[Announcement of Baosteel's Price Adjustment for Sheets & Plates Futures for Domestic Sales in September 2026] After study, Baosteel has decided to adjust its domestic sales prices for September 2026 on the basis of August 2026 as follows (all prices are excluding tax unless otherwise specified): 1. Hot-rolled base price raised by 50 yuan/mt. 2. Thick plate base price raised by 50 yuan/mt. 3. Pickled base price raised by 50 yuan/mt. 4. Cold-rolled base price raised by 50 yuan/mt. 5. Hot-dip galvanized base price raised by 50 yuan/mt. 6. Electrogalvanized base price raised by 50 yuan/mt. 7. Medium aluminum zinc-aluminum-magnesium base price raised by 50 yuan/mt. 8. High aluminum zinc-aluminum-magnesium base price raised by 50 yuan/mt. 9. Aluminum-zinc coated base price raised by 50 yuan/mt. 10. Color coated base price raised by 50 yuan/mt. 11. Non-oriented silicon steel base price raised by 50 yuan/mt. 12. Grain-oriented silicon steel base price raised by 50 yuan/mt. 13. Seamless pipe base price raised by 50 yuan/mt. 14. Welded pipe base price raised by 50 yuan/mt. 15. Wire rod base price raised by 50 yuan/mt. 16. Bar base price raised by 50 yuan/mt. 17. For adjustments to alloy surcharges and coating and plating surcharges, please refer to the September 2026 price list. 18. The above price adjustment notice shall take effect from the date of announcement. 19. The right to interpret this price adjustment notice belongs to the Marketing Center of Baoshan Iron & Steel Co., Ltd. (Baosteel International). Baoshan Iron & Steel Co., Ltd. Marketing Center (Baosteel International) August 10, 2026

After hitting the daily limit on August 5, Baowu Magnesium’s share price pulled back over the past two trading days. As of around 10:55 a.m. on August 7, the stock was up 2.74%, trading at 11.26 yuan per share. On the news front, Baowu Magnesium’s investor relations activity record dated August 4, 2026 shows: Question: What are Baowu Magnesium’s main businesses? Baowu Magnesium responded: The company’s businesses include magnesium materials, magnesium products, aluminum products, mineral products, and building formwork. Its main products include magnesium alloys, magnesium alloy deep-processed products, aluminum alloys, aluminum alloy deep-processed products, master alloys, and strontium metal. Question: Could you introduce the company’s ore resources? Baowu Magnesium responded: The company’s subsidiary Chaohu Baomei holds 90 million mt of dolomite ore reserves and is in active mining operation; subsidiary Wutai Baomei holds 580 million mt of dolomite ore reserves; and associate company Anhui Baomei holds 1.3 billion mt of dolomite ore reserves. The subsidiary Gansu Mining under Gansu Baomei holds 14.91 million mt of available quartzite ore reserves. Question: How was China’s magnesium product production in H1 2026? Baowu Magnesium responded: In H1 2026, China’s primary magnesium production was approximately 603,100 mt, up 26.49% YoY. China exported approximately 239,100 mt of various magnesium products, up 7.95% YoY. Question: How does the company promote magnesium metal? Baowu Magnesium responded: Relying on its full magnesium industry chain, the company focuses on lightweighting and high-end manufacturing, seizes the rapid growth opportunity of magnesium applications in lightweighting, and will focus on the following points: 1. Full-chain guarantee: With an integrated industry chain covering ore mining, magnesium smelting, alloys, and deep processing, we ensure a stable magnesium supply to support large-scale applications across sectors. 2. Technology leadership: Leveraging our technological strengths, we collaborate with universities, research institutes, and clients on R&D for new magnesium alloys, and break through key technologies such as large-scale integrated die casting and magnesium alloy corrosion resistance and flame retardancy. 3. Application expansion: Guided by high-end, green and intelligent development, we focus on automotive, robotics, aerospace and other fields, and provide integrated services covering materials, components, and solutions. Question: What is the pace of design wins and mass production of magnesium alloy die castings in the NEV sector? Baowu Magnesium responded: The company has concentrated superior technical resources to continue deepening its presence in mid-to-large magnesium casting businesses such as drive motors, instrument panel cross car beams, seat frames, and integrated auto body structural components. In the cross car beam area, we focused on breaking through with leading automakers, securing design wins for multiple hot-model cross car beams, and during this period launched the world’s first “semi-solid process CCB.” In drive motors, we are orderly advancing customer mass production deliveries, actively conducting aluminum-to-magnesium feasibility studies with industry-leading suppliers, and have achieved major breakthroughs in both rare earth alloy R&D and process optimization. Meanwhile, "magnesium alloy auto body integrated castings" became a hot topic in magnesium applications most concerned by NEV manufacturers in 2025. After successfully passing the whole-vehicle road test for a certain automaker's tailgate inner panel, one-stage sample trial production of magnesium components was subsequently completed, contributing substantial verification and testing data for industry technology iteration and further boosting NEV manufacturers' confidence in large magnesium part applications. Under this favorable situation, the company gradually established in-depth R&D cooperation with some leading automakers. In terms of performance: Baowu Magnesium's semi-annual performance forecast showed it expected a net loss of RMB14-20 million in H1. Regarding the reasons for the performance change, Baowu Magnesium stated: Due to a slight YoY increase in magnesium prices, the profitability of the company's magnesium materials segment was basically stable YoY. The main reasons for the YoY decline in the company's H1 performance include: due to aluminum price fluctuations and lower sales volume of aluminum products compared to the same period last year, the aluminum products business saw a decline in profitability; the newly built ferrosilicon project of subsidiary Gansu Baowu Magnesium was just commissioned in May, with consumption