The essence of this supply crunch is a "three-layered squeeze": Layer 1: Physical cutoff – the Hormuz blockade severed Middle Eastern supply, halting nearly half of global seaborne trade. Layer 2: Policy lockdown – overlapping export bans from Russia, Kazakhstan, and Turkey blocked alternative supply sources, further tightening global tradable volumes. Layer 3: Capacity and inventory collapse – war-damaged Middle Eastern production facilities are slow to restart.

[July 6 Morning Briefing] The US added 57,000 nonfarm jobs in June, below market expectations of an increase of 110,000. The combined job gains for April and May were revised down by 74,000. The most-traded SHFE nickel 2609 contract surged to the 128,000 yuan/mt level in early trading before pulling back slightly, and by the end of the morning session it was reported at 127,190 yuan/mt, up 0.59%. The US nonfarm payrolls report came in surprisingly weak, leading the market to turn more cautious on the employment outlook. Expectations for US Fed interest rate hikes cooled markedly, and the US dollar fell sharply, providing a catalyst for a rebound in nickel prices. In the short term, nickel prices are expected to be in the doldrums in the 125,000-135,000 yuan/mt range.

[SMM Analysis] SHFE copper cathode spot premiums experienced notable volatility in H1 2026, marked by deep discounts in phases, a recovery in Q2, and a return to positive territory by mid-year. In Q1, seasonal inventory buildup after the Chinese New Year, slow downstream recovery, and disruptions from contract rollovers repeatedly put spot premiums under pressure. Entering Q2, consumption improved QoQ, and concentrated smelter maintenance drove continuous destocking of domestic social inventory. In particular, the rapid decline in Guangdong inventory lifted spot premiums in South China, opened arbitrage opportunities for shipping inventory from East China to South China, and provided support to premiums in Shanghai and other regions. From May to June, although high copper prices and off-season expectations suppressed downstream purchases, the widening LME-COMEX spread diverted overseas supply to the US market, constraining the pace of imported copper replenishment in China, with low inventory levels still underpinning spot market resilience. Looking ahead to H2, SHFE copper premiums will be shaped by the interplay of inventory, consumption, imports, and supply additions. The Q3 off-season may limit the upside for premiums, but low inventories, uncertainty over import replenishment, and tight regional supply will continue to support spot premiums. In Q4, attention should be focused on the capacity ramp-up of new expansion projects such as Humon Phase 2, Chifeng Jintong Phase 2, and Shenghai Phase 2. If new supply is released smoothly, the import window opens, and consumption recovery remains weak, spot premiums may gradually come under pressure. However, if inventories stay low and import replenishment remains limited, premiums could still see intermittent strengthening opportunities.

SMM Alumina Morning Comment 7.06 Futures: Overnight, the most-traded alumina 2609 futures contract bottomed out and rebounded, hitting a low of 2,705 yuan/mt before staging a strong rebound, eventually closing at 2,820 yuan/mt, edging up 1 yuan/mt from the previous trading day. The daily candlestick formed a bullish candlestick with a long lower shadow, indicating strong support at the 2,700 yuan/mt level. From a moving averages perspective, the current price at 2,820 yuan/mt has risen above MA5 (2748.2) and MA40 (2815.55), but remains under resistance from MA10 (2790.8) and MA20 (2839.3). The short-term moving averages (MA5/MA10) are in a bearish alignment, while the medium-term MA20 still forms resistance above, indicating a tug-of-war between longs and shorts. The price oscillated around MA40. If it breaks through the MA20 (2839.3) resistance on high volume, it is expected to open up upside room; conversely, if it repeatedly fails to break through, caution is needed for a pullback to test the MA5 (2748.2) support. Overall, the futures show a consolidating pattern of 'bottoming out to confirm support while resistance persists above.' The short-term directional move will depend on volume confirmation and the battle at MA20. Ore market: As of July 3, 2026, the SMM Imported Bauxite Index was reported at $70.11/mt, up $0.13/mt from the previous trading day; the SMM Guinea FOB average price was $39/mt, flat from the previous trading day; the SMM Guinea bauxite CIF average price was $71/mt, flat; the SMM Australian low-temperature bauxite CIF average price was $64/mt, flat; the SMM Australian high-temperature bauxite CIF average price was $58.5/mt, flat; the Malaysian bauxite CIF average price was $52/mt, flat; the Malaysian bauxite CIF (washed) average price was $62.5/mt, flat; the Ghanaian bauxite CIF price was $78/mt, flat; the Turkish bauxite CFR price was $76/mt, down $2.5/mt from the previous Friday. Overall, for domestic ore, mine operations in Shanxi, Henan and other regions have recovered somewhat, and combined with falling alumina prices, sentiment among alumina refineries to push for lower raw material prices has strengthened, causing domestic ore prices to decline from earlier levels. As of July 2, in Shanxi, the EXW crushing plant price of bauxite with Al/Si ratio of 5.0 and alumina content of 60%, excluding VAT, was around 530-550 yuan/mt, with the average price up 10 yuan/mt MoM; in Henan, similar bauxite with Al/Si ratio of 5.0 and 60% alumina content, EXW crushing plant price, excluding VAT, was around 500-540 yuan/mt, with the average price up 20 yuan/mt MoM; in Guiyang, bauxite with Al/Si ratio of 6.0 and 60% alumina content, EXW price including VAT, was at 490-540 yuan/mt, with the average price up 20 yuan/mt MoM; in Guangxi, bauxite with Al/Si ratio of 6.0 and 53% alumina content, EXW crushing plant price excluding VAT, was at 320-335 yuan/mt. Imported ore side, uncertainties around Guinea’s July long-term contract prices and quota policies, combined with the traditional rainy season, prompted some mines to control shipments, lending some support to ore prices. Meanwhile, alumina refineries in China still held high inventories (equivalent to around 95 days), which limited their purchase willingness, and the tug-of-war over offer/bid prices between buyers and sellers persisted. In the short term, ore prices are expected to consolidate at highs. Going forward, close attention should be paid to the implementation of Guinea’s bauxite quota policy and the trend of ocean freight rates. Spot Prices: As of July 3, 2026, the SMM alumina index was at 2,773.71 yuan/mt, down 0.94 yuan/mt MoM; the SMM Shandong alumina index was at 2,791.91 yuan/mt, down 0.34 yuan/mt MoM; the SMM Henan alumina index was at 2,818.66 yuan/mt, down 1.73 yuan/mt MoM; the SMM Shanxi alumina index was at 2,829.98 yuan/mt, down 1.99 yuan/mt MoM; the SMM Guizhou alumina index was at 2,747.77 yuan/mt, down 1.59 yuan/mt MoM; the SMM Guangxi alumina index was at 2,674.59 yuan/mt, down 0.80 yuan/mt MoM. Daily Spot-Futures Spread: According to SMM data, on July 3, the SMM alumina index stood at a premium of 47.71 yuan/mt against the most-traded contract’s latest traded price at 11:30 a.m. Warrant Daily: On July 3, total registered alumina warrants increased by 6,312 mt from the previous trading day to 271,600 mt. In Shandong, total registered alumina warrants remained flat at 32,417 mt; in Henan, they held steady at 17,698 mt; in Guangxi, they were unchanged at 8,429 mt; in Gansu, they stayed flat at 11,704 mt; in Xinjiang, they rose by 6,312 mt to 201,300 mt. Markets outside China: As of July 3, 2026, the FOB Western Australia alumina price was $330/mt, the ocean freight rate was $32.30/mt, and the USD/CNY selling rate stood near 6.79. This translates to a selling price of approximately 2,863.50 yuan/mt at major Chinese ports, 89.79 yuan/mt above the SMM alumina index. Summary: Total alumina inventory in China edged up MoM, with relatively small overall changes. Breaking it down, raw material inventory at aluminum smelters declined, mainly because some smelters actively reduced high-priced in-factory inventories amid elevated spot alumina prices, leading to lower raw material stockpiling. In-factory inventory at alumina refineries edged up, as maintenance-related production cuts in Shanxi were offset by output increases in south China, resulting in limited overall changes. At ports, new vessels arrived successively, increasing port inventory. Warrant inventory trended downwards as the willingness to deliver to delivery warehouses waned due to invoice issuance issues and the spot-futures price spread. Inventory in transit and at yard stocks accumulated, mainly because warrants gradually matured and converted into spot cargoes, coupled with continued shipments from Guangxi, resulting in an increase in in-transit