SMM July 31 News: Today, Guangdong #1 copper cathode spot prices against the front-month contract: high-quality copper was reported at 120 yuan/mt, down 30 yuan/mt from the previous trading day; standard-quality copper was quoted at a premium of 40 yuan/mt, down 40 yuan/mt from the previous trading day; SX-EW copper was quoted at a discount of 20 yuan/mt, down 40 yuan/mt from the previous trading day. The average price of Guangdong #1 copper cathode was 105,790 yuan/mt, up 335 yuan/mt from the previous trading day, and the average price of SX-EW copper was 105,690 yuan/mt, up 330 yuan/mt from the previous trading day. Spot market: Guangdong inventory fell for three consecutive days, with reduced arrivals being the main cause. Although inventory kept declining, this was more due to reduced supply. Recently, downstream consumption was weak, especially near month-end when many enterprises saw production cuts. Suppliers had to slash prices to sell, causing premiums to pull back significantly. Today, the purchasing sentiment for copper cathode in Guangdong was 2.41, down 0.09 from the previous trading day, and the selling sentiment was 2.90, down 0.06 (historical data can be checked by logging into the database). Overall, weak downstream consumption at month-end forced suppliers to sell at lower prices, leading to a notable decline in spot premiums.

Today, distributed 210 prices were pulled back from high levels, as Q3 distributed demand began to decline and large-format module demand pulled back somewhat. With orders decreasing, the 720W module in the market started to see localized price concessions in shipments. In addition, technological efficiency improvements also contributed to the decline in module prices. Mainstream 210 power slowly rose to 725-735W, and enterprises with existing 715-720W inventory began to moderately lower prices to sell, leading to a price drop.

SMM, July 31: Sentiment in the A-share semiconductor industry chain futures market recovered, as improving industry chain fundamentals transmitted upward, driving a strong rally in the upstream strategic minor metal sector. As of around 10:15 on July 31, the minor metal sector index had risen 4.54%. Among individual stocks, Dongfang Tantalum and Yunnan Germanium hit their daily limit up, while Yunnan Tin, Xiamen Tungsten, China Rare Earth Nonferrous, China Tungsten High-Tech, Zhangyuan Tungsten, Xianglu Tungsten, and Dongfang Zirconium were among the top gainers. The rally in the minor metal sector was driven by the resonance of multiple industry dynamics. On one hand, demand for semiconductors and AI computing recovered, and expansion expectations for high-speed optical modules and AI servers improved. Germanium and tantalum, as core raw materials for semiconductor optoelectronic devices and high-end tantalum capacitors, saw continued strengthening of downstream demand from emerging industries. On the other hand, germanium and tantalum are strategic dispersed metals with concentrated global supply. Supply tightening expectations arose from geopolitical uncertainties outside China and domestic resource controls. Meanwhile, the ongoing localisation of high-end semiconductor materials further boosted market allocation sentiment, lifting the sector's performance. News [Yunnan Germanium: subsidiary signs major indium phosphide wafer supply contract worth 570 million to 855 million yuan; H1 net profit expected to rise YoY] Yunnan Germanium announced on July 24 that its controlling subsidiary Yunnan Xinyao recently signed a supply agreement with a client to sell indium phosphide wafers (substrates). The total contract value is estimated at between 570.08 million yuan and 855.12 million yuan (tax inclusive), representing 53.48% to 80.23% of the company's audited operating revenue in 2025. The contract will be performed from August 1, 2026, to December 31, 2027. Regarding the impact on the listed company, Yunnan Germanium stated: If the contract