SMM Weekly Stainless Steel Futures Review — week of July 20–24, 2026. Middle East conflict escalation and tight Indonesian nickel ore supply keep the benchmark contract elevated near a two-week high, though it slips RMB 105/mt over the week of July 20–24 as social inventories tip back into a build.

Over the past three weeks, the domestic spot market for platinum group metal (PGM) compounds has exhibited the following pattern: raw materials fluctuate sharply in tandem with macro sentiment, compound quotations passively rise and fall accordingly, while trading volume remains sluggish and dominated by rigid demand. Platinum and palladium raw materials have been pulled back and forth by Federal Reserve interest rate expectations and geopolitical conflicts in the Middle East, triggering wide swings on the Guangzhou Futures Exchange platinum and palladium futures market. Mainstream compounds including chloroplatinic acid, chloropalladic acid and rhodium nitrate adjust in line with primary metal feedstocks. However, processing margins for compounds remain thin, resulting in weaker price volatility compared with primary platinum and palladium ingots. The market features low inventory levels, slow shipments and batch-based purchasing. Midstream manufacturers avoid exposure risks to raw material prices, while downstream end-users adopt production-based procurement strategies. The signing of long-term contracts slows down, spot bulk orders account for a higher share, and widespread market caution prevails. Divergence across PGM compound varieties persists: platinum-based compounds receive incremental demand support from hydrogen energy and semiconductor sectors; palladium-based compounds remain under pressure; minor varieties including rhodium, ruthenium and iridium show greater independent price swings subject to fluctuations in segmented orders. Platinum-based Compounds Stable rigid demand stems from capacity expansion of electronic glass fibre fabrics, catalytic precursors for hydrogen fuel cells, and catalysts for nitric acid chemical production. Demand for diesel vehicle exhaust aftertreatment stays steady. Diversified demand offsets headwinds from the automotive catalyst segment. Palladium-based Compounds Output of internal combustion engine vehicles faces downward pressure, while July and August mark the seasonal low for automobile manufacturing. Several automakers conventionally arrange high-temperature production shutdowns and maintenance from late July to August, dragging down shipment momentum. Rhodium-based Compounds Rhodium raw material prices have trended higher over the past month amid divergent market expectations between buyers and sellers. Downstream clients prioritise inventory drawdown and procure only as needed. Holders are reluctant to cut prices substantially to offload stocks, extending negotiation cycles for spot orders and leading to generally slow shipment speeds. Ruthenium & Iridium-based Compounds Ruthenium raw material prices have surged significantly and traded at elevated levels in mid-to-late July. Trading merchants and smelters hold back supply out of reluctance to sell. They prioritise fulfilling existing long-term contracts and delay releasing spot supplies. The spot market sees quoted prices paired with limited available material, with abundant enquiries but limited concluded trades.

Indonesia is predominantly a thermal-coal producer serving power generation and industrial boilers; metallurgical coal represents a comparatively small part of the country’s production and export mix. Indonesia entered 2026 with the coal market expecting a government-led correction after two years of exceptionally high output. Policymakers signalled tighter RKAB approvals to control oversupply, support prices, preserve reserves and prioritise domestic demand. The result was a sharp recovery in the country’s core low and medium-CV coal prices, even though mine production did not fall as quickly as sentiment initially implied. The full H1 picture is therefore more complex than a simple supply-cut story. Indonesia retained abundant mining capacity and large headline production, but policy uncertainty, domestic obligations, coal-quality mismatches and selective marketing reduced the amount of coal immediately available to export buyers. At the same time, LNG disruption in Q2 encouraged greater coal burn in Asia and gave the rally a real demand component. 1. Indonesia’s coal foundation: scale, cost and Asian proximity Indonesia’s competitive advantage is not simply the size of its coal reserves. It is the combination of large-scale and relatively low-cost mining, short shipping distances to major Asian buyers and the ability to supply a wide range of thermal-coal qualities. This makes Indonesia the dominant volume supplier in seaborne low- and medium-CV coal, particularly to China, India, the Philippines, Malaysia and South Korea. Indonesia had approximately 97.96 billion tonnes of coal resources at end-2024. The supplied 2025 reserve chart reports 33.25 billion tonnes (33,250 Mt) of proved-plus-probable coal reserves. Kalimantan holds 69.3% and Sumatra 30.7%, with East Kalimantan and South Sumatra the two largest reserve regions. Around 69% of identified resources were low-calorific coal of 4,200 kcal/kg GAR or below. Indonesia approximately reports national coal reserves at 33.25 billion tonnes. East Kalimantan alone accounts for 47.2%, followed by South Sumatra at 23.5%; other islands collectively contribute only about 0.05%. This structure is visible from Indonesia’s mining-permit distribution. Kalimantan is the core export base, supported by established river, barging and seaborne logistics. Sumatra has greater domestic relevance through PLN supply, mine-mouth power plants and consumption of lower-CV coal. Higher-CV material exists, but it is not the dominant volume base of the Indonesian system. That quality profile creates both an advantage and a vulnerability. Low-CV coal is inexpensive on a per-tonne basis, but it is not always inexpensive after adjusting for energy content. Export competitiveness can therefore change quickly when freight rates rise or buyers switch toward more energy-dense coal from Australia, South Africa or other origins. 