indicators not yet stable, leading to relatively high product costs; the company's associate company Anhui Baowu Magnesium was still in the capacity ramp-up stage, with crude magnesium and alloy production significantly higher YoY, and various production technical indicators gradually optimized, but the products remained loss-making, impacting the company's investment income YoY; and due to the appreciation of the renminbi against the US dollar and euro, the company's foreign exchange losses on export business increased YoY, etc. On July 14, Baowu Magnesium issued an announcement on daily related-party transactions. Due to daily production and operation needs, the company and its controlled subsidiaries plan to conduct daily related-party transactions in 2026 with related parties including the controlling shareholder Baosteel Metal and its affiliates, other Baowu second-level subsidiaries and their affiliates, and the associate company Yi'an Yunhai. The types of related-party transactions include purchasing products and goods from related parties, accepting operational services from related parties, selling products and goods to related parties, providing operational services to related parties, providing and financial services (including deposits and loans, factoring, discounting, foreign exchange settlement and sales, etc.). The total estimated amount of daily related-party transactions (excluding financial services) in 2026 is RMB1.28 billion; in addition, the estimated amount of financial related-party transactions with Baowu Group Finance Co., Ltd. has not been adjusted, and the relevant quotas are already included in the overall arrangement. These related-party transactions strictly follow market-based fair pricing principles, with fair and reasonable transaction terms, which are conducive to ensuring the company's sustained and stable operations, will not harm the lawful rights and interests of the publicly listed company and minority shareholders, nor affect the company's operational independence. When asked "Hello, board secretary, could you tell me whether your company can stably mass-produce semiconductor-grade ultra-high-purity magnesium metal ingots as found online, and is the only publicly listed company? Also, what is the proportion of your sales in this area to the company's total sales over the past few years?" Baowu Magnesium responded on the investor interaction platform on June 23: The company's business includes magnesium materials, magnesium products, aluminum products, mineral products, and building formwork. The company's main products include magnesium alloys, magnesium alloy deep-processed products, aluminum alloys, aluminum alloy deep-processed products, master alloys, and strontium metal. Please refer to the 2025 annual report for the proportion of revenue by product segment. Regarding the specific products and sales proportion you mentioned, the company has not publicly disclosed such information; please refer to the company's official periodic reports or announcements. In response to the questions: "1. Regarding the Anhui Qingyang project, what is the mine commissioning progress, and what is the current approximate ore output of the mine? 2. What are the advantages of the company's vertical retort magnesium smelting technology? How does it compare with peers in Fugu?" Baowu Magnesium replied on the investor interaction platform on June 17: The company adopts the vertical retort magnesium smelting process, which has outstanding technical advantages: increased per-retort capacity, shortened production cycle, improved production efficiency, extended service life of reduction retorts, and a higher level of mechanized and automated operations. The Anhui Qingyang mine project has achieved a capacity of 20 million mt per year. Regarding the main business engaged in during the reporting period, Baowu Magnesium introduced in its 2025 annual report: The company is the leader in magnesium-based new materials under China Baowu, possessing the advantages of the entire industry chain and mine resources, leading vertical retort magnesium smelting technology, and its magnesium alloy capacity and market share rank among the top globally. The company focuses on lightweight materials, with products covering automobiles, household consumer electronics, e-bikes, building formwork, and other fields. After more than 30 years of development, the company has become a high-tech enterprise integrating mining, non-ferrous metal smelting and processing, committed to becoming a global leader in the magnesium industry. The company's business includes magnesium materials, magnesium products, aluminum products, mineral products, and building formwork. Its main products include magnesium alloys, magnesium alloy deep-processed products, aluminum alloys, aluminum alloy deep-processed products, master alloys, and strontium metal. For the company's future development outlook, Baowu Magnesium stated in its 2025 annual report: 2026 marks the starting year of the company's 15th Five-Year Plan, and the industry will usher in an important period of opportunity for high-end and large-scale development. The company's board of directors will lead the management to, with "building a lightweight solution provider and becoming a mainstay of China Baowu's new materials" as the core positioning, focus on the main business, deepen and refine operations, promote the upgrading of the entire industry chain, technological innovation, market expansion, and green development, achieving sustained improvement in operating performance and significant enhancement of core competitiveness. 1. Strengthen strategic guidance, consolidate the foundation for magnesium industry new quality productive forces. Accelerate the construction of a development pattern for the entire industry chain covering primary magnesium—alloys—deep processing—end-use applications, focus on tackling key technologies in green smelting and stable production with cost reduction, and accelerate large-scale promotion of key products. 2. Coordinate key project construction, synergistically enhance overall operational efficiency. Accelerate the construction and comprehensive acceptance of the Huayuan Wu's Mine in the Qingyang project, orderly promote the construction of the main plant area and optimization of production indicators, and orderly advance key projects of Gansu Baowu Magnesium, Wutai Baowu Magnesium, and Chaohu Baowu Magnesium. 