On July 17, an aluminum producer in Xinjiang experienced a pot leakage accident, where high-temperature molten aluminum ignited a fire in the plant, causing some capacity to be suspended. It is reported that the enterprise has an operating capacity of 800,000 mt/year.

The most significant change in the imported copper concentrate market in the first half of 2026 emerged during the mid-year term-contract negotiations. According to SMM, Antofagasta, a leading Chilean mining company, and several major Chinese smelters finalized the pricing mechanism for their mid-year copper concentrate term contracts on July 1. Rather than continuing with the traditional fixed-TC approach, the parties adopted an index-linked pricing mechanism.Chinese smelters had already agreed with Antofagasta on historically low term-contract treatment and refining charges of US$0 per dry metric tonne and US¢0 per pound in 2025. The further introduction of index-based pricing in the 2026 mid-year negotiations indicates that the pricing framework for imported copper concentrate term contracts is undergoing a structural transformation, against a backdrop of persistently and deeply negative spot TCs and steadily strengthening pricing power on the mine side. At a more fundamental level, the change in term-contract pricing reflects the persistent mismatch between mine-supply growth and the expansion of smelting demand. SMM estimates that global sulfide copper concentrate supply will increase by approximately 250,000 tonnes of contained copper in 2026 compared with 2025, representing growth of around 1.3%. By contrast, newly commissioned and expanded primary smelting capacity in China is expected to generate approximately 800,000 tonnes of additional concentrate demand on a contained-copper basis.The increase in mine supply is therefore significantly smaller than the expansion in smelter demand. Meanwhile, factors including the slower-than-expected restart of Grasberg, the continued absence of a full restart at Cobre Panamá, declining ore grades at mature Chilean mines, and the lingering effects of seismic activity at Kamoa-Kakula kept the imported copper concentrate spot market extremely tight throughout the first half of the year.SMM estimates that the global sulfide copper concentrate market will record a supply deficit of approximately 610,000 tonnes of contained copper in 2026. The shortage may not begin to ease until around 2029, when production from a number of new mine projects is expected to come on stream. At the same time, elevated sulfur and sulfuric acid prices have provided an important floor under copper smelter profitability and increased smelters’ ability to absorb deeply negative TCs, at least temporarily. On July 3, the SMM China Copper Smelter Sulfuric Acid Index stood at RMB 1,789 per tonne, up RMB 886 per tonne from RMB 903 per tonne on January 9. The rise in sulfuric acid prices since the beginning of 2026 has become an important earnings driver for Chinese copper smelters and has helped sustain high refined-copper output. Under the combined influence of the mine-smelter supply-demand mismatch and strong by-product margins, spot TCs for imported copper concentrate continued to fall during the first half of 2026. The monthly SMM Imported Copper Concentrate Index averaged negative US$121.44 per dry metric tonne in June, down US$18.31 per dry metric tonne from negative US$103.13 per dry metric tonne in May. On a weekly basis, the SMM Imported Copper Concentrate Index was reported at negative US$113.83 per dry metric tonne in early June and subsequently declined continuously to negative US$124.45 per dry metric tonne on June 26. On July 3, the weekly index fell further to negative US$128.25 per dry metric tonne, down US$3.80 per dry metric tonne from the previous assessment. The successive declines through the negative US$100 and negative US$120 per dry metric tonne thresholds demonstrate that the shortage of tradable spot concentrate continued to intensify. I. Supply: New Supply Falls Short of Expectations as Mine-Side Disruptions Continue to Constrain Tradable Availability Although several global copper projects were scheduled to deliver incremental concentrate supply in the first half of 2026, actual production growth came on stream significantly more slowly than the market had previously expected.The central issue on the supply side was not any single mine incident. Rather, disruptions at major mines, declining grades at mature operations, slower-than-expected ramp-ups at new projects, and changes in trade flows collectively reduced the volume of concentrate available for purchase in China’s spot market. Regarding Cobre Panamá, the Panamanian government approved First Quantum Minerals in April to remove, process and export stockpiled ore that had been mined before the operation was suspended. According to SMM, however, the current progress at Cobre Panamá mainly concerns the treatment of existing stockpiles and does not represent a full restart of mining operations.The mine remains subject to complex disputes involving mining rights, taxation, environmental requirements, local communities and political considerations. Consequently, even if a portion of the stockpiled material enters the market during the second half of 2026, its contribution to improving the global copper concentrate balance is expected to remain limited.Related analysis is available in the SMM article, “Cobre Panamá Copper Mine: From a World-Class Mine to a Shutdown Impasse—SGS Audit Signals the Possibility of a Restart”: https://hq.smm.cn/copper/content/103965399 Grasberg remains one of the largest variables affecting global copper concentrate supply in 2026. At the beginning of the year, Freeport-McMoRan forecast approximately 3.4 billion pounds of copper sales for 2026, based on the assumption that the Grasberg Block Cave would restart and ramp up in stages from the second quarter.Because the restart underperformed expectations, Freeport subsequently lowered its 2026 copper sales guidance to approximately 3.1 billion pounds in its first-quarter report. For the imported copper concentrate market, the significance of Grasberg extends beyond the mine’s headline production figures. Other important factors include the proportion of concentrate absorbed by Indonesia’s domestic smelting sector, PTFI’s smelter inventory arrangements, and the actual quantity of material available for shipment to