cargoes. The operational landscape for alumina is expected to see relatively small changes this week. Some enterprises using domestic ore may schedule maintenance due to ore supply-side issues, but the impact on monthly production will be limited, and overall inventory levels are expected to remain at current levels. On the price front, as the regional alumina mismatch problem gradually eases, the spot price center is likely to pull back, with the subsequent trend coming under pressure [All data other than publicly available information is derived from public data, market communication, and SMM's internal database models, processed by SMM for reference purposes only and does not constitute any decision-making advice.]

[SMM Morning Meeting Summary: Pullback in Rate Hike Expectations Supports LME Zinc Center Uptick] Last Friday, LME zinc opened at $3,471/mt, which marked the intraday low. Subsequently, bulls added to positions, and LME zinc climbed steadily, hitting a high of $3,549/mt near the end of the session. It finally closed up at $3,548/mt, up $75.5/mt, a gain of 2.17%. Trading volume dipped to 9,993 lots, while open interest increased by 2,517 lots to 271,000 lots.

Published：June 29, 2026 1. Review – First Test of the 4,000-USD Mark As feared, the falling 50-day moving average (4,468 USD) has posed an insurmountable hurdle for the price of gold in recent months. Since the last bounce off this moving average on May 12 at $4,773, the downtrend has accelerated significantly. In particular, breaking below the round $4,400 mark led to a sharp sell-off in the first week of June, bringing the price down to $4,023. Although the subsequent recovery was swift, reaching $4,382 within a few days, the Fed’s interest rate decision and the subsequent press conference under new Fed Chair Warsh once again triggered strong selling pressure. Within just seven days, the gold price plummeted to $3,959. The psychologically important $4,000 mark could no longer withstand the selling pressure, and gold fell to its lowest level since early November 2025. 1.1 $4,000 as a Key Level Even though price declines on the downside have recently accelerated significantly, the bears have overall made only slow progress on the downside so far. This week, the low set on March 23 was breached by $140. It took the bears about three months to achieve this! At the same time, however, the broader correction that began in late January remains unquestionably intact. Attention is now focused on the broad support zone around the $4,000 mark. Given the sometimes panicked sentiment of the past few days, a bottoming process typical of early summer is certainly possible here. The erratic and volatile back-and-forth of recent weeks supports this view. However, considerable correction potential has now built up in the stock markets, which is likely to weigh on precious metal prices as well in the event of a significant pullback. For now, patience remains the order of the day. Experience shows that precious metal prices often find a bottom in June or July, from which a substantial summer rally usually begins. For this to happen, however, the gold price would need to hold the $4,000 level and the silver price the $55 level. Alternatively, prices could drop another notch lower first. 2. Chart Analysis: Gold in U.S. Dollars 2.1 Weekly Chart: Bottom Formation in the Coming Days and Weeks Gold in U.S. dollars, weekly chart as of June 27, 2026. Source: Tradingview Since reaching an all-time high of $5,602 at the end of January, the gold market has been in a healthy, yet increasingly complex, correction phase. With the recent low of $3,959, the price has now fallen below the 38.2% Fibonacci retracement level of the previous uptrend (from $1,615 to $5,620). The next relevant retracement levels are at $3,608 (50 %) and $3,138 (61.8 %). This makes it clear that the worst-case scenario we have repeatedly outlined—in the range around $3,500—remains valid and still cannot be ruled out. In the short term, the weekly candles continue to slide southward along the lower weekly Bollinger Band ($3,997). However, one to a maximum of three additional weeks of strong downward pressure are likely to represent the maximum scenario for the bears’ run. Afterward, a bottoming process and the onset of a recovery—or a summer rally—are to be expected. At the same time, after nearly five months of correction and a price decline of over 29%, the weekly stochastic oscillator