On July 17, the SMM Imported Copper Concentrate Index (weekly) came in at -$146.15/dmt, down $13.31/dmt from the previous reading of -$132.84/dmt. The payable indicator for 20% grade domestic trade ore was reported at 98%-99%. The copper concentrates spot market saw slightly more activity this week compared to the previous week. In spot transactions, a trader sold 10,000 mt of Las Bambas to a smelter at a deduction of $15-16/dmt from the average of the SMM and FM indices, for September loading; meanwhile, a trader sold 10,000 mt of Calcine at a premium of $5/dmt to the average of the SMM and FM indices; a trader sold 10,000 mt of clean ore and 10,000 mt of Bisha at a fixed price of -$140/mt to a smelter, for August-September loading; a trader sold 20,000 mt of clean ore at a fixed price of -$155/mt, for Q4 loading; additionally, a trader sold 20,000-30,000 mt of bundled ore at a deduction of $20/dmt from the index, for loading from Q4 2026 to Q1 2027; a mine sold 10,000 mt of South American clean ore at a fixed price of -$160/dmt, for September loading, QP: M+3. On the tender front, the previous Jabal tender result was out, with a deal concluded on the trader side at a fixed price of -$250/dmt for 40,000-50,000 mt, for H2 shipment; the result of the Newmonet tender for 20,000-30,000 mt of Red Christ is still pending; in addition, SMM learned that a large mine previously tendered 100,000 mt in physical content of copper concentrates, with bids from traders coming in at over -$200/dmt for 2026 shipment, -$200/dmt for 2027 shipment, and over -$100/dmt for 2028 shipment. Overall, the copper concentrates spot market continued its trend of probing lower this week, with spot TCs declining further from the prior period. Smelters still had rigid restocking demand, but as TCs continued to drop, copper smelting profits were further squeezed, making smelters more cautious about accepting low-priced cargoes and tilting purchases more toward rigid restocking. Meanwhile, mine tenders and trader offers kept edging lower, and the low-priced spot deals further shook smelters' psychological price levels, widening the divergence between buyers and sellers. In the short term, spot copper concentrate TCs still face downward pressure, with the market closely watching smelters' acceptance of deeply negative cargoes. According to the latest data from the General Administration of Customs, China's copper concentrate imports in June 2026 were 2.335 million mt, down 1.10% MoM and edged up 0.03% YoY. From January to June 2026, cumulative imports of copper concentrates reached 14.609 million mt, edging down 0.9% YoY. Chile is currently being affected by a strong winter frontal system, with the main impact expected to be concentrated from July 16 to 17 and likely to persist through July 20–21. This weather event shows notable regional differences: moderate to heavy snowfall and strong winds are forecast for the high-altitude and mountainous areas of northern mining regions such as Antofagasta and Atacama, while central to southern Chile faces persistent heavy rainfall, raising the risk of localized flooding, landslides, and mudslides. The Chilean government has activated a preventive emergency response, and mining authorities have been communicating contingency plans with major mining enterprises. According to SMM’s communications with local industry participants, heavy snowfall and rainfall could cause short-term disruptions to road transport and port loading at some mine sites, with a risk of delays in the shipment pace of copper concentrates and copper cathode. The actual impact will depend on the duration of the weather and operating conditions at the major mines. On July 16, BHP released its production report, showing that group copper production in the fourth fiscal quarter ended June 30 was 491,900 mt, down 5% YoY and below the 516,200 mt recorded a year earlier, driven by lower output at the Escondida and Pampa Norte mines. For fiscal 2026, total group copper production was 1.95 million mt, down 3% YoY, a pullback from the 2.02 million mt in fiscal 2025 but the second consecutive year close to 2 million mt. Among them, Escondida—the world’s largest copper ore mine—produced 1.2612 million mt of copper on a 100% basis for the full year, down 3% YoY, mainly due to a decline in head grade at the beneficiation plant from 1.02% a year earlier to 0.90%. On July 17, SMM data on copper concentrates inventory at eleven ports showed 648,200 mt in physical content, down 42,000 mt from July 10. The main declines came from Fangchenggang Port and Qinzhou Port, down 30,000 mt and 21,000 mt WoW, respectively.

[SMM Imported Copper Concentrates] According to the latest data from the General Administration of Customs, China’s copper concentrate imports in June 2026 stood at 2.335 million mt, down 1.10% MoM and edging up 0.03% YoY. In January-June 2026, cumulative copper concentrate imports reached 14.609 million mt, edging down 0.9% YoY.

