SMM, July 28: In H1 2026, the global petroleum coke market had originally hoped for an easing of the previous year's tight supply and a gradual recovery in production from major producing regions. However, the early-year "signs of production increase" were successively interrupted by peak maintenance season, the escalation of Middle East tensions, and multiple refinery accidents. The global supply side displayed a typical pattern of "first increase then decline, overall tightness," while the structural divergence between high- and low-sulphur coke further intensified. I. Global Overview: From "Easing Expectations" to "Tightening Reality" In 2025, the global petroleum coke market tightened significantly due to concentrated refinery closures and a rising share of light crude processing — US coke production once fell to a 20-year low. Entering 2026, benefiting from improved economics for heavy sour crude, coke output in the US Gulf Coast surged to a 13-month high in January, and the market widely expected high-sulphur coke supply to exert downward pressure on prices in Q2. But this expectation was quickly overturned. The escalation of Middle East tensions in late February pushed up crude oil and shipping costs, and combined with successive accidents at key refineries in the US and Mexico from March to April, global supply tightened again, providing solid support to prices. The repeated cycle of "production increase — then production cuts" in global petroleum coke during H1 has become the dominant theme driving price fluctuations. II. US: Hit New High Early in the Year, Production Rebounded Despite March-April Disruptions The US is a major source of global high-sulphur coke. In January 2026, benefiting from favorable economics for processing heavy sour crude, US coke production rebounded to a 13-month high, momentarily making the market optimistic about supply easing in Q2. However, March-April saw a cluster of risk events: Valero's Port Arthur refinery (380,000 b/d) halted production due to a fire on March 23, with coking units partially restarting in early April but the large crude unit not back online until month-end, forcing April shipments to be delayed to May. Meanwhile, multiple refineries in Texas also experienced frequent malfunctions — ExxonMobil's Beaumont refinery (612,000 b/d) suffered a unit malfunction on April 22, and Marathon's Galveston Bay refinery (631,000 b/d) experienced a power outage on April 14. However, the disruption did not reverse the overall production increase. According to US EIA data, marketable petroleum coke production along the US Gulf Coast reached 2 million mt in April, up 14% YoY (up from 1.8 million mt a year earlier) and up 3% MoM, pushing nationwide production up 8% YoY. The growth was mainly driven by a surge in Venezuelan crude imports (more than doubled YoY and up 15% MoM in April), coupled with US Gulf Coast refining margins hitting a more than three-year high in late March and refinery operating rates averaging 95%; some refiners maximized operations to capture high product margins. Among them, Louisiana Gulf Coast production soared 29% YoY in April, hitting a more than six-year high. In other words, US supply in H1 was characterized by a "first-down-then-up" pattern—constrained by incidents in Q1, but clearly recovering by April. III. Mexico and Venezuela: Two Steps Forward, One Step Back on the Production Increase Path Venezuela: After the US eased sanctions restrictions, exports began to rebound from February but remained below year-earlier levels, contributing limited global growth. Mexico: Following the incident at the Pemex Dos Bocas / Olmeca refinery (340,000 b/d) on April 9, which involved a coke pit fire and damage to a tower at the coker unit, market participants expect it to resume operations at 50% load. This followed a separate fatal fire at the refinery in mid-March that resulted in five deaths. The successive incidents have cast a shadow over Mexico's full-year production increase plan. However, entering H2, coke output at Dos Bocas has continued to rebound, with daily production recovering to 4,000–5,000 mt. Stable shipments to India and Asia have started since July, slightly relieving pressure on US Gulf Coast cargoes, but the growth remains limited and insufficient to alter the tight balance landscape. Overall, the "recovery-driven