[SMM Morning Meeting Minutes: SHFE tin swung wildly throughout the week at 394,000-411,000 yuan/mt; amid a supply-demand stalemate, it is expected to continue consolidating at highs.]

SMM Jun 12 News: Metal markets: Overnight, domestic base metals broadly rose. SHFE copper rose 0.13%. SHFE aluminum rose 0.62%, SHFE lead fell 0.74%, SHFE tin rose 1.91%. SHFE zinc fell 0.19%. SHFE nickel rose 0.25%. In addition, the most-traded alumina futures contract rose 1.18%, and the most-traded cast aluminum contract rose 0.04%. Overnight, ferrous metals showed mixed performance. Iron ore closed flat at 766.5 yuan/mt, hot-rolled coil (HRC) flat at 3,365 yuan/mt, stainless steel rose 1.91%, and rebar fell 0.33%. Coking coal and coke: The most-traded coking coal futures contract fell 0.33%, while the most-traded coke futures contract rose 0.35%. Overnight overseas market: LME base metals nearly all rose. LME copper rose 0.94%. LME aluminum rose 0.87%, LME lead fell 0.25%. LME zinc rose 1.64%. LME tin rose 2.01%. LME nickel rose 0.37%. Overnight precious metals : Overnight COMEX gold rose 2.43%, COMEX silver rose 4.25%. Overnight the most-traded SHFE gold contract rose 0.75%, and the most-traded SHFE silver contract rose 2.41%. As of 7:15 on Jun 12, overnight closing prices: Macro front China: [SAMR Approves Release of a Batch of Important National Standards] Recently, the State Administration for Market Regulation (Standardization Administration of China) approved the release of 389 important national standards, covering high-tech, traditional industries, environmental protection, agricultural production, and people's livelihoods. After publication, these standards will play a vital role in promoting high-quality industrial development, improving people's quality of life, and safeguarding life and property. In the high-tech sector, 33 national standards were released for artificial intelligence, cybersecurity, blockchain, etc., clarifying technical and safety specifications. Six national standards were released for industrial internet and industrial digital twins, promoting smart manufacturing upgrades. Fifteen national standards were released for spacecraft grounding requirements, manned spacecraft markings and usage requirements, and general requirements for parachute systems of civil light and small rotary-wing drones, laying a solid foundation for the large-scale application of China's aerospace equipment. (SAMR) [SHFE: Adjusting Price Limit and Margin Requirements for Gold and Silver Futures Contracts] SHFE announced that for the gold AU2609 contract, the price limit is 17%, the hedging position margin rate is 18%, and the speculative position margin rate is 19%; for the silver AG2706 contract, the price limit is 17%, the hedging position margin rate is 18%, and the speculative position margin rate is 19%. [GFEX: Matters Regarding Polysilicon Futures PS2706 Contract and Lithium Carbonate Futures LC2706 Contract] GFEX announced that for the polysilicon futures PS2706 contract, the trading fee rate is 0.025% of the transaction value, the intraday closing fee rate is 0.025% of the transaction value; the minimum order size per trade is 5 lots for opening and 1 lot for closing; non-futures company members or clients are limited to a maximum daily opening volume of 200 lots. For the lithium carbonate futures LC2706 contract, the trading fee rate is 0.032% of the transaction value, the intraday closing fee rate is 0.032% of the transaction value; the minimum order size per trade is 5 lots for opening and 1 lot for closing; non-futures company members or clients are limited to a maximum daily opening volume of 400 lots. [DCE: Trading Schedule for 2026 Dragon Boat Festival Holiday] DCE announced that the market will be closed from Jun 19 (Friday) to Jun 21 (Sunday) and resume trading on Jun 22 (Monday). There will be no night session on the evening of Jun 18 (Thursday). On Jun 22 (Monday), the call auction for all contracts will take place from 08:55 to 09:00. Night session trading will resume on the evening of Jun 22 (Monday). US dollar: Overnight, the US dollar index fell 0.35% to 99.69. Market expectations for US Fed interest rate hikes were pushed back from December this year to January next year, with markets no longer fully pricing in a rate hike this year. (Jin10 Data APP) According to CME "Fed Watch": The probability that the US Fed will keep rates unchanged through June is 98.5%, and the probability of a cumulative 25bp rate cut is 1.5%. For the meeting through July, the probability that the Fed will keep rates unchanged is 91.3%, the probability of a cumulative 25bp rate hike is 7.4%, and the probability of a cumulative 25bp rate cut is 1.4%. Data released by the US Bureau of Labor Statistics on Thursday showed that the producer price index (PPI) rose 6.5% YoY in May, the largest increase since November 2022 and above the expected 6.4%; it rose 1.1% MoM, also exceeding the market forecast of 0.7%. The data echoed the consumer price index (CPI) released earlier, which also recorded the fastest pace in three years. The combination of these two inflation figures is expected to further cement market expectations that the US Fed will begin raising rates in 2026. With momentum rebuilding in the labor market, taming inflation has become the Fed's top priority for now. (From Wallstreetcn APP) Last week, US initial jobless claims increased slightly, indicating that the labor market retained resilience in early June. The US Department of Labor said on Thursday that in the week ending June 6, initial claims for unemployment benefits rose by 4,000 to a seasonally adjusted 229,000, above market expectations. Claims typically rise at the start of summer, as some states allow non-teaching staff to file for unemployment benefits during long school holidays. However, the government's model for stripping out seasonal fluctuations may not fully capture these changes. Last week, the government reported that the economy added jobs for the third straight month in May. The unemployment rate held at 4.3% for the third consecutive month. Some of the strength in job growth may be due to fewer layoffs. (Jin10 Data APP) Other currencies: [ECB Becomes First Major Central Bank to Raise Rates Since Inflation Reemerged] The European Central Bank raised interest rates for the first time in nearly three years, making it the first major central bank in the developed world to respond to inflation triggered by the Iran war. The bank lifted its main rate from 2% to 2.25%, a move widely expected but also highlighting the challenges faced by major economies due to rising energy prices resulting from the prolonged closure of the Strait of Hormuz. Investors widely expect the ECB to raise rates at least once more this year. The decision also made the ECB the first major central bank to tighten monetary policy in response to rising energy prices, which have pushed eurozone inflation above 3%. The US Fed, under Chair Warsh, is expected to hold rates steady next week as Warsh faces a dilemma between Trump's demand for low rates and mounting inflationary pressure; the Bank of England is also expected to keep rates unchanged next week. (Zhitong Finance) Data: Today will see the release of Germany's final May CPI MoM, the UK's April three-month GDP MoM, UK April manufacturing output MoM, UK April seasonally adjusted goods trade balance, UK April industrial output MoM, France's final May CPI MoM, US June one-year ahead inflation expectations preliminary, and US June University of Michigan consumer sentiment preliminary, among others. Also of note: the Huawei Developer Conference will be held from Jun 12-14; Elon Musk's commercial space company SpaceX is scheduled to list on the Nasdaq on Jun 12, 2026. Crude oil: Overnight, both oil futures fell, with WTI crude down 4.01% and Brent crude down 4.26%. Oil prices tumbled after Trump signaled that the US and Iran are about to reach a peace deal. OPEC's monthly report showed that OPEC lowered its forecast for 2026 global oil demand growth to 970,000 bpd (previously expected at 1.17 million bpd). It raised its 2027 global oil demand growth forecast to 1.73 million bpd (previously 1.54 million bpd). OPEC+ (including former member UAE) crude oil production averaged 33.13 million bpd in May 2026, down 190,000 bpd from April, mainly due to lower Iranian output. (From Wallstreetcn APP) Additionally, CME Group announced that, pending regulatory review, it will offer 24/7 (around the clock) trading for new, smaller crude oil and gold contracts. The new crude oil contract will be one-tenth the size of CME's existing micro WTI crude oil futures contract and will launch on August 30. Around-the-clock trading for the company's existing 1-ounce gold futures contract will begin on July 26. Derek Sammann, Global Head of Commodity Markets at CME Group, said: "In the face of geopolitical uncertainty, offering appropriately sized, regulated products available 24/7 enables traders to manage risk whenever news breaks." (Jin10 Data APP)

\LME aluminium prices have retreated steadily from their late-May peak, falling from nearly $3,680 per metric ton to around $3,480 per metric ton. More notably, the LME aluminium Cash-3M spread narrowed sharply over just one week, dropping from a cash premium of $104.56 per metric ton on June 1 to $15.17 per metric ton on June 9, a loss of nearly $90 per metric ton. This marks the steepest contraction in the backwardation structure since the outbreak of the Middle East conflict.

