SMM News August 1: Metals markets: Overnight, base metals in the domestic market showed mixed performance. SHFE copper fell 0.18%, gaining 2.9% in July. SHFE aluminum was unchanged at 23,665 yuan/mt, with a July gain of 4.63%. SHFE lead fell 1.41%, SHFE zinc rose 0.64%, and SHFE tin rose 0.72%. SHFE nickel fell 0.24%. In addition, the most-traded alumina futures edged up 0.04%, and the cast aluminum main contract edged up 0.02%. Overnight, most ferrous metals fell. Stainless steel rose 0.17%, iron ore fell 2.85%, rebar fell 0.83%, and hot-rolled coil fell 0.74%. In terms of coking coal and coke: the most-traded coking coal contract fell 1.38%, and the most-traded coke contract fell 1.51%. In the overnight overseas market, LME base metals broadly rose. LME copper edged up 0.03%, with a July gain of 3.16%. LME aluminum rose 0.06%, gaining 2.9% in July. LME lead fell 0.69%. LME zinc rose 0.84%. LME tin rose 0.26%. LME nickel fell 0.35%. Overnight precious metals : COMEX gold fell 1.49%, but posted its second straight weekly gain, up 0.68% for the week, with a July monthly gain of 1.49%; COMEX silver fell 2.1%, with a weekly decline, down 1.92% for the week, and two straight monthly losses, sliding 3.58% in July. Overnight, the most-traded SHFE gold contract rose 0.89%, posting its second straight weekly gain, up 0.55% for the week, with a July monthly gain of 1.52%; the most-traded SHFE silver contract fell 1.01%, but posted two straight weekly gains, up 0.98% for the week, with a July monthly gain of 1.21%. As of 8:16 on August 1, overnight closing prices: Macro front China side: [State Council executive meeting: Study and implement General Secretary Xi Jinping’s important speech on the H1 economic situation and ensuring sound economic work in H2] The meeting stressed that thinking and understanding should be aligned with the Party Central Committee’s scientific assessment of the economic situation, more concrete measures should be taken to promote sustained, innovation-driven, high-quality, and improved economic development, and efforts should be made to achieve a good start to the 15th Five-Year Plan. The efficiency of macro policy implementation must be effectively enhanced, existing policies should be fully and optimally utilized, and pragmatic and effective incremental policies should be timely devised and introduced. Domestic demand must be effectively expanded, with a focus on sectors with great potential and strong driving force to launch a series of robust measures, accelerating the implementation of major projects set in the 15th Five-Year Plan and solidly advancing the planning and construction of the “Six Networks”. Internal growth drivers should be continuously strengthened, with more effective and concrete measures introduced in building a unified national market and improving the business environment. Sustained efforts must be made to prevent and resolve risks in key areas, solidly carry out tasks such as disaster prevention, mitigation and relief, and workplace safety, strengthen assistance to people in need, and firmly uphold the bottom line of people's livelihoods. (CCTV) [Ministry of Industry and Information Technology Conducts Supervision and Inspection at Some Automotive Producers] To further standardize competitive order in the automotive industry and enhance the production consistency and quality and safety level of automotive products, the Equipment Industry Department I of the Ministry of Industry and Information Technology went to Chery Automobile Co., Ltd., NIO Automotive Technology (Anhui) Co., Ltd., and Anhui Jianghuai Automobile Group Co., Ltd. (JAC) from the 30th to the 31st to conduct supervision and inspection on the product safety assurance capabilities and production consistency of road motor vehicle manufacturing enterprises. It is reported that in the next step, the Ministry of Industry and Information Technology will work with relevant departments to deeply carry out actions to enhance production consistency and quality of road motor vehicle products, further strengthen the management of access review and testing verification for "radical" innovative designs of automotive products, urge automobile and motorcycle manufacturers to thoroughly investigate product safety risk hazards, strengthen product testing verification and safety assessment, standardize marketing and publicity practices, safeguard the bottom line of product safety, and effectively protect the legitimate rights and interests of consumers. (Xinhua) [China Securities Regulatory Commission Approves Coke Options Registration] Recently, the China Securities Regulatory Commission approved the registration of coke options on the Dalian Commodity Exchange. The CSRC will urge the Dalian Commodity Exchange to make thorough preparations to ensure the smooth launch and stable operation of coke options. On the US dollar front: Overnight, the US dollar index fell 0.2% to 99.78. On the weekly chart, the US dollar index declined, dropping 1.65% for the week. On the monthly chart, the US dollar index fell, down 1.37% for the month. According to The New York Times, Fed Chairman Warsh is reportedly considering reducing the number of regularly scheduled interest-rate-setting