To better track rare earth price swings and support long‑term contract settlements, SMM launched “Evening Prices” (since April 27, 2026) for Pr‑Nd and gadolinium, available via data terminal and Renrenkan. As afternoon transaction peaks have shifted due to volatility (e.g., Pr‑Nd alloy: 1.09M to 830k yuan/mt in H1 2026), evening prices reflect actual afternoon trades, benefiting metal‑magnet contracts. For magnet‑end‑user annual contracts, morning prices are recommended.

Overall market trading activity was sluggish. At month-end, the market maintained a steady posture, watching for the outcome of the new round of aluminum fluoride tender prices. However, as the raw material side showed signs of easing, prices are expected to be slightly under pressure next month. Going forward, close attention should continue to be paid to dynamic changes on the raw material cost side, as well as marginal adjustments in the procurement pace of downstream aluminum enterprises.

Since late April, aluminum billet processing fees in China's three major consumption regions staged a strong rebound, with South China taking the lead. Processing fees of φ120 aluminum billets (Guangdong) hit a Q2 low of -40 yuan/mt on April 16, then surged rapidly, approaching the 500 yuan/mt mark by month-end in May, and reaching a new yearly high of 490 yuan/mt on May 28. SMM believed there were three main reasons...

In May, the global aluminum market continued the core pattern of LME outperforming SHFE with divergent trends. The most-traded SHFE aluminum contract moved sideways in the doldrums, while LME aluminum maintained strength supported by low inventory and geopolitical premiums, with both seeing slight corrections at month-end. This month's market-driving logic revolved around Middle East ceasefire negotiations, rising expectations for US Fed interest rate hikes, divergence in inventory in and outside China, and accelerating export transmission, further highlighting the divergence between domestic and overseas aluminum price trends. The SHFE/LME aluminum price ratio declined further from the April average of 7.03 to the May average of 6.66, with the inverted price spread between domestic and overseas markets widening, as the trend of overseas aluminum prices outperforming SHFE aluminum continued to deepen. May Aluminum Price Review: Similar Pace but Intensifying Divergence in Strength China · The Most-Traded SHFE Aluminum Contract The contract opened low at around 24,800 yuan/mt at the beginning of the month. After the holiday, it pulled back rapidly due to high domestic inventory and weaker-than-expected downstream demand, hitting the monthly low of 24,075 yuan/mt on May 7. In mid-month, it rebounded to 24,620 yuan/mt driven by positive signals from the China-US meeting. In the latter part of the month, it pulled back to 24,375 yuan/mt as ceasefire expectations heated up combined with off-season drag. Ex-China · LME Aluminum The contract opened at $3,480/mt at the beginning of the month. In mid-month, it rallied to $3,680/mt (the monthly high and a four-year high) supported by supply disruptions and continued destocking. At month-end, it corrected to $3,628/mt, impacted by news that a US-Iran ceasefire agreement was 95% reached. In terms of price-driving factors, geopolitics remained the core common variable for aluminum prices in and outside China this month. Production cuts in the Middle East and shipping disruptions through the Strait of Hormuz continued to provide a shortage premium for LME aluminum. The price divergence stemmed from dual differences in macro policy and fundamentals—slow destocking from high inventory levels in China constrained SHFE aluminum's rebound space, while historically low inventory and a high premium structure outside China provided strong support for LME aluminum prices. Core Inventory Indicators: Extreme Divergence Between Domestic and Overseas Inventory with Contrasting Destocking Pace China · Gradual Decline from High Levels, Pressure Persists Social inventory began to pull back from the high of 1.456 million mt at the beginning of May, reaching approximately 1.401 million mt by month-end, with only about 55,000 mt destocked over the entire month. The destocking pace was slow, with inventory remaining at a near six-year high for the same period. SHFE warrants recorded 485,500 mt on May 29, still showing inventory buildup on a weekly basis, confirming ample spot supply in China. Ex-China · 20-Year Low, Structural Deficit Becomes Evident LME total inventory declined from approximately 363,000 mt at the beginning of the month to 338,000 mt at month-end, a decrease of approximately 25,000 mt over the month, with inventory levels at historically extreme lows. LME aluminum Cash-3M premiums closed at $92.53/mt at month-end, widening significantly from approximately $29/mt at the beginning of the month. Japan's Q3 spot premiums rose, premiums in Europe and