yunnan Tin: Expects H1 2026 Net Profit of 1.47–1.57 Billion Yuan, Up 38.43%–47.85% YoY] Yunnan Tin disclosed an earnings forecast on the evening of July 14, expecting attributable net profit in H1 2026 to be 1.47 billion to 1.57 billion yuan, up 38.43%–47.85% YoY; and recurring net profit is expected to be 1.88 billion to 1.98 billion yuan, up 44.23%–51.91% YoY. Spot Market Tin Overnight, some US chip stocks rebounded, and the Philadelphia Semiconductor Index surged, boosting the performance of tin, known as the “computing metal.” SHFE tin opened higher on July 31, lifting spot prices. In the tin spot market: On July 31, the average price of SMM 1# tin was 425,850 yuan/mt, up 1.51% from the previous trading day. As tin prices rose, spot market trading was sluggish. Fundamentals: (1) Supply: Tight ore and ingot supply, low inventory, amplifying elasticity. Myanmar’s rainy season extends through end-August, with mine flooding and logistics disruptions; Wa State’s June tin ore output was only 6,392 mt in physical content. China’s tin ore imports in July are expected to be basically flat MoM. The slow pace of production resumptions in Wa State has been priced in ahead of time, with no major shutdowns in the near term, but supply contraction expectations during the rainy season have yet to fully materialize. Indonesia’s tin ingot imports in July are expected to show some recovery MoM. (2) Demand: Improved solder operating rates, but acceptance of high prices needs to be tested. The operating rate at solder enterprises was 78.8% in June, up 4.6 percentage points from May; however, after the sharp spot price rally on July 30, downstream users were cautious and stayed on the sidelines, and whether high-priced spot cargoes can be absorbed still requires verification. Stockpiling for new Apple/Huawei models in late August is the next demand trigger point. Institutional Views A research report from Minmetals Securities points out: Germanium accounts for 60% of applications in optical communication and satellite PV fields, making it a metal for “AI computing power + space energy.” With its excellent refractive index tuning capability and radiation resistance, germanium has become a key material for AI data center optical interconnects and low-earth-orbit satellite PV systems. Looking at changes in demand structure, from 2020 to 2026, downstream germanium consumption grew from 160 mt to 240 mt, with optical communication’s share rising to 40% and satellite PV’s share to 20%, together accounting for 60% of total downstream demand. It expects that 90% of the demand growth in 2027 will come from two high-growth sectors: AI hardware and satellite PV. A research report from Caitong Securities shows: As AI computing power demand explodes, the market size of indium phosphide, used as a chip substrate material, will continue to expand. Indium resources are scarce and subject to policy restrictions, and product prices are entering an uptrend. High-purity red phosphorus is a very important semiconductor base material, with high purification technology barriers. Against the backdrop of accelerated AI application deployment driving related infrastructure construction, the indium phosphide substrate industry chain is expected to see dual opportunities from demand growth and domestic substitution. It is recommended to focus on enterprises with resource and technological advantages in the links of indium phosphide, indium, and high-purity red phosphorus. A research report from Datong Securities shows that minor metals have staged an independent rally, with tightened supply combined with strategic attributes leading to a value revaluation. The rare earth sector is preemptively pricing in new regulatory controls, with Myanmar ore imports disrupted, tight spot supply of Pr-Nd oxide driving prices sharply higher; tungsten and antimony ore grades are declining along with environmental protection-driven production restrictions, widening the supply gap, while PV and hard alloy demand remains firm during the off-season, and inventories are at low levels. AI computing power and communications sectors are boosting demand for gallium and germanium, and coupled with export control policies, concentrated stockpiling outside China is widening the price spread between Chinese and overseas markets. Scarce resources are resonating with financial attributes, and the sector continues to be favoured by capital. Recommended Reads:

​​​​​​​Falling nickel benchmarks, a fragmented overseas supply base and a Malaysian enforcement crackdown lift India's stainless scrap imports 11.4% while pushing the average import price down 6.6% in the 12 months to February 2026