SMM June 8 News: On the metals market front: Overnight last Friday, base metals across domestic and overseas markets fell broadly. In the domestic market, SHFE tin led the decline with a drop of 5.27%, while LME tin fell 4.92%. LME copper dropped 2.78%. LME aluminum, LME zinc, and SHFE copper all fell over 1%, with LME aluminum down 1.84%, LME zinc down 1.52%, and SHFE copper down 1.84%. Declines for the remaining metals were all within 1%. The alumina main contract rose 0.65%, while the cast aluminum main contract fell 0.61%. Overnight last Friday, ferrous metals generally rose. Only stainless steel fell, with a decline of 0.14%, while the remaining metals all increased. HRC and rebar saw gains of around 0.4%, with HRC up 0.47% and rebar up 0.44%. For coking coal and coke, coking coal rose 1.73%, and coke rose 0.15%. In the precious metals market, overnight last Friday, COMEX gold fell 3.35%, recording a weekly decline of 5.21%. COMEX silver plunged 8.08%, with a weekly decline of 10.39%, marking its fourth consecutive weekly drop. Domestically, SHFE gold fell 2.93%, with a weekly decline of 0.66%. SHFE silver fell 7.43%, with a weekly decline of 3.72%. The US achieved another strong month of job growth in May, raising concerns about a potential interest rate hike later this year. As of 8:27 on June 6, the closing market data from overnight last Friday: Macro Front [Foreign Ministry Introduces Arrangements for General Secretary Xi Jinping’s Visit to North Korea] At the invitation of Kim Jong Un, State Affairs Commission Chairman of the Democratic People's Republic of Korea, Xi Jinping, General Secretary of the Central Committee of the Communist Party of China and President of the People’s Republic of China, will pay a state visit to the Democratic People’s Republic of Korea from June 8 to 9. Foreign Ministry Spokesperson Mao Ning stated during a regular press conference on the 5th that this visit marks General Secretary Xi Jinping’s first state visit to North Korea in seven years. During the visit, the top leaders of the two Parties and two countries will exchange views on bilateral relations and issues of common concern. In recent years, under the strategic guidance of General Secretary Xi Jinping and General Secretary Kim Jong Un, the traditional friendly and cooperative relationship between China and the DPRK has maintained sustained, healthy, and stable development, bringing tangible benefits to both countries and their peoples. This year marks the 65th anniversary of the signing of the Treaty of Friendship, Cooperation and Mutual Assistance Between the People’s Republic of China and the Democratic People’s Republic of Korea. The two sides will take this visit as an opportunity to push for greater progress in China-DPRK relations that keeps pace with the times, enhance the well-being of both peoples, and make greater contributions to peace, stability, development, and prosperity in the region and the world. (Xinhua News Agency) Domestic front: On June 5, Premier Li Qiang presided over a State Council executive meeting. The meeting pointed out the need to further strengthen forward-looking layout and increase promotion efforts based on the characteristics of future industries, to firmly grasp the initiative in development. It is necessary to solidify the technological foundation, continuously increase investment in basic research, and systematically deploy breakthroughs in original and disruptive technologies. Ecological construction must be emphasized, promoting the deep integration of industry, academia, research, and application, encouraging close cooperation between upstream and downstream segments of the industry chain, and fostering more startups and unicorn enterprises in key tracks. [Ministry of Housing and Urban-Rural Development Seeks Public Comments on the Regulations on the Administration of Housing Provident Fund (Revised Draft for Comments)] The Ministry of Housing and Urban-Rural Development issued a notice to solicit public comments on the Regulations on the Administration of Housing Provident Fund (Revised Draft for Comments). Under any of the following circumstances, an employee may withdraw the balance stored in their housing provident fund account: (1) Paying rent; (2) Purchasing, constructing, renovating, or overhauling a self-occupied dwelling; (3) Repaying the principal and interest of a housing purchase loan; (4) Decorating a self-occupied dwelling, up to a certain limit; (5) Paying property management fees for a self-occupied dwelling; (6) Retiring or leaving their post; (7) Completely losing the ability to work and terminating the labor (personnel) relationship with their employer; (8) Emigrating and settling abroad; (9) Other housing consumption circumstances approved by the State Council. (Wall Street CN) The Ministry of Transport and ten other departments issued the Three-Year Action Plan for Promoting High-Quality Development of Small and Mini Passenger Vehicle Rental (2026–2028). The plan proposes accelerating the construction of electric vehicle charging facilities in expressway service areas, with 30,000 EV charging facilities (charging guns) of 60 kW power or above to be newly built or renovated in expressway service areas (including parking areas) by year-end 2028. The plan proposes accelerating the construction of electric vehicle charging facilities in expressway service areas, with 30,000 EV charging facilities (charging guns) of 60 kW power or above to be newly built or renovated in expressway service areas (including parking areas) by year-end 2028. US Dollar front: As of overnight closing last Friday, the US dollar index rose 0.62% to 100.07. Previously released data showed strong US employment data for May. The US Bureau of Labor Statistics disclosed that non-farm payrolls added 172,000 jobs in May. Employment data for the previous two months were revised upwards, and job gains over the last three months marked the best performance in more than two years. The unemployment rate held steady at 4.3%, with labour market resilience significantly exceeding overall market forecasts. Nick Timiraos, the Fed mouthpiece, noted that the re-acceleration of spring hiring this year will provide more ammunition for Fed officials who worry about inflation and believe current interest rates are too low to contain a new round of price pressures. Some officials recently hinted that the Fed should be ready to raise interest rates later this year, at least clawing back some of the three 25-basis-point cuts implemented in H2 last year. Those cuts were implemented to stabilize the labour market, which now looks much healthier. This jobs report will not entirely settle the debate over how much the Fed should consider raising rates later this year, but it does further suggest the case for near-term cuts has largely evaporated. The stronger argument for raising rates now comes from the inflation outlook. Multiple overlapping shocks—from AI infrastructure build-out, tariffs, and energy—could keep inflation persistently above the Fed’s 2% target, even if progress is made in restoring commercial shipping traffic through the Strait of Hormuz. If the Fed holds steady as inflation rises, inflation-adjusted real rates would fall. Even if the labour market is not the primary driver, this mechanism could become a key factor driving rate hike discussions. (Jin10 Data APP) Fed official Hammack stated that with the labour market appearing to be roughly balanced, a rate hike may be appropriate soon. Hammack said that while she never over-emphasizes any single data point, today’s employment report confirms again that the labour market appears to be mostly in balance. She noted the unemployment rate remains at 4.3%, which is basically consistent with what I define as maximum employment. “Given the uncertainty in the economic outlook, holding rates steady is appropriate for now. But if recent trends continue, action may soon be needed.” This essentially repeats remarks she made on June 2. (Jin10 Data APP) According to foreign media