the US continued to climb, and the rigid supply gap outside China provided sustained and strong support for LME aluminum. Macro and Fundamentals Intertwined: Geopolitical Dynamics and Rate Hike Expectations Dominating Sentiment Geopolitical Variables: Repeated Ceasefire Negotiations At the beginning of the month, the US military launched airstrikes on southern Iran, with military frictions between the two sides recurring. Shipping through the Strait of Hormuz remained disrupted, and geopolitical risk premiums climbed. At month-end, a US-Iran framework agreement was reportedly 95% complete, and a 60-day temporary ceasefire draft emerged. Expectations for the resumption of strait navigation warmed, and geopolitical premiums converged significantly. On the morning of May 28, both SHFE aluminum and LME aluminum plunged. US Fed Expectations: Hawkish Pressure US April CPI came in at 3.4% YoY, with core PCE reaching 2.8%. Inflation stickiness, compounded by Middle East conflicts pushing oil prices above $90/barrel, led hawkish US Fed officials to release signals of "raising rates at any time." Market expectations for a 25bp rate hike within the year surged abruptly, and a stronger US dollar continued to weigh on the demand outlook for non-ferrous metals. IV. Current Core Market Trades and Arbitrage Strategies (Including Divergence in Capital Behavior) Based on the current SHFE and LME fundamentals, inventory pace, and LME curve structure, the aluminum market overall exhibits a cautious unidirectional and arbitrage-dominated trading pattern. In particular, SHFE-LME cross-market reverse arbitrage (selling SHFE and buying LME) has become the core market play. Capital behavior among market participants has shown clear divergence, mainly falling into three categories: 1. Early-positioning capital (light long positions in reverse arbitrage) Some trading capital has positioned reverse arbitrage ahead of time based on the logic that China's inventory inflection point has already appeared. The core expectation of such capital is that as China's inventory gradually enters a destocking channel, accelerated destocking is highly likely to follow, rapidly easing China's high inventory pressure. The weak SHFE aluminum pattern is expected to be corrected, and the depressed SHFE-LME ratio has clear room for recovery, warranting early light positioning to capture the ratio rebound. 2. Wait-and-see cautious capital (staying on the sidelines for now) The majority of market capital has maintained a wait-and-see stance, with two core concerns: First, China is currently only experiencing slow destocking, and its sustainability is questionable during the off-season, as inventory pressure has not been substantially cleared and SHFE aluminum lacks sufficient rebound momentum. Second, LME is currently in a deep backwardation structure, making roll and extension costs for LME aluminum bulls extremely high, with significant cost erosion and high open interest pressure for holding long-term reverse arbitrage positions. Combined with the entrenched short-term pattern of LME outperforming SHFE, the price spread still risks further widening. Therefore, this segment of capital has chosen to wait for confirmed signals of accelerated destocking in China before entering the market. 3. Previously trapped capital (open interest under pressure, caught in a dilemma) Some positions that were established earlier to set up SHFE-LME reverse arbitrage are currently slightly underwater. Recently, LME has been continuously driven higher by geopolitical risks while SHFE has been range-bound and weak, with the divergence between LME outperforms SHFE intensifying, causing the ratio to remain persistently low and unrealized losses to emerge. Meanwhile, LME contango fees have risen sharply, long positions carrying costs continue to increase, and the pressure of holding trapped positions has further intensified. In the short term, these positions are caught in a dilemma, highly dependent on the subsequent pace of China's inventory destocking to restore the spread. Overall, the sole core inflection variable for SHFE-LME reverse arbitrage is currently the pace of domestic inventory destocking. Once weekly inventory drawdowns continue to widen and accelerated destocking is confirmed, it will directly drive a reversal in three types of capital behavior: sidelined capital entering the market en masse, trapped positions getting unwound, and early-entry positions realizing profits, triggering a rapid recovery in the ratio. Looking ahead to June, the aluminum market's core focus centers on three dimensions: first, whether the US-Iran ceasefire agreement can be formally signed and the pace of resuming navigation through the Strait of Hormuz, which will directly determine the extent of geopolitical premium convergence — if the agreement materializes and Middle Eastern aluminum supply gradually recovers, the prior support