meetings held by the US Fed, a move that could trigger significant shockwaves and would mark the biggest change in how the Fed operates in recent years. Currently, the Fed's 12-member Federal Open Market Committee (FOMC) meets eight times a year to vote on whether to raise, lower, or maintain borrowing costs. According to four people familiar with the matter, Warsh proposed the idea of adjusting the meeting frequency at this week's Fed meeting. The people said that at the meeting this week, Warsh discussed the legal basis the Fed must follow regarding the minimum number of meetings it must hold each year, as well as the timetable for such an adjustment. Warsh asked officials to provide him with their individual views, rather than holding a full discussion on the meeting schedule at this week's meeting. (Jin10 Data APP) Fed Chairman Warsh kept interest rates unchanged this week, but three officials dissented, advocating for an immediate rate hike to address persistent inflation risks. Katharine Neiss, Deputy Head of Global Economics at PGIM Credit, said that Warsh's press conference performance was “weaker than expected” and expected that the US Fed’s “hawkish pivot” would materialize in September, at which point there could be three consecutive rate hikes. Elias Haddad of Brown Brothers Harriman noted: The support for the US dollar from the resilience of US economic activity has been offset by Warsh's failure to translate his tough inflation rhetoric into credible policy action, raising the risk that the US Fed falls behind the curve. According to the CME FedWatch Tool, the market-implied probability of a rate hike in September was 65%, a pullback from 82% a week earlier. (Wall Street CN) Three US Fed policymakers said their dissenting votes in favor of a rate hike this week stemmed from stubborn inflation pressures, indicating that the internal pressure on Fed Chairman Warsh to act is mounting. In statements released Friday morning, Hammack and Kashkari said they were concerned that, although the current round of price increases may have originated from short-term factors such as President Trump's tariff policies and the Iran war, the inflation situation now warrants action by the US Fed. Logan joined them, saying that even if inflation cools somewhat, it is unlikely to fully pull back to the US Fed’s 2% target unless the US Fed raises rates; without any policy restraint, inflation could continue to run above target until an unexpected shock occurs. Kashkari said that if inflation remains stubborn, he could support a series of rate hikes, not just a single increase, to prevent inflation from becoming further entrenched. He said, “A series of small policy adjustments may be preferable to waiting for the situation to develop and ultimately having to take more aggressive action.” Hammack said that if the US Fed does not tighten policy, the pace of price increases could continue to accelerate. She said, “Inflation has been stubbornly above 2% for more than five years, and I am not confident it will pull back to our target on its own.” (Jin10 Data APP) Fed’s Barkin said that whether the interest rate level set by the US Fed is sufficient to curb inflation is an “open question,” and he also said he is uncertain whether he would join the three other regional Fed presidents who voted for a rate hike this week. In an interview on Friday, Barkin said, “I think there is a good case for tightening policy and taking back some of the rate cuts from last year.”He noted that given the slowdown in inflation data in June, "I think one can also argue... there is still time before the next meeting to determine whether the current policy stance is appropriate." Barkin will not be a voting member on interest rate decisions until next year. Furthermore, Barkin was skeptical about whether the labour market has strengthened significantly. He stated, "It does not feel like the labour market is tight." He also pointed out that the transmission of price increases through the economy is uneven, making it difficult to assess how much inflation remains. (Jin10 Data APP) On the macro front: Next week will see the release of China July RatingDog Manufacturing PMI, Switzerland July CPI MoM, France July Manufacturing PMI Final, Germany July Manufacturing PMI Final, Eurozone July Manufacturing PMI Final, UK July Manufacturing PMI Final, US July S&P Global Manufacturing PMI Final, US July ISM Manufacturing PMI, US June Construction Spending MoM, US June Trade Balance, US June JOLTS Job Openings, US June Factory Orders MoM, China July RatingDog Services PMI, France June Industrial Production MoM, France July Services PMI Final, Germany July Services PMI Final, Eurozone July Services PMI Final, UK July Services PMI Final, Eurozone June PPI MoM, US July ADP Employment Change, US July S&P Global Services PMI Final, US July ISM Non-Manufacturing PMI, Switzerland July Seasonally Adjusted Unemployment Rate, Eurozone June Retail Sales MoM, US July Challenger Job Cuts, US Initial Jobless Claims for the week ending August 1, US July Global Supply Chain Pressure Index, US June Wholesale Sales MoM, France Q2 ILO Unemployment Rate, Germany June Seasonally Adjusted Industrial Production