reports, May non-farm payrolls data far exceeded market expectations, and the US interest rate futures market significantly increased bets on a Fed rate hike at the December meeting. Based on data from LSEG, the rate futures market now prices in a 65% probability of a Fed rate hike in December, up from 48% before the jobs report. For the June meeting, the market still broadly expects the Fed to keep rates unchanged in the 3.50% to 3.75% range. The stronger-than-expected jobs data indicates the US labour market remains resilient, further weakening market expectations for near-term rate cuts while strengthening investor assessment that the Fed may need to resume rate hikes later to counter inflationary pressures. (Jin10 Data APP) According to CME FedWatch: The probability of the Fed keeping rates unchanged in June is 96.6% (compared to 96.4% before the non-farm payrolls release), with a 3.4% probability of a cumulative 25-basis-point cut. The probability of the Fed keeping rates unchanged through July is 90.6%, with a 6.2% probability of a cumulative 25-basis-point hike and a 3.2% probability of a cumulative 25-basis-point cut. (Jin10 Data APP) Macro front: This week, in China, data releases include the China May CPI year-over-year rate, China May PPI year-over-year rate, China May trade balance (TBD), and China May M2 money supply year-over-year rate (TBD), among others. In the US, data releases include the US May New York Fed 1-year inflation expectations, US May NFIB Small Business Optimism Index, US weekly change in ADP employment for the week ending May 23, US April trade balance, US May existing home sales annualized rate, US April wholesale sales month-over-month rate, US May unadjusted CPI year-over-year rate, US May seasonally adjusted CPI month-over-month rate, US May seasonally adjusted core CPI month-over-month rate, US May unadjusted core CPI year-over-year rate, US 10-year note auction yield for June 10, US 10-year note auction bid-to-cover ratio for June 10, US initial jobless claims for the week ending June 6, US May PPI year-over-year rate, US May PPI month-over-month rate, US June preliminary one-year inflation expectations, and US June preliminary University of Michigan Consumer Sentiment Index, among others. In Germany, data releases include the German April seasonally adjusted industrial output month-over-month rate, German April seasonally adjusted trade balance, and German May final CPI month-over-month rate, among others. In the Eurozone, data releases include the Eurozone June Sentix Investor Confidence Index, Eurozone ECB deposit facility rate for June 11, and Eurozone ECB main refinancing rate for June 11, among others. In the UK, data releases include the UK April three-month GDP month-over-month rate, UK April manufacturing output month-over-month rate, UK April seasonally adjusted goods trade balance, and UK April industrial output month-over-month rate, among others. Data including the Bank of Canada interest rate decision for June 10, French May final CPI month-over-month rate, Japan April trade balance, and Switzerland May Consumer Confidence Index will also be released. Furthermore, the Bank of Canada will announce its interest rate decision, and BoC Governor Macklem and Senior Deputy Governor Rogers will hold a monetary policy press conference. The European Central Bank will announce its interest rate decision, and ECB President Lagarde will hold a monetary policy press conference. Crude Oil front: As of overnight closing last Friday, oil prices in both markets fell together, with WTI oil down 3% and Brent oil down 2.37%. However, both recorded weekly gains, with WTI oil up 3.31% weekly and Brent oil up 1.82% weekly. The decline in crude oil prices overnight last Friday was primarily due to reduced market perceptions of a renewed US-Iran conflict. US President Trump stated at a campaign event in Wisconsin on the 5th that the war with Iran would be ended quickly, thus removing a significant factor contributing to high prices. With the midterm elections approaching, US public opinion widely believes the US-Iran war has driven up oil prices and the cost of living, putting pressure on Republican election prospects. (CCTV) Fitch stated in a new report that the closure of the Strait of Hormuz created a logistical supply shock but did not alter the market trend. The agency expects a rapid recovery in regional production, strong supply growth from non-OPEC countries, and potentially more aggressive OPEC policies to re-trigger an oversupply situation in Q4 2026, pushing oil prices downward once the Strait reopens. Based on an assumption that the Strait of Hormuz reopens around month-end July (implying an effective closure period of five months), our baseline expectation is that Brent crude will average $87 per barrel in 2026. Significant uncertainty remains regarding the exact timing of the Strait's reopening, and the risks facing oil prices are binary. The current price increase reflects a transitory logistical supply shock rather than a permanent loss of production capacity. We expect the Strait to reopen around end-July and anticipate a significant decline in Brent prices from the highs seen between March and July. (Jin10 Data APP) According to a Bloomberg survey, OPEC crude oil production fell to its lowest level in decades in May, as the US blockade on Iran and turmoil in the Persian Gulf region continued to suppress output. OPEC oil production dropped by 1.22 million barrels per day in May (half of which came from Iran), falling to 16.33 million barrels per day, its lowest level in at least 37 years. This figure excludes the UAE, which withdrew from OPEC last month. The survey indicated Iran’s oil production plunged last month by 710,000 barrels per day to 2.34 million barrels per day, a five-year low. US Central Command continues to enforce a blockade on all maritime traffic to and from Iranian ports. (Jin10 Data APP) Notably, however, the UK government has raised its domestic crude oil price forecast, believing that even if the US and Iran reach a peace deal, crude oil prices could remain around $100 per barrel through 2028, as it now anticipates energy supply recovery in the Gulf region will take longer. A new analysis warns that pressure on energy prices is higher than previously expected, amid a deteriorating global economic outlook. The UK government previously estimated Persian Gulf supply could recover about six months after the end of the war, but it now believes recovery could take as long as 14 months. (Jin10 Data APP)

Next week, macro data releases will include China’s May CPI annual rate, the US May unadjusted CPI annual rate, and the preliminary US June one-year inflation expectations, all of which are about to be released. Additionally, US-Iran peace talks have seen repeated setbacks, and the US is planning to impose additional tariffs on over 60 global economies under Section 301 of the Trade Act of 1974, leaving the macro environment clouded by numerous uncertainties. Furthermore, China’s head of state will pay a state visit to North Korea from June 8 to 9. On the LME lead front, following two consecutive weeks of heavy deliveries into warehouses, LME lead inventory hit a 13-year high. Meanwhile, a supply gap for high-grade lead ingots persists in Southeast Asia. Even though environmental protection inspections on secondary lead have concluded in the Vietnam market, spot lead continues to trade at widespread, high premiums, causing the LME lead ingot inventory buildup to reverse and shift into a decline. Overseas macro uncertainties abound, pressuring the base metals complex lower. Looking ahead, attention should be paid to the strong supportive factor of supply gaps for lead ore and lead ingots. LME lead is expected to trade within $1,990-2,050/mt next week. On the SHFE lead side, a supply-demand mismatch for lead ingots in China and inventory buildup risks are weighing on lead prices. Additionally, with futures delivery approaching, invisible inventory will be converted to visible inventory. During the lead price decline, secondary lead losses have widened, and supply of lead ore and scrap batteries has been tight, leaving limited downside room for lead prices. The most-traded SHFE lead contract is expected to trade within 16,200-16,650 yuan/mt next week. Spot price forecast: 16,200-16,500 yuan/mt. On the supply side, the post-maintenance recovery of primary and secondary lead has paused for now. Furthermore, with secondary lead losses widening, secondary refined lead has formed an inversion over primary lead. Coupled with potential delivery brand shipments to delivery warehouses, circulating supply is expected to tighten relatively, and spot discounts are expected to narrow further. On the consumption side, downstream enterprises are merely producing based on sales, and after the lead price drop, they have not engaged in concentrated procurement as witnessed during the mid-to-late May decline. They are expected to maintain just-in-time procurement.