logic for LME aluminum faces correction risk; second, whether domestic inventory destocking can accelerate — continued export growth and import suppression will keep driving destocking, and the magnitude of destocking will determine SHFE aluminum's upside elasticity. The US Fed's June FOMC meeting is highly likely to keep rates unchanged, but a hawkish tone and sticky inflation will continue to suppress interest rate cut expectations, with a stronger US dollar maintaining sustained pressure on non-ferrous metals. Overall, the aluminum market in June is expected to continue the pattern where LME outperforms SHFE, though the degree of divergence is likely to narrow. LME aluminum is expected to hover at highs amid the tug-of-war between geopolitical premium convergence and rigid ex-China supply deficits, with downside room constrained by low inventory and high premiums. [ Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice. ] Data source: SMM

I. MJP Quarterly Premium Surges, Asian Aluminum Market Pricing Center Shifts Significantly Upward This week, two major international aluminum producers, South32 and Rio Tinto, successively announced their Q3 2026 Japan Main Port (MJP) aluminum ingot CIF long-term contract quotes. South32 quoted $480/mt, while Rio Tinto quoted $460/mt. Compared to the Q2 finalised level of $350–353/mt, this represented a significant QoQ increase of $110–130/mt, a rise of over 30%, hitting a phased high in recent years. Affected by the sharp rise in premiums, the Japanese local spot market showed notable differentiation. Some downstream enterprises had relatively high price acceptance, releasing just-in-time procurement willingness; while more cost-sensitive buyers gradually shifted to alternative sources such as other mainstream ex-China brand aluminum ingots to reduce procurement costs. Regional cargo diversion intensified, and Japan's aluminum ingot procurement structure became increasingly diversified. II. Thailand CIF Market: Dual Tailwinds Support Price Rise, Market Shows Strong Prices but Weak Volume As Southeast Asia's core aluminum ingot transit and distribution hub, the Thai market was simultaneously supported by dual tailwinds of MJP high premium transmission and domestic aluminum scrap supply shortages, with traders showing strong willingness to hold prices firm. Currently, mainstream local aluminum ingot CIF offers remained stable at $300–320/mt, with quotes rising WoW. The logic supporting this round of price rise was clear: on the fundamentals side, China's aluminum scrap supply was tight, highlighting the overall aluminum element supply gap and providing solid bottom support for primary aluminum prices; externally, the Q3 MJP premium surge drove Southeast Asian traders to collectively raise spot quotes. Downstream participants mostly adopted a wait-and-see stance, with end-users only maintaining small-batch just-in-time procurement to restock, while overall proactive stockpiling sentiment remained subdued. Acceptance of high-priced resources was low, and the market exhibited a typical pattern of strong prices but weak volume. III. Vietnam Market: Fundamentals Operating Independently, Desensitized to MJP Premium Rise This round of MJP premium increase did not provide notable support to the Vietnamese aluminum market, with market trends remaining relatively independent. The core reason was that local processing enterprises chose to import aluminum semis as a substitute for purchasing aluminum ingots, significantly weakening domestic primary aluminum procurement demand. Domestic demand was diverted by finished aluminum semis, and market trading was sluggish. IV. South Korea Market: Transactions Recover and Prices Rise, Stockpiling Risks Gradually Emerge Driven by the rising QMJP premium, sellers in the South Korean market showed strong sentiment to hold prices firm, with the overall trading atmosphere outperforming other markets in the region. This week, spot transaction activity increased, and market transaction prices rose in tandem. V. Market Summary and Risk Alert: LME Structure Extremely Bullish, Squeeze Risk Elevated to High Levels At the current stage, the core contradiction in the Asian aluminum market stemmed from the global spot supply shortage. This shortage directly drove the Q3 MJP premium significantly higher and radiated outward to Southeast Asia, Japan and South Korea, and other regional markets, causing notable divergence in market conditions across regions. Meanwhile, the extreme backwardation structure in the LME market further amplifies potential risks at the commodity level: First, futures exhibit a deep backwardation structure. As of May 28, the LME Cash-3M backwardation was recorded at $92.53/mt. This extreme spot premium directly reflects the extreme scarcity of global spot resources. Second, social inventory is at historical lows. Total aluminum ingot inventory in LME registered warehouses stands