MoM, Germany June Seasonally Adjusted Trade Balance, UK July Halifax Seasonally Adjusted House Price Index MoM, France June Trade Balance, Switzerland July Consumer Confidence Index, Canada July Employment Change, US July Unemployment Rate, US July Seasonally Adjusted Nonfarm Payrolls, US July Average Hourly Earnings YoY, US July Average Hourly Earnings MoM, US July NY Fed 1-Year Inflation Expectations, China July Trade Balance in USD terms, China July Foreign Exchange Reserves, China July Trade Balance, China July CPI YoY, China July PPI YoY, and other data. Additionally, attention should be paid next week to: SpaceX releasing its Q2 2026 results; 2028 FOMC voting member and St. Louis Fed President Musalem speaking on the US economy and monetary policy; 2027 FOMC voting member and Richmond Fed President Barkin speaking. Crude oil: Overnight, both oil futures posted sharp gains, with WTI up 3.84% and Brent up 4.79%. On the weekly chart, WTI crude oil futures fell 2.81% over the week, while Brent crude oil futures fell 0.7%. On the monthly chart, WTI crude oil futures surged 24.89% over the month, and Brent crude oil surged 24.8%. The decline in vessel traffic through the Strait of Hormuz heightened market concerns over global crude oil transportation. Uncertainty remains over when crude oil supply from the Middle East will return to normal. The US-Iran ceasefire agreement reached in June completely broke down in early July. From mid-to-late July, the Strait of Hormuz, the world's most critical chokepoint for energy trade, remained severely disrupted, with intermittent blockades at times. Meanwhile, long-range drone strikes by Ukraine on Russian refineries destroyed approximately 30% to 45% of Russia's active refining capacity, pushing European diesel refining margins above $60/barrel and sending global refined product prices near wartime highs. (Wallstreetcn) The international shipping information platform "Marine Traffic" reported on July 31 that vessel transits through the Strait of Hormuz on July 30 dropped to 5 from 22 the previous day, a decline of 77%. Data from the platform showed that all 5 vessels passed through the Strait of Hormuz via the channel on the Iranian side. (Jinshi Data APP) According to CBS News citing multiple sources, the US and Israel are planning one of the most intense bombing campaigns to date against Iranian energy infrastructure, potentially targeting power plants and refineries, with the operation possibly lasting through the weekend. On August 1, Iranian media cited an Iranian official as saying that Iran believes an attack by the US and Israel on Iranian infrastructure would be a "reckless act," and that Iran has formulated a comprehensive plan to respond to "any reckless action by the US." (Jinshi Data APP) According to Iran's Tasnim News Agency, Yemen's Houthi forces stated that in implementing the strategy of "blockade against blockade," 8 Saudi oil tankers have been forced to change course and detour around the Cape of Good Hope after maritime restrictions were imposed on Saudi oil vessels. (Jinshi Data APP) Meanwhile, ICE data showed that for the week ending July 28, Brent crude speculators reduced net long positions by 6,948 lots to 185,083 lots. Diesel speculators increased net long positions by 2,654 lots to 87,194 lots. (Jinshi Data APP) Recommended reading:

In July 2026, the copper scrap market operated amid a backdrop where the most-traded SHFE copper contract shot up from 102,000 yuan/mt to above 106,000 yuan/mt, with a monthly gain exceeding 3,000 yuan/mt. Driven by the combined effect of copper cathode’s sustained one-way rise and copper scrap’s resistance to declines and holding prices firm, the price difference between primary metal and scrap widened from around 2,000 yuan/mt at the start of the month to over 4,000 yuan/mt at month-end, briefly reaching as high as 4,800 yuan/mt mid-month. The inherent resistance of copper scrap to price declines was the defining supply-side characteristic throughout the month. Under the dual constraints of ongoing compliance on reversed invoicing and a deepening high-temperature off-season, the market displayed a starkly polarized landscape: structurally tight supply, vigorous arbitrage-driven procurement downstream, and even weaker physical consumption in the off-season. Although the rise in copper prices and the widening of the price difference stimulated downstream purchase willingness, procurement was dominated by the hedging logic of “buying raw materials and shorting futures,” resulting in extremely limited restocking volumes for actual production. Supply side, the copper scrap market extended the structurally tight pattern seen since 2026, with the underlying constraint remaining the reverse invoicing policy. From July 1, the new "three-stream-in-one reverse invoicing" policy was officially enforced, but regulatory scrutiny intensified in Jiangxi, Hubei, and other regions. In Jiangxi, production came to a halt after quotas were exhausted; in Hubei, retroactive investigations under the reverse invoicing policy sparked enterprise concerns; and in Shuyang, Jiangsu, invoicing quotas remained restricted, keeping compliant and deductible copper scrap that was available