3. Deepen magnesium industry reform and innovation, promote the modernization of corporate governance systems. Steadily promote business development transformation and innovation, advance asset integration, and further optimize governance and control as well as business management models. 4. Accelerate the layout of smart development, comprehensively advance the construction of information systems. Complete full coverage of the Baowu standard financial system and the update and launch of the cost systems of subsidiaries, build a full-process informatization model project for magnesium business, and further enhance Baowu Magnesium's capabilities in operation management, cost-based management, compliance operation, and risk prevention and control. 5. Focus on reducing primary magnesium costs, continuously enhance market competitiveness. Reduce manufacturing costs of the three core components—reduction retorts, center tubes, and cones—optimize steel grades to extend the service life of reduction retorts, lower auxiliary energy consumption and the material-to-magnesium ratio. 6. Implement cost-based management, systematically build a high-quality development operating model. Deepen comprehensive benchmarking to identify gaps, systematically tackle the "four major costs" of primary magnesium, energy, logistics, and quality, and improve the operation management and control system. 7. Strengthen safety and environmental protection fortifications, systematically enhance green development levels. Continuously strengthen safety and environmental compliance rectification, highlight risk control and inherent safety improvement in key areas, and accelerate the construction of green factories and low-carbon capacity building. 8. Major risk factors and countermeasures the company faces (1) Risk of fluctuations in main raw material prices The company's main business involves magnesium, aluminum alloys and deep processing, with main raw materials being magnesium and aluminum metals. Magnesium and aluminum prices are affected by supply-demand dynamics, global and Chinese economic conditions, and are closely related to factors such as the progress of automotive lightweighting and demand from the 3C industry. If future magnesium and aluminum prices experience wild swings, it will have a certain impact on the company's cost control and profitability. The company is increasing the self-supply ratio of raw materials, adjusting product mix, and increasing the proportion of deep-processed products to mitigate the impact of raw material price fluctuations. (2) Risk of market demand fluctuations The company's magnesium and aluminum lightweight alloy products are mainly used in automobiles, consumer electronics, and other fields. At present, seizing the opportunity of automotive lightweighting development, while stabilizing the supply of magnesium and aluminum alloy base materials, the company is focusing on expanding downstream deep-processing businesses such as magnesium alloy automotive die-casting parts, magnesium alloy building formwork, and aluminum alloy extrusion products. Market demand in areas such as automotive lightweighting progress and 3C electronics consumption is influenced by multiple factors including macroeconomics, industrial policies, and process technology innovation. If downstream market demand falls short of expectations, it will affect the company's operating performance level. The company is expanding the application of its products in various fields, increasing the penetration rate of products in various application fields, to reduce the risk of market demand fluctuations. Looking back at the Chinese magnesium market in H1 2026, affected by the concentrated production stoppages at magnesium plants earlier, the pattern of strong supply and weak demand was quietly reversed. Tight spot supply and low inventory provided a good foundation for a phased rise in the magnesium ingot market fundamentals. Coupled with market disturbances such as the explosive demand for magnesium alloys, speculative demand surged, and market purchasing enthusiasm ran high. Magnesium prices showed a staircase-like increase in Q1. Overly high expectations boosted magnesium plants' production enthusiasm, and magnesium production climbed all the way. By June 2026, China's primary magnesium production exceeded 110,000 mt. The persistently rising production increased sales pressure on magnesium plants. As both inventory and production grew, magnesium prices trended downward in a staircase-like manner in Q2, and overall magnesium prices in H1 showed an inverted V-shaped trajectory. From the price performance of 99.90% magnesium ingot (Fugu, Shenmu) in H1 this year, it can be seen: the average price of 99.90% magnesium ingot (Fugu, Shenmu) on June 30, 2026 was 15,850 yuan/mt, compared to its average price of 17,950 yuan/mt on December 31, 2025, its average price fell by 2,100 yuan/mt in H1, a decline of 11.7%. Its daily average price in H1 was 16,607.33 yuan/mt, compared to its daily average price of 16,241.45 yuan/mt in H1 2025, its daily average price increased by 365.88 yuan/mt YoY, an increase of 2.25%. According to SMM quotes, the price of 99.90% magnesium ingot (Fugu, Shenmu) on August 7 was 15,850-15,950 yuan/mt, with an average price of 15,900 yuan/mt, up 0.32% from the previous trading day. Low-priced supply in the market tightened, and magnesium prices edged up slightly. On the supply side, affected by rising coal costs and sustained losses, producers had a strong willingness to hold prices firm, but some sources still offered small discounts, leading to a divergence in selling attitudes. On the demand side, downstream users and traders maintained a strong wait-and-see sentiment, with weak restocking willingness, making only small-scale just-in-time procurement, and market trading was sluggish. Cost support limited the downside room, but production cuts have not yet effectively promoted inventory destocking, and social inventory pressure remained. In the short term, magnesium prices lack upward momentum and face downside limitations, likely to continue moving sideways. Subsequent attention should be paid to the downstream recovery pace and restocking signals.