is clearly in oversold territory. Against this backdrop as well, the remaining downside risk appears significantly limited over the coming days and weeks. Should the correction nevertheless continue in the broader picture, the oscillator would first have to recover. Accordingly, the odds are good that the gold price will form a bottom now or in July in the range between 3,800 and 4,000 USD. Overall, the weekly chart remains bearish but is heavily oversold. A recovery or counter-movement is already on the horizon and could begin in July or August. In the bigger picture, however, the correction could drag on and bring new lows in the fall. 2.2 Daily Chart: New Buy Signal Gold in U.S. dollars, daily chart as of June 27, 2026. Source: Tradingview On a daily basis, the price of gold has lost contact with the still-slowly-rising 200-day moving average (USD 4,474) over the past three weeks. The gap widened at times to nearly 13%, underscoring the currently weak technical condition. Only a return above this closely watched moving average would significantly brighten the chart picture. By the end of the week, however, prices had recovered noticeably and closed the week at $4,088. The recovery that has begun should initially lead to the $4,120 range and, ideally, could extend directly to around $4,220 without any major pullbacks. The positive divergence in the daily stochastic is supportive here, as the indicator no longer fully confirmed the recent low of $3,959. In addition, the oscillator clearly reached its oversold zone. This suggests that a bottoming process may already have begun. Nevertheless, it cannot be ruled out that, in the course of the typical early-summer volatility, there will be further pullbacks before a sustained counter-movement can take hold. Overall, the daily chart could thus be on the verge of a trend reversal. The daily stochastic has turned upward in the oversold zone and offers further upside potential. However, a final pullback below the $4,000 mark down to the area around $3,840 remains possible. 3. Gold Futures Market Structure Commitments of Traders Report for the gold futures contract dated June 23, 2026. Source: Sentimenttrader According to the weekly Commitments of Traders Report (COT Report) published by the U.S. Commodity Futures Trading Commission (CFTC), commercial traders held a cumulative short position of 207,563 gold futures contracts at the closing price of $4,331 on June 16. The sharp price decline of the past few weeks has not yet led commercial traders to significantly reduce their short positions. Overall, there have been hardly any notable shifts since the beginning of the year, which supports our thesis that the COMEX is increasingly losing influence. In a long-term comparison, however, the commercial short position remains at a significantly elevated level. Based on data from the past 22 years, the CoT report should therefore continue to be interpreted negatively. 4. Gold Sentiment Sentiment Optix for gold as of June 23, 2026. Source: Sentimenttrader The sharp correction since late January has completely erased the previously highly euphoric sentiment. Since the low in March, sentiment indicators have been moving in the neutral, largely inconclusive range. In the worst-case scenario, the sentiment pendulum could still swing to the opposite extreme of panic and fear. However, this would require significantly lower prices, which we would currently only expect in the context of a severe stock market crash. In summary, sentiment remains in the neutral range with an Optix value of 58. Ideally, the Optix will soon turn upward again above the 50–55 range. Otherwise, the probability of a more severe correction will increase noticeably. 5. Seasonality of Gold Seasonality of the gold price over the last 17 years as of May 1, 2026. Source: Seasonax Typically, after its spring correction, the gold price finds a bottom in June or July and can then recover through September. Given the recent low of $3,959 and the erratic price movements of the past few weeks, such a turning point could already be taking shape in the coming days or weeks. August, in particular, has historically shown strong performance. Overall, the seasonal traffic light is gradually shifting from red to orange and will then turn green starting in mid-July. 6. Macro Update – The facade is still holding, but the foundation is increasingly eroding Share of the “Magnificent 7” in the S&P 500, as of June 25, 