The U.S. unadjusted annual CPI for April came in at 3.8%, the highest level since May 2023 and above the market forecast of 3.7%.

China Northern Rare Earth disclosed its 2025 annual report on April 18, which stated: 2025 was a pivotal year for the reshaping of the global rare earth industry landscape, a pivotal year for the strategic elevation of China's rare earth industry, and a pivotal year for the company to achieve historic breakthroughs in its business development. Over the past year, the company implemented national industrial policies and enhanced its capacity to serve national strategies. Production of major products hit record highs , with operating revenue reaching 42.563 billion yuan, up 29.11% YoY; net profit attributable to shareholders of the publicly listed firm reaching 2.251 billion yuan, up 124.17% YoY. The company maintained its industry-leading position in revenue, profit, output value, and market capitalization, successfully concluding the "14th Five-Year Plan" period. It effectively safeguarded the security and stability of China's rare earth industry chain and supply chain, and elevated China's rare earth industry to a new level of high-quality development. The explanation of operating revenue changes disclosed in China Northern Rare Earth's announcement stated: In 2025, amid an overall rise in rare earth market prices, the company seized market opportunities and coordinated the advancement of the "Five Unifications" scientific production model. Production and sales of major products, including smelting and separation products, rare earth metals, rare earth new materials, and rare earth permanent magnet motors, all achieved YoY growth. The main business disclosed in China Northern Rare Earth's 2025 annual report stated: Adhering to the development philosophy of "optimizing and expanding rare earth raw materials, refining and strengthening rare earth new materials, and specializing and differentiating end-use application products," the company is capable of producing 11 major categories, over 100 varieties, and more than 1,000 specifications of rare earth products. The company's products are mainly divided into rare earth raw material products, rare earth new material products, and rare earth end-use application products. Among them, the company's rare earth raw material products include rare earth salts, rare earth oxides, and rare earth metals, which serve as the primary raw materials for downstream rare earth new material and new material product processing enterprises. Rare earth new material products include rare earth magnetic materials, polishing materials, hydrogen storage materials, catalytic materials, and rare earth alloys. The company's rare earth end-use application products mainly include rare earth permanent magnet high-efficiency energy-saving motors, solid-state hydrogen storage cylinders, and hydrogen-powered two-wheelers. Regarding the business plan for 2026, China Northern Rare Earth stated in its 2025 annual report: 2026 is the opening year of the "15th Five-Year Plan" period and a critical year for the company to advance high-quality development and accelerate its transformation into a world-class leading rare earth enterprise. The company will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, take forging a strong sense of community for the Chinese nation as the main theme, fully implement the spirit of the 20th National Congress of the Communist Party of China and its successive plenary sessions, implement the spirit of General Secretary Xi Jinping's important speeches and instructions on Inner Mongolia and the rare earth industry, as well as the decisions and deployments of the Inner Mongolia Autonomous Region, Baotou Municipality, and other higher-level authorities. The company will maintain the general principle of seeking progress while ensuring stability, fully and accurately implement the new development philosophy, shoulder its responsibilities and mission, steadily improve operational quality and efficiency, build a comprehensive all-element and all-category industrial system, promote the deep integration of technological innovation and industrial innovation, accelerate the pace of deepening reform, enhance the level of modern governance, continuously strengthen core functions and enhance core competitiveness, accelerate the building of a world-class leading rare earth enterprise, achieve a good start for the "15th Five-Year Plan" period, and make new and greater contributions to the construction of the "two rare earth bases." Key production and operating targets for 2026 (these targets are planning targets only; whether they can ultimately be achieved is subject to uncertainty and do not constitute substantive commitments by the Company to investors; investors and relevant parties should maintain sufficient risk awareness and understand the differences between plans, forecasts, and commitments): achieve operating revenue of over 44 billion yuan and total profit of over 3.5 billion yuan. On the premise of meeting operating targets, ensure that employee income moves in tandem with the enterprise's economic performance and labor productivity. Centering on the work targets, the following key initiatives will be carried out: 1. Stabilize production, promote sales, and improve quality and efficiency, demonstrating a new outlook of a strong start. Based on the national rare earth total volume control indicators, organize and arrange production schedules scientifically. Make every effort to ensure stable and high output from Phase I of the green smelting upgrade and renovation project. Enhance the capability of full-element rare earth extraction and separation. Optimize rare earth metal production processes to improve product quality and capacity scale. Release newly added magnetic material alloy capacity, with per-mt product costs reaching industry-leading levels. The polishing segment will leverage resource and capacity advantages, implement transformation toward high-end and precision products, and enhance product competitiveness. Rare earth additives will focus on high value-added product development to ensure stable product supply. Monitor mainstream product price trends and maintain market stability. Achieve production-sales balance for rare earth lanthanum-cerium products while actively digesting inventories. Strengthen procurement and sales channel development for rare earth Pr-Nd products to enhance market control. The functional materials segment will seize policy and market opportunities to secure orders. Rare earth permanent magnet motors will target frontier fields to achieve new breakthroughs in sales. Refine cost management and implement comprehensive measures to deepen cost reduction, quality improvement, and efficiency enhancement. Optimize financing methods to provide low-cost funding support for the Company's development. 