at only around 340,000 mt, with stock levels hitting new lows. Available spot cargo remains insufficient, posing squeeze risks. Third, speculative stockpiling risks are intensifying. In a market environment of low inventory and high premiums, if regional traders collectively stockpile, hold back from selling, and hold prices firm, this could further tighten available market supply, exacerbate the current tight spot supply situation, and significantly increase the probability of a squeeze occurring. Overall, Asian aluminum prices are more likely to rise than fall in the short term, and the firm pricing pattern in core markets such as Thailand and South Korea will continue. However, market participants should be highly vigilant against squeeze crises triggered by the extreme LME backwardation structure. [Data Source Disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM. It is for reference only and does not constitute decision-making advice.] Data source: SMM

SMM May 28 update: The minor metal sector strengthened on May 28. As of the close on May 28, the minor metal sector rose 3.44%. In terms of individual stocks: Sino-Platinum Metals, Yunnan Germanium Industry, and China Molybdenum hit the daily limit, while China Minmetals Rare Earth, China Tungsten And Hightech, China Northern Rare Earth, and China Rare Earth led the gains. On the news front: According to authoritative local media in Zimbabwe and Xinhua News Agency, the Zimbabwean government recently issued the Mineral Classification and Declaration, explicitly listing lithium and other high-value minerals as "critical minerals" subject to equity and export controls. The critical minerals involved include 14 types: lithium, nickel, cobalt, graphite, copper, rare earth elements, chromium, platinum group metals (PGMs), manganese, antimony, uranium, ruthenium, tungsten, and niobium. The market is focused on the impact of tightening resource-country policies on global supply chains, with sentiment warming for minor metal varieties such as antimony and tungsten. Spot market Tungsten According to SMM pricing, on May 28, the average price of wolframite concentrates (≥65%) was 415,500 yuan/standard tonne (65%WO3 basis), up 1.22% from the previous trading day. Notably, after wolframite concentrates previously experienced a 61.88% decline over more than two months, driven by increased purchasing demand in the tungsten market, tungsten prices saw a rebound over two trading days. Currently, transactions in the tungsten concentrates market have improved, suppliers are bullish and hold back from selling, high-grade ore sees an upward shift in transaction center, while medium and low-grade ore circulates more but price increases appear lackluster. Downstream APT industry operating rates have slightly improved, but with limited new orders in the industry, smelters are cautious in restocking, with only small volumes of spot orders and large orders transacted in the market. Regarding the tungsten outlook, in the short term, driven by orderly inventory destocking, the return of downstream rigid demand, and the formation of pricing consensus among industry leaders, the tungsten market has overall entered a consolidation-at-lows and recovery phase. Going forward, key attention should be paid to the execution of long-term contracts and the pace of end-use demand recovery. According to SMM surveys, downstream cemented carbide alloy enterprises have seen inventory drop to low levels, with expectations of rigid restocking demand, but influenced by the market not yet being fully stabilized, enterprises remain cautious in procurement, generally adopting a small-order purchasing model. If upstream raw material inventory continues to be cleared and supply-demand imbalances are alleviated, tungsten prices are expected to enter a stabilization and consolidation phase in June-July. In the medium and long-term, the gap in Q3 mining quota transitions may lead to a contraction in market supply, coupled with expectations of the traditional September-October peak season, the industrial supply-demand structure will continue to optimize, thereby providing bullish support for tungsten prices. Rare Earths After the rally on May 27, the average price of Pr-Nd oxide on May 28 fell 1.79% from the previous trading day, and inquiries in the rare earth oxide market were sluggish on the 28th. Affected by futures price fluctuations combined with periodic restocking by some major producers, Pr-Nd oxide prices fluctuated frequently this week. Upstream and downstream players continued their stalemate, with suppliers maintaining relatively firm offers overall, while downstream metal producers maintained a strong wait-and-see sentiment and showed low purchase willingness at high prices. Absent other news-driven factors, Pr-Nd oxide is expected to remain in the doldrums in the short term before any significant change in the supply-demand