2026. Source: The Diary Of A CEO At first glance, the financial markets continue to appear surprisingly robust, but beneath the surface, warning signs are mounting. While the major U.S. indices are trading near their record highs, market breadth has noticeably deteriorated, and numerous former market leaders—such as Oracle, Salesforce, Netflix, Palantir, Microsoft, Meta, and Amazon—have long been in significant correction or bear market phases. For many of these high-flyers of recent years, the technical damage is now considerable. The fact that former growth and AI winners, as well as heavyweights from the megacap segment, have in some cases fallen sharply from their highs shows just how narrow the foundation of the still-ongoing bull market has become. As a result, the technology sector in particular—as the central driver of the boom—has now become highly vulnerable. 6.1 The Limits of the AI Boom Free cash flow forecast for the hyperscalers, as of June 26, 2026. Source: Financelot Even among the AI hyperscalers, the euphoria is beginning to show cracks. Valuations now appear so stretched that the gap between free cash flow and the major indices is unlikely to be sustained indefinitely. At the same time, declines in rental prices for AI GPUs and in data center profit margins are already evident. This reinforces a familiar pattern: either investments decline, revenues catch up significantly, or the market corrects. Based on current evidence, the third scenario appears increasingly plausible. This is because the AI boom thrives not only on technological strength but also on extreme capital investment over a very short period of time. If competitive pressure from China puts additional strain on margins and demand does not grow at the same pace, the hyperscalers will likely have to scale back their spending sooner or later. 6.2 Speculation on Credit Drives the Markets Margin debt as a percentage of GDP at an all-time high, as of June 6, 2026. Source: Hussman Strategic Advisors At the same time, margin debt as a percentage of GDP has reached a new all-time high of over 4%, surpassing even the levels seen in August 2021, March 2000, and July 2007. Historically, such extreme levels have always been followed by sharp pullbacks—not because a chart predicts the future, but because high leverage makes those who have to sell at the wrong moment particularly vulnerable. This is precisely where the real danger lies: as long as prices rise, debt acts as a catalyst. As soon as the market turns, that same leverage becomes a risk factor and amplifies the downward movement. In an environment where market breadth is already crumbling, this can significantly intensify the momentum of a sell-off. 6.3 Space Speculation as a Prime Example Most recently, the hype surrounding SpaceX’s IPO was unprecedented. It is precisely this euphoria and risk appetite in the market—combined with the stock’s extreme valuation—that make it a prime example of a speculative bubble, as the highly ambitious visions of the future, AI fantasies, and space dreams are far ahead of current business realities. An IPO with an implied valuation of around 2 billion USD and a revenue multiple of about 100 appears to be barely supported by fundamentals. As long as the bulk of the narrative rests on Starlink and projections reaching far into the future—such as Mars colonies, asteroid mining, or space-based AI—the risk-reward ratio remains massively skewed and highly unfavorable. 6.4 Late-cycle characteristics are piling up Boom & Bust Cycles, June 26, 2026. Source: Visual Capitalist The narrowing market breadth, combined with a “super-IPO,” is a classic late-cycle characteristic. When only a few mega-caps and rampant speculation on credit are driving the index higher, while a broad segment of the market is already giving way and “smart money” is cashing out via IPOs, the risk of an abrupt revaluation rises significantly! Boom-and-bust cycles are not an exceptional phenomenon, but a recurring feature of developing economies. Markets rarely move in a straight line but instead oscillate between excessive optimism and excessive pessimism. Phases of strong expansion are regularly followed by excesses, rising risks, and finally a correction that resolves imbalances and lays the foundation for the next upswing. 