is successfully executed, it is expected to have a positive impact on the company's operating results for the performance years. The specific impact and the reporting periods affected will depend on the actual fulfillment of the contract and will be subject to the revenue confirmed by the company's audit. [Dongfang Tantalum: domestic demand for high value-added products such as superalloys and semiconductor tantalum targets is gradually rising] Dongfang Tantalum stated during an institutional survey on July 23 that with the sustained 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 been fully advancing the technological upgrading and capacity expansion of its production lines, rationally organizing production, and gradually releasing new capacity. Guided by the strategy of achieving self-reliance in the industry chain, the localisation substitution process has evolved from individual product breakthroughs to systematic solutions, providing 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 have entered an upward channel. 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 (InP) substrate industry chain is expected to see dual opportunities from demand growth and domestic substitution. It is suggested to pay attention to enterprises with resource and technological advantages in the indium phosphide, indium, and high-purity red phosphorus segments. A research report from Da Tong Securities shows that minor metals have embarked on an independent upward trend, with tightening supply combined with strategic attributes leading to a revaluation of value. The rare earth sector has been speculating in advance on new regulation controls, Myanmar ore imports have been disrupted, spot Pr-Nd oxide supply is tight and prices have surged; declining ore grades at tungsten and antimony mines, coupled with environmental protection-driven production restrictions, have widened the supply deficit, while PV and cemented carbide demand remains robust even in the off-season, with inventories at low levels. AI computing power and the communications industry are boosting demand for gallium and germanium, and together with export control policies, concentrated overseas stockpiling has widened the price spread between Chinese and overseas markets. The resonance of scarce resources and financial attributes has kept the sector attracting capital interest. 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The operating rate of China's major copper cathode rod enterprises this week (Jul 24 - Jul 30) was 60.07%, down 2.49 percentage points WoW, up 2.49 percentage points from expectations, and down 11.66 percentage points YoY. Copper prices fluctuated at highs, coupled with the industry entering the traditional consumption off-season, downstream demand was generally weak, end-user rigid demand was insufficient, new orders growth for copper cathode rod enterprises was limited, and production continued to shrink. Downstream wire and cable and enamelled wire industries were also under pressure. Off-season sentiment combined with high copper prices suppressed purchase willingness, orders continued to shrink, further weighing on the operating load of copper cathode rods. Inventory side, earlier market raw material purchasing sentiment was weak, enterprise raw material inventories remained low for a long period; this week, some enterprises conducted restocking to meet rigid demand, raw material inventory up 1.77 percentage points WoW; but downstream willingness to pick up goods showed no improvement, persistently weak demand led to finished product inventory up 1.59 percentage points WoW. Looking ahead to next week (Jul 31 - Aug 6), enterprises that underwent maintenance earlier will gradually resume production, but some other enterprises will start production cuts, overall operating rate movement is limited. SMM expects the operating rate of copper cathode rod enterprises next week to fall 0.35 percentage points WoW to 59.72%.