production increases" in both countries were offset by incidents and infrastructure bottlenecks, resulting in H1 net global supply growth that was clearly below expectations. IV. Middle East: Core Refineries Hit, Saudi High- and Low-Sulphur Petroleum Coke Exports Hindered After the Middle East situation escalated on February 28, constrained regional crude exports pushed up oil prices and narrowed the heavy-light crude spread, directly weakening the economics of coker operations. The impact on petroleum coke supply has been particularly direct: Yasref refinery (Aramco/Sinopec, 400,000 b/d, Yanbu) has lowered coke production; Satorp refinery (Aramco/TotalEnergies, 460,000 b/d, Jubail) has faced shipment disruptions, with one processing unit damaged in a night attack on April 7–8, further tightening Saudi external supply. Saudi Arabia is the primary supplier of high-sulphur petroleum coke globally, especially to India and China. Disruptions to its production and shipments have directly intensified the tightness of spot high-sulphur petroleum coke in the Asian market. Notably, the supply disruption did not ease with the end of Q2—after the US-Iran temporary ceasefire agreement broke down on July 8, shipping in the Strait of Hormuz was again obstructed, and all cargoes from Saudi Arabia’s Jubail Satorp and Yanbu refineries were delayed, extending the supply interruption into early H2. 5. Russia: Exports to China Surge Against the Trend, Refinery Attacks Add Further Uncertainty Russia is one of the core sources of China’s petroleum coke imports. In H1, amid multiple disruptions, it exhibited a trajectory of “volume increase, attacks, and renewed tightening”: Import share rose against the trend: According to General Administration of Customs data, China’s total petroleum coke imports in H1 2026 reached 8.1103 million mt (YoY -2.24%), of which Russian petroleum coke imports amounted to 1.4361 million mt, a significant YoY increase of 221,000 mt, or 18.18%, lifting its import share to 18% and making it one of the few sources to grow against the trend in H1. Predominantly high-sulphur resources with diversified transport: Currently, Russian petroleum coke specifications remain largely high-sulphur resources. In addition to traditional sea transport, some traders choose to deliver via rail into China, mainly for use in prebaked anode and anode auxiliary material applications. Refinery attacks hit supply: Recently, the Russia-Ukraine situation has continued to deteriorate, damaging delayed coking units (CDU and secondary processing units) at core refineries such as Omsk. Russia’s overall refining capacity was paralyzed by over 40% at one point, with the affected products mainly being medium-sulphur petroleum coke with 1.8% sulphur and general-grade petroleum coke around 4% sulphur. According to market surveys, the Omsk refinery is expected to gradually resume production by end-July, while the Tatarstan refinery will resume in early September, leading to near-term supply tightening expectations. Overall, Russian petroleum coke supported China’s high-sulphur petroleum coke supply in H1 by “filling the gap with volume,” but the pace of refinery production resumptions and geopolitical risks in H2 will be key variables affecting the stability of exports to China. 6. China: Independent Refinery Output High Initially, Then Low; June Operating Rate Plummets to 42.69%As the world's largest petroleum coke consumer, China's domestic coke production also came under pressure in H1. According to SMM's monthly data on independent refineries: Total H1 volume: From January to June 2026, cumulative petroleum coke production at independent refineries was approximately 4.7831 million mt, down 148,100 mt from 4.9312 million mt in the same period of 2025, a 3.0% YoY decline. Monthly trend shaped higher at the start and lower later: January output of 867,300 mt (operating rate 66.24%) was the H1 high; it then declined month by month, with June output falling to 656,200 mt and the operating rate at only 42.69%. Compared to June 2025's 761,500 mt and 60.67%, the declines were 13.80% and 17.98 percentage points, respectively. Significant regional divergence: Shandong independent refineries produced about 3.5543 million mt in H1, up 8.2% YoY; non-Shandong independent refineries produced about 1.2291 million mt, a sharp 25.3% YoY