This process is requested by Baosteel as there are some changes in export situation compared to the time when the anti-dumping duty is issued. The review is to check whether the reason is acceptable so the anti-dumping duties need to be changed or not. When the review is ongoing, the duty is still active

Vietnam's Ministry of Industry and Trade has launched the first review of anti-dumping duties on hot-rolled coil (HRC) steel imports from China following a request by China's Baosteel Group, one year after the measures took effect. The review is conducted under Decree 86/2025, which allows annual reassessments during the first four years of implementation. Vietnam imposed official anti-dumping duties of 23.1% to 27.83% on certain Chinese HRC products in July 2025 after an investigation initiated at the request of Hoa Phat and Formosa, while ending a parallel probe into imports from India. The review could determine whether the existing tariff rates remain appropriate for Baosteel under current market conditions.

[Baosteel Announcement on the Adjustment of Domestic Futures Selling Prices for Sheets & Plates in August 2026] After study and decision, Baosteel’s domestic sales price adjustment for August 2026 based on July 2026 is announced as follows (unless otherwise specified, all prices below are tax-exclusive): 1. Hot-rolled products: raised by 50 yuan/mt. 2. Heavy plates: raised by 50 yuan/mt. 3. Pickling: raised by 50 yuan/mt. 4. Common cold-rolled: raised by 50 yuan/mt. 5. Hot-dip galvanizing: raised by 50 yuan/mt. 6. Electrogalvanization: raised by 50 yuan/mt. 7. Medium aluminum zinc-aluminum-magnesium: raised by 50 yuan/mt. 8. High aluminum zinc-aluminum-magnesium: raised by 50 yuan/mt. 9. Galvalume: raised by 50 yuan/mt. 10. Color coating: raised by 50 yuan/mt. 11. Non-oriented silicon steel: raised by 50 yuan/mt. 12. Grain-oriented silicon steel: raised by 50 yuan/mt. 13. Seamless pipes: raised by 50 yuan/mt. 14. Welded pipes: raised by 50 yuan/mt. 15. Wire rods: raised by 50 yuan/mt. 16. Bars: raised by 50 yuan/mt. 17. For adjustments to alloy surcharges and coating/plating surcharges, please refer to the August 2026 price list. 18. The above price adjustment notice takes effect from the date of announcement. 19. The right of interpretation of this price adjustment notice belongs to the Marketing Center of Baoshan Iron & Steel Co., Ltd. (Baosteel International). Baoshan Iron & Steel Co., Ltd. Marketing Center (Baosteel International) July 10, 2026

The integrated hydrogen production and storage demonstration project of Baosteel Xinneng Company has recently been filed. The project is located in the Baiyun Obo Mining District of Baotou City, Inner Mongolia, and the project entity is Inner Mongolia Baosteel Xinneng Co., Ltd., with a total investment of 41.9 million yuan. It plans to have a construction period from September 2026 to December 2028. According to the filing information, the project will construct one set of 1,000 Nm³/h alkaline water electrolysis hydrogen production unit and one set of 500 Nm³/h solid proton exchange membrane water electrolysis hydrogen production unit, along with supporting gaseous hydrogen storage tanks, a 100 kg solid-state hydrogen storage device, and a heat storage and release system. Meanwhile, the project will also build utility systems for power supply, control, compressed air, and nitrogen generation, forming a demonstration system that integrates hydrogen production, hydrogen storage, and auxiliary operational support. From a technical configuration perspective, the project simultaneously deploys two hydrogen production routes—alkaline water electrolysis and proton exchange membrane water electrolysis—and introduces a combination of gaseous and solid-state hydrogen storage. The multi-route synergistic configuration helps verify the operational compatibility of different hydrogen production and storage technologies in industrial scenarios, accumulating data and experience for subsequent large-scale rollout. The Baiyun Obo Mining District is an important resource-based industrial area in Baotou, long possessing scenarios for mining development, metallurgical support, and energy utilization. The implementation of this integrated hydrogen production and storage demonstration project will further enhance local clean energy conversion and on-site hydrogen utilization capabilities, and also provide a new pathway for resource-based regions to promote green and low-carbon transition. At the application level, upon completion, the project can carry out demonstrations in directions such as industrial hydrogen use, energy storage regulation, and clean energy absorption. The water electrolysis hydrogen production unit can convert electrical energy into hydrogen energy, and the hydrogen storage system can undertake short-cycle regulation and stable supply functions, helping enhance the availability of hydrogen in industrial production and energy systems. It is worth noting that the configured 100 kg solid-state hydrogen storage device and heat storage and release system reflect exploration of the application of new-type hydrogen storage technologies. Compared to reliance solely on gaseous hydrogen storage, solid-state hydrogen storage offers differentiated value in safety, system integration, and adaptability to specific scenarios, making it suitable for operational verification in demonstration projects. With the continuous development of wind and solar power resources and the layout of the green hydrogen industry in Inner Mongolia, integrated hydrogen production and storage projects are becoming an important link in the improvement of the regional hydrogen industry chain. This project filing by Baosteel Xinneng is expected to drive the Baiyun Obo Mining District to form a demonstration model in new energy hydrogen production, hydrogen storage equipment application, and industrial low-carbon energy use, providing new project support for the development of Baotou’s hydrogen energy industry.