In July, China’s EV battery cell output rose about 10% MoM, with LFP technology continuing to serve as the primary driver of growth. Demand side, new car models kept increasing vehicle battery capacity, while accelerating commercial vehicle electrification jointly lifted power battery cell demand. Among these, LFP power batteries, leveraging cost advantages and safety, saw further penetration rate gains in both passenger and commercial vehicle segments, becoming a key force in the overall output expansion. Notably, expectations of the formal battery consumption tax taking effect in early September had a certain pull-forward effect on production schedules for July–August. Some battery companies and automakers stepped up stockpiling ahead of the policy window to reduce subsequent tax costs. Against this backdrop, August power battery cell production schedules are expected to maintain a robust growth rate of around 8% MoM for both LFP and ternary power battery cells, supported by peak-season stockpiling and the “consumption tax rush.” Looking ahead, as the “installation rush” effect gradually fades, the pace of power battery cell production scheduling in September is expected to slow, with MoM growth possibly retreating to the 5%–6% range. In the longer term, once the consumption tax policy is implemented, all segments of the battery industry chain will face a new round of cost pass-through and price competition, and enterprises’ production planning strategies will shift from “policy-driven” to “demand-driven,” with the market poised to enter a new rebalancing phase.

Tata Steel's June-quarter results showed stronger realised prices and a richer product mix helped offset lower steel volumes, highlighting the growing role of value-added products and downstream integration in supporting margins beyond benchmark HRC prices.

SMM July 31 Today at 11:30, the futures closing price was 105,660 yuan/mt, up 620 yuan/mt from the previous trading day, and the average spot premium was 260 yuan/mt, down 5 yuan/mt MoM from the previous trading day. Today, copper scrap prices rose 200 yuan/mt MoM. The sales sentiment index for copper scrap rose to 2.48, and the procurement sentiment index fell to 1.98. The price spread between copper cathode and copper scrap was 4,523 yuan/mt, up 391 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod was 1,440 yuan/mt. According to the SMM survey, copper prices moved higher at the end of the week. Copper scrap suppliers sold into strength, but constrained by the Jiangsu region, the policy ceased to be implemented. Secondary copper rod enterprises suspended production to observe the situation, causing market demand for tax-exclusive copper scrap to decline further, while tax-inclusive supply continued to remain tight. In certain regions, for copper scrap with 13% VAT, the invoice tax rate has risen to 11-12%.

Sentiment in China’s battery-grade manganese sulfate market has gradually returned to rationality, as the flood-related factors that previously lifted prices in Guangxi continue to ease.In early July, continuous heavy rainfall and floods hit major production areas in Guangxi. Rising river levels and disrupted logistics forced multiple manganese sulfate producers to suspend operations for safety inspections and equipment maintenance, triggering a temporary shrinkage of available spot supply.

[Scrap Aluminum and Secondary Aluminum Weekly Review: Cost-Driven Price Strengthening, High-Temperature Holiday Drags Demand, ADC12 Gains Constrained] This week, ADC12 market prices first stabilized and then rose. SMM ADC12 prices held steady at 24,000 yuan/mt early in the week, were raised for two consecutive days mid-week driven by costs, and stood at 24,200 yuan/mt as of Thursday, up 200 yuan/mt from last Thursday. The cost side remained the core driver of this week's price increase.