China’s spot market. Should the recovery at Grasberg continue to fall short of expectations in the second half of the year, the shortage of clean spot concentrate is unlikely to ease materially. In Africa, the effects of seismic activity at Kamoa-Kakula remain ongoing. Ivanhoe Mines previously issued 2026 copper production guidance of 380,000–420,000 tonnes for Kamoa-Kakula, followed by 500,000–540,000 tonnes in 2027. The company also stated that dewatering and rehabilitation work at the Kakula mine was continuing.Compared with the previous medium- to long-term target of annualized production exceeding 550,000 tonnes, however, the pace of production growth in 2026 has slowed significantly. Kamoa-Kakula had been expected to be one of the most important sources of global copper concentrate supply growth in recent years. The slowdown in its production ramp-up has therefore further reduced the potential for mine-supply growth to support a recovery in TCs. In Chile, declining grades at mature mines, transitions toward deeper underground mining, and operational accidents continued to constrain supply flexibility. The effects of the 2025 cave-in at El Teniente extended into 2026. Codelco previously stated that the accident had resulted in the loss of tens of thousands of tonnes of copper production in 2025 and would continue to affect the subsequent recovery schedule.The incident illustrates the structural challenges facing Chile’s large and mature mining operations in areas such as deep-level mining, ground-pressure management, and the timely delivery of replacement and mine-life-extension projects. In addition to El Teniente, several other major Chilean mines continued to face declining grades, throughput fluctuations and maintenance-related disruptions, limiting the recovery potential of Chilean clean-concentrate supply. Peru’s supply performance was comparatively more resilient than Chile’s, although incremental production remained highly concentrated among a limited number of operations. Major mines such as Antamina and Las Bambas benefited during certain periods from higher ore grades, improved recoveries and operational normalization, supporting Peru’s overall copper production.From the perspective of the imported spot market, however, Peruvian supply remains exposed to community disruptions, transportation-corridor interruptions, mine-grade transitions and unstable shipment schedules. Moreover, because much of the incremental production is concentrated among a small number of large mines, it is insufficient to fully offset supply losses associated with Grasberg, Cobre Panamá and mature Chilean mines. In Mongolia, the ramp-up of the Oyu Tolgoi underground mine represents one of the relatively few clearly identifiable sources of incremental global mine supply in 2026. Rio Tinto disclosed that its copper production increased by 11% year on year in 2025, primarily due to the strong ramp-up at Oyu Tolgoi.Nevertheless, while additional output from Oyu Tolgoi is contributing to global supply growth, the incremental volume from this single project remains insufficient to reverse the overall tightness in the copper concentrate spot market, given the larger increase in Chinese smelting demand and recurring disruptions at other major mines. According to SMM estimates, disruptions at major global copper mines and incremental production falling short of expectations will have a combined impact of approximately 480,000 tonnes of contained copper in 2026. Uncertainty surrounding the realization of mine supply therefore remains the primary factor driving imported copper concentrate TCs lower. From a trade-flow perspective, China’s copper concentrate imports from Chile and Peru both declined to varying degrees during the first half of 2026. According to customs data, China imported 3.7640 million tonnes of copper concentrate from Chile during January–May 2026, down 228,000 tonnes, or 5.71%, year on year.Imports from Peru totaled 3.1002 million tonnes during the same period, representing a year-on-year decrease of 147,900 tonnes, or 4.55%. Lower arrivals from the principal South American origins intensified competition among Chinese smelters for alternative feedstocks, blended concentrates, land-transported concentrates and off-specification materials. China’s total imports of copper ores and concentrates amounted to 12.2758 million tonnes during January–May 2026, down 1.01% year on year. The modest decline partly reflected the relatively high comparison base in the corresponding period of 2025. Other contributing factors included strong consumption of copper anode and blister copper in the first quarter, temporary adjustments to some smelters’ raw-material mix, and changes in the arrival schedule of term-contract cargoes.The decline in headline import volumes should therefore not be interpreted simply as evidence of materially weaker concentrate demand from domestic smelters, nor does it have a direct one-to-one relationship with spot TC movements.For the spot market, the more important variables are the marginal volume available outside term contracts, the share of mainstream clean concentrate in the available supply pool, and smelters’ periodic inventory-replenishment requirements. During the first half of 2026, new smelting capacity, continued demand for off-contract inventory replenishment, and frequent mine disruptions kept the spot market tight even though the decline in apparent import volumes was limited. Spot TCs consequently remained under sustained downward pressure. II. Demand: China’s Smelting Expansion Continues While Production Cuts Remain Fragmented On the demand side, Chinese copper smelters remain the principal source of incremental global copper concentrate consumption. Although deeply negative TCs continued to compress core smelting margins during the first half of 2026, and some smelters temporarily reduced operating rates because of maintenance, feedstock constraints and processing-margin losses, the continued commissioning of new and expanded primary smelting capacity kept concentrate demand relatively inelastic. According to SMM statistics, new and expanded primary smelting capacity in China in 2026 is expected to correspond to approximately 800,000 tonnes of contained copper.Newly commissioned capacity typically requires substantial initial feedstock inventories. Even when spot TCs are deeply negative, new production lines must continue