This week, the weekly TCs of domestic Pb50 concentrate were lowered by 50 yuan/mt Pb to an average of 150 yuan/mt Pb, and domestic TC center continued to edge lower. From June to July, domestic lead concentrate output edged down slightly due to safety and environmental protection inspections, tailings storage issues, and rainy season maintenance shutdowns, strengthening mines' bargaining power. Meanwhile, primary lead smelters' core profit source is sulphuric acid and associated metals (silver, copper, zinc, etc.), and their comprehensive profit currently stands above 1,000 yuan/mt. Driven by profits and raw material replenishment, companies continue to compete for ore. During the week, SMM learned that a mine in South China concluded a Q3 lead concentrates transaction of 2,800 mt Pb, with the transaction price set at the arithmetic average of the monthly weekly average TCs of SMM domestic Pb50 concentrate in the pickup month minus 1,015 yuan/mt Pb, with lead content of 55%, silver content of 300-400 g/mt, and a silver coefficient of 95.99% (copper less than 1g and around 7g zinc not valued); the TC fell 300 yuan/mt Pb MoM. Meanwhile, over the week, imported TCs outside China fell further by $5/dmt to -$165/dmt, mainly due to unresolved overseas port logistics and strikes, and Peru entering a 60-day state of emergency due to El Niño, keeping long-term mine supply disruptions in place. Traders held prices firm and held back from selling.

SMM, June 25: This week, aluminum fluoride enterprises focused on delivering orders. Approaching month-end, the market awaited new price guidance. Trading sentiment was sluggish, and prices remained stable. As of now, SMM aluminum fluoride prices closed at 11,280-11,700 yuan/mt; cryolite prices held steady, with SMM quoting 7,000-8,500 yuan/mt. Raw material side: China’s 97% wet-process fluorite market was generally stable this week, with mainstream delivered prices at 3,100-3,400 yuan/mt and regional price differences persisting. On the supply side, high-grade resources remained tight due to safety and environmental protection inspections and production restrictions at small mines. This was compounded by a slowdown in imports from Mongolia and limited spot circulation, keeping inventories low and strengthening miners' willingness to hold prices firm. Demand side showed clear divergence. Traditional refrigerants were in the off-season, with losses at hydrofluoric acid firms suppressing purchases, which remained predominantly need-based and under long-term contracts. However, demand for lithium battery electrolytes and electronic-grade hydrofluoric acid was stable, providing support for high-quality fluorite. Overall, the supply tightness is unlikely to ease in the short term, and incremental imports are limited, with prices most likely holding up well. Nonetheless, downstream appetite to chase higher prices was insufficient, capping any gains. China’s aluminum hydroxide market edged up within a narrow range this week; the SMM weighted average aluminum hydroxide price was 1,698 yuan/mt, a slight increase of 0.89% WoW. Upstream cost support kept spot quotations firm, while downstream purchases were only as needed on a need-to basis, limiting overall transaction volume growth. The sulphuric acid market moved sideways at high levels, with price changes difficult in either direction. Low upstream sulphur spot inventory further consolidated the cost floor; combined with acid producers cutting production due to losses and clustered maintenance shutdowns across regions, supply in certain areas became relatively tight. However, the phosphate fertilizer sector entering its off-season and subdued purchase willingness capped sharp price increases for acid, while steady demand from the LFP new energy sector and fine chemicals provided bottom support. Synthesizing raw material-side performance this week, the fluorite market remained stable, while aluminum hydroxide and sulphuric acid rose, with divergent raw material price trends pushing up the comprehensive production cost of aluminum fluoride. The supply side continued operating under a pattern of persistently rigid high costs, sustained profit pressure, and low operating rates. Synchronized strength in sulphuric acid and aluminum hydroxide this week drove up overall production costs, pushing the industry into widespread losses. Incidents of enterprise maintenance shutdowns and flexible production cuts increased, with the industry operating rate holding at a low level of around 40%, limiting the incremental supply of effective spot cargo. On the demand side, the operating aluminum capacity downstream remained high and stable, providing a rigid support floor for aluminum fluoride demand. However, aluminum smelters only purchased as needed for rigid demand restocking, while simultaneously pushing for lower prices and standing by, with no release of additional incremental procurement. Summary: There was no significant directional catalyst in the aluminum fluoride market this week. The firm cost side continued to support prices, and the industry remained in a state of high costs, low profits, and low operating rates. In the short term, upstream raw material prices remain the core factor influencing the market, with limited downstream demand growth, and the market is likely to continue the tug-of-war between upstream and downstream. Next month, aluminum fluoride prices are expected to have strong downside support and some upside elasticity. However, constrained by the procurement pace of end-users, the room for price increases will still hinge on raw material costs and procurement changes at aluminum enterprises.