in the market persistently tight. After Document No. 770 cleared local illegal tax rebates at the end of 2025, small and mid-sized copper scrap traders reliant on subsidies continued to exit the market, significantly shrinking overall available supply compared to the same period in previous years. Mainstream copper scrap invoice tax rates exceeded 11%, rising to 12% in certain regions, further driving up enterprises' raw material procurement costs. On the import side, China's cumulative copper scrap imports from January to June stood at 1.2415 million mt in physical content, up 8.39% YoY. Although smelting capacity expansions for secondary copper in the US and Europe siphoned off high-grade supply, domestic scrap utilization enterprises, influenced by policy factors, were willing to pay higher premiums to secure overseas secondary copper raw materials. Even with elevated discount rates on overseas secondary copper raw materials, imports of such materials showed little sign of a near-term pullback. However, downstream orders were mediocre due to the traditional consumption off-season, placing some pressure on further import growth. Additionally, June was a period of concentrated maintenance for some smelters, leading to divergent demand for different grades of secondary copper raw materials. Owing to bare bright copper's strong substitution for copper cathode, its procurement demand remained relatively stable, with transaction coefficients staying high. In contrast, No.1 copper and No.2 copper were largely affected by smelter maintenance and a phased slowdown in raw material demand, resulting in slight declines in their transaction coefficients. Overall copper prices consolidated with an upward bias in July, but trade remained sluggish amid relatively weak downstream consumption. The discount of bare bright copper to copper cathode widened from about 500 yuan/mt at the start of the month to roughly 900 yuan/mt. Despite subdued end-use demand, prices of tax-inclusive secondary copper raw materials stayed at relatively high levels against a backdrop of persistently tight domestic invoice supply and limited availability of duty-paid material. From the demand side, the price difference between primary metal and scrap widened to over 3,800 yuan/mt, making the economic benefits of copper scrap evident, and the purchase willingness of secondary copper rod enterprises was notably robust. However, the robust purchase willingness was mainly directed at futures arbitrage rather than physical restocking: during the period when copper prices shot up, secondary copper rod enterprises generally adopted the hedging strategy of "buying copper scrap while shorting futures" to purchase copper scrap. However, these arbitrage-driven purchases did not fully translate into actual production restocking, and the operating rate of secondary copper rod enterprises only edged up from 17.38% at the beginning of the month to 18.29% at month-end. On the smelting side, anode plate producers using copper scrap, constrained by the "reverse invoicing" policy, were forced to purchase large quantities of imported copper scrap to ensure delivery of long-term contracts. However, the growth in imported copper scrap was limited and could not fully meet the demand from downstream processing and smelting, causing some anode plate producers to shut down part of their capacity, and the delivery volume under long-term contracts is expected to decline. The implementation standards of the "reverse invoicing" policy vary by region. Some secondary copper rod enterprises faced insufficient input invoices due to "reverse invoicing" issues, unable to issue sufficient output invoices to downstream end-users, resulting in some payments being temporarily withheld by 13%-15%. Meanwhile, downstream clients of anode plate producers using copper scrap are mostly state-owned enterprises, which must ensure the safety and compliance of output invoices. The safest approach is to purchase imported copper scrap that inherently includes 13% VAT, thereby avoiding the risk of input invoices being reversed due to non-compliant "reverse invoicing." Against the backdrop of the "reverse invoicing" policy and the "rectification of the invoicing economy," the invoice costs for tax-inclusive copper scrap in the market have risen sharply, causing the tax-inclusive price difference between primary metal and scrap to deviate from actual market conditions. Looking ahead to August, if the price difference between primary metal and scrap can stabilize above 4,000 yuan/mt, the implementation criteria for reverse invoicing are further clarified, and credit limits in some regions are marginally relaxed, it may drive the release of some rigid demand. Otherwise, under the combination of low copper cathode inventory, high premiums, and downstream reluctance to buy at high prices, the copper scrap market will continue to maintain a weak equilibrium pattern of "suppliers selling and rod enterprises buying for hedging when copper prices rise, and both sides waiting and seeing when copper prices are high." The genuine recovery of physical consumption still awaits a copper price correction or a substantial improvement in end-user orders.

