[SMM Analysis: Looking back at H1 2026, the polysilicon market, due to prominent overcapacity issues compounded by historical inventory and other factors, although occasionally rebounding on the back of policy expectations, the overall downward "downtrend" persisted. Looking ahead to H2 2026, SMM believes that from the supply-demand or capacity side, it is difficult to see significant spontaneous improvement. Key focus areas are policy expectations and cost dynamics—cost determines the price floor, while policy determines the price trend.

The gap between Q3 QMJP offers and actual transaction prices in the Japanese market has widened significantly. At present, the physical spot premium for primary aluminum ingots in Japan stands at USD 395 per metric ton, representing a month-on-month increase of USD 43.5 per ton versus Q2. Nevertheless, overall market sentiment remains bearish, with spot transactions oscillating around the USD 385 per ton mark. The dual pressures from supply and demand fundamentals constitute the core driver behind the softening spot premium in Japan. On the supply side, market expectations for growing global aluminum supply surplus have intensified steadily. In addition, steady progress has been made in resuming aluminum production capacity in the Middle East, reinforcing expectations of rising overseas supply and capping upward room for spot premiums. On the demand side, Japan has entered its traditional seasonal lull in consumption as scheduled. Downstream end-users have slowed purchasing activity amid sluggish demand, gaining stronger bargaining power and shifting the supply-demand negotiation dynamic firmly in favor of buyers. As a result, the spread between QMJP ingot offers and physical transaction prices in Japan ranges from USD 65 to 70 per ton. Following the official release of Q3 QMJP pricing, spot offer prices in Japan firmed up temporarily, yet this failed to boost trading volumes, leaving the market locked in a stalemate between bulls and bears. Amid persistent expectations of expanded supply, the temporary firmness in spot prices is projected to give way to corrective declines. The bearish overall trend for Japanese aluminum ingot premiums in Q3 is unlikely to reverse. In other regional markets, trading activity in the spot aluminum ingot markets of Thailand and South Korea remained extremely muted this week with subdued overall liquidity. In the early week, ahead of the official publication of Q3 QMJP benchmarks, both traders and downstream manufacturers adopted a wait-and-see stance, limiting inventory restocking strictly to immediate operational needs. After the latest Q3 QMJP prices were released, benchmark levels fell short of pre-market consensus forecasts, prompting sellers across Southeast Asia and South Korea to lift their asking prices. Actual trading data, however, shows downstream buyers in Thailand and South Korea continued to purchase only to cover rigid demand, lacking substantive demand support. Spot premiums and discounts have thus remained range-bound at elevated levels. In the short term, resuming Middle Eastern smelter capacity and incremental overseas aluminum supply will continue to cap premium upside, compounded by weak seasonal end-user demand that adds further downward pressure to the market. Asian spot aluminum ingot premiums and discounts are therefore expected to maintain divergent, softening momentum, marked by volatile asking prices and persistently thin physical trading volumes in the near term.

Japan’s Q3 QMJP offers and transaction price spreads were wide, with actual spot premiums for Japanese aluminum ingot currently at $395/mt, up $43.5/mt QoQ from Q2. However, the overall market remained weak, with spot transactions consolidating around $380/mt. The core driver behind the weakening spot premiums in the Japanese market this time was dual pressure from supply and demand. Supply side, market expectations for incremental global aluminum supply release continued to heat up. In addition, the pace of production resumptions at Middle Eastern aluminum capacity progressed steadily, reinforcing expectations for overall supply release outside China and capping upside room for spot premiums. Demand side, the traditional consumption off-season in Japan arrived as expected, with downstream end-users slowing their procurement pace and demand lacking momentum. This strengthened downstream bargaining power, and the tug-of-war between upstream and downstream tilted decisively in favor of buyers. As a result, the spread between Japan QMJP aluminum ingot offers and actual transaction prices stood at $65-70/mt. After the official release of Q3 QMJP prices, Japan’s spot market offers briefly firmed, but this did not lead to a recovery in transactions, and a stalemate between bulls and bears persisted. Against the backdrop of strengthening supply release expectations, spot prices are expected to undergo a pullback adjustment after their brief firmness, making the overall weak pattern for Q3 Japanese aluminum ingot premiums difficult to reverse. Regional markets, spot aluminum ingot trading sentiment in Thailand and South Korea was very sluggish this week, with overall market activity low. Early in the week, as Q3 QMJP had not yet officially settled, traders and downstream enterprises generally held a wait-and-see sentiment, and the market was mainly characterized by just-in-time stockpiling. Following the official release of the latest Q3 QMJP prices, as the overall pricing fell short of earlier market expectations, sellers in Southeast Asia and South Korea raised their offers. However, judging from actual transactions, downstream enterprises in Thailand and South Korea still stuck to just-in-time procurement mode, with insufficient support from real market demand, and spot premiums maintained a pattern of consolidation at highs overall. In the short term, production resumptions in the Middle East and incremental supply release outside China will continue to cap the upside for premiums, while weak end-user demand during the off-season further compounds market pressure. Going forward, Asian aluminum ingot spot premiums are expected to continue a divergent and weak trend, with fluctuating offers and sluggish transactions remaining persistent features. [Data source statement: Except for publicly available information, all other data are processed by SMM based on public data, market communication, and SMM’s internal database models, and are for reference only; they do not constitute decision-making advice.] Data source: SMM