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.

Overall, upstream producers support prices amid losses with rising factory inventories, midstream traders destock continuously , while downstream purchasers insist on low-price procurement. The multi-dimensional market game has weakened overall trading liquidity. Costs form a solid bottom support for spot prices, while high factory inventories and sluggish off-season demand cap upward price momentum. Sustained market downturns may trigger further active production cuts on the supply side.

[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.

[SMM Aluminum Downstream Analysis: July Aluminum Processing PMI at 42.2%, All Segments Enter Contraction Territory; End-Use Demand Weakens, Export Divergence Hinders Near-Term Recovery] In July, the aluminum processing industry exhibited a pattern of broad-based off-season weakness across all segments with structural divergence. Only the new energy sector demonstrated demand resilience, while domestic demand in other sectors contracted broadly and significantly. Export performance was uneven, with aluminum wire and cable exports plummeting and dragging down the industry. Combined with raw material constraints, high-temperature production restrictions, and disturbances from price spread recovery, overall industry activity remains deeply mired in contraction territory, and near-term recovery momentum is insufficient.

According to data from the National Bureau of Statistics (NBS), China's PMI for July 2026 I. China's Manufacturing PMI In July, the Manufacturing PMI was 49.2%, down 1.1 percentage points MoM, with the level of prosperity pulling back. By enterprise size, the PMIs for large, medium, and small enterprises were 49.5%, 49.7%, and 47.4%, respectively, down 1.2, 0.8, and 0.8 percentage points MoM, all below the threshold. Examining the sub-indices that constitute the Manufacturing PMI, all five—the Production Index, New Orders Index, Raw Material Inventory Index, Employment Index, and Supplier Delivery Time Index—were below the threshold. The Production Index was 49.9%, down 1.5 percentage points MoM, indicating a slowdown in manufacturing production activity. The New Orders Index was 48.5%, down 2.7 percentage points MoM, indicating a pullback in manufacturing market demand. The Raw Material Inventory Index was 48.3%, down 0.1 percentage points MoM, indicating that the inventory of major raw materials in manufacturing continued to decrease. The Employment Index was 49.0%, up 0.5 percentage points MoM, indicating a slight rebound in the employment climate of manufacturing enterprises. The Supplier Delivery Time Index was 49.5%, down 0.4 percentage points MoM, indicating that the delivery times for raw material suppliers to manufacturers lengthened compared to the previous month. II. China's Non-Manufacturing PMI In July, the Non-Manufacturing Business Activity Index was 49.0%, down 1.2 percentage points MoM, with the non-manufacturing sector's level of prosperity falling from the previous month. By industry, the Business Activity Index for the construction sector was 47.0%, down 2.0 percentage points MoM; that for the service sector was 49.3%, down 1.1 percentage points MoM. Within the service sector, the Business Activity Indices for postal services, telecommunications, broadcasting, television and satellite transmission services, as well as culture, sports, and entertainment, were all in a relatively high prosperity range above 55.0%; while those for capital market services and real estate were below the threshold. The New Orders Index was 44.4%, down 3.6 percentage points MoM, indicating a pullback in the prosperity level of non-manufacturing market demand. By industry, the New Orders Index for the construction sector was 40.1%, down 6.2 percentage points MoM; that for the service sector was 45.2%, down 3.2 percentage points MoM. The Input Price Index was 49.7%, unchanged MoM and still below the threshold, indicating that the overall level of input prices used by non-manufacturing enterprises in their operating activities continued to fall. By industry, the Input Price Index for the construction sector was 48.7%, down 1.7 percentage points MoM; that for the service sector was 49.9%, up 0.3 percentage points MoM. The Selling Price Index was 47.9%, down 0.5 percentage points MoM, indicating that the overall decline in selling prices for non-manufacturing enterprises expanded somewhat. By industry, the Selling Price Index for the construction sector was 47.7%, down 2.1 percentage points MoM; that for the service sector was 47.9%, down 0.3 percentage points MoM. The Employment Index was 45.4%, down 0.4 percentage points MoM, indicating a pullback in the employment climate of non-manufacturing enterprises. By industry, the Employment Index for the construction sector was 40.9%, down 1.4 percentage points MoM; that for the service sector was 46.2%, down 0.2 percentage points MoM. The Business Activity Expectations Index was 55.4%, up 0.1 percentage points MoM, indicating that non-manufacturing enterprises' confidence in market development strengthened. By industry, the Business Activity Expectations Index for the construction sector was 51.8%, up 0.7 percentage points MoM; that for the service sector was 56.0%, unchanged from the previous month. III. China's Composite PMI Output Index In July, the Composite PMI Output Index was 49.3%, down 1.3 percentage points MoM, indicating that the production and business activities of Chinese enterprises slowed down from the previous month. III. China's Composite PMI Output Index In June, the Composite PMI Output Index was 50.6%, up 0.1 percentage points MoM, indicating that the overall expansion of Chinese enterprises' production and business activities slightly accelerated. China's PMI Pulls Back in July —NBS Service Sector Survey Center Chief Statistician Huo Lihui Interprets China's PMI for July 2026 On July 31, 2026, the NBS Service Sector Survey Center and the China Federation of Logistics and Purchasing released China's PMI. Chief Statistician Huo Lihui from the NBS Service Sector Survey Center provided an interpretation. In July, the Manufacturing PMI, Non-Manufacturing Business