6.5 Semiconductors as a Warning Sign Semiconductor Index, as of June 16, 2026. Source: Creative Planning Given the parabolic rise in semiconductor stocks, history also speaks clearly. To date, there have been only two periods in which the “Semiconductor Index” rose by more than 230% within 14 months: from December 1998 to February 2000 and from April 2025 to the present. The fact that these are precisely the only two such episodes underscores just how extraordinary—and at the same time fragile—such parabolic rises typically are. The warnings from prominent investors are correspondingly stark. Ray Dalio warns of an environment reminiscent of earlier bubble phases, and Jeremy Grantham describes the U.S. stock markets as historically expensive in light of the AI euphoria. 6.6 Fed Under Scrutiny Meanwhile, the Federal Reserve remains wary of premature expectations of monetary easing. At its most recent meeting, it kept key interest rates unchanged but simultaneously raised its inflation forecasts and made it clear that the fight against inflation is not over. Under Kevin Warsh, the central bank is also placing less emphasis on traditional forward guidance. As a result, markets will have to focus more on the data going forward, which is likely to make monetary policy expectations more volatile and reactions in the financial markets more erratic. On top of that, markets often react nervously in the first few months following a change in leadership at the Fed, as monetary policy, reaction patterns, and communication styles must first settle into a new rhythm. It is striking, however, that markets have recently interpreted the Fed’s stance as more restrictive than its projections suggest. While higher interest rates have been priced in for the short term, the Fed’s projections for the coming years continue to point toward falling key interest rates. 6.7 Oil Remains the Pacesetter Oil short positions at an all-time high, as of June 22, 2026. Source: Zerohedge Of course, the oil price remains a key factor for the next phase of monetary policy. The recent easing of tensions in the Persian Gulf and the resumption of shipping traffic through the Strait of Hormuz have put pressure on the crude oil market and dampened inflationary momentum for the time being. Should this trend continue, the recent surge in inflation could potentially prove to be temporary. This would also increase pressure on the central bank to reconsider interest rate cuts later this year. Despite the easing of tensions, however, the geopolitical situation remains extremely fragile. A renewed escalation in the Middle East could drive oil prices significantly higher at any time, thereby abruptly worsening the inflation outlook. Therefore, the current oil oversupply should not be misinterpreted as a sign of a permanently more balanced market. The additional volumes of crude oil that have entered the market in recent weeks, the extremely low inventory levels, the still-restricted transport routes, and the ongoing shortage of refined products point more toward a temporary distortion than toward a sustainable easing of the situation. Added to this are record-high short positions. Consequently, volatility in the oil market will remain high, and another price spike is already on the horizon. 6.8 Shortages of Intermediate Goods Will Feed Through to Consumer Prices At the same time, new bottlenecks are emerging in critical intermediate goods. Sulfur and sulfuric acid, in particular, are becoming a bottleneck for the extraction of numerous industrial metals and, consequently, for the supply of copper, nickel, uranium, cobalt, and rare earth elements. However, this is not only an issue for industry but also for inflation. When intermediate products become scarcer and more expensive, the effects are felt with a delay on investment, production, and ultimately on consumer prices. 6.9 Precious Metals as a Strategic Buffer The bottom line is that signs of a late phase in the cycle are mounting: While the major indices continue to trade near their all-time highs and still appear strong, market breadth, credit excesses, semiconductor euphoria, AI hype, and speculative IPO fantasies are already painting a significantly more fragile picture. Added to this are a cautious central bank, a still-volatile oil market, and rising consumer prices. The environment thus remains vulnerable to abrupt shifts in direction: The facade is still standing, but the foundation is already becoming noticeably more fragile. This is precisely why real assets should continue to play a central role in the portfolio. Although precious metals have been correcting for nearly five months and the weekly chart now shows signs of being oversold, the macroeconomic environment—marked by high debt, inflation, and political uncertainty—continues to support a gradual increase in holdings as a strategic store of value and liquidity buffer. Gold and silver are and will remain important diversifiers and provide the best long-term protection against inflation. 