On June 30, 2026, the National Energy Administration issued the “Guidelines for Data Classification and Grading in the Energy Industry (2026 Edition).” Hydrogen energy was officially designated as a first-level category of energy data, on a par with traditional fossil fuels such as coal, crude oil, and natural gas, marking the domestic hydrogen industry’s departure from a single-demonstration phase and its full entry into a development cycle of large-scale and standardized systems. This top-level data system adjustment reshapes hydrogen’s national strategic positioning, leveraging a unified data management system to connect the entire chain of green hydrogen cost reduction, storage and transportation infrastructure, and diversified applications, and the industry may usher in a new expansion cycle. I. Policy Upgrade: Hydrogen Energy’s Strategic Status Achieves a Hierarchical Leap 1. Core Basis for Document Issuance The Guidelines serve as detailed implementation rules for the Data Security Law and the Measures for the Security Management of Data in the Energy Industry (Trial), defining a total of 12 first-level data categories for energy, including coal, oil and gas, and hydrogen energy. Hydrogen energy enters the basic energy data series for the first time, bringing the hydrogen industry under the national unified energy safety regulatory system. 2. Policy Evolution Context The Medium and Long-Term Plan for Hydrogen Industry Development (2021-2035), released in 2022, established hydrogen’s energy attribute in law for the first time and set the goal of diversified commercial applications by 2035. With the implementation of this data classification document in 2026, hydrogen completes its identity shift from a “demonstration and pilot industry” to a “national basic energy category,” and industry development moves from being purely driven by policy subsidies to a new phase characterized by policy guidance, scenario validation, and market-oriented operation in parallel. 3. Three Top-Level Strategic Support Logics Energy Security Assurance: Global geopolitical conflicts have intensified fluctuations in oil and gas imports. In 2025, China’s crude oil import dependency was 72.3%, and natural gas import dependency was 43.8%. Hydrogen, produced from renewable sources such as wind, solar, and hydropower, can significantly reduce reliance on fossil fuel imports while simultaneously achieving carbon reduction targets. Domestic Industry Supply-Demand Mismatch Correction: In 2024, China’s total hydrogen production was 37.28 million mt, ranking first in the world. Domestic planned capacity for green hydrogen accounted for 52% of the global total, but the average annual operating rate of commissioned green hydrogen facilities was only 23.6%, leaving a large amount of electrolyzer capacity idle. Unified data standards will compel the industry to shift from blindly expanding hydrogen production capacity to a demand-side orientation that aligns with downstream consumption scenarios. Global Hydrogen Competition Breakthrough: The EU implemented the Hydrogen Strategy Act in 2026, and the US allocates over $9 billion annually in hydrogen industry subsidies, as Europe and the US accelerate their efforts to seize dominance in hydrogen standards and trade. China uses the hierarchical management of hydrogen data to improve its domestic standard system, shore up shortcomings in industrial digitalization, and enhance the competitiveness of international hydrogen projects and equipment exports. II. Industrial Empowerment Value of the Hydrogen First-Level Data Classification System (1) Establishing a Baseline for Full-Chain Data Compliance and Security The Guidelines unify the classification of all energy data into three control levels: general, important, and core, covering the entire process of hydrogen production, storage, transportation, refueling, and utilization. They define mandatory control rules: geographical infrastructure data with coordinate accuracy ≤100 meters for hydrogen refueling stations, hydrogen production bases, and pipeline networks are classified as important data, with strict limits on external disclosure. Real-time operational control instructions for water electrolysis hydrogen production units and sensor data from high-pressure storage and transportation equipment are classified as core data, and unencrypted external transmission is prohibited. Electricity load data for wind and solar-powered electrolysis hydrogen projects and supporting new energy power plants are subject to tiered protection, with electricity data for super-grade green hydrogen projects implementing the highest protection standards. All enterprises must establish a full-life-cycle data ledger, mandatorily use commercial encryption technologies, and simultaneously comply with classified protection 2.0 and critical information infrastructure protection requirements to avoid risks such as monitoring data leaks in coal chemical and hydrogen plants, and cyberattacks on industrial control systems. (2) Restoring Industry Investment Confidence and Reducing Market Uncertainty As of year-end 2025, there were 627 registered wind and solar electrolysis hydrogen projects nationwide, with a total planned investment exceeding 860 billion yuan, but only 148 projects actually started construction, representing an overall commencement rate of 23.6%. The core pain point for the sluggish industry investment was the lack of unified data statistical standards, cost accounting, and operational supervision standards for hydrogen, causing capital to remain on the sidelines for a long time. This policy improves the investment environment in three ways: The National Energy Administration simultaneously releases unified hydrogen data statistical specifications, so enterprises no longer need to build their own differentiated data systems, reducing digital compliance costs per project by 30%-45%. Concurrently, it aligns with 19 existing draft national hydrogen standards, achieving bidirectional unification between data standards and equipment, storage, transportation, and refueling technology standards, thereby enhancing the export recognition of domestic electrolyzers and hydrogen storage cylinders. Standardized data provides a unified basis for financial institutions’ cost calculations and project return assessments, substantially mitigating investment risks arising from policy changes. Supporting policies simultaneously tightened industry assessment: In April 2026, the National Energy Administration clarified dynamic elimination mechanisms for nine major hydrogen pilot regions. Projects are assessed monthly on economic viability based on operational data after commissioning; those without a stable profit model for six consecutive months are directly withdrawn, marking the industry's complete departure from the era of extensive subsidies. (III) Enabling Data Interoperability Across the Industry Chain to Revitalize Idle Hydrogen Capacity The Guidelines categorize a secondary-level hydrogen data catalog, covering seven segments: planning, engineering construction, hydrogen production, tube trailer storage and transportation, hydrogen refueling, transportation/industrial consumption, and technological R&D, thereby establishing a framework for data interoperability across the entire industry chain. Benchmark practice: Rongcheng New Energy built China’s first system for capitalizing hydrogen entire industry chain data assets. Its hydrogen big data platform aggregates data from all dimensions including hydrogen production units, tube trailers, hydrogen refueling stations, heavy truck operations, and equipment maintenance, accumulating a total of 21.08 billion real-time operational data entries. Leveraging cross-segment data synergy, the enterprise reduced its overall hydrogen production, storage, and transportation costs by 12.7% and lowered equipment idle rate by 18%. Meanwhile, the policy mandates that enterprises holding important or core hydrogen data undergo at least one security risk assessment per year. Cross-border data transfers of hydrogen technology and capacity data, as well as cross-enterprise data flows, must be preceded by a specialized risk review. This not only controls cross-border data security but also delineates a clear compliance pathway for domestic enterprises’ hydrogen project cooperation outside China, facilitating the export of green hydrogen equipment and complete hydrogen production processes. III. Conclusion Elevating hydrogen to a first-level energy data category is a landmark policy move that incorporates hydrogen into the management of the fundamental energy system. On one hand, through three-tier data security controls, it fills the gaps in digital regulation of hydrogen and mitigates cybersecurity risks in the industry. On the other hand, it unifies industry standards for statistics, operations, and cost data, alleviating three core pain points: idle green hydrogen capacity, investment wait-and-see attitude, and fragmentation of the industry chain. Against the backdrop of intensifying global hydrogen competition and China's dual goals of energy supply security and carbon reduction, data standardization will accelerate the large-scale deployment of green hydrogen, the comprehensive layout of storage and transportation pipeline networks, and propel hydrogen from a niche demonstration track to a core emerging industry that supports China's energy transition and participates in global energy competition.