relationship. Institutional Views Huafu Securities noted in its research report dated May 24, when commenting on other minor metals: rare earths performed weakly, while tantalum pentoxide surged during the week. In the rare earth market, end-use demand from downstream magnetic material sectors remained weak, with no large-scale concentrated restocking observed — only sporadic rigid-demand small orders were transacted, and the demand side consistently failed to provide effective support for the market. Market sentiment fluctuated significantly, with frequent tug-of-war between longs and shorts. Overall industry confidence was insufficient, with a notable stalemate between upstream and downstream on offer and bid prices, and significant divergence within the industry regarding the outlook for subsequent market trends. On Friday, the market maintained a wait-and-see attitude, awaiting changes in the magnetic material restocking pace and a recovery in downstream demand. Individual stocks: for antimony, Hunan Gold, Huaxi Nonferrous, and Huayu Mining are recommended; for molybdenum, China Moly, China Gold, and CMOC; for tungsten, Jiaxin International Resources, China Tungsten High-Tech, Xiamen Tungsten, and Zhangyuan Tungsten; for rare earths, China Rare Earth, China Northern Rare Earth, JL MAG Rare-Earth, and Xiamen Tungsten. Kaiyuan Securities' mid-year 2026 investment strategy for the metals sector indicated: Copper: Supply side, most ex-China miners continued to face declining ore grades and recovery rates, with disruption factors persisting (Ivanhoe's Kamoa-Kakula copper mine, Codelco's El Teniente copper mine). Although China's domestic enterprises added incremental capacity, the overall increase was limited. Under optimistic assumptions, global supply growth from 2026 to 2027 may fall below 2%. Demand side, power demand in both China and the U.S. maintained high growth rates in H1, which is expected to contribute marginal incremental copper demand. Kaiyuan Securities believes that the supply-demand structural imbalance for copper will become more pronounced in 2026, supporting a rise in the copper price center. Lithium: Supply side, capital expenditure in the lithium industry contracted and supply discipline gradually took shape. Combined with frequent disruptions, supply elasticity in the lithium industry has declined notably compared to before. Meanwhile, energy storage demand sustained high prosperity, driving gradual improvement in the lithium demand structure and marginal easing of inventory pressure. Lithium prices are expected to see a phased recovery. Lithium enterprises with resource security, low-cost advantages, and integrated layouts are expected to see earnings recovery elasticity outperforming the industry average. Lithium mine and lithium chemicals companies with high resource self-sufficiency rates and strong cost control capabilities are worth watching. Tungsten: As a strategic metal where China holds a dominant position, tungsten ore supply is constrained by resource depletion, environmental protection, and other factors. Combined with the government's total volume control on tungsten ore mining, tungsten ore production release remains limited. Demand side, emerging sectors are boosting tungsten demand, which is expected to provide long-term support for tungsten prices. According to a CITIC Securities research report, the current metals sector valuation remains at a reasonable level, with aluminum, copper, nickel-cobalt-tin-antimony, and gold valuations at relatively low levels, and a valuation rebound is still anticipated. Sector dividends have pulled back slightly, but the projected dividend yields of some individual stocks still exceed 5%. Looking ahead to 2026, liquidity shocks are expected to ease, supply disruptions are expected to occur frequently, and certain downstream sectors are expected to sustain relatively high prosperity. It is recommended to maintain a focus on allocation opportunities in lithium, copper, rare earths, strategic metals, aluminum, and gold sectors. Recommended Reading:

[Trading Sentiment Unlikely to See Significant Improvement; GO Silicon Steel Prices May Remain in the Doldrums Next Week] Demand side, downstream end-user enterprises in transformers, power equipment, and other sectors maintained stable operations, but overall procurement pace remained cautious as the industry entered a period of mediocre demand. Enterprises mostly adhered to the principle of purchasing as needed, only restocking for daily essential requirements. Willingness for large-volume concentrated purchases was sluggish, and actual market transaction volumes were insufficient. The supply side remained relatively stable, with traders' overall inventory pressure manageable, mainly maintaining reasonable standing inventory levels. Willingness to actively stockpile or lock in goods was low, and most chose to wait and see how the market would trend.