Next week, macro data releases will include China’s May CPI annual rate, the US May unadjusted CPI annual rate, and the preliminary US June one-year inflation expectations, all of which are about to be released. Additionally, US-Iran peace talks have seen repeated setbacks, and the US is planning to impose additional tariffs on over 60 global economies under Section 301 of the Trade Act of 1974, leaving the macro environment clouded by numerous uncertainties. Furthermore, China’s head of state will pay a state visit to North Korea from June 8 to 9. On the LME lead front, following two consecutive weeks of heavy deliveries into warehouses, LME lead inventory hit a 13-year high. Meanwhile, a supply gap for high-grade lead ingots persists in Southeast Asia. Even though environmental protection inspections on secondary lead have concluded in the Vietnam market, spot lead continues to trade at widespread, high premiums, causing the LME lead ingot inventory buildup to reverse and shift into a decline. Overseas macro uncertainties abound, pressuring the base metals complex lower. Looking ahead, attention should be paid to the strong supportive factor of supply gaps for lead ore and lead ingots. LME lead is expected to trade within $1,990-2,050/mt next week. On the SHFE lead side, a supply-demand mismatch for lead ingots in China and inventory buildup risks are weighing on lead prices. Additionally, with futures delivery approaching, invisible inventory will be converted to visible inventory. During the lead price decline, secondary lead losses have widened, and supply of lead ore and scrap batteries has been tight, leaving limited downside room for lead prices. The most-traded SHFE lead contract is expected to trade within 16,200-16,650 yuan/mt next week. Spot price forecast: 16,200-16,500 yuan/mt. On the supply side, the post-maintenance recovery of primary and secondary lead has paused for now. Furthermore, with secondary lead losses widening, secondary refined lead has formed an inversion over primary lead. Coupled with potential delivery brand shipments to delivery warehouses, circulating supply is expected to tighten relatively, and spot discounts are expected to narrow further. On the consumption side, downstream enterprises are merely producing based on sales, and after the lead price drop, they have not engaged in concentrated procurement as witnessed during the mid-to-late May decline. They are expected to maintain just-in-time procurement.

[Ex-China Lead Market Dynamics] It was learned that the recent environmental protection inspections on secondary lead in the Vietnamese market had temporarily come to an end, and some lead smelters had gradually resumed production. However, in the face of the current primary lead supply gap, spot lead in the local market continued to maintain high premiums. According to the latest information, the CIF premium for Vietnamese lead ingots with Pb≥99.99% in June had reached $180/mt as a common transaction price, compared to around $165/mt in May.

SMM News, May 29: As of May 28, secondary lead finished product inventories stood at 21,700 mt, up 280 mt WoW from May 21. This week, environmental protection inspections in Guangdong concluded, and enterprise capacity was gradually recovering. In addition, lead prices fluctuated at highs, and downstream battery enterprises showed low purchase willingness. Looking ahead to next week, the sluggish end-use consumption trend is expected to continue. Spot order supplies in the market are expected to remain tight with firm offers, limited room for price negotiation, and significant transaction resistance, and the pace of finished product inventory digestion is expected to continue to slow down.