purchasing concentrate to ensure operational stability, complete equipment commissioning and ramp-up, and maintain market share. As a result, the practical effectiveness of production cuts by smelters as a mechanism for restoring TCs has been significantly weakened. The Chinese smelting sector in the first half of 2026 was characterized by the coexistence of maintenance-related disruptions and demand generated by capacity expansion. On the one hand, several smelters scheduled maintenance during the second quarter, temporarily reducing concentrate consumption. On the other hand, ramp-ups at newly commissioned facilities, term-contract obligations, low inventory safety margins and strong sulfuric acid earnings prevented smelters from implementing coordinated production cuts.Particularly in an environment where imported concentrate inventories remained structurally tight, some smelters continued to make essential market inquiries to secure production continuity, even when they reduced the frequency of their spot purchases. III. Smelting Economics: Strong Sulfuric Acid Margins Increase Tolerance for Negative TCs, but Volatility Risks Are Rising The earnings structure of copper smelters changed materially during the first half of 2026. Traditionally, smelter profitability has primarily been derived from TC/RC income and credits from gold, silver and other by-products. With spot TCs for imported copper concentrate moving deeply into negative territory, however, processing-fee income fell sharply and sulfuric acid margins became significantly more important. Overall copper smelting margins were weaker in the early part of the first half and improved later in the period. Declining TCs imposed substantial pressure on profitability, but elevated sulfuric acid prices, strong precious-metal prices and improved returns from certain other by-products provided a partial offset.Approximately 3.5–4.0 tonnes of sulfuric acid are produced as a by-product for every tonne of refined copper output. When sulfuric acid prices are high, acid earnings can substantially offset the impact of negative TCs and rising smelting costs. Nevertheless, according to SMM estimates, spot-based smelting margins at Chinese copper smelters have now approached break-even, and smelters have become noticeably less willing to purchase spot cargoes at increasingly unfavorable TCs. The rise in sulfuric acid prices has mainly been driven by two factors. First, geopolitical disruptions in the Middle East, tight sulfur supply and higher import costs raised the cost base of sulfuric acid production. Second, demand from phosphate fertilizers, chemicals, hydrometallurgical operations and battery-material producers provided broad-based downstream support.The sharp rise in sulfuric acid prices has reshaped the economics of copper smelting in China, with acid earnings accounting for a substantially larger proportion of smelters’ non-TC/RC income. This was also an important reason why Chinese smelters did not implement large-scale voluntary production cuts during the first half of 2026 despite the continued decline in TCs. The support provided by sulfuric acid margins is not without risk, however. Should geopolitical disruptions ease in the second half of the year, sulfur supply recover, or restrictions on Chinese sulfuric acid exports result in more material being redirected to the domestic market, sulfuric acid prices could retreat from their elevated levels.If acid margins narrow while copper concentrate TCs remain deeply negative, pressure on smelter profitability will become more visible again. Some higher-cost smelters may respond by extending maintenance periods, reducing utilization rates or cutting spot concentrate purchases. Sulfuric acid prices will therefore be one of the key variables determining whether TCs can stabilize during the second half of the year. IV. Spot Market: Frequent Mine Tenders and the Emergence of Index-Minus Pricing Trading activity in the imported copper concentrate spot market was uneven during the first half of 2026, but mine tenders and trader offers remained important channels for price discovery. As spot TCs continued to decline, outright fixed-price transactions repeatedly established new market lows, while index-minus pricing gradually became the dominant quotation format. Since the second quarter, trader offers have increasingly been expressed as an average of the SMM and Fastmarkets indices minus an additional differential. This pricing method indicates that, in an environment of continuously declining spot TCs, concentrate sellers increasingly prefer index-linked formulas that preserve their exposure to further downward movements in TCs. Smelters’ purchasing behavior remained conflicted. On the one hand, deeply negative TCs continued to compress smelting margins, limiting smelters’ willingness to accept expensive spot concentrate carrying extremely unfavorable processing terms. Some companies therefore reduced the frequency of their active inquiries.On the other hand, ramp-ups at new smelting facilities, insufficient inventory safety margins and uncertainty surrounding term-contract arrivals meant that some smelters still needed to replenish stocks to meet essential production requirements. Consequently, the market did not experience a collective withdrawal of buyers sufficient to drive a meaningful recovery in TCs. Instead, continuously lower mine-tender settlements pushed the spot index further into deeply negative territory. V. H2 Outlook: Limited Marginal Supply Recovery and Persistently Deeply Negative TCs Looking ahead to the second half of 2026, the imported copper concentrate spot market will continue to be driven by the interaction between the actual realization of mine-supply recovery and the resilience of Chinese smelting demand.On the supply side, the treatment of Cobre Panamá stockpiles, progress in the Grasberg restart, incremental production from Oyu Tolgoi, and shipment stability at major Peruvian mines may provide some marginal improvement. Based on current developments, however, Cobre Panamá has not achieved a full restart, the Grasberg recovery schedule has already been revised downward, production growth at Kamoa-Kakula has slowed, and mature Chilean mines remain exposed to declining grades and safety-related disruptions. The conditions required for a substantial easing of the global copper concentrate market are therefore not yet in