2. Optimize layout and add momentum, shaping new advantages in industrial development. Efficiently advance the construction of key projects and accelerate the construction of Phase II of the green smelting upgrade and renovation project. Promote the Northern Jinlong separation production line to achieve trial production within the year. Promote stable and smooth production at the Jinmeng rare earth secondary resource project. Build a full-category industrial system and accelerate the implementation of joint venture and cooperation projects. Promote stable production and full production at the Northern Magnetic Material digital green technology empowerment project, and expand segmented application fields of rare earth permanent magnet materials. Strengthen the promotion and application of solid-state hydrogen storage materials and expand new applications in the rare earth catalysis field. Enhance the level of digital and intelligent management, deepen the construction of information management and control systems, continue to advance the in-depth application of business systems such as human resources, discipline inspection, and engineering projects, and further consolidate the digital form of business operations. Build a procurement-sales collaborative management platform to form a closed-loop business process covering "procurement, production, inventory, sales, and finance," achieving business-finance integration. Advance the construction of green smelting smart factories, progressively cultivate major production units to build smart factories, and continuously improve the CNC rate of key processes and the digitalization rate of production equipment. 3. Coordinating internal and external efforts to tackle key challenges, empowering innovation to seek new breakthroughs. Increase high-quality scientific and technological supply and strengthen R&D investment intensity. Focus on project deployment and research breakthroughs in areas such as cost reduction in smelting and separation, quality improvement in metal electrolysis, development of new rare earth materials, and expansion of new rare earth applications, developing new products, new processes, and new equipment. Conduct high-value patent cultivation and standards development and revision in key areas across the entire industry chain. Improve the "1+2+N+4" rare earth industry technology innovation platform system, launch high-level rare earth innovation platform projects, and comprehensively optimize and integrate technology innovation resources. Further leverage the role of the industrial transformation center, streamline the pathway for commercializing research outcomes, and enhance the quality and efficiency of technology transfer. Deepen the integration of industry, academia, and research, and promote the establishment of joint laboratories with renowned universities in China. Carry out "Three Firsts" application work in areas such as NdFeB alloy production equipment, rare earth permanent magnet motors, rare earth polishing fluids, and rare earth functional additives, and achieve substantive results. Further leverage the functions of the company's collaborative innovation centers across various industrial sectors, strengthen resource coordination and centralized management, and implement organized research. Focus on tackling key common technologies, promote close interaction and coordinated development among subsidiaries, and drive the output and transfer incubation of major scientific and technological achievements. Introduce the technology readiness level evaluation system into the entire R&D management process to establish quantitative assessment channels. Continue to strengthen the recruitment and cultivation of scientific and technological talent, providing full support in terms of compensation, research funding, and living benefits. 4. Deepening and substantiating reforms to stimulate new vitality in enterprise development. Enhance the company's management and control effectiveness, improve the board of directors' construction and authorization system, explore the formulation of management systems for the performance of duties by full-time and part-time chairpersons, and elevate the board's standardized performance and scientific decision-making capabilities. Optimize the company's management and control matters, processes, and authorities to improve decision-making efficiency. Promote the optimization and integration of subsidiaries. Implement the requirements of the "doubling" initiative for specialized, refined, distinctive, and innovative enterprises, and cultivate additional such enterprises. Deepen the reform of the three systems, improve the cadre assessment and evaluation system, and strengthen the rigid implementation of assessment results. Optimize the selection and appointment mechanism, intensify competitive recruitment and market-oriented hiring, implement "3+6" contract-based management, and firmly establish a talent selection orientation that prioritizes actual performance and practical contributions. Closely align with the company's development and actual business needs, scientifically evaluate organizational structures, reasonably reduce management layers, and enhance management effectiveness. Leverage new projects and production lines to establish shared employment mechanisms, promoting dynamic position integration and workforce optimization. Deepen the reform of the compensation distribution system, build a "same-level, broad-grade" compensation system based on position value and performance contributions, strengthen the linkage between subsidiary performance and the company's overall profitability, and drive a close connection between employee income and enterprise profitability as well as individual contributions. 5. Striving for Excellence in Management to Elevate Modern Governance to New Heights. Strengthened strategic security management, enhanced information resource integration, and actively participated in the formulation of national industrial policies. Strengthened financial management by rigorously implementing comprehensive budget management, further reinforcing capital control, and establishing a capital risk prevention and control system. Enhanced financial informatization by building a standardized, efficient, and well-adapted financial shared services system. Strengthened risk and compliance management by improving the compliance management system to ensure that business development and compliance management advanced in tandem. Established a legal affairs shared system to reduce legal service costs for subsidiaries and strengthen the company's overall legal risk prevention and control capabilities. Improved the comprehensive risk management system and optimized risk management across the entire process of strategy, operations, and management. Strengthened safety and environmental protection management, guided by the "10000" safety vision, to enhance intrinsic safety levels. Effectively carried out safety management of relevant parties. Rigorously implemented environmental protection accountability, improved integrated traceability management of solid waste across production, sales, transportation, and utilization, and enhanced emergency response capabilities. Strengthened talent management by reinforcing training and empowerment, implementing targeted training by level and category, and improving the competency of key personnel. Deepened specialized cultivation of high-level talent and strengthened the deep integration of talent development with the company's strategic growth. Innovated the training model for industrial workers, built a platform for skills inheritance and innovation, simultaneously consolidated talent reserves, optimized talent structure, and enhanced talent effectiveness. Strengthened market capitalization management by establishing a scientific market capitalization management philosophy, improving the ESG management system, and comprehensively leveraging measures such as information disclosure, investor relations management, cash dividends, mergers and acquisitions, and ESG on the basis of enhancing the company's value creation capabilities, to improve market capitalization management performance and maintain the