SMM, July 2: PV aluminum extrusion: This week, leading PV frame enterprises maintained a full production schedule. In July, downstream module manufacturers face delivery targets, and module production schedules are expected to edge up MoM from June, boosting supporting demand for PV frames and driving a higher industry production schedule. Currently, some frame enterprises in east and north China have reported that they will maintain full-capacity operations in the near term. On the raw material front, aluminum prices continued to drift lower this week, but PV frame enterprises did not adjust their restocking pace in response; they continued to purchase as needed against orders, without any concentrated restocking actions. Overall, the operating rate of China's PV frame enterprises is likely to hold up well in the short term. Raw material prices: During the period (Jun 29-Jul 2, 2026), the SMM A00 weekly average price was 22,560 yuan/mt, down 4.0% from the previous week. Overall, progress was made in indirect technical talks between the US and Iran, with discussions on fund repatriation and Strait of Hormuz security underway. Nuclear negotiations are about to commence, geopolitical risk premiums continue to converge, the dispute over Strait of Hormuz governance persists, and full resumption of transit through the Strait remains uncertain. A hawkish pivot by the US Fed boosted the US dollar index, tilting the global macro front toward a bearish stance and exerting downward pressure on aluminum prices. Domestically, the proportion of liquid aluminum continued to rise, and weekly aluminum ingot warehouse withdrawals hit a four-year high. The destocking pace accelerated once again, marking the biggest highlight recently, though absolute inventory levels remained in an elevated range. As geopolitical risk premiums continue to converge, compounded by expectations of new overseas project launches, macro headwinds dominated. LME aluminum faced considerable pressure in the short term, and SHFE aluminum followed suit under pressure in the absence of fresh positive macro catalysts. Aluminum prices are expected to remain in the doldrums. Next week, the most-traded SHFE aluminum contract is expected to trade within the 21,800-23,000 yuan/mt range, with LME aluminum trading in the $2,950-$3,150/mt range. Further attention is needed on: the actual pace of production resumptions at Middle Eastern aluminum enterprises after full Strait of Hormuz transit resumes; the US dollar's movement and its transmission to commodities after the hawkish Fed signals materialize; and whether domestic inventory destocking continues to accelerate.

[SMM Comment: New National Standard Implementation Combined with Tightening Tax Compliance Accelerates Rare Earth Scrap Recycling Industry from "Chaos" to "Order"] On July 1, GB/T 46992-2025, "Technical specification for classification and comprehensive utilization of recyclable rare earth secondary resources," officially came into effect. The standard systematically classifies rare earth secondary resources into nine major categories for the first time and innovatively designs a three-level "SRRE" coding system. Together with GB/T 23588-2020, "NdFeB production and processing recycled materials," they form a complementary framework—the latter provides detailed technical specifications for the single NdFeB category, while the former offers a management framework covering all categories. Both standards are now in effect simultaneously, marking a new stage of systematic management for rare earth secondary resources.