SMS group has received an order from Baosteel Steel Pipe (Ma'anshan) Science and Technology Co., Ltd. to supply two PQF® seamless tube rolling lines in Ma'anshan. SMS will provide core equipment, Level 1 automation, technological measurement systems, and CARTAneo® process technology software for both plants. Each line is designed with annual capacity of nearly 1.18 million tonnes. First pipe production is scheduled for Q4 2027.

SMM News Release, July 3 Domestic molybdenum market saw a trend of correction at the start of June, rally in mid-month and narrow high-level fluctuations at month-end, with mainstream products posting modest gains throughout the month.

Asked "Dear Board Secretary, I would like to inquire whether your company, as found online, can stably mass-produce semiconductor-grade ultra-high-purity magnesium metal ingots and is the only publicly listed firm for such products. Also, what has been the sales proportion of such products in the company's total sales in recent years?" Baowu Magnesium Industry responded on the investor interaction platform on June 23: The company's businesses include magnesium material business, magnesium products business, aluminum products business, mineral products business, and building formwork business. Its main products include magnesium alloys, magnesium alloy deep-processed products, aluminum alloys, aluminum alloy deep-processed products, master alloys, and strontium metal. For the revenue breakdown by product, please refer to the 2025 annual report. The company has not publicly disclosed information regarding the specific products and sales proportions you mentioned. Please refer to the company's officially released periodic reports or announcements for such information. Regarding the question "1. What is the commissioning progress of the mine in the Qingyang project in Anhui, and what is the current ore output? 2. What advantages does the company's vertical retort magnesium smelting technology have? How does it compare with peers in Fugu?" Baowu Magnesium Industry responded on June 17 on the investor interaction platform: The company adopts vertical retort magnesium smelting technology, which features outstanding technical advantages: increased single-retort capacity, shortened production cycle, improved production efficiency, extended service life of reduction retorts, and a higher level of mechanized and automated operations. The Anhui Qingyang mine project has reached a capacity of 20 million mt per year . On June 3, during a survey, Baowu Magnesium Industry stated that the company already has a certain level of technology reserves in magnesium-based hydrogen storage, but the development of the hydrogen storage industry mainly relies on downstream application expansion, which takes time. Currently, downstream application expansion is slow: the hydrogen energy industry chain (production/storage/transportation/utilization) lacks overall maturity, and orders have yet to materialize at scale. On June 3, during a survey, Baowu Magnesium Industry stated that in terms of end-use breakdown, the largest use of magnesium is in magnesium alloys, accounting for about 49%; followed by addition to aluminum alloys, about 26%; steel desulfurization, about 12%; as a metal reducing agent, about 8%; and other fields, about 5%. On June 3, during a survey, Baowu Magnesium Industry stated that the company's magnesium ingot production costs have the following advantages: 1. The company has a complete industry chain advantage, especially in stable raw material supply. 2. The company continues to increase investment in original magnesium smelting technology, enhancing the cost competitiveness of its primary magnesium through large-scale vertical retort magnesium smelting technology and energy efficiency optimization. Baowu Magnesium Industry announced on May 26 that it recently received a notice from its controlling shareholder, Baosteel Metal Co., Ltd., that 263 million shares (26.53% of total shares) will be transferred at no cost to China Baowu Steel Group Corporation Limited. After the transfer, the controlling shareholder will change to China Baowu, while the actual controller remains the State-owned Assets Supervision and Administration Commission of the State Council, unchanged. The announcement shows Baosteel Metal is a wholly owned subsidiary of China Baowu. Before this transfer, China Baowu indirectly held 26.53% of Baowu Magnesium through Baosteel Metal, being the indirect controlling shareholder. After the transfer, China Baowu will directly hold 26.53% and become the controlling shareholder. Performance: Baowu Magnesium Industry disclosed its 2025 annual report on April 29, showing: In 2025, the company achieved revenue of 9,911,752,817.29 yuan, up 10.34% YoY, and net profit attributable to shareholders of the publicly listed firm was 18,548,946.85 yuan, down 111.62% YoY. The decline was mainly due to the continued downward trend of magnesium prices, which caused a significant YoY decline in the magnesium material business profit; meanwhile, the joint venture Anhui Baomei Light Alloy Co., Ltd. is in the ramp-up stage of a new project, with low production and high costs, plus low magnesium prices, which dragged down the company's investment income YoY. Regarding the main business activities during the reporting period, Baowu Magnesium Industry introduced in its 2025 annual report: The company is a leader in magnesium-based new materials under China