place. On the demand side, new and expanded Chinese primary smelting capacity will continue to support structurally strong concentrate consumption. Although some smelters may temporarily reduce production because of losses, maintenance or feedstock constraints, the ramp-up of newly commissioned projects, the fulfillment of term contracts, sulfuric acid margins and regional refined-copper price differentials will continue to weaken the impact of production cuts on TCs.Should the effect of maintenance outages gradually diminish during the third quarter while newly commissioned capacity continues to ramp up, China’s demand for imported copper concentrate is likely to remain elevated on a sequential basis. Sulfuric acid prices will remain a key variable for smelting profitability in the second half of the year. Should sulfuric acid prices remain elevated or rise further, smelters will continue to demonstrate a relatively strong capacity to absorb negative TCs, limiting the potential for a recovery in spot TCs. Conversely, should sulfuric acid prices retreat from their highs, pressure on smelter profitability will increase again. Some smelters may respond by extending maintenance, cutting operating rates or reducing spot purchases, potentially allowing TCs to stabilize or recover modestly for a period. In the spot market, mine-tender results will remain an important leading indicator for TC movements in the second half of the year. As term-contract pricing becomes increasingly index-linked and more spot transactions adopt index-minus formulas, the SMM Imported Copper Concentrate Index is expected to play an even stronger role as the principal pricing anchor for market transactions. Should mine-tender settlements remain deeply negative, spot TCs may fall further. Conversely, if incremental volumes from the Grasberg recovery, Cobre Panamá stockpile processing and Oyu Tolgoi materialize at the same time, while maintenance activity among smelters increases, TCs may stage a temporary recovery. Overall, some marginal improvement in imported copper concentrate supply is possible during the second half of 2026. Nevertheless, given the continued commissioning of new Chinese smelting capacity, the shortage of tradable concentrate, and the support that strong sulfuric acid margins provide to smelter operating rates, a sustained and substantial recovery in spot TCs appears unlikely. Spot TCs for imported copper concentrate are therefore expected to remain volatile within deeply negative territory during the second half of the year. Any temporary recovery will depend largely on the actual realization of mine restarts, the extent to which smelters implement maintenance and production cuts, and changes in sulfuric acid profitability.

In H1 2026, the MHP market generally followed a logic of “continuously tightening supply and nickel and cobalt payables consolidating higher.” Nickel and cobalt payables rose steadily, only pulling back this month.

1. Tender Conditions This public tender for stainless steel welding wire and other items (PGWZMYHGZHD260708302743) is issued by Pangang Group Materials and Trade Co., Ltd., the bid inviter. The funds for this tender come from self-raised sources. The project has met the conditions for tendering, and an open tender is now conducted. 2. Project Overview and Tender Scope 2.1 Project Name: Public Tender for Stainless Steel Welding Wire and Other Items 2.2 If the tender fails, the procurement method will be converted to negotiation procurement. 2.3 For details of the tender content, scope, and scale, refer to the attached Bill of Materials (Attachment.pdf). 3. Bidder Qualification Requirements 3.1 Joint venture bidding is not allowed for this tender. 3.2 Bidders must meet the following qualification requirements: (1) Production-type business license (2) Distribution-type business license 3.3 Bidders must meet the following registered capital requirements: Registered capital for production-type bidders: 2,000,000 yuan and above Registered capital for distribution-type bidders: 2,000,000 yuan and above 3.4 Bidders must meet the following performance requirements: When submitting a bid, bidders must provide performance proof for similar products from January 1, 2023 to the bid submission deadline (scanned copies of VAT invoices). 3.5 Bidders must meet the following capability, financial, and other requirements: Financial requirements: Refer to the attachment (if applicable) Capability requirements: Refer to the attachment (if applicable) Other requirements: 1. Bidders must indicate the producer when participating in the tender. Products must be genuine, and factory certificates (original quality certificates or warehouse withdrawal documents) from the above manufacturers must be provided upon delivery. The supplier is responsible for product quality within the validity period. 2. If a bidder fails to upload valid quality management system certification documents corresponding to the declared producer, the bid price will be invalid. 3. Bidders must upload a commitment letter for no safety accidents in the format of Attachment 3. 3.6 For projects that must be tendered according to law, bids from dishonest persons subject to enforcement are invalid. 4. Obtaining Tender Documents 4.1 Those intending to participate in the tender may log in to the Ansteel Intelligent Bidding Platform at http://bid.ansteel.cn to download the electronic tender documents from 23:00 on July 9, 2026 to 13:45 on July 31, 2026 (Beijing time, the same hereinafter). Click to view tender details:

[SMM Magnesium Market Analysis: Semi Coke Losses Raise Smelting Costs; China’s Magnesium Ingot Comprehensive Cost Rose MoM in June] At the end of May, a safety accident at the Qinyuan coal mine directly tightened the supply of raw coal in the region, rapidly driving up market coal prices. There was a significant time lag in the transmission of semi coke prices, and losses on production at semi coke plants intensified, substantially increasing the energy raw material cost for primary magnesium smelting. Enterprises mitigated fixed expenses such as plant and equipment depreciation by raising capacity, which only slightly alleviated cost pressure. The incremental cost impact from higher energy prices was stronger, pushing up the industry’s overall smelting cost. Processing profits at upstream plants continued to be squeezed, and profit margins narrowed for most enterprises.