Since entering Q2 2026, the silicon manganese alloy market has remained under sustained pressure. Prices of upstream raw materials—including manganese ore and coke—have stayed elevated, while downstream steel consumption remains sluggish amid strong price-suppression efforts from mills. The industry is caught in a dual squeeze of “high costs and weak demand,” with losses spreading rapidly from isolated cases to a widespread trend.

July 31, 2026 – The main alumina futures contract closed at 2,621 yuan/ton today, extending its recent weak performance. On the previous trading day (July 30), prices briefly touched an intraday low of 2,617 yuan/ton, plunging 1.37% in a single session and marking a fresh near-term trough. Under the combined bearish pressures of sustained supply expansion, intensifying import competition, and fading speculative sentiment, the alumina market is undergoing a fundamental-driven valuation correction. However, unlike the sharp downturn seen in late 2025, the current significantly higher feedstock costs are building a support floor that may prove difficult to break through decisively. On the supply front, domestic alumina operating capacity remains persistently elevated, with incremental pressure continuing to accumulate. In the Guangxi region, previously idled production lines from maintenance shutdowns are steadily resuming operations, gradually restoring regional supply capacity. Meanwhile, the southern region still faces nearly 3 million tonnes of new capacity slated for release in the coming months, further reinforcing market expectations of a loosening supply landscape. The fading excitement surrounding bauxite supply news has further undermined sentimental support for futures prices. Concerns over Guinean bauxite supply disruptions, which once rattled the market, have gradually receded from the spotlight as time passes. With speculative long positions exiting amid waning media attention, the market has lost its sentiment premium, and prices are reverting to supply-demand fundamentals. Overseas supply continues to weigh heavily on the domestic market. Alumina imports have surged significantly this year, with port inventories climbing to a lofty 940,000 tonnes. The persistent inflow of foreign alumina has not only supplemented domestic availability but also placed sustained downward pressure on spot quotations. Weakening spot prices have formed a negative feedback loop with the futures market, reinforcing the downward price spiral. Nevertheless, despite the layered bearish arguments, current prices are not without defense. Compared with the December 2025 selloff that bottomed at 2,437 yuan/ton, expectations for downside floors differ markedly this time. Back then, Guinean bauxite prices were quoted only around $60/ton, while current prices have climbed to the $70-75/ton range, driving the industry average fully-loaded cost to approximately 2,530 yuan/ton. This materially higher cost base implies that even with deeply bearish fundamentals, a repeat of the free-fall price rout is unlikely to materialize, as cost support effects will strengthen marginally as prices decline. The potential opening of export arbitrage remains one of the few upside catalysts on the horizon. Should overseas alumina prices continue to rise while domestic prices remain subdued, widening the price differential sufficiently to cover export costs, export channels could open periodically, providing a marginal outlet for excess domestic capacity. However, even if such a window materializes, the volumes that can be diverted are unlikely to offset the incremental pressure from new capacity additions in the southern region. Export opportunities are more likely to serve as short-term sentiment-driven rebound catalysts rather than a sufficient condition for a trend reversal. Taken together, alumina prices are expected to trade within a narrow range in the near term, caught between the bearish excess supply narrative and cost support. The core trading range is projected at 2,600-2,650 yuan/ton. Given that market fundamentals are expected to remain loose through August, futures prices could breach the key 2,600 yuan psychological level, though downside potential appears limited by rigid cost support on the mining side.