[Brief Review of China's Iron Ore Market] The domestic ore market in western Liaoning saw cautious trading. Currently, the wet-basis tax-inclusive ex-factory price of 66-grade iron ore concentrates stood at 730-735 yuan/mt. Mines and beneficiation plants maintained firm asking prices, but buyers mostly adopted a wait-and-see approach with no purchase willingness at this price level. Affected by the coal mine accident in Shanxi, most mines were concerned about stricter safety and environmental protection inspections and dared not operate easily. Some large mines even planned to halt production for maintenance in the near term to avoid risks. Available spot cargo resources were expected to tighten further, providing some support for local ore prices. However, iron ore futures showed a weak trend recently.

SMM May 22 update: As of May 21, secondary lead finished product inventories stood at 21,400 mt, up 4,000 mt WoW from May 14. Lead prices fell first and then rose this week, with downstream battery enterprises showing strong wait-and-see sentiment, and weak procurement drove inventory accumulation. After lead prices recovered, some large smelters held back from selling, and spot order inventories rose notably. Going into next week, a major plant in Jiangxi is expected to ramp up production after production resumptions, and a smelter in Guangdong is expected to resume production after environmental protection inspections. Meanwhile, downstream enterprises will begin a new round of long-term contract cargo pick-up. Under the combined effect of multiple factors, secondary lead finished product inventories are unlikely to decline effectively.

[China Iron Ore Brief] Iron ore concentrates prices in west Liaoning remained relatively stable, with the current ex-factory price of 66-grade iron ore concentrates at 740 yuan/mt on a wet basis and tax-exclusive. On the mines and beneficiation plants side, the impact of safety and environmental protection inspections persisted, and overall iron ore concentrates resources remained relatively tight. On the steel mills side, most steel mills maintained normal production as planned, while individual steel mills recently began maintenance on their pellet plants, affecting demand for iron ore concentrates

Overall, cost support remains strong, supply is tightening while demand is stable, and prices are expected to rise further next month. Close attention should be paid to dynamic changes in raw material costs and adjustments in downstream procurement pace going forward.