★ Macro ★ 01 ★★ [June China Warehousing Index Returns to Expansion Territory] The China Federation of Logistics and Purchasing released the June China Warehousing Index. With the concentrated commencement of major infrastructure projects nationwide and the simultaneous recovery of supply and demand in manufacturing, warehousing business demand improved noticeably, and the index returned to expansion territory. The June China Warehousing Index stood at 50.2%, up 0.6 percentage points MoM. 02 ★★ [ PBOC Net Withdrawal of 59.5 Billion Yuan via Open Market Operations ] The People's Bank of China (PBOC): Today, it conducted a 10 billion yuan 7-day reverse repo operation, with a bid amount of 10 billion yuan, an awarded amount of 10 billion yuan, and an operation rate of 1.40%, unchanged from the previous level. As 69.5 billion yuan of 7-day reverse repos matured today, a net withdrawal of 59.5 billion yuan was recorded on the day. 03 ★★ [ PBOC Governor Pan Gongsheng: Supports HKMA in Raising RMB Business Funding Arrangement from 200 Billion Yuan to 500 Billion Yuan ] Pan Gongsheng, Governor of the People's Bank of China, stated on July 7 at the "Hong Kong Fixed Income and Currency Summit cum Bond Connect Forum" that Hong Kong is the world's largest offshore RMB business center. To further develop the RMB offshore market, liquidity supply is a fundamental arrangement. In recent years, the People's Bank of China has coordinated the role of RMB clearing banks and currency swap arrangements to provide stable RMB liquidity support for the Hong Kong offshore market. Previously, the People's Bank of China signed an 800 billion yuan standing swap arrangement with the HKMA, and also upgraded and established an RMB business funding arrangement totaling 200 billion yuan, providing a stable and relatively low-cost source of medium and long-term RMB funds for commercial banks in Hong Kong. Pan Gongsheng stated that on this basis, he supports the HKMA in increasing the size of the RMB business funding arrangement from the current 200 billion yuan to 500 billion yuan, and extending the usage period to no more than three years. 04 ★★ [ SAFE Releases Foreign Exchange Reserve Data for End-June 2026 ] Data from the State Administration of Foreign Exchange (SAFE) showed that as of the end of June 2026, China's foreign exchange reserves stood at $3,416.3 billion, down $26 billion from the end of May, a decline of 0.75%. In June 2026, influenced by macroeconomic data from major economies, the monetary policies and expectations of major central banks, and other factors, the US dollar index rose, while major global financial asset prices showed mixed performance. The combined effects of exchange rate translation and changes in asset prices led to a decline in foreign exchange reserves for the month. China's economy is generally stable and developing with innovation and quality, which is conducive to the basically stable scale of foreign exchange reserves. ★ Industry and Downstream ★ 01 ★★ [June Sales of Various Excavators Total 25,445 Units] According to data released by the China Construction Machinery Association on Tuesday, 25,445 units of various excavators were sold in June, up 35.3% YoY. Of which: domestic sales were 10,898 units (including 65 electric excavators), up 33.9% YoY; exports were 14,547 units (including 34 electric excavators), up 36.4% YoY. 02 ★★ [Global New Ship Order Tracking (June 29–July 5)] According to tracking by International Ship Network: from June 29 to July 5, 2026, global shipyards received a total of 68+4 new ship orders. Of which, Chinese shipyards received 57+4 new ship orders; Japanese shipyards received 3; South Korean shipyards received 4; and Philippine shipyards also received relevant new ship orders. 03 ★★ [ Da-Qin Railway: June Cargo Transport Volume of Da-Qin Line at 36.89 Million mt ] Da-Qin Railway announced that in June 2026, the company's core operating asset, the Da-Qin Line, completed a cargo transport volume of 36.89 million mt, up 13.79% YoY; the daily average volume was 1.2297 million mt. The daily average number of heavy-haul trains operated on the Da-Qin Line was 86.9, of which the daily average number of 20,000-tonne trains was 61.1. In January-June 2026, the cumulative cargo transport volume on the Da-Qin Line reached 204 million mt, up 7.96% YoY. 04 ★★ [Xuanwei Laibin Guangming Coal and Power No.1 Mine Ordered to Suspend Production for Rectification] Recently, the Yunnan Bureau of the National Mine Safety Supervision Administration issued an official notice, stating that due to multiple major accident hazards at the No.1 Mine of Yunnan Xuanwei Laibin Guangming Coal and Power Co., Ltd., and the illegal organization of production with existing problems, the regulatory authorities ordered the mine to suspend production for rectification in accordance with the law. It is understood that from June 11 to 