In June, global scrap tungsten markets diverged. India followed China's tungsten price rally, with active trading and higher prices in mid-June before cooling as China softened. Europe saw low-level consolidation due to high speculative inventories, but prices began to edge up in late June as stocks cleared. China's tungsten market experienced a sharp rebound followed by a pullback, and is expected to consolidate in the near term, while medium-to-long-term fundamentals remain solid.

According to SMM statistics, on July 2, aluminum billet inventory in China's mainstream consumption areas dropped to 130,000 mt, down 4,000 mt from last Monday and 10,000 mt from last Thursday, with the destocking pace accelerating markedly. Compared with the same period, it was 23,500 mt lower than in 2025 and 9,700 mt lower than in 2024, pushing total inventory to the lowest level for the same period in the past three years. In terms of warehouse withdrawals,

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.

[TCs Continue to Pull Back, Zinc Prices Maintain Fluctuating Trend] The most-traded SHFE zinc 2608 contract opened at 24,215 yuan/mt, then dipped to 24,180 yuan/mt during the session. Subsequently, bears reduced positions, pushing prices higher to touch 24,430 yuan/mt. However, bulls then cut positions, causing prices to pull back and fluctuate around a center of 24,315 yuan/mt. The contract eventually closed up at 24,295 yuan/mt, a gain of 85 yuan/mt, or 0.35%. Trading volume increased to 63,712 lots, while open interest decreased by 2,246 lots to 90,310 lots...

The MHP market was tight overall this week, with nickel and cobalt payables staying high. On the supply side, after the strait reopened, production at some producers recovered somewhat but remained below previous levels, and quotes stayed high under cost pressure. On the demand side, mid-year downstream nickel and cobalt salt prices showed weakness, and producers faced significant pressure from losses. Salt producers had relatively low acceptance of high-priced MHP, putting pressure on MHP payables. Given weak downstream product prices, MHP payables may pull back in the short term. The high-grade nickel matte market also saw supply-demand weakness on both sides. High-grade nickel matte currently has a clear cost advantage over MHP, but on the supply side, major producers have already signed long-term contracts, leaving limited available spot supply. On the demand side, actual consumption capacity is insufficient due to restrictions in matching downstream production lines. Overall purchasing sentiment was weak, trading activity was low, and payables remained stable. The geopolitical premium in the international sulfur market is gradually being cleared, but supply-side disruptions have intensified. The US-Iran agreement stipulates that the Strait of Hormuz will be unblocked within 30 days, and the resumption of navigation will be a gradual process. Kazakhstan indefinitely suspended sulfur exports from June 27 (only allowed to sell to Russia). Russia extended its export ban to the end of 2026, and Turkey's ban lasts until end-September, compounding short-term supply disruptions. Medium and long-term sulfur prices are expected to be under pressure, but the recovery of supply has a time lag, and prices will swing wildly at highs. Regarding nickel prices, market expectations for interest rate hikes continued to mount at the start of this week, and nickel prices continued to decline. On Thursday, non-farm payrolls data came in below expectations, prompting some recovery. Against a backdrop of lower MHP payables and stable high-grade nickel matte payables, the absolute prices of MHP and high-grade nickel matte edged down along with nickel prices. In addition, MHP cobalt prices and refined cobalt prices also declined. Overall, the intermediate product market will be under pressure in the short term.

As of Friday, SiMn 6517 (cash) in north China was at 5,600-5,700 yuan/mt, down WoW; in south China, SiMn 6517 (cash) was at 5,650-5,750 yuan/mt, down WoW, and SiMn 6014 (cash) there was at 5,450-5,500 yuan/mt, down WoW. Recently, SiMn futures moved weakly sideways in a narrow range, with a strong wait-and-see sentiment in the market, low willingness to sell among producers, and weak spot and futures prices.

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