SMM April 29: Driven by positive news including the slight edge up in Pr-Nd oxide spot prices on April 29, upbeat Q1 results from multiple rare earth enterprises such as China Northern Rare Earth, China Southern Rare Earth Group, and China Rare Earth, and favour from some market funds, the rare earth permanent magnets concept saw a notable rally on April 29. As of the close on April 29, the rare earth permanent magnets concept rose 4.41%. In terms of individual stocks, China Northern Rare Earth, Huahong Technology, China Rare Earth, Shenghe Resources, and Yahua Group hit the daily limit, Ximag Technology surged over 16%, and Sinomine Resource Group, China Southern Rare Earth Group, Xiamen Tungsten, and JL MAG Rare-Earth were among the top gainers. News [31 World Firsts: China's Mineral Resource Inventory Released] On April 29, the Ministry of Natural Resources released China's latest mineral resource inventory. China ranks first in the world in reserves of 14 minerals including rare earth , tungsten, tin, molybdenum, antimony, gallium, germanium, indium, fluorite, and graphite. In 2025, China ranked first globally in production of 17 minerals including coal, vanadium, titanium, zinc, rare earth , tungsten, tin, molybdenum, antimony, gallium, indium, gold, and tellurium. Currently, China's mineral production and smelting and processing scale ranks first globally, with the national mining output value reaching approximately 32.7 trillion yuan in 2025, accounting for over 23% of GDP. The significant growth in resource reserves has laid a solid foundation for resource self-sufficiency and controllability. [Ministry of Natural Resources: Investment in Mineral Exploration to Continue Increasing during the 15th Five-Year Plan Period] On April 29, Xiong Zili, Director of the Geological Exploration Management Division of the Ministry of Natural Resources, stated that during the 15th Five-Year Plan period, the state will continue to thoroughly implement a new round of strategic actions for mineral exploration breakthroughs. The Ministry of Natural Resources is expected to further improve the coordinated system for exploration, production, supply, reserves, and sales of strategic mineral resources, and strengthen security risk monitoring and early warning for strategic mineral resources. In terms of key priorities, efforts will focus on scarce strategic minerals such as copper, iron, lithium, cobalt, and nickel, while consolidating the resource position of advantageous minerals such as rare earth , tungsten, and tin. In terms of spatial layout, land-sea coordination will be strengthened, with active expansion of survey, exploration, and development space, and intensified basic geological survey efforts. The goal is to identify a number of mineral deposits ready for development by 2030 and form new capacity as soon as possible. [Inner Mongolia: Aiming to Cultivate Three Trillion-Yuan Industrial Clusters by the End of the 15th Five-Year Plan] On April 21, the Information Office of the Inner Mongolia Autonomous Region People's Government held a special press conference themed "Launching the 15th Five-Year Plan and Striving to Write a New Chapter of Chinese-Style Modernization in Inner Mongolia on the New Journey," introducing and interpreting the relevant contents of the Outline of the 15th Five-Year Plan for National Economic and Social Development of the Inner Mongolia Autonomous Region. Bao Gang, Deputy Secretary of the CPC Inner Mongolia Autonomous Region Committee and Chairman of the Autonomous Region People's Government, stated that Inner Mongolia strives to cultivate and form three trillion-yuan-level industrial clusters in new materials, new-type chemicals, and digital industries, as well as rare earth, non-ferrous metals, PV, and other nine 100-billion-yuan-level industry chains by the end of the "15th Five-Year Plan" period. [China Northern Rare Earth: Q1 Net Profit 918 Million Yuan, up 113.12% YoY] China Northern Rare Earth announced that its Q1 2026 revenue was 11.859 billion yuan, up 27.69% YoY; net profit was 918 million yuan, up 113.12% YoY. [China Rare Earth & Vanadium: Q1 Net Profit 171 Million Yuan, up 261.55% YoY] China Rare Earth & Vanadium announced that its Q1 2026 operating revenue was 1.535 billion yuan, up 1.90% YoY. Net profit was 171 million yuan, up 261.55% YoY. During the reporting period, the company strengthened market analysis, further coordinated rare earth business procurement and sales synergies, and steadily improved rare earth product performance, achieving expected profits. Meanwhile, it continued to strengthen the governance of loss-making enterprises, with loss-making enterprises achieving YoY loss reduction. The company's associated enterprise Dabaoshan Company maintained stable and high production, with copper, sulfur, and tungsten products achieving YoY increases in both production and sales volumes and prices. Enterprise profitability increased, and the investment income recognized by the company under the equity method also increased. [China Rare Earth: 2025 Net Profit 173 Million Yuan, Turning from Loss to Profit YoY] China Rare Earth released its 2025 annual report, achieving operating revenue of 3.182 billion yuan, up 5.11% YoY; net