2. Coal-quality classification: where Indonesian supply sits Indonesian thermal coal is conventionally classified by calorific value on a gross-as-received basis. GAR reflects the energy value of coal including its as-received moisture and is closely linked to the typical moisture, ash, sulphur, combustion behaviour and end-use of each cargo. Indonesia’s commercial identity is concentrated in the low- and medium-CV portion of this spectrum, which are usually in the range of ICI 3 to ICI 5. The quality labels are broad commercial descriptors. Actual cargo value also depends on moisture, sulphur, ash, mine location and logistics. Both the ICI commercial assessment system and the HBA administrative system are structured around the qualities Indonesia actually mines and sells, although they use different reference specifications and serve different purposes. ICI has five grades; the current HBA framework has four. 3. Production expanded rapidly before the 2026 policy turn Indonesia’s coal production illustrates a decade of steady output growth interrupted by a first pullback in 2025. Production rose from 563.7 million tonnes in 2020 to a peak of 836 million tonnes in 2024, a compound annual growth rate of roughly 10.4%, a pace driven largely by expanding export demand from China and India alongside rising domestic industrial consumption. That growth reversed in 2025, with output easing to approximately 817 million tonnes, a decline of about 2.3% year-on-year, marking the first contraction in the series and an early signal of the tighter production discipline that would carry into the 2026 RKAB cycle. A notable feature of the underlying data is that Indonesia's Domestic Market Obligation has been met, and generally exceeded, in every year shown. Actual domestic allocation has consistently run in the range of roughly 25% to 30% of total production, comfortably above the regulatory minimum requirement, rather than sitting at the statutory floor. This suggests domestic supply commitments have not been a binding constraint on producers during this period; rather, the recent tightening in domestic allocation reflects deliberate policy intent to raise that share further, not a response to prior shortfalls. Exports have remained the larger channel throughout, but their share of total production has gradually narrowed as the domestic allocation has grown, consistent with the broader shift toward prioritising Indonesia's power and smelting demand. After this high-output period, the government initially sought a much sharper reduction for 2026, with an ambition to move production toward the 600 Mt range. Many companies reportedly received initial RKAB quotas 40–70% below their 2025 levels. The policy objectives were broader than price support: they included controlling oversupply, preserving reserves and ensuring that domestic power and strategic industries received priority. 4. Why Indonesia runs two coal benchmarks 4.1 HBA: the government’s administrative reference Harga Batubara Acuan is set monthly by the Ministry of Energy and Mineral Resources. Its main role is administrative: HBA forms the basis for the Harga Patokan Batubara reference selling price, royalty and PNBP calculations, and DMO-price compliance. Cargo adjustments reflect actual calorific value, moisture, sulphur and ash against four reference specifications: HBA at 6,322 kcal/kg GAR, HBA-I at 5,300, HBA-II at 4,100 and HBA-III at 3,400. HBA History Timeline Before 2023, HBA used a weighted basket that included the Indonesian Coal Index, Newcastle Export Index, GlobalCoal Newcastle Index and Platts 5900 alongside Indonesian assessments. Because several components represented premium high-CV coal from outside Indonesia, HBA could detach sharply from the value realised by Indonesian sellers of low-CV cargoes. In October 2022, for example, HBA reached about $330/t while ICI 4, representative of a grade many Indonesian producers were actually shipping, was around $91–95/t. Producers argued that the gap overstated royalty obligations for companies not selling premium coal. Kepmen ESDM No. 41/2023 replaced the international-index basket with a formula based on actual realised FOB-vessel transaction prices reported through the e-PNBP Minerba system. The calculation assigns 70% weight to the prior month’s average sales price and 30% to the month before that. The supplied material identifies Kepmen ESDM No. 72/2025 as the current governing regulation and says it retains the transaction-based approach and four-tier structure. 4.2 ICI: the commercial market benchmark The Indonesian Coal Index is a weekly market-assessed price series jointly produced by Argus Media and PT Coalindo Energy. It covers five FOB grades, 6,500, 5,800, 5,000, 4,200 and 3,400 kcal/kg GAR, and draws on input from buyers, sellers and intermediaries active in the physical market. ICI is more commonly used in commercial negotiation because of its frequency, independence, granular mapping to actual cargo qualities and comparability with Newcastle and Richards Bay benchmarks. HBA remains indispensable, but for a narrower fiscal and administrative function. Since HBA is now derived from domestic transactions that themselves reflect market conditions, the two series move more closely than before 2023, although HBA still tends to lag. That breadth is a large part of why ICI functions as the leading price reference for Indonesian coal more broadly, used for both domestic and international contracts, royalty and tax calculations, corporate finance, and production planning, rather than a narrower, origin-specific price series. Its weekly cadence, relative to HBA's monthly and backward-looking construction, is the other key reason it remains the benchmark commercial parties actually negotiate against: it responds to current market conditions rather than lagging by up to two months, it is derived independently of government administration, and it is quoted alongside Newcastle and Richards Bay for cross-market comparison. HBA continues to serve a narrower but essential function, determining royalty obligations and DMO-price settlement rather than commercial transaction value. 