Baowu, with advantages across the entire industry chain and mine resources, leading vertical retort magnesium smelting technology, and its magnesium alloy capacity and market share are among the global frontrunners. The company focuses on lightweight materials, with products covering automotive, consumer electronics, e-bikes, building formwork, etc. After more than 30 years of development, the company has become a high-tech enterprise integrating mining, non-ferrous metal smelting, and processing, aiming to be a global leader in the magnesium industry. Its businesses include magnesium material business, magnesium products business, aluminum products business, mineral products business, and building formwork business. Its main products include magnesium alloys, magnesium alloy deep-processed products, aluminum alloys, aluminum alloy deep-processed products, master alloys, and strontium metal. Outlook on future development: Baowu Magnesium Industry stated in the 2025 annual report: 2026 marks the start of the company's 15th Five-Year Plan, and the industry will see an important period of high-end and large-scale development. The board will guide management with the core positioning of "building a lightweight solutions provider and becoming the new materials main force of China Baowu," focusing on the main business, deepening cultivation, advancing full-industry-chain upgrading, technological innovation, market expansion, and green development, to achieve sustained improvement in operating performance and significant enhancement of core competitiveness. 1. Strengthen strategic guidance and solidify the foundation for new quality productive forces in the magnesium industry. Accelerate building a full industry chain from primary magnesium to alloys, deep processing, and terminal applications, concentrate on breakthroughs in green smelting and stable, low-cost production technologies, and speed up large-scale promotion of key products. 2. Coordinate the construction of key projects to synergistically improve overall operational efficiency. Speed up construction and comprehensive acceptance of the Huayuan Wujia mine in the Qingyang project, orderly advance main plant construction and production indicator optimization, and steadily push forward key projects in Gansu Baomei, Wutai Baomei, and Chaohu Baomei. 3. Deepen magnesium industry reform and innovation, promoting modern corporate governance. Steadily advance business transformation and renewal, promote asset integration, and further optimize governance, management control, and business management models. 4. Accelerate intelligent development layout and fully advance IT system construction. Complete full implementation of the Baowu standard financial system and rollout of cost systems in subsidiaries, create a full-process IT model project for magnesium business, further enhance operational control, cost calculation, compliant operations, and risk prevention and control capabilities. 5. Focus on attack on primary magnesium cost to continuously enhance market competitiveness. Reduce manufacturing costs of three core components: reduction retorts, center pipes, and cones; optimize steel grades to extend retort service life; reduce auxiliary energy consumption and material-to-magnesium ratio. 6. Implement cost-conscious management and systematically build a high-quality development business model. Deepen overall benchmarking to identify and address gaps, systematically attack the "four major costs" — primary magnesium, energy, logistics, and quality — and improve the operational control system. 7. Strengthen safety and environmental protection fortresses, systematically elevate green development. Continuously strengthen safety and environmental compliance rectification. Highlight risk management in key areas and enhance intrinsic safety. Accelerate green factory and low-carbon capability building. 8. Main risk factors and countermeasures (1) Risk of fluctuating main raw material prices The company's main business is magnesium and aluminum alloys and deep processing, with primary raw materials being magnesium and aluminum metals. Prices are affected by supply-demand dynamics, global and Chinese economic conditions, and closely tied to automotive lightweighting progress, 3C industry demand, etc. If magnesium and aluminum prices swing wildly in the future, it will affect cost control and profitability. The company is raising the self-sufficiency ratio of raw materials, adjusting product mix, and increasing the proportion of deep-processed products to mitigate the impact. (2) Risk of fluctuating market demand The company's magnesium and aluminum lightweight alloy products are mainly used in automotive and consumer electronics. Currently, seizing auto lightweighting opportunities, the company is expanding into downstream deep processing such as magnesium alloy automotive die castings, magnesium alloy building formwork, and aluminum extrusion products. The pace of automotive lightweighting and 3C electronics demand are influenced by macro-economy, industrial policies, and process technology innovation. If downstream demand falls short of expectations, it will affect operating performance. The company is expanding product applications in various fields, increasing penetration rates, to reduce the risk of demand fluctuations. In addition, the Q1 2026 report released by Baowu Magnesium Industry shows: In Q1 2026, revenue was 2.132 billion yuan, up 4.86% YoY; net profit