profit attributable to shareholders of the publicly listed firm was 173 million yuan, turning from a net loss of 287 million yuan in 2024 to profitability. The company proposed to distribute a cash dividend of 0.29 yuan per 10 shares to all shareholders, with no bonus shares and no capital reserve conversion to share capital. The company's Q4 net profit was -20 million, and Q3 net profit was 30 million. Based on this calculation, Q4 net profit turned from profit to loss QoQ. The analyst consensus forecast for Q4 net profit was 169 million, while the calculated Q4 net profit was -20 million, with performance falling below expectations. [JL MAG Rare-Earth: Q1 Net Profit 193 Million Yuan, up 20.09% YoY] JL MAG Rare-Earth announced that its Q1 2026 operating revenue was 2.036 billion yuan, up 16.05% YoY. Net profit attributable to shareholders of the publicly listed firm was 193 million yuan, up 20.09% YoY. Basic earnings per share were 0.14 yuan/share, up 16.67% YoY. Many enterprises reported positive Q1 results, which was closely linked to the notable rise in Pr-Nd oxide prices in Q1. A review of SMM's Q1 Pr-Nd oxide price trend shows that the average price of Pr-Nd oxide on March 31 was 721,500 yuan/mt, an increase of 115,000 yuan/mt compared with its average price of 606,500 yuan/mt on December 31, 2025, representing a Q1 increase of 18.96%. The average price of Pr-Nd oxide in Q1 this year was 745,955.36 yuan/mt, compared with its Q1 2025 average of 429,605.26 yuan/mt, up 316,350.1 yuan/mt YoY, a YoY increase of 73.64%. Pr-Nd Oxide Price Rose Nearly 1% on April 29 Spot market. On April 29, Pr-Nd oxide was quoted at 770,000-775,000 yuan/mt, with an average price of 772,500 yuan/mt, up 0.98% from the previous trading day. As the holiday approached combined with news-driven factors, wait-and-see sentiment was strong in the Pr-Nd oxide market. Upstream suppliers maintained firm offers, but downstream metal plants had limited acceptance of high-priced supplies, and market trading was sluggish. Absent major news, rare earths are expected to move sideways in the short term. Institutional Views Huayuan Securities stated that Pr-Nd oxide prices moved sideways. Over the past two weeks, Pr-Nd oxide rose 2.44% to 776,000 yuan/mt, dysprosium oxide rose 0.36% to 1.375 million yuan/mt, and terbium oxide rose 0.41% to 6.11 million yuan/mt. Supply side, policy and supply side tightness provided support, with spot supply of Pr-Nd oxide remaining tight and upstream suppliers showing low willingness to sell at low prices. Demand side, downstream magnetic material enterprises had weak orders and low purchase willingness, with overall trading sluggish. The Q2 rare earth concentrates transaction price between China Northern Rare Earth and Bao Gang United Steel rose 44.61% QoQ, supporting the upward shift of the rare earth price center. Recommended stocks: Rising Nonferrous Metals, China Rare Earth, China Northern Rare Earth, JL MAG Rare-Earth, Ningbo Yunsheng, Zhenghai Magnetic Material, etc. A CITIC Securities research report noted that China's strengthened rare earth export controls have led to shortages and significant price increases for some rare earth oxides outside China, and since advanced ceramics production relies on rare earth oxides, Japanese and American producers that previously dominated the high-end ceramics market face risks of raw material price hikes and even supply disruptions. This ongoing situation is expected to accelerate Chinese high-end ceramics producers' efforts to go global and capture market share, ushering in a historic opportunity. Investors are advised to watch other high-end ceramics producers with export capabilities. Xiangcai Securities noted that rare earth supply is tightening at an accelerating pace — separation enterprises are successively implementing production cuts, scrap enterprises face output fluctuations due to environmental protection inspections, and expectations for declining actual Pr-Nd supply are clear. Meanwhile, downstream magnetic material enterprises maintain stable long-term contract orders with inventory at low levels, and willingness to lock in orders and replenish as needed has strengthened, with notable short-term demand release. Combined with the reinforced strategic value positioning of the industry and liquidity easing support, the sector's price resilience is prominent, and rare earth prices are expected to continue their rising trend going forward. Bank of America strategist Michael Hartnett stated that investors should pile into commodity markets in the coming years, as this asset class will benefit from global geopolitical and macro-economic turmoil. Middle East wars and the AI race have heightened focus on supply chains, with governments working to limit the impact of surging energy and other natural resource prices on industries and consumers, while seeking to secure supplies of critical minerals such as rare earths vital to manufacturing and technology. For the remainder of this decade, as investors seek to hedge against risk, inflation, and a weakening US dollar, commodities will replace equities as the big winner of the "buy anything but bonds" trade. 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