[SMM Lithium Battery Anode Raw Material Market Weekly Review: Anode Prices Remained Generally Stable, Supply-Demand and Cost Dynamics to Drive Future Trends] May 28: This week, artificial graphite anode material prices remained stable. Raw material prices edged down during this period, but were affected by the lag in production cycles.

This week, overseas aluminum scrap and secondary aluminum markets continued to fluctuate at relatively high levels. Affected by Middle East tensions, tight shipping logistics and fluctuations in LME aluminum prices, overall market sentiment remained cautious. The industry generally continued to show a market pattern characterized by “strong cost support and downstream demand mainly driven by rigid procurement needs.” Aluminum scrap market In the aluminum scrap market, Malaysia’s mixed aluminum casting scrap Tense prices remained stable at USD 2,600/mt this week after rising last week, with overall market quotations relatively steady. Malaysia’s aluminum cable scrap Talon prices edged up slightly from MYR 14,250/mt (~USD 3,593/mt) to MYR 14,300/mt (~USD 3,605/mt). Meanwhile, baled used beverage can (UBC) prices saw a noticeable correction, falling by MYR 850 from MYR 10,500/mt (~USD 2,647/mt) to MYR 9,650/mt (~USD 2,433/mt). SMM indicates this price adjustment was mainly due to some companies restructuring their quotation systems and pricing mechanisms, rather than a significant weakening in end-user demand. In Thailand, Talon prices increased from THB 117,500/mt (~USD 3,601/mt) last week to THB 122,500/mt (~USD 3,755/mt), while baled UBC prices remained relatively stable around THB 85,500/mt (~USD 2,621/mt), indicating relatively limited overall market fluctuations. SMM analysis indicates that the overseas aluminum scrap market continues to be supported by tight supply conditions. Ongoing disruptions in the Red Sea and Strait of Hormuz continue to affect global aluminum scrap circulation, with shipping delays and rerouting still occurring in some regions, keeping freight and import costs elevated. Some market participants reported that European-origin scrap has been more heavily affected by shipping disruptions, leading buyers to gradually shift procurement preference toward U.S.-origin scrap with relatively more stable logistics, further supporting imported aluminum scrap prices. At the same time, local supply of high-quality aluminum scrap in Southeast Asia remains tight. Some downstream factories in Malaysia continue to increase their reliance on imported aluminum scrap, further reflecting that regional supply-side pressure has not eased significantly. SMM estimates that the domestic and overseas aluminum scrap price spread in China remains around RMB 2,500–3,000/mt, leaving arbitrage opportunities for certain products and providing continued support for aluminum scrap trading activity in Southeast Asia. On the demand side, overseas ADC12 producers and secondary aluminum enterprises are still mainly purchasing based on rigid demand. Although aluminum scrap prices remain at relatively high levels, downstream buyers have become more cautious compared with earlier periods, and transaction speeds for high-priced materials have slowed somewhat. Overall, the market continues to be dominated by procurement on a need-only basis. Secondary aluminum ADC12 market In the ADC12 market, Malaysia’s domestic ADC12 secondary aluminum alloy prices remained stable this week at MYR 13.30/kg (~USD 3,353/mt), while FOB prices held steady at USD 3,395/mt, with overall market trends remaining relatively stable. In Thailand, domestic ADC12 prices rose alongside higher LME aluminum prices, increasing from THB 110/kg (~USD 3,372/mt) last week to THB 112/kg (~USD 3,433/mt), while FOB prices remained largely stable around USD 3,370/mt throughout the week. SMM analysis shows that some ADC12 producers already have orders scheduled through July and August. While order-taking remains cautious, operations are generally stable. As a result, producers currently prefer maintaining stable quotations