attributable to shareholders of the publicly listed firm was 5.0891 million yuan, down 81.94% YoY. Regarding the increase in Q1 revenue, Baowu Magnesium Industry explained: Sales of main products and material prices rose YoY. For the decline in net profit, the company said it was due to a decrease in product gross margins and increased losses from joint ventures. Baowu Magnesium Industry mentioned that its magnesium alloy capacity and market share rank among global leaders. Looking back at the performance of SMM magnesium alloy AZ91D in Q1 this year: The average price on March 31, 2026 was 19,650 yuan/mt, compared with 17,950 yuan/mt on December 31, 2025, the average price rose by 1,700 yuan/mt in Q1, or 9.47%. The daily average price in Q1 2026 was 18,932.14 yuan/mt, up 1,320.74 yuan/mt, or 7.5% YoY, from 17,611.4 yuan/mt in Q1 2025. According to SMM price quotes: The EXW price of SMM magnesium alloy AZ91D on June 24 ranged from 18,250 to 18,350 yuan/mt, with an average of 18,300 yuan/mt, down 0.54% from the previous trading day. Currently, magnesium alloy prices are in the doldrums alongside magnesium ingot prices, with overall low trading sentiment. Fundamentals side: Supply side, magnesium alloy smelters have stable operating rates, ample spot supply in the market, and overall supply is loose; demand side, downstream die-casting plants show significant divergence in orders, with stable automotive orders, persistently sluggish two-wheeler orders, and alloy processing fees in the doldrums. Overall, the magnesium alloy market maintains a supply-strong-demand-weak pattern, with prices expected to remain in a weak consolidation phase in the short term.

I. Overseas Markets: Driven by Two Core Catalysts – Surging Demand for Stationary Power Generation, Supply Constraints Hinder Aviation Green Hydrogen Rollout (I) European Off-Grid Stationary Fuel Cells Secure Repeat Bulk Orders; Overseas OEMs Restructure Revenue Mix Ballard Power Systems, Canada’s leading fuel cell manufacturer, unveiled a landmark repeat order on June 15: a second 15 MW fuel cell system supply contract from a UK renewable off-grid power producer. The order covers 150 sets of 100 kW automotive-grade fuel cell modules, slated for delivery in H2 2026. These modules will be integrated into hydrogen power generators to replace conventional diesel gensets, serving off-grid power needs at construction sites, film production sets, large-scale events, and critical infrastructure. Underpinning demand remains robust: multiple European nations have rolled out policies phasing out diesel generators for construction and cultural tourism applications. Coupled with prolonged grid connection lead times for industrial parks and data centers, demand for zero-carbon off-grid power sources has expanded rapidly. UK-based GeoPura has deployed Ballard fuel cells at scale to operate charging stations and construction site power supplies, validating the technology’s commercial viability. Strong earnings reflect booming market momentum. In Q1 2026, Ballard’s stationary fuel cell business posted USD 5.2 million in revenue, skyrocketing 775% year-on-year to become the company’s second-largest revenue segment, trailing only its transit fuel cell division. This repeat order confirms sustainable, replicable growth in the overseas off-grid power segment. A new industry trend has emerged: automotive fuel cell modules are downward-compatible with stationary power applications, enabling manufacturers to amortize production costs across shared assembly lines and unlock profit upside. Parallel demand is emerging for AI computing backup power. Global tech giants are ramping up investments in hydrogen backup power. Microsoft and Amazon continue to deploy megawatt-scale fuel cell setups for data center power supply. Boasting millisecond load switching capability and zero carbon emissions, hydrogen has become the prime alternative to diesel gensets for AI computing campuses, creating dual demand alongside Europe’s construction and tourism sectors. (II) UK Launches SAF Policy Consultation; Long-Term Green Hydrogen Demand via PtL Jet Fuel Secured, Yet Severe Short-Term Capacity Gaps Persist Over the past two weeks, the UK Department for Transport (DFT) officially launched a public consultation on its mandatory sustainable aviation fuel (SAF) blending mandate, focusing on industry-wide capacity assessments for hydrogen-based power-to-liquid (PtL) fuels. The initiative signals two pivotal industry shifts: Mandatory policy locks in long-term green hydrogen demand. The UK’s SAF blending rules will take effect by end-2026, requiring 0.2% of jet fuel to come from green hydrogen-derived PtL feedstocks by 2028, rising to 3.5% by 2040. Meanwhile, caps will be imposed on waste oil-based HEFA fuel usage, forcing jet fuel producers to comply with regulations via green hydrogen paired with captured CO₂ to synthesize PtL fuels. This opens vast long-term upside for green hydrogen, with the industry widely viewing mandatory PtL blending as a core permanent growth driver for hydrogen demand. Near-term industrial bottlenecks trigger a transitional industry adjustment phase. The UK currently hosts no commercial-scale PtL jet fuel production facilities. Projects face compounded headwinds including constrained renewable power supply, elevated green hydrogen costs, limited carbon capture feedstock sources, and financing hurdles. Industry stakeholders report production timelines for advanced non-HEFA