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.

[SMM Imported Copper Concentrate] According to the latest data from the General Administration of Customs, China's copper concentrate imports in May 2026 were 2.361 million mt, up 0.40% MoM but down 1.73% YoY. In January-May 2026, cumulative copper concentrate imports reached 12.275 million mt, a slight cumulative YoY decrease of 1.0%.

According to the China Earthquake Networks Center, a magnitude 6.9 earthquake struck the Antofagasta Region in northern Chile at 17:52 local time on May 25 (05:52 Beijing time on May 26, 2026), with a focal depth of approximately 114 kilometers. Within a 200-kilometer radius of the epicenter, 21 earthquakes of magnitude 3 or above have occurred in the past five years, the largest of which was a magnitude 7.3 earthquake on July 19, 2024. According to data from the General Administration of Customs, Chile is the largest source country for China's copper concentrate imports. From January to April 2026, China imported a total of 9.9151 million mt in physical content of copper concentrates, of which 3.0526 million mt in physical content were imported from Chile, accounting for approximately 30.79%.

The 2026 SMM Hong Kong Metals Forum , organized by Shanghai Metals Market (SMM) and sponsored by China Securities International as platinum sponsor, wrapped up successfully at Novotel Hong Kong Century on May 6. With over 300 registrations and 200 on-site attendees, the forum focused on the theme "New Metals Cycle: Prices, Power & Global Wrestling". The event featured keynote speeches by industry experts and SMM analysts, covering base metals, new energy materials, and strategic revaluation of minor and precious metals. Two high-level panel sessions were held, exploring hot topics such as geopolitics, supply-demand fluctuations, CBAM impacts, and market opportunities. It also served as an efficient platform for networking and cooperation across entire industry chains. SMM Opening Address SMM Chairman Adam Fan SMM Chairman Adam Fan stated in the opening address that it was a great honor to gather with elites from all sectors of the industry at this forum. The world is currently at a critical development period, and the exchange of industry ideas is not only an industry necessity but also an inevitable requirement for global development. Adam reviewed the century-long legacy of the London Metal Exchange, which has weathered nearly 150 years of global changes and industry evolution, fully demonstrating that although market structures may change, the fundamental need for risk management and reliable price discovery remains constant. At the same time, Adam candidly acknowledged that global markets are currently mired in a pattern of deep fluctuations. Geopolitical conflicts, supply chain fragmentation, and the compounding crises of energy and food, overlaid with de-globalization and rising trade protectionism, have intensified market uncertainty and inflationary pressures, posing severe challenges to global economic growth and industrial cooperation. Against this backdrop, SMM has steadfastly upheld its mission, refusing to be a bystander to the trend of industry fragmentation, and is committed to serving as a bridge for global industrial connectivity amid a landscape of division. SMM is dedicated to promoting dialogue and exchange, breaking down industry and regional barriers, and bringing together regulators, traders, and producers from around the world to discuss industry development. SMM upholds the principle of information transparency, continuously providing accurate, real-time market data to help the industry see through market fog and clarify market distortions. SMM deepens pragmatic cooperation by building a neutral and professional platform for exchange and matchmaking, driving all parties to pursue collaborative development based on shared interests and transcending political differences. Adam emphasized that information sharing and open collaboration would be leveraged to mitigate market risks and strengthen overall industry resilience, and called on the industry to seize the opportunity of this forum to jointly explore solutions, transforming current challenges into momentum for driving integrated and robust development of the global metals industry. Speech by Platinum Sponsor Wang Guangxue, Member of the Executive Committee of China Securities Co., Ltd. and Chairman of China Securities Futures Co., Ltd. Wang stated that as a vital bridge connecting the capital market and the real economy, China Securities has always been committed to serving the high-quality development of the metals industry. Leveraging the comprehensive financial strengths of CITIC Group, the company has built a full-chain integrated service system covering securities, futures, investment, and research. The company has been deeply engaged in the commodities sector, continuously providing forward-looking research to anticipate market trends, utilizing futures instruments to build robust risk barriers, and empowering industrial upgrading through capital services. It will fully leverage CITIC Group's full-license resource advantages and the strategic value of Hong Kong as an