company's position as the largest by market capitalization in the rare earth industry. When discussing potential risks, China Northern Rare Earth mentioned product price risk: Affected by internal and external factors such as macro economic conditions, cyclical industry fluctuations, changes in rare earth market supply and demand, intensified market competition, and geopolitical disruptions, prices of major rare earth products may fluctuate and decline, posing product price risk. Countermeasures: The company will closely monitor market conditions, strengthen market forecasting and analysis, innovate marketing models, adjust marketing strategies, improve product quality, vigorously expand markets, and increase product market share. While maintaining and expanding the marketing base for Pr-Nd products, the company will intensify marketing efforts for La-Ce products, optimize service quality, and improve client satisfaction. Leveraging the role of a major rare earth group, the company will stabilize confidence, stabilize expectations, and stabilize market operations, adopting comprehensive measures to overcome unfavourable factors and striving to mitigate the impact of product price risk on the company's operating performance. Looking back at the SMM Pr-Nd oxide price trend in 2025: the average price of Pr-Nd oxide on December 31, 2025 was 606,500 yuan/mt, compared with the average price of 398,000 yuan/mt on December 31, 2024, representing an increase of 52.39% in 2025. In comparison, the annual daily average price of Pr-Nd oxide in 2025 was 491,576.13 yuan/mt versus 391,871.9 yuan/mt in 2024, indicating a YoY increase of 25.45% in the daily average price in 2025. Driven by expectations of supply reduction due to partial shutdowns at separation plants, upstream suppliers raised their quotes rapidly, low-priced spot cargo in the market tightened quickly, pushing rare earth prices up for three consecutive days. According to SMM pricing, on April 20, the price of Pr-Nd oxide was 815,000-818,000 yuan/mt, with an average price of 816,500 yuan/mt, up 1.74% from the previous trading day. As the price of Pr-Nd oxide rose, wait-and-see sentiment in the market intensified, while downstream magnetic material enterprises had limited acceptance of high-priced metals, and purchasing enthusiasm declined. In the short term, supported by strong confidence among upstream suppliers to hold prices firm, Pr-Nd product prices are expected to hover at highs. For more information on rare earth fundamentals, technical aspects, and policy developments, please attend the ~ SMM Rare Earth Forum Contact: Wang Haiqiao Contact: 19818727891

Over the past half-century of industrialisation, the global seaborne iron ore market took shape and solidified into a "duopoly" supply structure dominated by Australia's Pilbara region and Brazil's Carajás and Iron Quadrangle regions. However, with the evolution of macroeconomic cycles, the structural shift in China's economic growth momentum, and the historic imperative for the global steel industry to transition toward low-carbonisation and green development, this traditional supply landscape is undergoing an unprecedented reshaping. On November 26, 2025, as the first commercial vessel loaded with Simandou iron ore slowly departed Mabariya Port for the open sea, Guinea's Simandou iron mine officially commenced production. As the world's largest and highest-quality greenfield iron ore project, this milestone signalled the gradual rise of the African continent—long relegated to a secondary position—as an important emerging force in the global ferrous metals market. Why should we pay attention to the African market? The African continent's iron ore resources are regarded as the third most important region for global iron ore supply, after Brazil's Carajás region and Australia's Pilbara region. The sheer scale and high grade of its resources account for 13.8% of global iron ore resources. It is also set to be the primary supply-side growth driver over the next five years. Therefore, changes in African iron ore will long remain a key market determining international iron ore prices . This article provides a comprehensive analysis of the current status and landscape of African iron ore and select steel markets, offers an in-depth discussion of future development trends, and presents a data-driven outlook on market changes. I. Global Iron Ore Background According to SMM survey data, as of 2025, global iron ore production is estimated at approximately 2.472 billion mt. Of this, Africa contributed approximately 95 million mt, accounting for nearly 4% of total global production. With the successive commissioning of various large-scale mining projects, Africa's iron ore capacity is expected to double by 2030, reaching a scale of nearly 259 million mt. Assuming no production cuts in other regions, Africa-produced iron ore's global market share is expected to rise to nearly 10%, while the global iron ore market's oversupply is estimated to increase to approximately 220 million mt. (Chart-1: Balance Sheet) Although the international iron ore market has already entered a prolonged cycle of loose supply, the substantive supply shock from African iron ore is expected to materialise gradually only over the next five years. In the short term, based on an estimated 15 million mt of new African shipments in 2026, their outstanding high-grade characteristics are expected to quickly meet steel mills' current demand for low-carbon ore blending, allowing the market to absorb them smoothly, with a relatively mild impact on absolute international iron ore prices. The key point to watch will be from 2028 to 2029. As railway, port, and other infrastructure facilities still under development in Africa are fully connected, the surge in high-grade iron ore production will exert heavy downward pressure on the right side of the global iron ore cost curve. This will not only systematically push down the price center of iron ore but also trigger intense structural squeeze; that is, the survival space for low-grade, high-cost mines will be significantly compressed. This price downcycle is expected to persist through 2028. When international ore prices fall below the marginal cost support level of $90/mt, non-mainstream small mines on the far right of the cost curve will be forced to shut down and exit the market. By then, the global iron ore supply landscape will have completed a new round of reshuffle, re-forming a multi-oligopoly ecosystem dominated by ultra-large, low-cost mines (including new African mines), supplemented by quality mid-sized mines. (Chart-2: Price Forecast Curve) II. African Market Current Landscape: South Africa as the Dominant Leader with Multiple Strong Players, West African Countries Actively Expanding Having analyzed the foundation of the global iron ore market landscape, the focus will now shift to the overall situation in Africa. As the primary driving force behind supply growth over the next five years, Africa's iron ore production is concentrated in West Africa and South Africa. Currently, Africa is dominated by three major countries. Among them, South Africa is the largest producer, with production reaching approximately 67 million mt in 2025, and its export shipments firmly hold an absolute dominant position of approximately 65% of Africa's total iron ore exports. However, constrained by potential structural limitations, the future organic growth potential of South Africa's iron ore industry is relatively limited. As major iron ore projects in other emerging resource-rich African countries successively come into production and release capacity, South Africa's share in Africa's overall export market is expected to face sustained contraction. Next is Mauritania, as Africa's second-largest iron ore producer, with production of 15 million mt in 2025 and export volumes of approximately 12 million mt, accounting for 12% of the African market. Mauritania borders the Atlantic Ocean, possesses abundant high-grade iron ore deposits deep in the