[SMM Magnesium Market Analysis: Magnesium Market Walked a Symmetric Consolidation Pattern in H1 2026, Weakening After the Fade of the Boom – Where Is the Bottom of Magnesium Prices?] Looking back at the Chinese magnesium market in H1 2026, affected by concentrated production halts at magnesium smelters earlier, the pattern of strong supply and weak demand quietly reversed. Tight spot supply and low inventory provided a good foundation for phased rises in the fundamentals of the magnesium ingot market. Coupled with news-driven disturbances such as surging demand for magnesium alloys, speculative demand suddenly emerged, and market procurement enthusiasm soared. In Q1, magnesium prices showed a stair-step increase. Overly high expectations boosted smelters' production enthusiasm, and magnesium smelter output rose continuously. By June 2026, China's primary magnesium production had reached 110,000 mt. The continuous increase in output added to the sales pressure on magnesium smelters. With both inventory and output rising, magnesium prices showed a stair-step decline in Q2. Overall, magnesium prices presented an inverted V-shaped trend in H1.

[Weekly Review of Aluminum Scrap and Secondary Aluminum]The price difference between A00 aluminum and aluminum scrap narrowed sharply, and with cost support, the spread between ADC12 and primary aluminum continued to widen.

[SMM Hot-Rolled Coil Daily Trading Volume] On July 2, the combined daily trading volume of hot-rolled coil among sample enterprises in SMM's four cities (Shanghai, Lecong, Tianjin, Ningbo) totaled 11,140 mt, down 220 mt (-1.8%) DoD, down 20.99% calendar YoY, and down 14.96% lunar YoY.

[SMM Battery-Grade Manganese Sulphate Weekly Review: Cost Increases Drive Price Recovery; Manganese Sulphate Market Expected to Hold Up Well] This week, China’s manganese sulphate market shifted away from the previous weakness, stopped falling and edged up, with futures officially ending the prolonged weak consolidation. This round of price increases was mainly driven by strong cost-side support: sulphuric acid prices surged again recently, coupled with spot manganese ore prices staying high, significantly raising overall production costs for manganese salt enterprises...

[SMM EMM Weekly Review: Cost and Production Cuts Double Bottom Support, Off-Season Market Stabilizes in Narrow Range] This week, China's EMM market rebounded slightly and then entered a sideways movement channel. Spot quotations overall stabilized and consolidated. The futures market showed a stalemate pattern where both gains and losses were difficult, with the downside room for prices fully locked. Costs and the supply side formed a double bottom support, becoming the core driving force stabilizing the market......

The overall market remained sluggish this week. Although the July consumption peak season has arrived and battery cell production schedules saw WoW growth, high inventories in the cathode and upstream sectors absorbed the incremental demand, preventing it from transmitting upstream along the industry chain. Hence, shipment pressure on cobalt salt plants and cathode material plants remained unabated. From the market sentiment perspective, the influence of supply-side disruptions has weakened noticeably. Mid-week, the DRC announced the cancellation of unused Q2 quotas, which triggered only brief fluctuations that morning before quickly subsiding, indicating that market focus has shifted from the policy front to the pace of own demand and inventory digestion. While the quota cancellation brought some changes to H2 fundamentals, it merely shifted the supply-demand pattern from very loose to relatively loose and did not fundamentally reverse market fundamentals. On the price front, the trends for cobalt chloride, Co3O4, and LCO were largely consistent, all in a consolidation phase. For cobalt chloride, smelter quotations began to stabilize, with some firms raising slightly to test the market. However, under inventory pressure and the “rush to buy amid continuous price rise and hold back amid price downturn” sentiment, downstream procurement remained cautious, actual transactions were limited, and downside room in the short term was small, keeping prices largely stable. Co3O4 moved sideways following cobalt salt; after the interim reporting window, previous selling pressure was largely released, and quotations tended to stabilize, but downstream cathode plants continued to push for lower prices, and transactions remained scarce. For LCO, in addition to being dragged down by weak upstream Co3O4 prices, lithium carbonate prices recently rose significantly, but downstream enterprises’ inventories buffered the impact of raw material fluctuations on quotations, leaving overall prices relatively stable. Overall, the core issue facing the industry chain currently is that previously accumulated inventories have not yet been fully digested. Even though end-user battery cell demand has improved marginally, it will still take time for this to transmit upstream. In the short term, price rebound will be under considerable pressure, fundamentally because market inventories are excessively high, severely suppressing procurement demand for upstream products.

[SMM Analysis] Energy storage battery cell prices remained stable this week due to tight short-term supply-demand conditions and transmission lags. In H2, with the concentrated rollout of new capacity and the combined effect of the year-end export rush, the market is expected to break out of the stable period and enter a new round of resonance, with both volume and prices rising.