[SMM Analysis: Energy Storage Surge Boosts Electrolyte Demand, VC Industry Supply-Demand Tension Intensifies] The ESS sector’s growth certainty is prominent; a surge in installations across multiple scenarios in and outside China is driving up demand for ESS battery cells; demand for electrolyte and upstream lithium chemicals and additives is expanding in tandem; and the industry’s supply-demand pattern is being reshaped.

CATL released an investor relations activity record showing H1 power and energy storage battery sales up approximately 60% YoY, with energy storage batteries accounting for about one-quarter of total sales. The company stated the energy storage market will maintain rapid growth through next year, with capacity utilization basically saturated in H1. The 587Ah large energy storage cell has achieved scaled delivery, with energy storage systems accounting for nearly 70%. The company is optimistic about AIDC business prospects.

CATL released an investor relations activity record announcement, stating that combined sales of power and ESS batteries grew about 60% YoY in H1, with ESS battery sales making up roughly one-quarter. The energy storage market will sustain rapid growth this year and next. The capacity utilization rate was basically saturated in H1. The company has been stockpiling to meet client demand and advancing capacity construction. Domestic ESS sales accounted for a slightly higher proportion than overseas. ESS systems made up close to 70%, and the 587Ah large-format ESS cell has achieved mass delivery. The company is optimistic about the prospects of the AIDC business and can provide complete innovative energy solutions.

Chinese steel investment is gradually shifting from direct exports to localized production in Southeast Asia. New and planned projects in Malaysia, Indonesia, Vietnam, Thailand, and the Philippines are expected to strengthen regional supply, but if capacity growth continues to outpace demand, it could further intensify market competition.

[SMM Weekly Survey on Aluminum Downstream: This Week, Aluminum Processing Operating Rate Dropped 0.2 Percentage Point to 61.1%, Off-Season Effect Deepens and Continues] Overall, as the off-season effect deepens, downward pressure on the industry's operating rate remains unabated. Export orders for aluminum plate/sheet and strip and aluminum foil provide some temporary support, while other sub-sectors are expected to remain in the doldrums in the short term.

In the first half of 2026, the price trends of the three major black mass categories diverged significantly. LFP black mass was highly correlated with the spot and futures prices of lithium carbonate. Ternary battery powder, supported by the multi-metal value of nickel, cobalt, and lithium, exhibited a "high-then-low, wide-range oscillation" pattern.

As of July 21, the operating rate among 50 EAF steel mills mainly producing construction steel nationwide was 36.62%, up 0.04 percentage point WoW; the capacity utilization rate was 36.50%, down 0.06 percentage point WoW; daily average production of construction steel stood at 81,300 mt, down 100 mt WoW.

The National Railways of Zimbabwe (NRZ), in partnership with several private logistics enterprises, has transported the first 1,000 mt of lithium concentrates from the Gwanda Lithium Mine to Mozambique's Port of Maputo via rail, adding a new rail transport option for the country's lithium ore exports. The route spans nearly 1,000 km, comprising the Beitbridge–Bulawayo Railway (Gwanda–Beitbridge section, 180 km), the NRZ network to Chicualacuala (approx. 300 km), and Mozambique's Limpopo Corridor to Maputo (522 km). The opening of this corridor is significant. Previously, Zimbabwe's lithium ore exports had long relied on road transport, which not only incurred higher unit transportation costs but also faced issues such as road congestion, border delays, and capacity shortages. The completion of this rail corridor is expected to improve shipment stability and reduce inland transportation costs, particularly benefiting mines along the southwest–southeast transport corridor. In the short term, however, the boost to national export capacity is expected to remain limited. NRZ's freight volume has fallen from approximately 12 million mt in the 1990s to 2 million mt in 2025, reflecting chronic underinvestment and constrained operational capacity. This initial shipment should therefore be seen more as a logistics trial run rather than proof of large-scale rail capacity formation. SMM Insight For inland African lithium ore suppliers, logistics costs have historically been a major drag on cost competitiveness. The new rail option is a positive for Zimbabwe's landed cost competitiveness. If rail capacity utilization continues to improve, relevant mining enterprises could achieve lower and more stable FOB and CFR China landed costs compared with a road-only transport model. The corridor's long-term significance will depend on train frequency, loading capacity, border clearance efficiency, port handling capacity, and whether lithium sulfate products—driven by Zimbabwe's domestic downstream processing policies—can share the same transport corridor. Key points to watch: subsequent shipment volumes, rail freight rates, throughput capacity at the Port of Maputo, corridor operational stability, and adoption by major producers such as Bikita, Arcadia, and Sabi Star. Nyirongo Joseph SMM Zambia Office nyirongojoseph@smm.cn

In today's [SMM Analysis] India's Vraj Iron & Steel Ltd has approved the first phase of a 450 crore rupees ($52 million) greenfield integrated steel project in the eastern state of Chhattisgarh, adding 201,000 tonnes per year (tpy) each of sponge iron and mild steel billets. The company expects the first phase to be commissioned within 30 months of the groundbreaking ceremony.

Iron ore futures trended weaker today. The most-traded DCE I2609 contract closed at 739.5 yuan/mt, down 1.00%. Spot prices at Qingdao Port fell about 4-8 yuan/mt from the previous trading day. Traders' quoting enthusiasm was moderate, and steel mills were in a rather wait-and-see mood. As of now, spot transaction volumes were moderate. According to the latest SMM survey, the blast furnace capacity utilization rate among sample steel mills was 89.49%, down 0.50 percentage point WoW. Their daily average hot metal output was 2.4247 million mt, down 13,500 mt WoW. Although the intensity of environmental protection-driven production restrictions fell short of expectations, hot metal output is still expected to continue its downward trend. Meanwhile, environmental protection and safety inspection factors have not yet subsided, and some steel mills may arrange temporary maintenance. Overall, blast furnace hot metal output is likely to continue declining in the near term, and iron ore demand is expected to remain weak. Therefore, iron ore prices are expected to consolidate with a bearish bias in the near term. [SMM Steel]