13, 2026, the Yunnan Bureau of the National Mine Safety Supervision Administration conducted an on-site inspection of the No.1 Mine of Yunnan Xuanwei Laibin Guangming Coal and Power Co., Ltd. and found that the mine was still organizing production despite major accident hazards such as "falsifying drawings, concealing mining faces, and continuing production; and failure to install safety monitoring and personnel position monitoring systems in the coal mine." 05 ★★ [One Residential Plot in Hangzhou Sold at 26.68% Premium] On July 7, a residential plot in the Xiaoshan Century City core unit, Hangzhou, was transferred, with a land area of 34,167.00 m², planned building area of 95,667.60 m², plot ratio of 2.8, starting price of 3.635 billion yuan, and starting floor price of 38,000 yuan/m². After 98 rounds of bidding, Poly Development finally won the plot for a total price of 4.605 billion yuan, with a transaction floor price of 48,139 yuan/sq m and a premium rate of 26.68%. ★ Other Hot Topics ★ ⭕ [HBIS Releases Full-Scene Solution for High-End Green Metal Decoration Materials] The opening of the exhibition hall and the release of the solution represent HBIS’s practical commitment to deepening its green and low-carbon transformation, implementing the national “2024-2025 Energy Conservation and Carbon Reduction Action Plan,” the “Implementation Plan for High-Quality Development of the Green Building Materials Industry,” and the deployment for high-quality development of the new materials industry in Hebei province. It is another landmark practical achievement for HBIS in the transformation and upgrading process from “steel to materials” and “manufacturing to service,” leveraging its advantages across the entire industry chain to precisely address core client needs, actively overcome industry development bottlenecks, and lead the industry’s high-end upgrade. ⭕[Guizhou Province Coal Mine Enterprise Safety Production Permit Application Status] According to relevant regulations, following the decision made at the Party Leadership Group meeting of the Guizhou Provincial Energy Administration on June 30, 2026, approval was granted for the extension/renewal or issuance of safety production permits for the following: Guizhou Bangda Energy Development Co., Ltd., Shuicheng District Shaomi Laodigou Coal Mine; Guizhou Pannan Coal Development Co., Ltd., Xiangshui Mine Jiuwuji Well Area; and Zunyi Bozhou District Sheng’an Coal Industry Co., Ltd., Zunyi County Panshui Town Xing’an Coal Mine. ⭕[Jilin Province Coal Mine Capacity Status for H1 2026] In accordance with the requirements of the “Notice of the General Office of the National Energy Administration on Improving the Coal Mine Capacity Registration and Announcement System for Carrying Out Construction Coal Mine Capacity Announcements” (Guonengfa Coal [2017] No. 17), the capacity status of legal construction coal mines with reported construction commencement information and complete mining licenses and business licenses, as well as legal production coal mines with complete mining licenses, safety production permits, and business licenses, as of June 30, 2026, is hereby announced. *This report is an original work and/or compilation created by SMM Information & Technology Co., Ltd. (hereinafter referred to as “SMM”), and SMM legally holds the copyright, which is protected by the Copyright Law of the People’s Republic of China and other applicable international treaties. Without written permission, no part may be reproduced, modified, sold, transferred, displayed, translated, compiled, disseminated, or otherwise disclosed to any third party or licensed for use by any third party. If any violation is discovered, SMM will pursue legal liability for infringement, including but not limited to requiring the assumption of contractual breach liability, restitution of unjust enrichment, and compensation for direct and indirect economic losses. 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Upon discovery of such violations, SMM will pursue legal remedies for infringement, including but not limited to demanding contractual liability for breach of contract, restitution of unjust enrichment, and compensation for direct and indirect economic losses. The views expressed in this report are based on market-collected information and a comprehensive assessment by the SMM research team. The information provided in this report is for reference only and at your own risk. This report does not constitute direct investment research advice. Clients should make decisions prudently and not use this as a substitute for their independent judgment. Any decision made by the client is unrelated to SMM. Furthermore, SMM is not responsible for any losses or liabilities arising from unauthorized or illegal use of the views in this report. SMM reserves the right to modify and ultimately interpret the terms of this statement.