Activity Index, and Composite PMI Output Index were 49.2%, 49.0%, and 49.3%, respectively, down 1.1, 1.2, and 1.3 percentage points MoM, with the overall level of prosperity pulling back from the previous month. I. Manufacturing PMI Pulls Back, While High-Tech Manufacturing Continues to Expand In July, influenced by factors such as a high base from the earlier rapid growth in manufacturing and some manufacturing sectors entering their traditional off-season, the Manufacturing PMI fell to 49.2%. (1) The equipment manufacturing and high-tech manufacturing sectors continued to play a supportive and leading role. The PMIs for equipment manufacturing and high-tech manufacturing were 51.4% and 53.3%, respectively, significantly higher than the overall manufacturing average, maintaining relatively rapid expansion and driving the sector toward new and high-quality development. The PMIs for the consumer goods and high energy-consuming industries were 47.8% and 47.0%, respectively, down 2.4 and 0.1 percentage points MoM, with their levels of prosperity pulling back. (2) Production and demand grew rapidly in some equipment manufacturing industries. The Manufacturing Production Index and New Orders Index were 49.9% and 48.5%, respectively, down 1.5 and 2.7 percentage points MoM, indicating that both production and market demand among manufacturing enterprises pulled back. By industry, the Production and New Orders Indices for general-purpose equipment and computer, communication, and electronic equipment were both above 53.0%, indicating high market activity and rapid growth in both production and demand. Indices for industries such as non-metallic mineral products, ferrous metal smelting and rolling processing, and automobiles were below the threshold, indicating weak supply-demand momentum. (3) Price indices continued to fall. The Major Raw Material Purchase Price Index and EXW Price Index were 53.2% and 47.8%, respectively. Affected by recent fluctuations in some commodity prices and other factors, these indices have fallen for four consecutive months. Among these, both price indices for the non-ferrous metal smelting and rolling processing industry were below 45.0%. Due to significant price level fluctuations, enterprise purchase willingness weakened, and the Procurement Volume Index fell to 49.4% this month. (4) Market expectations remained stable. The Manufacturing Production and Business Activity Expectations Index was 54.1%, with enterprises generally remaining optimistic about market development. By industry, the Expectations Indices for the food, beverage, and refined tea, and railway, shipbuilding, aerospace, and other equipment sectors rose above 60.0%, as related enterprises showed increased confidence in near-term industry development. II. Non-Manufacturing Business Activity Index Declines, While the Cultural and Tourism Sector Is Relatively Active In July, the Non-Manufacturing Business Activity Index was 49.0%, down 1.2 percentage points MoM, with the level of prosperity in the non-manufacturing sector pulling back from the previous month. (1) The cultural and tourism sector's prosperity rebounded. The Service Sector Business Activity Index was 49.3%, down 1.1 percentage points MoM, with market activity in the service sector pulling back. By industry, driven by summer consumption, residents' leisure, entertainment, and travel activities increased, leading to a clear MoM rebound in the Business Activity Indices for air transportation, accommodation, culture, sports, and entertainment. The total business volume of related enterprises grew rapidly. The indices for wholesale trade and monetary and financial services declined significantly, representing the main unfavourable factors behind the pullback in service sector prosperity this month. Indices for capital market services and real estate were below the threshold. The Service Sector Business Activity Expectations Index was 56.0%, unchanged from the previous month, with enterprises' confidence in near-term market development remaining relatively stable. (2) The construction sector's level of prosperity declined. Affected by unfavourable factors such as recent high temperatures, heavy rains, flooding, and other natural disasters in some regions, the construction progress slowed down, and the Business Activity Index was 47.0%, down 2.0 percentage points MoM. The Construction Business Activity Expectations Index was 51.8%, up 0.7 percentage points MoM, indicating that enterprises' confidence in near-term industry development strengthened somewhat. III. Composite PMI Output Index Below the Threshold In July, the Composite PMI Output Index was 49.3%, down 1.3 percentage points MoM, with the production and business activities of Chinese enterprises slowing down from the previous month. The Manufacturing Production Index and Non-Manufacturing Business Activity Index, which constitute the Composite PMI Output Index, were 49.9% and 49.0%, respectively.

This week (July 25–July 30), the SMM copper wire and cable enterprise operating rate recorded 65.94%, down 1.24 percentage points WoW and 1.4 percentage points YoY. During the week, copper prices pulled back in stages but remained in a high range. Downstream enterprises maintained a cautious purchasing sentiment, with market transactions largely supported by rigid demand, and growth in new orders was limited. Inventory side, wire and cable enterprises remained on the sidelines regarding raw material procurement, only restocking for rigid demand on slight pullbacks, with raw material inventory down 0.47% WoW. Facing weak demand in the off-season, wire and cable enterprises slowed their production pace and prioritized digesting existing finished product inventories, with finished product inventories down 1.48% WoW. Looking ahead to next week, the industry remains in the traditional consumption off-season. Coupled with further copper price increases suppressing downstream order signing willingness, enterprises are expected to continue reducing production loads. SMM expects the copper wire and cable operating rate next week (July 31–August 6) to decline by 1.5 percentage points WoW to 64.44%, and also down 1.5 percentage points YoY.