Sahara Desert, and enjoys exceptionally favorable geographic location and mineral resources. Moreover, it is within close proximity to European and Middle Eastern markets that urgently need green industrial raw materials, providing it with unique advantages for absorbing the global transfer of green metallurgical capacity. It will be a highly promising iron ore supplier in the future. In addition, Sierra Leone, as another important supply hub in the region, also has an expected production of 12 million mt in 2025, holding a stable share of approximately 12% in the African export market. Chinese-invested iron ore mines within the country are actively expanding their operations. Macro trade flow perspective, based on full-year 2024 trade data, the proportion of African iron ore shipped to the Chinese market was relatively low compared to traditional mainstream mining regions, accounting for only about 60%, while the broader Asian market encompassing China, Japan, and South Korea collectively absorbed approximately 70% of African iron ore shipments. Meanwhile, Western European countries represented by the Netherlands and Germany constituted the core secondary shipping destination for African iron ore, with a trade flow share of nearly 14%. The remaining marginal trade flows exhibited a diversified pattern, radiating broadly to emerging steel capacity clusters in the Middle East, including Bahrain, Oman, and Saudi Arabia. (Chart-3: African Iron Ore Market Overview) Enterprise level, Kumba Iron Ore and Assmang , both based in South Africa, became Africa's largest and second-largest iron ore producers with annual production of 37 million mt and 17 million mt, respectively. Kumba's mines such as Sishen are globally renowned for producing high-grade fines (>62%) and premium lump with excellent physical and metallurgical properties (Premium Lump, Fe 65.2%). Under the current trend of blast furnace emission reduction, this type of lump ore that can be directly charged into furnaces and reduce sintering carbon emissions has been highly sought after by the market, commanding a significant premium. Assmang also possesses high-quality iron ore assets, jointly controlled by African Rainbow Minerals (ARM) and Assore at a 50:50 ratio. Its Assmang fines and Assmang lump (grade at 64-65%) are also high-quality direct furnace charge materials. However, for this enterprise, the biggest bottleneck lies not at the pit head but on the rails. Heavy reliance on Transnet's rail shipping capacity means that logistics bottlenecks frequently cap its shipment volumes. SNIM (Société Nationale Industrielle et Minière de Mauritanie) is Mauritania's state-owned mining company and Africa's third-largest iron ore producer after the two South African companies. Unlike mainstream Australian and Brazilian ore, SNIM's products occupy a unique niche in terms of physicochemical specifications and market segmentation. Its most widely traded product is TZFC fines, characterized by extremely low aluminum (Al2O3) and phosphorus (P) content. As an excellent blending raw material, major steel mills prefer to blend SNIM ore fines with high-aluminum Australian fines (such as certain Pilbara blend ores) to significantly dilute the impurity ratio in furnace charge and optimize blast furnace performance. (Chart-4: Top-Tier Enterprises) III. Transformation of the African Market: Major Producing Countries May Stagnate While Emerging Projects Become Key Growth Drivers So where will future growth come from? According to SMM observations, the African market is expected to undergo significant structural changes over the next five years. Multiple large-scale iron ore projects across African countries are already under construction and plan to commence production before 2030. Based on estimates, Africa's iron ore supply is expected to grow substantially from approximately 95 million mt currently to 260 million mt over the next five years, representing a cumulative increase of up to 85%. The market landscape will also shift from South Africa-dominated exports led by Western players to Guinea-dominated exports. (Chart-5: African Market Production Trend) The primary growth driver will come from Guinea in West Africa. The country's renowned Simandou iron ore mine, jointly developed by multiple enterprises, is currently the world's largest undeveloped high-grade open-pit hematite deposit. With resource reserves exceeding 5 billion mt and a designed capacity of 120 million mt, it is the project with the greatest strategic potential to reshape the existing iron ore market landscape. Since the first ore shipment in late November 2025, as of Q1 2026, Simandou's main export port, Morebaya Port, has cumulatively shipped nearly 1.6 million mt. Blocks 1 and 2, developed under the leadership of the Winning Consortium Simandou (WCS), have been successfully commissioned, with 2026 capacity expected to be achieved and shipments expected to reach full production of 60 million mt within the next 2–3 years. Blocks 3 and 4, which are expected to commence production in Q1 2026, are led by Simfer (a Rio Tinto & Baowu joint venture) and are expected to ship 5 million mt of ore in 2026, reaching full production of 60 million mt over 30 months. In other words, Guinea is expected to reach 120 million mt before 2030, vaulting to become the world's second-largest iron ore project, behind only Brazil's S11D project (with a post-expansion designed capacity of 200 million mt, expected to commence production in 2030). Other countries such as Liberia, Gabon, Sierra Leone, and Congo Republic all have iron ore projects under development, with a combined capacity of approximately 46 million mt planned to commence production by 2030. The largest among these is the Tokadeh Phase II project (Tokadeh Phase II) in Liberia, owned by ArcelorMittal (AML), which is expected to commence production in H2 2026 and reach full production of 20 million mt capacity by year-end, with iron ore concentrate expected to exceed Fe 66%. Given that AML's steelmaking capacity in Europe cannot absorb such a massive increase in the short term, the majority of Tokadeh 's products are expected to flow into the international market for trading, exerting downward pressure on iron ore concentrate prices. Currently, the largest exporting country, South Africa, is expected to largely maintain its production within the range of 63–67 million mt, with a risk of slight decline. The primary reason is that South Africa's iron ore transportation is highly dependent on the heavy-haul railway line (TFR) from Sishen to Saldanha Port. In recent years, Transnet Freight Rail (TFR), under South Africa's national transport company Transnet, has seen a significant decline in transport capacity due to numerous issues including locomotive and rolling stock shortages, frequent cable theft, and prolonged underinvestment in infrastructure, resulting in severely reduced transportation capacity for major bulk commodities such as iron ore and coal. South Africa's largest iron ore mine, Kumba, in its 2025 year-end financial report released in February 2026, indicated that its total finished product inventories reached as high as 7.5 million mt , increasing rather than decreasing compared to 6.9 million mt at the end of 2024. As railway transport capacity failed to match mine production capabilities, major South African iron ore producers were forced to accumulate large inventories at mine sites. To prevent inventory overflow, miners had to proactively lower production guidance. Although miners have been working to address transportation issues, the deep-rooted railway problems are difficult to resolve in the short term. Beyond 2030, there is also Mauritania's SNIM strategic growth blueprint. In the first phase (Horizon 1), the company plans to raise annual capacity to 45 million mt by 2031 through implementing lean production, equipment and technology upgrades, and joint development of new reserves. Of this, 20 million mt will be absorbed by SNIM's own wholly-owned capacity, while another 25 million