★ Macro ★ 01 ★★ [PBOC Conducts 1,000 Billion Yuan Outright Reverse Repo Operation Today] The People's Bank of China recently announced that it would conduct a 1,000 billion yuan outright reverse repo operation on July 6, with a fixed quantity, rate tender, and multiple-price bidding, for a term of 3 months (91 days). As 800 billion yuan of this tenor matures within the month, this 3-month outright reverse repo operation will achieve a rollover with increased volume, ending the three-month streak of shrinking volumes for this tenor. 02 ★★ [ People's Daily: Panda Bonds Reflect Foreign Investors' Increasing Bet on China ] Since the start of this year, panda bond issuance has heated up significantly, with over 130 billion yuan issued in the first five months, and is expected to reach a new high for the full year. Large-scale panda bond issuance by mainstream international issuers signals strong global recognition of China's institutional environment, development expectations, and the renminbi. Specifically, three key reasons stand out. First, comparative financing cost advantages have made borrowing in renminbi more attractive. Second, the continuous improvement of the panda bond framework has enhanced financing convenience. Third, the popularity of panda bonds is closely linked to the accelerating pace of renminbi internationalization. The growing panda bond market is forming a positive feedback loop with the international use of the renminbi. 03 ★★ [ PBOC Reverse Repo Operation Results in Net Withdrawal of 49.5 Billion Yuan on the Day ] The PBOC conducted a 7 billion yuan 7-day reverse repo and a 1,000 billion yuan outright reverse repo operation today. With 157.5 billion yuan of 7-day reverse repos and 800 billion yuan of outright reverse repos maturing today, the net withdrawal for the day amounted to 49.5 billion yuan. In the open market this week, a total of 678.5 billion yuan reverse repos will mature, with 157.5 billion yuan, 69.5 billion yuan, 100 billion yuan, 288.5 billion yuan, and 63 billion yuan maturing from Monday to Friday respectively. Additionally, 800 billion yuan of 89-day outright reverse repos matured on Monday, and the PBOC conducted a 1,000 billion yuan 3-month outright reverse repo operation on Monday. ★ Industry and Downstream ★ 01 ★★ [World's Largest Dock Restarts] After being taken over by a new owner, the long-dormant Gunsan Shipyard of South Korea's largest shipbuilding group, HD Hyundai, has officially restarted, securing its first new ship order. Amid a global new shipbuilding orderbook that continues to fluctuate at highs, this shipbuilding base, which had been idle for nearly nine years, is re-entering the sight of global shipowners, leveraging its advantage of relatively shorter delivery cycles. 02 ★★ [Shaanxi Coal Industry: June 2026 Coal Production Up 0.70% YoY] Shaanxi Coal Industry announced that in June 2026, its coal production was 14.46 million mt, cumulative 91.17 million mt, up 0.70% and 4.30% YoY respectively; sales of self-produced coal were 13.07 million mt, cumulative 83.66 million mt, down 9.49% and up 3.45% YoY respectively. Power generation side, total power generation was 3.352 billion kWh, cumulative 19.082 billion kWh, down 11.86% and up 7.39% YoY respectively; total electricity sales were 3.136 billion kWh, cumulative 17.946 billion kWh, down 12.40% and up 7.98% YoY respectively. 03 ★★ [Hoa Phat Price Adjustment Info] FHS announced July prices last Friday, continuing a significant cut of 1,050 VND per kg (approx. $40 per mt) compared to the previous month. Please see below. ================= 20kt and above: $538 CIF (14,230 VND/kg) 15kt to 20kt: $540 CIF (14,280 VND/kg) 10kt to 15kt: $542 CIF (14,330 VND/kg) 5kt to 10kt: $544 CIF (14,380 VND/kg) 2,000 mt to 5,000 mt: $546 CIF (14,430 VND/kg) <2kt: $548 CIF (14,490 VND/kg) Shipment: Aug/Sep 2026 Port: HCM/PM Exchange rate: 26,460 VND = $1 04 ★★ [Bao Gang United Steel HH AREMA Heat-Treated Rail First Export Outside China] In June 2026, Bao Gang United Steel successfully completed the first batch export of HH370 grade high-strength heat-treated rails conforming to AREMA standards. This marked the first export of HH grade rails, filling the gap in the company’s production and export capabilities for all categories of AREMA-standard rails, further enriching its high-end AREMA-standard rail product portfolio, and demonstrating its full independent manufacturing strength from proprietary technological breakthroughs to large-scale stable production. ★ Other Hot Topics ★ ⭕ [Shan Steel Rizhao Company 800MPa High-Strength Steel First Successful Trial Production] Recently, the 800MPa grade high-strength steel was successfully trial-produced on the hot rolling line. Inspection showed good flatness and surface quality, marking that the hot rolling plant of Shan Steel Rizhao Company has reached a new level in high-end product development, further enhancing the competitiveness of its hot-rolled products in the lightweight markets for construction machinery and commercial vehicles. ⭕ [The environmental impact report for the Phase II construction of the Dongfang Special Steel Green High-End Nickel-Chromium New Material Intelligent Manufacturing Project was approved.] This is an expansion project with a total investment of 3,823,998,800 yuan, of which 190 million yuan is for environmental protection. The project is located at No. 1333 Jiagang Road, Xinfeng Town, Nanhu District, Jiaxing City (within the existing plant area of Zhejiang Nanhu Economic Development Zone and on newly added adjacent land). The project plans to purchase vacuum induction furnaces, electroslag furnaces, vacuum consumable furnaces, cold continuous rolling units, cold single-stand rolling units, and supporting cold annealing, pickling, and tempering units, forming a capacity of 1 million mt of cold-rolled white coils and 35,200 mt of specialty smelting. ⭕ [Multiple departments jointly deploy a crackdown on illegal activities in production safety.] It was learned from the Ministry of Emergency Management on July 6 that the Office of the State Council Work Safety Committee, together with the Political and Legal Affairs Commission of the CPC Central Committee, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, and the Ministry of Justice, recently issued a notice. It deploys all regions and relevant departments to conscientiously implement the spirit of General Secretary Xi Jinping's important instructions on production safety, strictly implement the spirit of the national production safety video conference, and, in conjunction with the three-year action plan for tackling the root causes of production safety and the investigation and rectification of major accident hazards, focus on key industries such as ore mines, chemicals, fire protection, and industry and trade to deeply carry out a crackdown on illegal activities in production safety. *This report is an original work and/or compilation created by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), which legally holds the copyright and is protected by the Copyright Law of the People's Republic of China and other applicable laws, regulations, and international treaties. 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On July 6, it was learned from the Ministry of Emergency Management that the Office of the Work Safety Committee of the State Council, together with the Political and Legal Affairs Commission of the CPC Central Committee, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, and the Ministry of Justice, recently issued a notice, deploying all regions and relevant departments to earnestly implement the guiding principles of General Secretary Xi Jinping's important instructions on work safety, strictly enforce the spirit of the national work safety video conference, and, in conjunction with the three-year action to address the root causes of work safety and the investigation and rectification of major accident hazards, focus on key industry sectors such as mines, chemical industry, fire protection, and industrial and trade, and deeply carry out the "crackdown on illegal activities and violations" in work safety.