rather than continuing to aggressively raise prices. Some manufacturers are also retaining a certain level of spot inventory to cope with potential raw material supply fluctuations and unexpected order demand. In addition, some customers have recently begun delaying shipment schedules and slowing cargo pickups, mainly due to limited acceptance of high prices among end-users and continued market uncertainty regarding future price trends. In the Indian market, although Indian buyers are offering relatively higher prices, some companies still remain cautious toward concluding transactions. Overall, SMM expects overseas aluminum scrap and ADC12 markets to continue fluctuating at relatively high but stable levels in the short term. Future market direction will still depend on developments in the Middle East situation, shipping recovery conditions, LME aluminum price movements, and actual downstream order-taking and cargo pickup activity. Exchange Rate Reference: 1 USD = 3.96 MYR 1 USD = 32.62 THB

SMM, May 22: Cobalt product prices showed mixed performance this week. Refined cobalt spot prices rose by 2,000 yuan/mt over the week, with downstream buyers still purchasing as needed. Cobalt salt performance was relatively weak, with cobalt sulphate, cobalt chloride, and Co3O4 spot prices all recording varying degrees of decline. The overall market performance was sluggish, still awaiting feedback from subsequent downstream production schedules... SMM compiled the price fluctuations of cobalt products this week, as follows: : According to SMM spot prices, refined cobalt spot prices fluctuated upward this week. As of May 22, refined cobalt spot prices rose to 424,000-430,000 yuan/mt, with an average price of 427,000 yuan/mt, up 2,000 yuan/mt from May 15, a gain of 0.47%. Fundamentals: Supply side, mainstream smelters maintained stable quotes this week, with trader spot-futures price spreads stable at parity to a premium of 8,000-10,000 yuan/mt. Demand side, downstream alloy and magnetic material enterprises continued purchasing as needed, maintaining control over raw material inventory levels. The metal price spread between refined cobalt and low-priced cobalt salts remained at a low level, and cobalt salts were difficult to sell, making enterprises reluctant to re-dissolve cobalt salts to produce refined cobalt. The market is likely to continue its volatile pattern in the short term, and price rises still depend on effective support from cobalt salt prices. Cobalt salts ( and ): : According to SMM spot prices, cobalt sulphate spot prices continued to edge down this week. As of May 22, cobalt sulphate spot prices fell to 92,000-95,000 yuan/mt, with an average price of 93,500 yuan/mt, down 1,000 yuan/mt from 94,500 yuan/mt on May 15, a decline of 1.06%. According to SMM, on the supply side of cobalt sulphate this week, mainstream brand price centers shifted down to 92,000-95,000 yuan/mt; some smelters and traders, under capital turnover pressure, again made concessions on shipments, with low-priced sources dropping to 88,000-89,000 yuan/mt. Demand side, downstream enterprises still primarily consumed earlier inventory, with weak procurement enthusiasm, only making small just-in-time procurement for restocking. Some downstream sources reported that LCO production schedules fell short of expectations, and they maintained a wait-and-see stance before orders were confirmed. Cobalt sulphate prices are likely to continue fluctuating in the short term, with subsequent recovery still dependent on the release of downstream restocking demand. : According to SMM spot prices, cobalt chloride spot prices also declined this week. As of May 22, cobalt chloride spot prices fell to 112,000-115,500 yuan/mt, with an average price of 113,750 yuan/mt, down 1,750 yuan/mt from 115,500 yuan/mt on May 15, a decline of 1.52%. From the spot market perspective, according to SMM, cobalt chloride market transactions were mediocre this week. Supply side, top-tier players continued to hold prices firm, refusing to sell at low prices, providing