5. Early-2026 production: policy tightened faster than mine output Indonesia’s coal production did not collapse in early 2026. The market became more constrained because production was increasingly shaped by RKAB policy rather than mining capability. Preliminary figures cited in the supplied analysis put January–May output at 302 Mt, only 6% lower year on year, while coal sales and marketing fell much more sharply to 257.27 Mt, down 17%. An indicative H1 estimate of about 362.4 Mt would already equal more than 60% of a 600 Mt annual target and imply an annualised pace above 700 Mt. This was the core contradiction of H1: supply policy was bullish for prices, but implementation remained incomplete. Miners were still producing at a relatively high rate while market absorption, exports and domestic allocations became more selective. 6. Exports, Asian demand and Indonesia’s global position In the 2025 customs mirror-data comparison, Indonesia remained the world’s largest coal exporter by volume at 531.15 Mt, equal to 41.9% of reported export-side declarations. Australia followed at 356.45 Mt. The United States, South Africa, Colombia, Russia and Canada were substantially smaller. Australia competes most directly in high-CV thermal and metallurgical coal; Indonesia leads total export volume through its large low- and medium-CV thermal-coal base. Top 20 coal-exporting countries in 2025 (million tonnes; customs mirror-data ranking). On the import side, China was the largest reported buyer in 2025 at 491.09 Mt, or 32.5% of import-side declarations, followed by India at 253.46 Mt, or 16.8%. Japan, South Korea, Vietnam and Taiwan formed the next group. Global seaborne coal demand is therefore heavily concentrated in Asia. For Indonesia, China and India remain the main external demand centres because of their scale and ability to consume Indonesian low- and medium-CV coal. Top 20 coal-importing countries in 2025 (million tonnes; customs mirror-data ranking). 6.1 H1 2026 reported shares and June destination mix According to SMM-processed data and available customs information, January-June 2026 export-side declarations totalled 469.32 Mt. Indonesia accounted for 195.58 Mt, or 41.7% of this reported origin-side total, followed by Australia at 29.8%, the United States at 8.1% and South Africa at 6.9%. On the importer side, combined January-June destination demand was led by China at 182.82 Mt, or 30.4% of the reported total, followed by India at 17.0%, Japan at 11.0% and South Korea at 9.5%. These proportions describe the January-June global origin structure and importer-side destination demand; they are not an Indonesia-to-China bilateral matrix. Because late-period customs reporting is incomplete, SMM treats them as provisional H1 proportions that may be revised after additional declarations. 7. DMO, "penugasan" and the difference between total and usable supply Indonesia’s Domestic Market Obligation is a domestic-priority rule. The general benchmark requires coal producers to allocate 25% of approved annual production to domestic users. Compliance is linked to RKAB approvals and annual domestic assignments, with reporting, quality and delivery obligations that protect PLN, coal-fired power plants and strategic industries. The 25% benchmark is therefore a minimum policy reference rather than a uniform realised ratio for every miner. Non-compliance may trigger compensation funds, fines or restrictions on overseas coal sales. "Penugasan" refers to the practical assignment of domestic supply, identifying which miner supplies which domestic buyer, usually PLN or another strategic user. DMO is the broad quota, while penugasan is the allocation mechanism. This makes the burden uneven: miners with large PLN or state-linked assignments can effectively supply more than the headline percentage. Indonesia’s domestic coal challenge is less about aggregate national availability than the allocation of suitable coal to specific users. DMO establishes producers’ broad domestic sales obligations, while the government may appoint particular producers or traders to address urgent supply shortages. However, the resulting burden cannot be inferred solely from the share of demand associated with state-linked users; company-level assignments and delivery data are needed to show which suppliers carry the largest obligation. PLN Group and independent power producers were estimated to require 152.51 Mt in 2026. The reported January–May shortfall of approximately 9.4 Mt comprised 5.67 Mt of medium-rank coal and 3.76 Mt of low-rank coal. However, the stated receipt average of 10.7 Mt per month does not fully reconcile with these figures and should be checked against PLN’s actual monthly delivery schedule. The shortage nevertheless illustrates that sufficient national production does not guarantee the availability of the correct coal grade, location and delivery timing for each power plant. Price-cap framework: Coal supplied for public electricity generation is capped at US$70/t FOB vessel at the 6,322 kcal/kg GAR reference specification under MEMR Decree 139.K/HK.02/MEM.B/2021. Coal supplied to domestic industrial users, including cement, is capped at US$90/t under Decree 58.K/HK.02/MEM.B/2022. Both marker prices are adjusted for actual calorific value, moisture, sulphur and ash. The US$90/t regime excludes metal-mineral processing and refining, so smelter coal should not automatically be treated as cement-price-capped. The commercial tension becomes material when export-equivalent netbacks exceed the domestic caps. Take example for the first May 2026 period, the official 6,322 GAR HBA was US$106.57/t, implying a headline benchmark gap of US$36.57/t versus the PLN cap and US$16.57/t versus the industrial cap before quality, freight, contract and royalty effects. A miner carrying a high DMO or penugasan share may therefore earn less revenue and margin than on an export sale of comparable coal, creating an incentive to limit domestic exposure to required or assigned volumes. This is a margin concern, not a legal option to avoid DMO: non-compliance can trigger fines, compensation payments and export restrictions. If export prices fall below the caps, or quality and logistics adjustments absorb the spread, the export premium can narrow or disappear. 