7. Conclusion: Gold – Bottoming Out Ahead of the Summer Rally After more than five months of correction, the gold market is likely gradually ripe for a counter-movement or recovery. The brief dip below the round mark of $4,000 may already have marked the early-summer low. Alternatively, the bears may make one last attempt in the coming weeks to push the gold price below this psychological level. However, given the oversold weekly chart and the now more favorable seasonal trends, the odds point more toward an upside surprise. The upcoming recovery could turn out to be a summer rally, targeting at least the range between $4,400 and $4,500. However, we are not yet convinced of a sustained breakout from the downtrend channel with prices clearly above $4,550; it is quite possible, in fact, that the correction will continue for the time being following a summer rally. This view is also supported by the increasingly fragile environment in the stock markets, which is characterized by dwindling market breadth, high credit leverage, AI hype, and speculative one-off fantasies. Overall, the big picture remains dominated by high uncertainty, as geopolitics, oil prices, inflation, and interest rates can set the markets in motion again at any time, while consumers face increasing price pressure. This is precisely why gold and silver are indispensable strategic building blocks in a world where the facade still stands, but the foundation is increasingly eroding. Source： https://goldinvest.de/en/gold-building-a-bottom-before-the-summer-rally

Philippine market: Zambales and Northern Luzon officially entered the rainy season. A low-pressure system may make landfall on Monday, and CIF prices followed Indonesian procurement prices lower. Overall CIF China offers fell this week: 1.3% at $45.5–47/wmt, 1.4% at $56–57/wmt, 1.5% at $64–65/wmt, and 1.8% at $91–94/wmt. CIF Indonesia offers held flat, with 1.3% at $45–46/wmt and 1.4% at $55–56/wmt, largely aligning with smelter tender prices. Freight rates eased notably this week: Surigao–Lianyungang around $13.25/wmt, Surigao–Indonesia around $11/wmt. Overall freight rates dropped by around $0.5/wmt WoW, significantly easing the situation where “freight rates stayed high.” FOB prices also moved lower, with 1.3% at $33–35/wmt, 1.4% at $41.5–43.5/wmt, and 1.8% at $76–78/wmt, confirming the earlier view that FOB would follow CIF’s pullback. Supply side, Zambales and Northern Luzon officially entered the rainy season, worsening mine roads, disrupting shipments, and leading to low outbound volumes. In terms of weather, the Philippines is expected to see continuous rainfall for the first five days of next week, shifting to mainly showers in the last two days, with total weekly rainfall surging across the country. Meanwhile, a low-pressure system is forming in the eastern waters; though not expected to intensify into a tropical depression or storm, it is forecast to make landfall in the central-southern Philippines next Monday and move northwestward across land, affecting Luzon, Visayas, and Mindanao. In major producing areas, cumulative weekly rainfall next week around the Manicani-Homonhon-Dinagat-Surigao belt is expected to more than double WoW, with the Homonhon area likely to be impacted by swells for 2–3 days. Dinapigue’s rainfall is forecast to be about six times this week’s level, with wave heights reaching around 1.7 meters on Wednesday and Thursday. RTN, Ipilan, and Berong loading points in Palawan are all expected to see higher rainfall next week compared to this week. In Zambales, cumulative weekly rainfall is forecast to be about 2.5 times this week’s level. Despite sustained weather disruptions, Chinese port inventories are already high, so weather’s support to prices remains very limited. Cost side, international oil prices pulled back slightly, alleviating mining and transportation cost pressures, but spot freight rates remained at relatively high levels, with the easing not yet fully materialized. Demand side, smelters in both China and Indonesia held dual-high