July 31, 2026 News: As of today, the most-traded alumina futures contract closed at 2,621 yuan/mt, continuing its recent weak trend. The previous day (July 30), prices briefly dipped to 2,617 yuan/mt intraday, with a single-day decline of 1.37%, hitting a new phase low. Under the weight of multiple bearish factors—sustained supply releases, intensifying import pressure, and fading speculative sentiment—the alumina market is undergoing a fundamentally driven valuation correction. However, unlike the deep decline at the end of 2025, the significantly higher ore-side costs are now building a floor that is hard to break through easily. Supply side, China’s operating alumina capacity remains high, and incremental pressure continues to mount. Enterprises in Guangxi that were previously under maintenance are steadily resuming production, with some production lines already restarted, gradually restoring regional supply capability. Meanwhile, south China still has nearly 3 million mt of new capacity planned for release in the coming months, further reinforcing market expectations of a loose supply pattern. The waning heat on the bauxite front further erodes futures sentiment support. Supply disruptions in Guinea that had previously sparked market concerns are gradually fading from view as time passes. After the news heat dissipated, speculative bull funds exited one after another, stripping the futures of sentiment premium as prices returned to supply-demand fundamentals. The impact of overseas resources continues to weigh on the Chinese market. This year, alumina imports have climbed sharply, with port inventories accumulating to a high of 940,000 mt. The continuous inflow of overseas alumina has not only effectively supplemented domestic supply but also exerted persistent downward pressure on spot quotations. The weakening spot price and futures are in a negative feedback loop, reinforcing the downward price spiral. However, despite bears advancing their logic step by step, current prices are not without resistance. Compared to the December 2025 sell-off to 2,437 yuan/mt, the expected bottom in this round of decline is significantly different. At that time, Guinea bauxite was quoted just over $60/mt, whereas ore prices have now jumped to the $70-75/mt range. The industry average full cost has consequently climbed to around 2,530 yuan/mt. This substantial upward shift in the cost center means that even if fundamentals turn fully bearish, a free-fall price collapse is unlikely to recur, and the cost support effect will strengthen marginally as prices decline. The opening of the export window is one of the few potential rebound variables in the current market. If overseas alumina prices continue rising while domestic prices remain low, and the price spread between Chinese and overseas markets widens enough to cover export costs, the export channel may periodically clear, offering a marginal absorption path for domestic surplus capacity. But rationally speaking, even if the export window opens, the total volume it can divert will still be insufficient to cover the incremental pressure from new capacity in south China. The improvement in exports is more of a short-term rebound catalyst at the sentiment repair level, rather than a sufficient condition for a trend reversal. Overall, in the short term, alumina prices will fluctuate narrowly between the surplus logic and cost support. The core price fluctuation range is expected to stay at 2,600-2,650 yuan/mt. Given that fundamentals will remain loose in August, futures prices may fall below the 2,600 yuan/mt mark, but due to the rigid constraint of ore-side costs, the downside room is relatively limited. (The above information is based on market collection and comprehensive assessment by the SMM research team. The information provided is for reference only. This article does not constitute direct investment advice. Clients should make decisions prudently and not replace their own independent judgment with this. Any decisions made by clients are not related to SMM.) Data source: SMM

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:

I. Import & Export Data: Volumes Are Rising According to customs data, China imported 4,400 tonnes of lithium hydroxide in June 2026, up 12% month-on-month and nearly triple year-on-year. Of this, 1,159 tonnes came from South Korea, accounting for 26% of the month's total imports; Chile ranked second with 993 tonnes; while imports from Indonesia remained low, with 774 tonnes arriving in June. On the export front, China exported 6,018 tonnes of lithium hydroxide in June, up 70% month-on-month, driven primarily by quarter-end shipment concentration and a modest recovery in overseas demand. Of this, 5,032 tonnes were exported to South Korea and 679 tonnes to Japan. Since 2026, China has shifted from a net exporter to a net importer of lithium hydroxide. Cumulative data shows that total imports for January–June reached 31,700 tonnes, a nearly threefold increase from the 8,000 tonnes imported during the same period last year, reflecting a certain degree of resilience in domestic demand. The surge in imports is now an established fact. Behind it lie both the cyclical advantage of domestic demand and prices over overseas markets, as well as traders' strategic moves to establish a foothold ahead of potential exchange listings. Yet regardless of the driving factors, a more practical question emerges — with import volumes climbing to record highs, can importers sustain profitability? Below, we assess the profit margins of imported lithium hydroxide through two pathways: direct resale and carbonation