8. H1 2026 price trend: policy-led Q1, demand-led Q2 For analysing 2026 prices, ICI 3, ICI 4 and ICI 5 provide the clearest view because they represent Indonesia’s physical medium- and low-CV market. HBA remains relevant for administrative and fiscal purposes, but its monthly look-back means it tends to follow the physical market with a delay. Q1: RKAB expectations, weather, and tighter spot supply Q1 was initially driven by expectations that Indonesia would reduce its 2026 coal production target from 790 million tonnes in 2025 to around 600 million tonnes. While company-level RKAB allocations were still being finalised, delayed approvals and uncertainty over individual quotas made some miners cautious about production planning and forward sales. This tightened immediately available spot cargoes, particularly from smaller and medium-sized producers. Seasonal rainfall reinforced the policy-driven supply concerns by disrupting open-pit mining, haul roads and barging operations in parts of Kalimantan and Sumatra. January exports fell to 39.56 million tonnes, down 22.7% month on month, while BPS subsequently confirmed that national coal production declined during Q1. However, the impact was uneven: some producers front-loaded output and DMO deliveries ahead of potential quota reductions, meaning the market faced constrained marginal supply rather than a uniform nationwide production cut. From January 2 to March 27, ICI 3 rose 23.0% from $60.91/t to $74.89/t, ICI 4 increased 32.7% from $45.46/t to $60.31/t, and ICI 5 gained 17.6% from $30.97/t to $36.41/t. ICI 4 recorded the strongest percentage increase, consistent with tighter availability and stronger competition for Indonesia’s core 4,200 kcal/kg GAR export grade. Nevertheless, part of its outperformance reflected its lower starting price, while the LNG disruption beginning in early March also contributed to the final stage of the Q1 increase. Q2: LNG disruption and gas-to-coal demand During Q2, market support shifted toward regional energy security. Disruption to oil and LNG flows through the Strait of Hormuz removed a substantial portion of global energy supply, sharply raising Asian gas and international oil prices. Higher LNG prices encouraged utilities with sufficient fuel flexibility and available coal-fired capacity to reduce spot-gas consumption and increase coal generation. The disruption also affected coal supply costs. Brent rose from around $71/bbl on February 27 to $104/bbl on March 9 and remained volatile during Q2, while diesel and other refined-product prices increased even more sharply. Because Indonesian open-pit coal production depends heavily on diesel-powered mining equipment, trucks, barges and support vessels, higher fuel prices raised production and logistics costs. The coal rally therefore reflected both stronger gas-to-coal switching demand and a higher cost base across the Indonesian supply chain. From March 27 to June 26, ICI 3 rose another 13.3% to $84.83/t, ICI 4 gained 9.3% to $65.92/t, and ICI 5 increased 14.1% to $41.54/t. Prices peaked around June 12 before easing modestly into month-end. Across H1, ICI 3 increased 39.3%, ICI 4 gained 45.0% and ICI 5 rose 34.1%. Overall, the rally reflected the combined effects of RKAB-related supply expectations, weather and operating constraints, LNG-driven fuel switching and higher oil-related production and transportation costs. 9. H2 2026 outlook: a pause before a possible Q4 recovery The H1 rally has stalled. Overseas buyers are pushing back on higher offers, and comfortable inventories have taken the urgency out of restocking. Absent a fresh catalyst, price action into H2 looks more like consolidation than a resumption of the uptrend. RKAB is the decisive H2 variable. Producers are seeking to maximise economically usable approvals, and SMM’s indicative scenario places total 2026 quota availability at around 730-750 Mt. This is an analytical scenario, not an announced official total, and it is conditional mainly on domestic coal requirements being met. DMO compliance, cargo quality and actual delivery capacity will determine how much approved volume can become exportable supply. Winter demand offers some support, but seasonality alone won't do much heavy lifting. A real rebound needs more than a calendar effect — tight RKAB discipline, a weather or logistics disruption, or restocking that outpaces the norm. If approvals land near the top of our range and get fully drawn down, the extra tonnage argues for a longer correction, not a shorter one. SMM believes that RKAB size is the swing factor for Q4 price direction The size of 2026 RKAB approvals is the single variable that decides which way H2 prices move. If approvals land large, quota issued near the top of the range and largely usable, it is expected the correction to continue. More approved tonnage means more coal eligible for export, and that supply overhang caps any price recovery through year-end. If approvals stay tight, and DMO enforcement holds firm, the exportable pool shrinks. Combine that with the seasonal demand pickup that typically accompanies Q4 rainy-season disruption to output and logistics, and the setup shifts toward a price recovery into year-end — tight supply meeting a seasonal demand bump, rather than seasonality doing the work on its own. In short: large RKAB → correction persists. Tight RKAB + strict DMO → year-end price recovery. The quota decision is the fork in the road; everything else (winter demand, rainy-season logistics) just determines how sharp the move is once that fork is decided.