fuels lag policy targets, prompting government concerns that supply shortages will fail to meet blending obligations. The consultation will evaluate potential adjustments to HEFA volume caps and compliance frameworks. The DFT will consolidate industry feedback in autumn 2026; any policy tweaks could slow near-term investment in PtL projects, though the long-term growth thesis for green hydrogen aviation remains intact. II. Domestic China Market: Top-Tier Policy Catalysts Land, Commercialization Accelerates Across Segments, Cost Disadvantages Remain a Key Hurdle (I) Top-Down Policies Unlock New Incentives; Comprehensive Hydrogen Pilots Unleash Full Industrial Chain Potential At the start of June, three central ministries jointly issued a circular on comprehensive hydrogen application pilots, spurring intense industry discussion over policy implementation details in the subsequent two weeks. Pilots span the entire industrial chain with amplified financial support. The central government has selected urban agglomerations to carry out four-year demonstration programs, with maximum funding awards of RMB 1.6 billion per cluster. Supported use cases extend beyond traditional fuel cell vehicles to green hydrogen chemical production, hydrogen metallurgy, hydrogen-blended power generation, off-grid energy storage, and hydrogen-powered vessels. Two landmark 2030 targets have been formalized: a national fleet of 100,000 fuel cell vehicles and a retail hydrogen price of RMB 25 per kg for transport, with leading regions targeting RMB 15 per kg, laying out clear long-term scale and cost roadmaps for the sector. Leading industry experts align on the sector’s development cycle. During FCVC 2026 (June 10–12), Academician Ouyang Minggao stated the hydrogen industry has crossed the “valley of death,” identifying the next five years as a critical window for large-scale commercialization. Wan Gang, former vice chairman of the China Association for Science and Technology, called for accelerated development of wind-solar coupled green hydrogen and cross-regional hydrogen transportation corridors. Aligned policy and industrial consensus have boosted long-term sentiment among primary market investors and A-share hydrogen stock participants. (II) Segmented Commercialization Gains Traction: Industrial Green Hydrogen, Commercial Vehicles, and Domestic Equipment Exports All Deliver Growth Accelerated large-scale green hydrogen deployment in heavy industry. Ningxia Baofeng’s RMB 13.5 billion green hydrogen-coal chemical integration project has entered commissioning, delivering an annual green hydrogen output of 150,000 tons at production costs below RMB 18 per kg, setting a domestic benchmark for low-cost green hydrogen. Baosteel Zhanjiang’s million-ton hydrogen metallurgy production line has achieved full operational capacity, deploying domestically manufactured hydrogen shaft furnace technology to replace imported equipment. Massive industrial hydrogen consumption is driving upstream demand for electrolyzers. As of end-March, China’s installed renewable hydrogen production capacity exceeded 250,000 tons per annum, doubling from end-2024 levels. Scaling penetration of fuel cell commercial vehicles and two-wheelers. Regional hydrogen price data updated June 1 shows retail hydrogen prices of RMB 29–38 per kg across major domestic markets, still above the RMB 25 per kg national target. Nevertheless, 49-ton hydrogen heavy-duty trucks have cut hydrogen consumption to 8.5 kg per 100 km, undercutting diesel trucks in operating costs on select trunk haul routes. Hydrogen two-wheeler pilots are expanding rapidly, with tens of thousands of hydrogen light vehicles deployed in Chengdu, Changzhou, and Huangshi. Fast refueling and stable low-temperature driving range have unlocked new civilian niche demand. Rapid overseas expansion of domestic hydrogen equipment. At the Brazil International Hydrogen Exhibition (June 16–17), a delegation from the Daxing Hydrogen Demonstration Zone in Beijing showcased Chinese electrolyzers and hydrogen heavy-duty trucks to tap Latin American demand. Overseas demand for off-grid power and zero-emission mine power aligns with Ballard’s international order momentum, lifting export growth expectations for domestic fuel cell system and electrolyzer manufacturers. (III) Core Domestic Market Constraint: Elevated End-User Hydrogen Costs Impede Full-Scale Commercialization The latest China Hydrogen Price Index shows clean hydrogen priced at RMB 34.34 per kg in the Yangtze River Delta, RMB 38.13 per kg in the Pearl River Delta, and industrial hydrogen at RMB 29.33 per kg in Henan. Only wind- and solar-rich chemical parks in western China have achieved the RMB 18 per kg low-cost green hydrogen threshold. High costs tied to hydrogen storage and refueling infrastructure allocation erode economic viability for transportation and distributed power applications. For the near term, industry growth will remain concentrated in large-scale industrial hydrogen consumption and policy-subsidized pilot projects. Conclusion Near-term market catalysts stem from overseas power generation equipment orders, domestic pilot policy rollouts, and surging equipment exports. Over the long run, off-grid hydrogen power and green hydrogen aviation will emerge as the sector’s core high-growth tracks. The industry, however, continues to face headwinds including capacity constraints, prohibitive production costs, and project financing challenges.