This week, finished steel continued its gradual decline, while raw materials began to stabilize, with coking coal rebounding to some extent. During the week, rumors about a coal mine accident in Shanxi and customs clearance restrictions at the Mongolian border spread, boosting sentiment. Coupled with the China Mineral Resources talks, the raw materials side rebounded from lows. In the second half of the week, as rumors of maintenance at steel mills across various regions emerged, negative feedback expectations intensified somewhat, and raw materials pulled back. Approaching the weekend, however, the 10th round of coke price increases was initiated, pushing coking coal and coke futures higher. In the spot market, the off-season characteristics of end-users became increasingly evident, with the market restocking at low prices as needed. With spot prices remaining relatively firm, the spot-futures price spread continued to widen...

Iron ore prices followed an initial rise and subsequent decline this week, with the price center shifting further lower. The core drivers were that after the ninth round of coke price cuts was implemented, steel mill losses widened further. Combined with expectations of environmental protection-driven production restrictions in some regions, blast furnace maintenance plans increased, hot metal production continued to pull back, and the demand side was clearly under pressure. In terms of supply, global iron ore shipments and China’s port arrivals both increased MoM, with supply-side pressure intensifying somewhat and further weighing on ore prices. During the week, market talk that benchmark negotiations might restrict low-grade ore port cargo pick-up pushed futures to a short-term rebound. However, the market broadly viewed the probability of this measure actually being implemented as low, and after sentiment was released, price logic returned to a demand-led mode. Affected by this, spot prices performed weaker than futures. In port spot cargoes, the weekly average of the MMI 61% index slipped 5 yuan/mt MoM. Chart: MMI 61% Port Spot Index Source: SMM The domestic iron ore concentrate market edged lower this week, with regional divergence in performance. Prices remained basically stable in Tangshan, Qian’an, and Qianxi in Hebei. Areas such as Chaoyang, Beipiao, and Jianping in western Liaoning edged down by 5-10 yuan/mt. East China saw a pullback of 10-15 yuan/mt. Overall domestic ore production remained steady, but the resource landscape diverged by region. Supply in Hebei remained somewhat tight; within this, the Chengde area saw a further contraction in resource supply due to a mining accident, which provided some support to local iron ore concentrate prices. On the demand side, hot metal production at steel mill blast furnaces remained at a high level, still offering support to iron ore concentrate demand. However, steel mill profits have narrowed significantly recently, and the overall desire to bargain down prices is strong, causing local iron ore concentrate prices to edge down slightly. Chart: Tight Domestic Ore Supply Supports Prices — Domestic vs. Imported Ore Price Spread to Widen Further Next Week Outlook for Next Week Looking ahead to next week, the probability of the 10th round of coke price increases being implemented is relatively high. Increasing steel mill maintenance resulting from losses will lead to a larger decline in hot metal production. Iron ore demand will continue to deteriorate. Meanwhile, mines will push shipments in June, and imported ore port arrivals still have upside room over the next two weeks, leading to a slight accumulation in port inventories. In addition, a new round of talks between the US and Iran is scheduled for mid-month, and crude oil prices still face downside expectations, so iron ore shipping costs will remain weak. Iron ore prices will remain under pressure. However, considering the disturbance from benchmark negotiation news, there may be opportunities for a price rebound. Overall, iron ore prices are expected to remain in the doldrums next week. Domestically, the tight iron ore supply situation is expected to be difficult to alleviate. But given that demand for iron ore concentrates has weakened somewhat, steel mills’ push for lower prices will continue to dominate. The game between sellers and buyers continues. Overall, the domestic iron ore market is expected to be in the doldrums next week, but the decline may be smaller than that for imported ore.