JSW Steel expects production and sales to strengthen from Q2 FY27 as the expanded Blast Furnace-3 at Vijayanagar ramps up, while reaffirming an aggressive capacity expansion pipeline spanning Dolvi, Odisha, Utkal and Kadapa. Despite the planned BF-3 shutdown, the company reported record first-quarter steel sales of 6.25 million tonnes, supported by resilient domestic demand and a 46% year-on-year increase in exports.

SMM, July 23: Metals market: Overnight, domestic base metals generally rose. SHFE copper fell 0.16%, SHFE aluminum gained 0.35%, SHFE lead gained 0.54%, SHFE zinc gained 0.98%, and SHFE tin fell 0.23%. SHFE nickel rose 0.62%. Additionally, the most-traded alumina futures contract fell 1.72%, and the most-traded casting aluminum contract gained 0.28%. Overnight, ferrous metals all rose. Stainless steel edged up 0.2%, iron ore gained 0.34%, rebar rose 0.16%, and HRC edged up. Coking coal and coke: the most-traded coking coal contract added 0.51%, and the most-traded coke contract edged up 0.08%. Overnight overseas, LME base metals mostly moved sideways. LME copper edged down 0.04%. LME aluminum was flat at $3,192.5/mt. LME lead fell 0.18%. LME zinc fell 0.15%. LME tin rose 0.39%. LME nickel fell 0.53%. Overnight precious metals : COMEX gold rose 1.44%, and COMEX silver rose 1.57%. Overnight, the most-traded SHFE gold contract gained 1.16%, and the most-traded SHFE silver contract gained 1.69%. As of 7:07 am July 23, overnight closing prices: Macro front China: [National Energy Administration: As of end-June, national cumulative installed power generation capacity reached 4.04 billion kW, up 10.8% YoY] On July 22, the National Energy Administration released national electricity statistics for the January-June period. As of end-June, total installed power generation capacity reached 4.04 billion kW, up 10.8% YoY. Solar power capacity was 1.27 billion kW, up 15.8% YoY; wind power capacity was 680 million kW, up 18.5% YoY. [CSRC: steadily expand high-level institutional opening and continuously improve the convenience for foreign investors in the capital market] On July 21, Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), met in Beijing with John Graham, President and CEO of Canada Pension Plan Investment Board. The two sides exchanged views on global and China economic and financial trends, investing in China’s capital market, and other topics. Wu Qing noted that against a complex and shifting international landscape, China’s economy performed generally stable in H1, maintaining a positive and improving trend and demonstrating resilience and vitality. The CSRC will pursue progress while ensuring stability, resolutely safeguard the sound and stable operation of the capital market, steadily expand high-level institutional opening, and continuously improve the convenience for foreign investors in the capital market. We welcome international institutional investors, including the Canada Pension Plan Investment Board (CPP Investments), to expand their investments in China and share in the dividends of China’s economic and capital market reform and development. Graham stated that CPP Investments, as a long-term investor with a global footprint, pays close attention to and remains optimistic about the effectiveness of China’s economic reform and development, has long regarded China as one of its key investment regions globally, and will continue to practice its value investing philosophy by actively deploying investments in China. [Beijing State-owned Capital Operation and Management Co., Ltd. (BSCOMC): To date, it has allocated nearly 10 billion yuan of its own funds to the stock market.] On July 22, Beijing State-owned Capital Operation and Management Co., Ltd. (BSCOMC) announced that, to date, BSCOMC had allocated nearly 10 billion yuan of its own funds to the stock market. Going forward, BSCOMC will rely on its own funds and its securities companies and public fund subsidiaries to continue increasing its holdings of listed companies’ stocks, support the development of the Beijing Stock Exchange, and, in line with its functional positioning as a state-owned capital operation company, resolutely safeguard the strategic value of listed companies’ core assets, thereby contributing the strength of Beijing’s state-owned enterprises to the stable and healthy development of the capital market. On the US dollar front: Overnight, the US dollar index fell 0.09% to 101.12. US military strikes on Iran entered their 11th day, oil prices spiked to a six-week high, inflation expectations heated up in response, and the possibility of a Fed rate hike in July resurfaced. (Wallstreetcn) According to CME FedWatch: The probability of the Fed keeping rates unchanged in July is 65.3%, while the probability of a cumulative 25bp rate hike is 34.7%. By September, the probability of unchanged rates is 22%, a cumulative 25bp hike is 54.9%, and a cumulative 50bp hike is 23%. (Jin10 Data APP) Joseph Lavorgna, chief US economist at Sumitomo Mitsui Banking Corporation (SMBC), stated that if inflation does not slow, policymakers will lose their hard-won credibility. In a report, Lavorgna noted that over the past 70 years, there have been only six instances where core inflation fell by 0.9% or more year-over-year. In