international financial center to continuously strengthen its cross-border comprehensive financial services capabilities. The company aims to tailor integrated risk management and asset allocation solutions at home and abroad for enterprises across the metals industry chain, precisely helping enterprises hedge against price fluctuation risks, and enabling them to operate steadily and advance with high quality in complex market environments. Structural Shifts: Rethinking Commodity Benchmarks in an Era of Persistent Inflation and Rivalry Speaker: Tian Yaxiong, Co-Head of R&D Department, China Securities Futures Tian shared professional research findings and cutting-edge market insights on hot topics including the market outlook for global metals and the deep impact of geopolitics on commodity trends. SMM Industry Analysis: Market Outlook and Pre-seminar Sharing for Base Metals and New Energy Materials (Copper, Aluminum, Nickel, Cobalt, Lithium, and Tin) & How SMM Empowers Your Commodity Trading & Analysis Speakers: Dr. Yanchen Wang, Managing Director of SMM Global UK Ltd.; Thomas Feng, Head of Industry Analysis at SMM Dr. Wang first analyzed the macroeconomic landscape. At the beginning of this year, the manufacturing PMIs of major economies performed quite well, actually exceeding 50%. Without the conflict, demand this year would have been quite strong. However, at the end of February, the US-Iran conflict broke out, and the International Monetary Fund subsequently revised down its global economic growth expectations. He pointed out that China's exports remain one of the three pillars that are still functioning well to date. Regarding automobile consumption, he noted that for the EV market, the positive factor for the auto industry also lies in exports. In Q1 this year, export performance was indeed very strong. If you look at EV exports alone, they actually grew nearly 160% YoY. Driven mainly by growth in global markets, he remains optimistic about the auto industry this year. In Europe, gasoline and diesel prices have risen significantly due to the US-Iran conflict, and EV demand is expected to benefit from this factor. He believes the power sector continues to maintain strong growth. Based on power grid and power generation investment data from the first two months, combined with State Grid Corporation of China's earlier announcement that fixed asset investment during the "15th Five-Year Plan" period is expected to reach 4 trillion yuan, this indicates that electricity demand will drive strong growth. State Grid Corporation of China will build more ultra-high voltage transmission projects, which will undoubtedly support aluminum demand and also copper demand. Aluminum: Wang noted that base metal prices experienced wild swings since the beginning of this year. He also discussed that China's aluminum smelters continued to raise operating rates due to favorable profitability; aluminum demand pulled back in Q1, and high prices drove inventory higher; approximately 950,000 mt of new aluminum smelting capacity in Indonesia may come online in 2026, with some investors watching Angola; and aluminum semis and wheel hub exports maintained growth in Q1. Copper: After copper prices experienced a pullback and adjustment in March, downstream procurement demand in China was rapidly released, providing strong support for copper prices to rebound. Copper prices rose sharply, with the market downplaying geopolitical risks. China's copper cathode demand was robust, and inventory continued to decline. China's copper scrap market was not truly facing a spot shortage issue. The outlook for copper cathode demand is positive. China remains dependent on copper concentrate imports. Spot copper concentrate TCs showed no signs of bottoming out. By-product revenue sustained smelter profits. He also analyzed the DRC sulphuric acid market conditions, the expected slowdown in global refined production growth, and how a refined market supply deficit should support higher copper prices. He also mentioned that the AI industry maintained strong development momentum, bringing new growth momentum to copper demand. Tin: He elaborated from the following perspectives: Myanmar tin production — slow recovery, upward trajectory, 2025-2027E; Indonesia tin ore RKAB quotas — expected to ease slightly in 2026; DRC — major mine production remained stable, but the M23 movement added uncertainty; global tin prices — supply determines the floor, macro factors drive fluctuations; the global tin market is expected to maintain a tight balance, with new mining capacity expected to be concentrated for release in 2028. Thomas Feng shared insights on nickel, cobalt, and lithium: emerging from the trough and entering a new cycle. ►New energy demand landscape: from EV popularization to energy storage deployment. First, he reviewed and provided an outlook on the global NEV market: NEV demand no longer maintains a one-sided high-growth trajectory, but instead exhibits characteristics of regional differentiation, structural divergence, and intensifying cyclical volatility; development paces in China, Europe, and the US have shown notable differences; performance trends of BEVs, PHEVs, and commercial