Iron ore prices drifted lower this week, with the most-traded contract I2609 leading the decline in ferrous metals, hitting an intraday low of 706 yuan/mt , a new year-to-date low. This round of decline was driven by multiple factors: on one hand, policy expectations from the Politburo meeting fell through , causing market sentiment to weaken markedly, and speculative funds accelerated their exit; on the other hand, fundamental pressure continued to intensify —last week, port arrivals of iron ore surged 54% WoW, while in the Tangshan area, stricter environmental protection-driven production restrictions led to a roughly 20% reduction in hot metal output at some steel mills, with daily average hot metal production falling 16,000 mt, clearly shrinking demand and significantly accumulating port inventories. Under the combined weight of weak fundamentals and bearish sentiment , the most-traded contract posted a maximum intraday decline of over 3%. Compared to the drastic correction in futures, port spot cargoes showed relative resilience , with a markedly narrower decline. Particularly noteworthy is that some ore types with structurally tight supply , such as mixed fines and Ukrainian concentrates, saw relatively small price declines due to limited tradeable resources, demonstrating some grade premium resilience. Chart: MMI 61% Port Spot Price Index Source: SMM Domestic iron ore concentrates prices edged down this week. From a regional perspective, prices in areas such as Tangshan, Qian'an, and Qianxi in Hebei were relatively stable; those in Chaoyang, Beipiao, Jianping, etc. in western Liaoning fell by 1-5 yuan/mt; while east China saw declines of 10-15 yuan/mt. In the Tangshan area, the domestic ore market was generally stable this week, with the delivered price, tax included, of 66% grade iron ore concentrates on a dry basis closing at 980–985 yuan/mt. Local iron ore concentrates supply remained relatively tight, providing some support to ore prices; steel mills, affected by environmental protection-driven production restrictions, saw weak daily consumption demand and mostly maintained inventory destocking strategies, with supply-demand bargaining persisting in the market. Although an accident occurred at a major mine in east China, its impact on local production was limited, and mining and selecting operations in other areas mostly proceeded normally as planned. Demand side, hot metal output at steel mills declined due to production restrictions, weakening support for iron ore concentrates. Overall, domestic concentrates prices showed a slight downward trend this week. Chart: Larger Decline in Imported Ore Widened Domestic-Imported Ore Price Spread Outlook for next week Imported ore: Looking ahead to next week, environmental protection-driven production restrictions in the Tangshan area are gradually being lifted, and blast furnaces at steel mills are resuming production one after another. Meanwhile, coke prices continued to decline, improving steel mill profitability somewhat, and hot metal output is expected to extend its modest rebound in the near term, providing some support to iron ore demand. However, global iron ore shipments simultaneously rebounded, with a more pronounced increase. Supply-side pressure was significantly greater than demand pressure. Under a loose supply-demand balance, port inventories are expected to continue accumulating, thus capping the upside room for ore prices. Cost side, affected by the escalating US-Iran conflict, rising crude oil prices drove a slight rebound in ocean freight rates, providing some cost support for iron ore prices. Additionally, market pessimism was somewhat released this week, and ore prices dropped more than expected, creating a need for a technical rebound in the short term. But considering overall weak end-use demand, it is hard to provide sustained upward momentum. Ore prices next week are expected to consolidate and stage a corrective rebound, with limited upside room. Domestic Ore: Looking ahead to next week, some ore dressing plants in parts of North China are expected to resume production, and overall iron ore concentrate output may rebound slightly. However, the tight supply situation is unlikely to improve significantly; demand side, hot metal production of steel mill blast furnaces is expected to see a small increase. Overall, domestic concentrate prices may inch up slightly.

This week, the industry chain exhibited a diverging pattern, with upstream raw material and cobalt salt prices weakening while midstream and downstream material prices remained relatively stable. Trading in refined cobalt, intermediate products, cobalt sulphate, cobalt chloride, Co3O4, and cobalt powder was generally sluggish. Downstream buyers mostly maintained just-in-time procurement, as off-season demand was insufficient, and inventory pressure along with low-priced supply continued to weigh on market prices. Although some miners and smelters, supported by high-cost inventory, still intended to hold prices firm, traders and recycling companies became more active in selling, and the decline in the cost of refined cobalt reverse dissolution further strengthened market expectations of pushing for lower prices. In the short term, related product prices still face downward pressure. Ternary cathode precursor, ternary cathode material, and LCO prices remained stable overall. Leading ternary cathode precursor companies performed well in export orders, and domestic production schedules recovered somewhat, but small and medium-sized enterprises were still affected by the off-season. Demand for ternary cathode materials from the EV sector stayed at a high level; some battery cell enterprises stockpiled in advance, and August orders are expected to be stable with slight growth. Consumer-side demand remained mediocre. Affected by sluggish end-use demand and substitution by ternary cathode materials, LCO production and sales remained low, further narrowing enterprises' profit margins. Subsequent market recovery will still depend on the restocking pace in mid-to-late August and the release of demand during the September-October peak season.

[SMM Cobalt Lithium Morning Meeting Summary: Raw Material Price Divergence Intensifies; Energy Storage Demand Supports Continued Industry Prosperity] This week, the relevant material markets continued to diverge in performance. Upstream ore prices stopped falling and rebounded, but high-price transactions remained constrained. Some ex-China capacities gradually recovered, and market attention shifted from supply disruptions to the pace of new capacity releases. Salt products were supported by maintenance outages, tightening circulation of spot orders, and low inventories, leading to somewhat active spot transactions. However, downstream players still mainly made just-in-time procurement on price dips, and concentrated stockpiling has yet to emerge. The cobalt industry chain remained under pressure overall, with the price centers of refined cobalt, intermediate products, cobalt salts, and cobalt powder shifting downward. Off-season demand, inventory pressure, and low-priced cargoes continued to weigh on the market. Nickel sulphate inventories declined, and cost support strengthened somewhat. Prices of ternary cathode precursors and ternary cathode materials generally remained stable. The LFP, electrolyte, and sodium-ion battery sectors performed relatively strongly, with demand from energy storage, commercial vehicles, and Q3 stockpiling driving production schedules higher. Inventories of some products continued to decline. The anode and separator markets were generally stable. Different raw material varieties in the recycling sector showed divergent performance. The overall industry chain remained in a phase of concurrent demand improvement and cost pass-through.