each case, the slowdown in inflation occurred because the Fed was tightening policy. Lavorgna said, “The longer the Fed waits, the greater the likelihood that interest rates will have to rise above the level necessary. That’s why so many past tightening cycles ended in tragedy. Chair Warsh understands this.” (Jin10 Data APP) On the macro front: Today, data due to be released include China’s June RMB share in Swift global payments, Australia’s June seasonally adjusted unemployment rate, the UK’s July CBI industrial order book balance, the Eurozone’s deposit facility rate as of July 23, the Eurozone’s main refinancing rate as of July 23, Canada’s May retail sales month-over-month, US initial jobless claims for the week ending July 18, and the Eurozone’s July consumer confidence flash estimate. Also note: The ECB will announce its interest rate decision; ECB President Lagarde will hold a monetary policy press conference; Google and Tesla Q2 earnings reports were released after the US stock market close on July 22. Crude oil: Overnight, both crude oil futures extended gains for the third straight session, with WTI up 2.54% and Brent up 4.93%. The escalating Middle East conflict and market fears of supply disruptions supported oil prices. According to Iran's Tasnim News Agency, the Khatam al-Anbiya Central Command issued a statement saying the Strait of Hormuz remains closed. Any vessel needing to pass through the strait must use designated routes and follow previously announced transit arrangements. The statement noted that if the US follows through on its threats, Iran will cut off all oil flows in the Gulf region and strike oil, gas, electricity, and economic infrastructure there. The statement also said repeated US threats will only lead to the expansion of war in the region and beyond. (Jin10 Data APP) US domestic crude oil production for the week ending July 17 recorded its largest decline since the week ending January 30, 2026. US EIA Strategic Petroleum Reserve inventories for the week ending July 17 dropped to their lowest since the week ending March 25, 1983. EIA report: Commercial crude oil inventories excluding strategic reserves increased by 2.01 million barrels to 412 million barrels, up 0.49%. (Jin10 Data APP) US refiners are raising diesel output to near record levels, reversing the seasonal trend. According to the US Department of Energy, refineries have averaged 5.3 million barrels per day of refined fuel oil (of which diesel is the main component) this month. If sustained, this would be the highest diesel production for July on record in the US and one of the highest months outside the winter heating season. Typically, diesel production peaks near year-end, but this year, due to severe global supply tightness, refiners have ramped up output months ahead of schedule. (Jin10 Data APP) Recommended Reading:

[SMM Aluminum Express News] Metro Mining expects bauxite production to reach 6.6–7.1 million WMT in 2026, with plans to further expand capacity to 8 million WMT per year. The company targets 5 million WMT of production in the second half of 2026, supported by low strip ratios, short average haul distances of 9 km to port, and 2H delivered costs of around US$30/dmt. The Bauxite Hills operation continues to benefit from favorable operating conditions, including 0.5 m average overburden with no blasting, feed grades of 48–50% alumina, product grades of 51–53% alumina, yields of 60–80%, and moisture below 10% for more than seven months annually. Metro Mining has also locked in 80% of its freight requirements for 2026–27, hedged US$75 million at an AUD/USD exchange rate of 0.65, and reported normal diesel inventory levels.

Chile’s National Energy Commission has approved the final terms of the 2026/01 Supply Tender, which will procure energy and capacity for regulated customers of distribution companies. The tender includes two blocks totaling 2,835GWh per year once fully implemented. It does not require awarded energy to come solely from renewables or set technology-specific quotas, but bids cannot be backed by assets using coal, petcoke, diesel or No. 6 fuel oil as primary fuels, while natural gas remains eligible. The rules explicitly allow energy storage systems to back supply commitments, provided they are connected to Chile’s National Electric System and have sufficient annual injection capacity. Bids are due by Dec. 4, 2026, with awards scheduled for Jan. 13, 2027.

South32 reported payable copper production of 16,000 tonnes from its 45% interest in the Sierra Gorda mine in Chile for the quarter ended June 30, down 9.6% year-on-year and below market expectations of 17,500 tonnes. Mining operations at the project continued to be affected by heavy rainfall, which had previously disrupted access to mining areas and temporarily suspended processing operations. The company also expects Sierra Gorda's FY2027 operating unit costs to be about 10% higher than FY2026 guidance due to a previously announced one-off workforce payment and higher diesel prices. In addition, the joint venture recently approved a fourth grinding line expansion, with approximately US$725 million of growth capital expenditure planned between 2027 and 2030 to increase processing capacity by around 25%.