mt will be achieved through attracting international capital to form joint ventures. Furthermore, SNIM has even set its sights on 2045 (Horizon 3), formulating a long-term goal of raising annual capacity to 80 million mt . In addition, there is the MIFOR project in the DRC. On March 26, 2026, the DRC signed a relevant memorandum of understanding with China, and the MIFOR project was listed as a flagship project with priority support. The mine is estimated to hold cumulative resources of 15 billion to 20 billion mt, with an average grade exceeding 60%. Its potential scale is considered to be approximately 2.5 times that of the Simandou project in Guinea. The first phase of the project is expected to cost $28.9 billion, involving the construction of a heavy-haul freight railway combined with Congo River shipping, ultimately connecting to the Banana deep-water port on the Atlantic coast. Initial annual production is expected to be 50 million mt, with a long-term goal of expanding to 300 million mt per year . All these projects are destined to make Africa an indispensable source of iron ore supply in the future. (Chart-6: Selected African Iron Ore Projects) IV. Global Steel Industry Chain Transformation: Will Africa, as a Hub of High-Grade Ore, Empower DRI Production? Notably, most of Africa's currently operating and planned iron ore projects have an average total iron grade (Fe) largely above 65% , with extremely low impurity content. This scarce high-grade ore is an ideal raw material for the direct reduced iron (DRI) process. As the DRI-EAF green steel route gains traction in Europe, the US, and China, future demand for iron ore with grades of 65% and above will surge exponentially. This will confer an exceptionally high "grade premium" on major iron ore projects including South Africa's Kumba, Guinea's Simandou, and other mines coming into production in the future. In the long run, the pricing benchmark for iron ore is inevitably shifting away from the traditional Platts 62% index, and African miners will gain bargaining leverage when renewing long-term agreements, thereby reshaping the global industry chain profit distribution landscape. In line with the global carbon neutrality trend, international investors, encouraged by local governments, are actively deploying high-value-added processing facilities, including DRI plants and high-grade pellet plants, aiming to fully leverage Africa's abundant high-grade iron ore resources and enormous energy potential for DRI production. Based on SMM's observations, approximately 200,000kt of DRI capacity is expected to emerge in Africa by 2030. The largest project among them is an 8.1 million mt DRI complex located in Libya, a joint venture between Turkish steel mill Tosyali and Libya's national steel company. (Chart-7: African DRI Projects) As China advances its "dual carbon" goals, the steelmaking industry is undergoing corresponding adjustments. China has set out a strategic blueprint for carbon peaking by 2030 and carbon neutrality by 2060. The traditional high-carbon-emission long-process steelmaking route dominated by blast furnace-converter operations is facing extremely stringent capacity replacement policies and environmental protection regulations. Meanwhile, the global trade system is also accelerating the imposition of carbon costs — for example, the implementation of the EU's Carbon Border Adjustment Mechanism (CBAM) — compelling the global steel supply chain to accelerate its transition from the source toward a low-carbon or even zero-carbon "green steel" era. Under this irreversible transformation trend, the short-process route combining DRI with electric furnace (EAF) has become the most commercially feasible decarbonization pathway. To meet the surging global demand for green steel in the future, market forecasts indicate that by the 2030s, global DRI designed capacity will need to increase by hundreds of millions of metric tons. This dramatic expansion in production scale will profoundly reshape the global steel supply landscape. The share of traditional pig iron production will gradually decline, while low-carbon DRI supply will directly determine the competitiveness of major economies in the global green steel market. In particular, the "hydrogen metallurgy" technology, which uses green hydrogen to replace natural gas and coal for iron ore reduction, is widely recognized by the industry as the core to achieving ultimate zero-carbon steelmaking. (Chart-8: Reshaping of the Steel Industry Chain Under Green Transformation) Represented by world-class high-quality iron ore projects such as Simandou in Guinea, the gradual commissioning of these super mines is expected to inject over 100 million mt of high-grade iron ore supply into the global market annually, significantly alleviating the global shortage of DRI-grade ore. More critically, North Africa and West Africa possess solar and wind energy potential that is second to none globally, enabling large-scale green hydrogen production at extremely low costs locally. This perfect combination of "high-grade ore + affordable green hydrogen" has led multinational capital and steel giants to increasingly favor establishing DRI production lines directly on African soil, reducing iron ore locally into low-carbon Hot Briquetted Iron (HBI) that is convenient for transport, before shipping it to electric furnaces in Asia and Europe for smelting. As a result, Africa will formally transition from the old era to become an indispensable part of the green iron production chain.

Next Monday, markets outside China will be closed for one day on April 6 for the Easter holiday, including the LME and other exchanges. Meanwhile, China will also be in the Qingming Festival holiday, with the SHFE and other exchanges likewise closed. In terms of macroeconomic data, key releases include China’s March CPI YoY and the US March non-seasonally adjusted CPI YoY, while the US Fed will also release the minutes of its monetary policy meeting. LME lead, geopolitical tensions outside China have repeatedly resurfaced and the situation remained relatively severe, with the impact on energy, shipping, and other areas continuing. China’s lead ingot import window had remained open for a long time, attracting overseas lead ingot inflows into the Chinese market and reducing spot lead circulation in Southeast Asia and other markets. Especially during periods of rising LME lead, LME Cash-3M contango further narrowed WoW to -$20.77/mt, which will support lead prices to hold up well. LME lead is expected to trade at $1,890-1,965/mt next week. SHFE lead, lead ingot supply is expected to increase in April, but the consumption side is facing the traditional off-season. Coupled with the Qingming Festival holiday, when downstream enterprises will be on holiday, the risk of post-holiday lead ingot inventory buildup will rise, which will weigh on the upward momentum of lead prices. In addition, delivery of the SHFE lead 2604 contract will come onto the agenda after the holiday, and attention should be paid to changes in plant warehouse lead ingot inventory into visible inventory, with caution against lead prices retreating after rapid rise. The most-traded SHFE lead contract is expected to trade at 16,500-16,900 yuan/mt next week. Spot price forecast: 16,350-16,700 yuan/mt. During the Qingming Festival holiday, many downstream enterprises plan to take time off, leading to a temporary absence of lead consumption. Together with the approaching traditional off-season, downstream enterprises will maintain purchase as needed. On the supply side, production at primary lead and secondary lead enterprises will rise steadily, while imported lead continues to flow into China, making it possible for spot discounts for lead to widen.

As of March 31, faced with upward cost pressure from high chromium ore prices, most ferrochrome producers have planned maintenance and output cuts recently. The supply-demand relationship of ferrochrome is expected to gradually adjust to a tight balance in the outlook.