processing. II. Profitability of Direct Resale of Imported Lithium Hydroxide The following profit calculations are based on a comparison between the imported CIF cost (including tariffs, VAT, and port & agency fees) and the domestic SMM battery-grade lithium hydroxide spot price. A phased breakdown is provided below. January–May (First Half) : Import profits were generally substantial, with margins reaching as high as RMB 25,000/tonne or more. During this period, domestic lithium hydroxide prices were on an upward trajectory, while overseas demand remained sluggish and price increases lagged noticeably. Coupled with high overseas inventory levels, foreign holders showed a strong willingness to offload amid the elevated domestic prices, offering certain discounts on actual transactions, which allowed domestic buyers to enjoy margins better than theoretical estimates. June–July : Profitability narrowed significantly. By mid-to-late July, even imports from zero-tariff sources such as South Korea and Australia were hovering around the breakeven point. During this phase, domestic lithium hydroxide prices entered a downward channel, while overseas price declines lagged behind in tandem. At the same time, overseas demand picked up modestly, and holders — having largely cleared their earlier inventories — turned more reluctant to release cargoes, with widespread stockpiling behavior. As a result, the price drop overseas did not keep pace with the decline in China, compressing import margins further toward breakeven. It should also be noted that the above margin calculations implicitly rely on a key assumption: that imported lithium hydroxide can clear customs within a short storage timeframe and be sold at the SMM battery-grade lithium hydroxide (coarse particle) spot price. In practice, however, this assumption may not hold across all scenarios. The realities facing traders when importing lithium hydroxide into the Chinese market are twofold. On the one hand, major domestic cathode material manufacturers have long-standing relationships with leading domestic brands, with well-established supplier qualification systems and process parameters — replacing an imported brand requires a lengthy requalification cycle and faces limited downstream acceptance. On the other hand, lithium hydroxide from different source countries varies in particle size distribution, magnetic material content, and impurity profiles, making it not a straightforward "drop-in" substitute. These factors mean that imported lithium hydroxide often struggles to transact directly at domestic hydroxide spot prices in practice. Instead, it must be sold at a discount — either through an outright price reduction or by pricing reference to the main carbonate futures contract. This implies that actual profits are not as generous as the apparent figures would suggest. III. Profitability of Carbonation Processing of Imported Lithium Hydroxide Core assumptions are as follows: imported material is purchased at a 94%–98% discount to the SMM battery-grade lithium hydroxide spot price, and the carbonation process recovery rate is estimated at 95%–98%. Under these conditions, after the imported lithium hydroxide is carbonated into lithium carbonate, profitable opportunities emerge only in isolated months, with overall margins remaining fairly narrow. Summary Import volumes are growing, and for most of the first half of the year profitable import windows were available (notably in March and May). However, from June onward, apparent profits have narrowed rapidly toward the breakeven point. When further factoring in the discount required for direct resale or the margin compression from carbonation processing, the actual profitability of lithium hydroxide imports in recent months becomes even more limited. For importers aiming to sustain profitability in this space going forward, relying on simple price arbitrage will no longer suffice. Instead, competitive advantages must be built through downstream channel partnerships, quality premiums, and exchange rate risk management. Note: The import margin calculations in this report are based on a specific CIF benchmark. Actual transaction prices may vary by source country, brand, and purchase volume, while discount levels and carbonation costs are market-based estimates and are provided for reference purposes only. Data source: SMM & China Customs

As of this Friday, SiMn 6517 (cash) was 5,650-5,700 yuan/mt in north China, flat WoW; in south China, SiMn 6517 (cash) was 5,700-5,750 yuan/mt, unchanged WoW from last Friday; south China SiMn 6014 (cash) was 5,350-5,400 yuan/mt, flat WoW. Recently, SiMn futures moved sideways in a weak trend, market sentiment was heavily cautious, prices fell, and futures prices were basically in sync with spot prices.

July 31 report: North China ports: 46% Australian lumps 40.5-41 yuan/mtu, down WoW; South African semi-carbonate 33.5-34 yuan/mtu, down WoW; Gabonese 38.3-38.7 yuan/mtu, down WoW; South African high-iron 28.8-29.3 yuan/mtu, down WoW; South African medium-iron 36-36.5 yuan/mtu, flat WoW. South China ports: 46% Australian lumps 42.9-43.4 yuan/mtu, flat WoW; South African semi-carbonate 36.5-37 yuan/mtu, down WoW; Gabonese 41.1-41.6 yuan/mtu, up WoW; South African high-iron 31.2-31.7 yuan/mtu, down WoW; South African medium-iron 38-38.5 yuan/mtu, flat WoW. Manganese ore prices continue to grind lower, end-use demand remains weak, and it is common for traders to sell at lower prices.

July 31, 2026 - This week, ferrochrome market trading was stagnant and prices fell; the chrome ore market was sluggish, with limited inquiries......