July 20, 2026 Since the spring of 2026, something unusual has been unfolding in the gold market. Countries that had been among the world's largest buyers of gold for years have suddenly begun selling their reserves. These sales are taking place quietly. They are not announced publicly, and the transactions only appear in central bank data weeks or even months later. Those who look closely quickly realize that these are not routine portfolio adjustments. Instead, something far more significant is happening right before our eyes, largely unnoticed. What we are witnessing is a silent emergency response to an economic shock that is placing enormous strain on the global financial system: the closure of the Strait of Hormuz as a consequence of the Iran war. The logic becomes clear once the underlying mechanism is understood. Roughly 20% of the world's oil passes through the Strait of Hormuz. If that route is blocked, oil prices rise sharply, forcing oil-importing countries to obtain additional U.S. dollars to pay their energy bills. For a central bank, the fastest way to raise those dollars is by selling its most liquid dollar-denominated assets—typically U.S. Treasury securities. However, once those holdings have been largely exhausted and additional dollars are still required, gold often becomes the only remaining dollar-convertible reserve asset. Turkey Illustrates the Entire Drama No country demonstrates this process more clearly than Turkey. In March 2026, following the U.S. and Israeli military strikes against Iran that began in late February, the Turkish central bank reduced its holdings of U.S. Treasuries from US$15.7 billion to US$1.8 billion —a reduction of nearly 90% in just one month . Once that buffer had been depleted, the central bank turned to its gold reserves. During the first two weeks of the Iran war alone, it sold or pledged approximately 58 tonnes of gold , worth around US$8 billion , from reserves totaling roughly US$130 billion . This was not a strategic shift away from gold. Rather, it was a sign of financial distress. After all, no country willingly sells its gold simply to pay for gasoline and diesel as long as better alternatives remain available. Turkey is not an isolated case. It is merely the most visible example of a broader group of countries that Jay Martin , publisher of the commodity newsletter Capital 10X , describes as "oil-importing emerging markets." This group includes India, Indonesia, Thailand, the Philippines, Egypt, Pakistan, Vietnam, and South Africa . They all share two characteristics: they depend heavily on imported oil, and they hold a significant portion of their national savings in U.S. Treasury securities. When oil prices surge, these countries are among the first to come under financial pressure. The Sri Lanka Pattern: When Running Out of Money Leads to Empty Shelves Sri Lanka's experience in 2022 demonstrates what happens once a country has exhausted its reserves. The country imports nearly everything required to keep its economy functioning—fuel, medicine, and food—and pays for those imports in U.S. dollars. When tourism collapsed during the COVID-19 pandemic, Sri Lanka's foreign exchange reserves fell from US$7.6 billion at the end of 2019 to just US$50 million by the spring of 2022. The consequences were as predictable as they were dramatic. Fuel first became scarce and eventually disappeared altogether. Medicines could no longer be purchased abroad. Food prices skyrocketed, while nationwide power outages lasted for hours at a time. Public anger escalated rapidly. In July 2022, hundreds of thousands of protesters stormed the presidential residence, forcing the country's president to flee. The difference between then and now is crucial. Sri Lanka's crisis resulted from the collapse of tourism and affected only one country. A global energy shock, by contrast, affects many countries simultaneously. The chain reaction, however, is identical. Every country that sells U.S. Treasuries puts downward pressure on bond prices, making other countries nervous and encouraging them to sell as well. Each sale increases the likelihood of the next. What Washington Is Really Doing—And What It Reveals Two quiet actions by the U.S. government demonstrate how seriously Washington views the situation. First, the United States is drawing down its Strategic Petroleum Reserve at a record pace. Anyone who believes this is primarily intended to help American motorists ahead of the congressional elections in November is not entirely wrong—but that explanation does not tell the whole story. The U.S. is also shipping part of those reserves overseas, an unusual move given that the Strategic Petroleum Reserve is intended for domestic emergencies. Second, in an effort to reduce mounting pressure on the U.S. Treasury market, the U.S. Treasury Department has quietly eased sanctions on Russian oil twice. This is occurring in the middle of a war in which Russia is on the opposing side. That step is equally extraordinary and suggests that the United States itself is under considerable pressure. The motivation behind both measures is the same. Washington wants to prevent vulnerable emerging-market economies from collapsing and triggering a wave of Treasury selling that could destabilize the U.S. bond market. Falling prices for U.S. government bonds mean weaker investor demand and higher borrowing costs for issuers. Neither outcome is desirable for U.S. President Donald Trump, who has repeatedly expressed his preference for lower interest rates. If the system were truly stable, none of these extraordinary measures would be necessary. Their implementation suggests that the pressure is not confined to individual emerging markets. The United States itself now finds it necessary to intervene in order to stabilize global financial markets. Source： https://goldinvest.de/en/why-countries-are-selling-their-gold-and-what-s-really-behind-it