decline. Shandong's share of total independent refinery production rose to around 74.3%. Structural highlights: Low-sulphur coke was relatively strong, supported by rigid demand from anode materials and prebaked anodes, while high-sulphur coke saw limited price gains due to downstream resistance to high prices but still moved its overall center higher. The structural tightness in high-quality low-sulphur resources during H1 is likely to remain the main theme throughout the whole year. 7. China Port Spot: Low-sulphur Coke Stays High and Firm, High-sulphur Coke Diverges Tightening supply has been reflected in domestic port spot prices. According to SMM's China port petroleum coke spot price monitoring, low-sulphur and high-sulphur coke prices showed clear divergence in H1: Low-sulphur coke stayed high with marginal supplement from imports: Represented by Brazilian and Argentine low-sulphur coke, imports of high-quality resources saw significant YoY growth in port arrivals during H1, and port spot prices long operated in the range of 4,100–4,500 yuan/mt. Indonesian low-sulphur coke port spot prices drifted higher from around 4,450 yuan/mt in January, touched a high of 4,900 yuan/mt at the end of April, and then pulled back to 4,600 yuan/mt by late July. Overall, low-sulphur coke demand is rigid (anode materials, high-end prebaked anodes) while incremental supply is insufficient, with imports providing only marginal supplementation, and the supply-demand mismatch supports the price center. Divergence within high-sulphur petroleum coke: US high-sulphur petcoke prices remain relatively firm, staying above 3,000 yuan/mt, while prices for high-sulphur petcoke from Russia, Saudi Arabia, and other sources are notably lower, with some grades trading only in the 1,400–2,000 yuan/mt range. The price spread reflects differences in cargo quality, shipping costs, and port arrival stability: cargoes from the US Gulf Coast are supported by rebounding EIA production and aggressive Indian buying, whereas Saudi high-sulphur petcoke is under pressure due to shipment disruptions from the Satorp and Yanbu refineries, leading to unstable port arrivals and depressed prices. Consolidating at recent highs: Since July, port spot prices have shown a pattern of mixed performance and consolidation at highs. Low-sulphur petcoke has softened slightly in the off-season demand period, but declines have been limited; high-sulphur petcoke prices have diverged due to different shipment paces from the US Gulf and the Middle East. Overall, the cost side (import average price up 37.88% YoY) provides solid support for domestic prices, leaving relatively small downside room. This price structure indicates that the global supply tightness in H1 was not simply an "overall shortage," but rather the result of structural tightness in low-sulphur resources combined with regional mismatches in high-sulphur resources. VIII. H2 Outlook Looking ahead to H2, whether global supply can truly shift from decline to growth depends on three key variables: the pace of de-escalation in the Middle East, the pace of resumption at accident-hit refineries in the US and Mexico, and the strength of export recovery after easing of sanctions on Venezuela. Against the backdrop of the maintenance peak receding and some units planning to resume production, the supply-demand gap is expected to narrow further and gradually return to balance. However, the structural tightness of high-quality low-sulphur resources may remain the main theme throughout the year.

SMM Morning Meeting Minutes: LME copper opened at $12,415.5/mt overnight, initially fluctuating downward to a low of $12,145/mt, after which copper prices gradually shifted upward, touching a high of $12,459/mt, then the price center dropped sharply and consolidated near the session close, finally settling at $12,187/mt, up 0.45%, with trading volume reaching 64,600 lots and open interest at 341,000 lots. The most-traded SHFE copper contract 2602 opened at 97,020 yuan/mt overnight, initially fluctuating upward to a high of 98,400 yuan/mt, after which the price center declined steadily, approaching a low of 96,010 yuan/mt near the session close, and finally settled at 96,060 yuan/mt, down 4.38%, with trading volume at 231,900 lots and open interest decreasing by 221,000 lots, reflecting long position reduction.