inventories, with limited near-term restocking appetite. The buyer-dominated pattern persisted, and spot trading stayed sluggish. On inventories, as of June 26, Philippine nickel ore stocks at Chinese ports stood at around 6.44 million wmt (approximately 51,000 mt in nickel metal content), sustaining the ample supply picture. Indonesian market: HMA dropped sharply MoM—down 7.6% to a new low; RKAB revision window opened; heavy rainfall continued to disrupt shipments in Halmahera and Obi. Indonesia’s Ministry of Energy and Mineral Resources published the HMA nickel reference price for the first half of July at $17,225.67/dmt, a significant drop of about 7.6% from $18,642.33/dmt in the second half of June. Based on this, the theoretical HPM price for Ni 1.6% saprolite ore is around $66.6/wmt, and for Ni 1.2% limonite ore around $47.4/wmt. Premiums: premiums for 1.6% material remained stable; premiums for 1.4% material were around $1.3/wmt; for 1.5% and 1.6%, around $3/wmt—overall limited movement. In spot trading, 1.2% limonite ore was offered at around $30/wmt, and 1.5% saprolite ore at around $65/wmt, with both declining by about $5.5/wmt in total this week, mainly driven by the sharp fall in the HMA reference price. Supply side, the impact of the rainy season on Sulawesi production areas remained relatively mild in some regions, with limited disruption to overall shipments. However, weather conditions in Halmahera and Obi Island were generally severe, with persistent heavy rainfall and deteriorating sea conditions already causing some restrictions on mine production. Despite shipment disruptions, overall smelter inventory levels remained relatively adequate, limiting the near-term influence on procurement pace. Meanwhile, smelters continued to demand higher ore grades; low-grade ore (1.3–1.4%) supply was largely filled by Philippine cargoes, and multiple smelters turned to actively seeking high-grade ore (≥1.45%). Yet domestic high-grade ore supply remained scarce, with circulating grades concentrated in the 1.45–1.50% Ni range, intensifying procurement competition. Spot transaction prices for 1.2% limonite ore stayed stable this week; smelter procurement stayed low, with general reluctance to transact at HPM theoretical prices, deep discounts persisted, and low HPAL operating rates continued to weigh on purchasing prices. On the policy front, on Thursday, June 25, Tri Winarno, Director-General of Mineral and Coal at Indonesia’s Ministry of Energy and Mineral Resources, clarified that the total RKAB quota for nickel ore in 2026 has not yet been finalized. The government is still evaluating companies’ revision applications through the official review mechanism, with no specific figure set, focusing on assessing actual industry demand rather than relaxing restrictions. The RKAB revision window officially opened on July 1 and runs until July 31, with mining companies already initiating preparation work for revision applications and submitting production quota adjustment materials intensively; all adjustments are subject to full review.

[SMM Analysis: Surging Demand in H1 2026 Drives Industry Expansion, Anode Volume and Price Both Rise, Welcoming Recovery Opportunities] SMM July 3: In H1 2026, a surge in downstream demand drove steady improvement in the anode industry’s prosperity, significantly releasing overall market vitality.

[Guangdong Zinc: End-users Hold Certain Inventory, Market Transactions Struggle to Show Significant Increase] Guangdong 0# zinc mainly traded at 24,080-24,360 yuan/mt, with mainstream brands quoted at discounts of 100-70 yuan/mt against the 2608 contract, and at a discount of 15 yuan/mt against Shanghai spot zinc. The Shanghai-Guangdong price spread widened...

[Expectations for US Fed Interest Rate Hikes Delayed, Short-Term Weakness in Aluminum Prices Hard to Break] In China, the proportion of liquid aluminum continued to rise, and warehouse withdrawals of aluminum ingots hit a four-year high in the past week. The further acceleration of the destocking pace has been the biggest highlight recently, but the absolute inventory level remains in a high range. Recently, with the continued narrowing of the geopolitical risk premium coupled with expectations for new project startups outside China, macro headwinds still dominate. LME aluminum is under significant pressure in the short term, and domestic aluminum prices are expected to follow LME aluminum and remain in the doldrums.