July 17, 2026 Gold is trading at $3,992.55 and silver at $55.44 — both at or near multi-month lows. The cause is an oil shock that most investors are filing under the wrong heading. It is not hitting precious metals once, but twice: through interest rate expectations, and through the production costs of the mines. The starting point: 29% below the high Gold tested the $4,000 mark on Thursday, leaving it roughly 29% below the all-time high of $5,595.47 set on 29 January 2026 — the weakest level since November 2025. Silver has fared worse. At $55.44, the white metal sits some 54% below its January peak of around $121. The gold-silver ratio has consequently climbed to 72.0, up from about 69.6 in the middle of the week. Silver, in other words, continues to lose ground in relative terms — a classic sign that what is being traded here is not a precious metals thesis but an interest rate thesis. The first hit: oil drives rate expectations The trigger does not sit in the bullion market. It sits in the Strait of Hormuz. Escalation between the United States and Iran has driven oil prices higher and reinforced concerns that interest rates could remain elevated for longer. Brent stood at $85.92 on 14 July, its highest since 15 June, after gaining 9.6% the previous day. The transit figures speak for themselves: only 57 crossings were recorded from Friday through Sunday — a drop of more than 50% against the prior week. On 15 July, Washington additionally reinstated its naval blockade of Iranian ports. For the Federal Reserve, this is a problem. Softer-than-expected US inflation data has largely ruled out a July rate increase, yet Fed Chair Kevin Warsh reiterated his commitment to restoring price stability. The market remains split: traders currently price roughly a 51% probability of a hike in September — down from about 60% at the start of July. The June dot plot showed nine of 18 participants projecting at least one hike before year-end, eight projecting no change, and one projecting a cut. Warsh submitted no dot of his own. Higher energy prices strengthen the expectation that the Fed will need to keep policy tighter for longer, which reduces the appeal of non-yielding gold. That is the first hit. What makes it notable: an oil-driven inflation impulse arriving while the central bank is boxed in is precisely the textbook stagflationary setup investors buy gold to hedge. For now, the rate channel is beating the crisis channel. The second hit: oil is eating into mining margins This is where it becomes uncomfortable for gold equity investors — and this is the point most analyses skip. On paper, producers are in excellent shape. With gold averaging $4,700 an ounce and AISC below $2,000, sector margins in 2026 sit at historically exceptional levels and are generating record cash flows. Share prices do not reflect that. GDX was trading at $74.82 on 14 July, against a 52-week range of $50.45 to $117.18. Year-to-date, the junior index GDXJ is down 8.61% and GDX down 8.2%. Over one month, the pullback hit the juniors harder at -4.79% versus -3.78% for the seniors. The reason: the market is still grappling with the reality of higher energy costs, which will continue to overshadow gold miners' record-high margins in 2026. Diesel for the fleet, power for the mill, freight for consumables — energy is one of the largest single line items in an AISC calculation. The same oil price that is pressuring gold through rate expectations is therefore pressuring producers a second time through the cost side. For explorers and developers without cash flow, a third effect follows: rising capital costs make financings more expensive at precisely the moment share prices are on the floor. What is holding the floor: the central banks Set against this picture is a remarkably stable pillar of demand. Central banks bought a net 244 tonnes of gold in the first quarter of 2026 — more than in the previous quarter and above the five-year average. Poland added 14 tonnes in April alone (45 tonnes year-to-date), the People's Bank of China extended its buying streak to 18 consecutive months, and the Czech National Bank added 2 tonnes. The decisive detail: this buying continued while gold sat 28% below its January peak. The official sector is not buying the trend. It is buying the allocation. The World Gold Council's survey of 76 central banks, published on 16 June, reinforces the point: 89% expect global central bank gold holdings to increase over the next twelve months, a record 45% plan to add to their own reserves (up from 43% in 2025), and 74% expect the US dollar's share of global reserves to decline over the next five years. Standard Chartered supplies the counterweight. In a note dated 24 June, analyst Suki Cooper put roughly 298 tonnes of ETF gold below its holders' average cost basis at prices around $4,000 — up from 270 tonnes when gold was still above $4,250. That is some $38 billion held by investors whose rational response to any recovery is to exit near breakeven. Those positions are not support. They are a ceiling. Assessment and outlook The forecasting landscape is split accordingly. Morgan Stanley concedes that its $5,200 target for the second half now depends increasingly on a revival in ETF demand; Goldman Sachs has already cut both its December forecast and its ETF demand projections. J.P. Morgan, by contrast, is sticking with $6,300 by year-end. HSBC in January flagged a range of $3,950 to $5,050 for 2026 — the lower bound is being tested today. OCBC, conversely, expects prices to keep falling on rising Treasury yields, a firmer dollar and weaker investor demand. Our reading: the decisive question for the coming weeks is not whether central banks keep buying — they do — but whether the oil price stays where it is. If Brent retreats, the rate pressure and the cost pressure unwind simultaneously, and the miners become the leveraged expression, because record margins would then be valued without the energy caveat. If oil stays elevated, the sector is likely to remain under valuation pressure even with a stable gold price. Two dates frame the question. The FOMC meets on 28 and 29 July — CME data puts the probability of rates being held at 3.50% to 3.75% in July at 66.3%, so the language on September is what matters. Late July into early August brings the World Gold Council's Gold Demand Trends for Q2. That report is the test of whether official-sector demand is still absorbing the ETF outflows. Source： https://goldinvest.de/en/gold-oil-price-double-hit-gold-miners