From a macro perspective, the US Fed's Beige Book further confirmed the overall stagnation of economic activity and weak consumption. Fed officials intensively released dovish signals, with Governor Waller and San Francisco Fed President Daly both supporting an interest rate cut in December to address potential "non-linear deterioration" risks in the labour market. Coupled with the mild decline in the US core PPI and controllable inflation pressure, expectations for accommodative monetary policy were reinforced. The US dollar index was in the doldrums due to sluggish growth and looser policy, providing core support for precious metals. Meetings surrounding the Russia-Ukraine conflict are still under repeated discussion. As long as the Russia-Ukraine situation remains unresolved, the safe-haven premium for precious metals will not completely dissipate. This week, driven by macro tailwinds, the precious metals market performed strongly. Silver prices, supported by both macro factors and destocking narratives, rose more than gold. Market sentiment is in an exceptionally exuberant phase, but risks of overbought and oversold conditions still need to be monitored going forward. [Economic Data] Bullish: The US November ISM Manufacturing PMI came in at 48.2 (previous: 48.7, expected: 49). US November ADP employment change was -32,000 (previous: 47,000, expected: 10,000). Bearish: US API crude oil stocks for the week ending November 28 were 2.48 million barrels (previous: -185.9). US EIA crude oil stocks for the week ending November 28 were 574,000 barrels (previous: 277.4, expected: -821,000 barrels). [Spot Market] In the domestic silver spot market, silver prices rose consecutively and hit highs this week before pulling back under pressure. Towards the weekend, the TD-SHFE silver most-traded contract spot-futures price spread narrowed, and spot premiums saw a slight decrease. This week, mainstream quotations for national standard silver ingots in the Shanghai market were quoted at premiums against TD that decreased to 20-30 yuan/kg, or at around parity against the SHFE silver 2502 contract. Near the weekend, some suppliers of national standard silver ingots quoted at discounts of 10-5 yuan/kg against the SHFE silver 2502 contract. Quotations from large smelters' silver ingot suppliers remained relatively firm, still at premiums of 30-35 yuan/kg against TD, or at discounts of 5-0 yuan/kg against the SHFE silver 2502 contract during the week. Downstream sectors are gradually entering the off-season, and some smelters sold on rallies. The destocking trend for domestic silver ingot spot inventory slowed down. Spot circulating supply became more ample compared to last week. However, downstream buyers generally showed caution towards high prices, purchasing cautiously or demanding significant price negotiations. Some traders mentioned that increased pressure from purchasing and hedging at high silver prices led to a decline in willingness to purchase and build positions. Overall market transactions remained sluggish. PV Silver Paste: This week, the reference average price for solar cell rear-side silver paste was 8,055-8,694 yuan/kg; for solar cell front-side finger, it was 12,117-13,076 yuan/kg; and for solar cell front-side busbar, it was 12,067-13,026 yuan/kg.

SMM Morning Meeting Minutes: LME copper opened at $10,799/mt overnight, fluctuated considerably at the beginning of the session and touched a low of $10,784.5/mt, then fluctuated upward unilaterally and touched a high of $10,876/mt. Subsequently, the center of copper prices gradually moved downward and finally closed at $10,817/mt, up 1.49%, with trading volume reaching 24,000 lots and open interest reaching 316,000 lots. The most-traded SHFE copper contract 2512 opened at 86,450 yuan/mt overnight, touched a low of 86,230 yuan/mt at the beginning of the session, then fluctuated upward and touched a high of 86,890 yuan/mt, before fluctuating downward and finally closing at 86,730 yuan/mt, up 1.34%, with trading volume reaching 67,000 lots and open interest reaching 255,000 lots.

[SMM Aluminum Morning Meeting Minutes: Global Supply-Demand Fundamentals Tighten, Aluminum Prices Expected to Hold Up Well in the Short Term] On the night of October 22, the most-traded SHFE aluminum contract opened at 21,105 yuan/mt, with the highest price at 21,180 yuan/mt and the lowest price at 21,085 yuan/mt, finally closing at 21,105 yuan/mt, up 0.42%. The night session overall showed a pattern of retreat after rapid rise, with the trading center moving up to around 21,100 yuan/mt. From a technical perspective, the MA averages realigned into a bullish formation (MA5: 21,098 > MA10: 21,048 > MA30: 20,981 > MA60: 20,960), and the MACD 60-minute candlestick showed a slight expansion of the red bar, maintaining a golden cross. In terms of trend, SHFE aluminum remains in an upward channel. Considering recent highs and lows (the monthly low at 20,640, the high around 21,200), the resistance is expected to be in the range of 21,280–21,480, and support in the range of 20,530–20,750.

[SHFE Tin Midday Review: SHFE Tin Under Pressure and Fluctuating Slow Resumption of Production in Myanmar and Weak Demand Await Macro Guidance] During the midday session on August 19, 2025, the most-traded SHFE tin 2509 contract was at 266,320 yuan/mt, down slightly by 0.2% from the previous day's settlement price, maintaining a fluctuate rangebound pattern with somewhat sluggish trading. LME three-month tin closed overnight at $33,670/mt.