vehicles have diverged; and the impact of inventory and price cycles on industry operations is increasing significantly. Second, in his review and outlook of the global energy storage market, he noted that the global energy storage market will remain concentrated in three key regions: China, the US, and Europe. Driven by 2030 climate goals, emerging markets such as the Middle East, Australia, and Southeast Asia are showing strong growth in demand for large-scale energy storage. Benefiting from cost advantages and improved safety performance, LFP battery market share is expected to continue climbing. ►Lithium: Reshaping the Supply-Demand Pattern in a New Cycle Global lithium carbonate market: shifting from overall surplus to structural tightness, with prices in a post-trough reassessment and recovery phase. Lithium hydroxide supply and demand maintained a tight balance: production on the supply side was driven by demand, the market share of ternary power batteries was squeezed, and room for growth was limited. The concentration of lithium resource supply declined, with marginal growth rates slowing down simultaneously. Significant demand growth drove the continued expansion of resource projects. ►Nickel: Navigating Policy Changes and Narrowing Oversupply Indonesia's nickel ore HPM adjustment: aimed at enhancing the economic value of non-nickel resources. The discussion covered scenario analysis of nickel ore prices following the implementation of the new policy, and the impact analysis of nickel ore benchmark price adjustments on MHP full costs. Indonesia's nickel ore RKAB quota: a tight balance is expected to set the tone for 2026. Global primary nickel is expected to remain in persistent oversupply. Regarding the logic behind refined nickel price trends, it was noted that policy and macro factors jointly amplified price fluctuations, while cost support elevated the long-term price floor. ►Cobalt: Shifting from Surplus to Shortage after the DRC Export Ban——Long-Term Uncertainty Remains Following the DRC policy announcement, cobalt product prices in China rose rapidly. However, high prices suppressed downstream demand, putting prices under pressure. Starting from H2 2025, the Chinese market continued destocking. Amid raw material shortages, enterprises began using MHP and recycled materials as production substitutes. MHP and recycling are expected to continue growing rapidly, effectively bridging the cobalt hydroxide gap. Cost pressure transmitted in both directions: LCO doping/ternary substitution restarted, and consumer cobalt demand is expected to decline by 10%. As persistently high cobalt prices suppress demand, if China secures 90% of the DRC quota, supplemented by MHP and recycling supply, inventory buildup could occur as early as 2026. Panel Discussion: Global Metals Market Outlook——Geopolitics Disruption, Macro Cycles and the Return of Commodity Volatility •Copper and Aluminum Price Rise, 2024-2026 •Precious Metals Storm: Silver Swung Wildly, Gold Hit Record Highs — Interest Rate Cycles, Safe-Haven Demand, and Industrial Logic •Precious Metals and Industrial Metals: Are Commodities Entering a New Cycle •Focus on Critical Minerals: Emerging Region Supply Rise and Policy Shifts, Green Transition Co-Shaping a New Narrative •Chinese Market: The 15th Five-Year Plan Moderator: Yanchen Wang, Managing Director, SMM Global UK Ltd. Panelists: Yahong Tian, Co-Head of R&D, CITIC Futures Henry Van, Head of Industrial Metals Analysis, Trafigura Sharon Ding, Head of China Basic Materials, UBS Justin William Hughes, Commodity Derivatives Distribution, Optiver Xie Shaobo, Head of China, Appian Mining Fund & independent non-executive Director, Zijin Gold International Panelists noted aluminum has great upside—its 10% price rise lags its 4%-5% supply contraction (vs. oil’s 60% price surge on 10% supply drop), with valuation recovery incomplete. They were more optimistic about copper demand, driven by real downstream demand rather than speculation; aluminum semis’ upside is underappreciated due to high oil prices. Long-term, copper and gold are key for mining investment, with scarce high-quality copper mines and solid gold fundamentals. They also discussed US tariffs, China’s metal demand resilience and overseas mining investment. Overseas mining success hinges on resource-to-reserve certainty; West Africa, Latin America, DRC and Zambia are new hotspots, while Australian/Canadian listed miners are undervalued. Enterprises must plan prudently based on risk tolerance. Geopolitical conflicts (e.g., Iran) may trigger energy crises, but current inflation control and China’s high metal consumption share weaken demand impact. Long-term, energy crises will boost electrification, expanding copper/aluminum demand. Investment depends on risk appetite and fundamental grasp. SMM Industry Analysis: Strategic Re-valuation of Minor Precious and Minor Metals in 2026 — The Case of Silver and Tungsten Silver: Market Supply-Demand Balance and Macroeconomic Volatility: Evolution and Shift in Industrial Demand, Particularly Driven by the PV Sector Tungsten: Strategic Status Upgrade - Supply Constraints and High-End Demand Driving the 2026 Price Rally Speaker: Juno Zhu, Senior Analyst of Minor and Precious Metals, SMM Juno shared insights on the strategic revaluation of tungsten and silver. Tungsten: Tungsten prices have surged over 500% since 2025; China holds over 50% of global tungsten reserves, contributes nearly 80% of global production, and possesses a complete industrial value chain; China's tungsten supply constraints in 2025: H1 mining quotas declined 6.45% YoY; global new project stagnation: limited capacity expansion in 2026, with ex-China mine development cycles of 3–5 years; domestic tungsten downstream applications: significant growth in cutting tools and PV tungsten wire in 2025; European market: persistent raw material shortages, with Rotterdam tungsten prices surging since February 2025; China's tungsten product exports: transitioning from primary products to deep-processed products; SMM analysis: the tungsten market supply-demand gap is expected to persist but narrow in 2026; prices are expected to consolidate at highs after overheating cools. Silver: Silver price fluctuations in 2026: an unexpected surge from Q4 2025 to Q1 2026, where frenzied investment demand and capital liquidity completely overshadowed the impact of the industrial off-season. Shift in trade dynamics in Q1 2026: SGE-LBMA premiums reversal and a surge in imports. Demand spike in Q1 2026: the PV industry started with a recovery, and an investment boom generated a phased demand peak. PV market outlook: policy shifts in 2026 are expected to curb demand growth, with overall silver consumption remaining stable. Silver demand outlook for 2026: industrial fundamentals provide support, while investment surges serve as a tactical highlight. Silver supply outlook for 2026: mild annual growth and an expanding secondary supply share are expected to drive a tight balance in the market. Market outlook: short-term trends are expected to revert to industrial fundamentals, while the medium and long-term trajectory is expected to fluctuate at highs driven by safe-haven demand. Panel Discussion: Metals in a Fragmented World: Trading Opportunities in the Age of Instability (Physical Trading and Hedging) •Shifting Liquidity Landscape across LME, CME, and SHFE •Shipping Risks and Sanctioned Metals: Implications for LME Inventory Structure •How European CBAM is Reshaping Global Metals Trade Flows •Is the Metals Market Entering an "Era of Geopolitical Risk Premiums" •Internationalization of SHFE & GFEX: Opportunities and Challenges for Global Investors Moderator: Jean Tang, Commercial Director, SMM Panelist: Anant Jatia, Founder and Chief Investment Officer, Greenland Investment Management Bella Yu, General Manager of Marketing Department, Liyang Unilink E-commerce Co., Ltd. David Wilson, Director of Commodity Strategy, BNP Paribas Duncan Hobbs, Research Director, Concord Resources Nicholas Snowdon, Head of Metals and Mining Research, Mercuria Energy Trading SA Sabrina Qian, Director of Geared broking desk, IFCHOR GALBRAITHS Anant Jatia stated: CBAM represents a major policy shift in Europe's metals sector. It is not merely about raising trade costs, but will profoundly reshape global metal trade flows and pricing logic. CBAM officially took effect in January this year, initially covering categories such as steel and aluminum semis, with its core mechanism incorporating carbon emission intensity costs into Europe's metal pricing system. High-carbon-emission producers will need to bear additional carbon allowance costs, significantly weakening their export competitiveness to Europe, while green capacity powered by clean energy will gain a clear advantage in the European market and capture greater market share. Following the policy's implementation, the landed cost of metals in the European market will rise, sustaining a long-term regional premium similar to the aluminum premium structure in the US market. Compared with the market differentiation among LME-registered brands following CBAM's implementation, what deserves more attention are the entirely new market opportunities it creates. By sourcing low-carbon, high-quality materials, market participants can potentially capture green premiums, while the mechanism will also transform metal trading models and the global trade flow landscape. The panelists also discussed the changing liquidity landscape across LME, CME, and SHFE. They noted that liquidity in the commodity market is becoming increasingly fragmented, with copper and other products now tradable across multiple global futures exchanges. Price discovery is no longer concentrated in a single market, and the traditional pattern of one market leading gains and others following has reversed, with multi-exchange rotation driving price movements becoming the norm. Factors such as geopolitical policies and tariff adjustments have given rise to regional pricing divergence, with price movements in some markets increasingly driven by capital flows and sentiment. Policy and geopolitical events have also significantly affected the spread between futures and spot prices of metals, creating opportunities for cross-market arbitrage. Meanwhile, policies related to critical minerals supply security, regional supply shocks, and geopolitical disruptions have widened the dislocation between regional fundamentals and price signals. The metals market has entered a window of structural arbitrage opportunities, and this trend is expected to persist. Cross-market arbitrage continues to provide liquidity support to exchanges, a phenomenon broadly observed across both industrial and precious metals. In addition, the panelists engaged in in-depth discussions on the differences between exchange liquidity and industrial liquidity, as well as factors influencing metal price trends, including fundamentals, geopolitical developments, energy costs, and commodity transportation costs. Opening Remarks for Coffee Break Xu Tao, CEO of CSCI In his address, Xu Tao stated that Hong Kong serves as a vital hub in the global metals pricing and trading system, playing a key role in the aggregation of LME delivery resources and the internationalization of RMB-denominated commodities. Going forward, China Securities International will continue to leverage its role as a bridge for cross-border business, deepen collaboration with CSC Futures, and provide clients at home and abroad with efficient and professional comprehensive financial services in commodities, contributing to a higher level of opening-up of China's financial markets. Networking (Coffee Break) Acknowledgments The 2026 SMM Hong Kong Metals Forum was successfully held with special thanks to the Platinum Sponsor, China Securities International, for its strong support, as well as sincere gratitude to Liyang Unilink E-commerce Co., Ltd. for its significant contribution to the forum. Going forward, China Securities and China Securities International will continue to leverage the unique geographical and resource advantages of Hong Kong as an international financial center, deepen strategic cooperation with authoritative industry platforms such as SMM, and continuously improve the "onshore + offshore" integrated bulk commodity comprehensive service system, precisely empowering enterprises to seize market opportunities and hedge operational risks, contributing professional expertise to advancing the internationalization of China's bulk commodity market and enhancing the industry's global competitiveness. Liyang Unilink E-commerce Co., Ltd. (formerly Wuxi Stainless Steel Electronic Trading Center) has been engaged in new energy materials and critical metals supply chain services for over 20 years. Through its digital platform and offline service network, the company provides upstream and downstream clients with full-process online services including price negotiation, contract signing, contract execution, payment settlement, cargo delivery, processing, quality inspection, and after-sales services. With transparent pricing, 100% fulfillment guarantee, and strict quality control, it has established stable cooperation with over 30,000 industrial clients. In the field of critical strategic metal resources, Unilink has built a supply chain service system covering 14 critical metal varieties including indium, bismuth, nickel, cobalt, and lithium. Spot delivery volumes of indium and bismuth each account for over 90% of China's consumption. For new energy materials, spot delivery volumes of nickel, cobalt, and lithium on Zhonglian Jin's platform account for 30%, 90%, and 20% of China's consumption respectively, while daily sulfur trading volume exceeds 80,000 mt. Unilink implements a service model of "payment upon delivery, cargo pick-up upon payment," effectively shortening delivery cycles, reducing enterprise operating costs, and helping upstream and downstream clients achieve stable and efficient material scheduling. Zhonglian Jin strictly adheres to national industrial policies and resource management requirements, consistently focusing on serving the real economy, fully ensuring the security and smooth operation of bulk commodity supply chains, and promoting efficient resource allocation. It has ranked among China's Top 500 Service Enterprises and China's Top 20 Growing Internet Enterprises for two consecutive years. With that, the 2026 SMM Hong Kong Metals Forum came to a successful conclusion! Thank you for your help and support for this forum~

According to the latest data from the General Administration of Customs, in March 2026, China imported 2.63 million tonnes of copper concentrate, up 13.84% month-on-month and 9.86% year-on-year; the cumulative year-on-year increase stood at 6.41%.

On March 13, 2026, China's copper smelting industry set a new historical record. According to SMM data, the imported copper concentrate index closed at -60.39 USD/dmt, officially breaking through the -60 USD level.

[SMM Analysis: How does the Iran-Israel conflict affect copper concentrate?]

[SMM Analysis: Key Anchor in Great Power Rivalry: The U.S. "Project Vault" and the Changing Resource Landscape in Latin America] Amid the current accelerated reshaping of the global resource competition landscape, China's copper concentrate import pattern is undergoing a profound structural transformation. The latest trade data from 2025 clearly outlines this trend: China is significantly enhancing its capacity to acquire copper concentrate resources from neighboring countries.