strong support for cobalt chloride prices; while small and medium-sized producers, constrained by capital recovery and performance pressure, proactively lowered quotes, but even with price cuts, transactions were difficult to conclude, leading to continued price declines. Demand side, downstream enterprises, affected by weak demand and inventory accumulation, maintained persistently low purchase willingness. SMM believes that current cobalt chloride prices already have strong support, with limited possibility of further decline, and holds an optimistic view on the market outlook. From a cost perspective, prices are expected to rebound subsequently, but upside room is limited, with the estimated period around June. : According to SMM spot prices, Co3O4 spot prices showed a volatile downward trend this week. As of May 22, Co3O4 spot prices fell to 353,000-363,000 yuan/mt, with an average price of 358,000 yuan/mt, down 5,500 yuan/mt from 363,500 yuan/mt on May 15, a decline of 1.51%. According to SMM, the Co3O4 spot market continued its sluggish pattern this week. Supply side, enterprises found it difficult to maintain high prices and lowered prices to ship, but even so, product inventory continued to accumulate. Demand side, downstream LCO material enterprises still primarily relied on client-supplied materials plus long-term contracts, with spot order procurement volumes continuing to decline; meanwhile, affected by weak demand, some enterprises proactively slowed down their long-term contract cargo pick-up pace. Looking ahead, the subdued Co3O4 market is expected to persist for an extended period, but the price outlook remains positive, though support comes more from the cost side, with supply-demand and procurement factors having relatively limited impact. Regarding raw material cobalt intermediate products: According to SMM spot prices, cobalt intermediate product spot prices remained stable this week. As of May 22, cobalt intermediate product (CIF China) spot prices held steady at $25.8-26.2/lb, with an average price of $26/lb. According to SMM, on the supply side of cobalt intermediate products this week, suppliers maintained firm bullish expectations, with quotes consistently held above $26/lb. Demand side performance was stable; affected by weak cobalt salt prices, downstream smelters only made just-in-time procurement, with some non-standard products transacting near $25/lb. On the quota front, 2025 Q4 miner quota approvals were largely completed, while Q1 quota approvals were slower due to procedural constraints; coupled with tight logistics capacity in the DRC, where cobalt cargo had lower transportation priority, the arrival of large-volume shipments to China may be further delayed . In the short term, dragged by weak demand, prices are likely to remain stable, but after downstream orders materialize and restocking demand is released, intermediate product prices still have upside room for recovery. News: According to Webstock Inc., on May 18, Ilya Epikhin, Global Head of Natural Resources at consulting firm Arthur D. Little, stated that 2027 could see the first deep-sea mineral extraction, with copper, cobalt, and nickel being "mined" from the ocean for the first time. It is reported that polymetallic nodules on the seabed (containing 28%-30% manganese, 1% copper, 1% nickel, 0.2%-0.7% cobalt) are found at depths of 4,000-6,000 meters, with concentrations ranging from 5-15 kg per m², with the Clarion-Clipperton Zone in the North Pacific being the world's most resource-rich area for nodules. Corporate developments: On May 12, XTC New Energy Materials (Xiamen) was asked about the impact of cobalt raw material price increases on the company. XTC New Energy Materials (Xiamen) responded that the company is one of the world's largest cobalt consumers, maintaining long-term close cooperation with upstream enterprises, with stable cobalt raw material supply. In the 3C consumer electronics sector, clients focus more on LCO performance, so the negative impact of cobalt raw material price increases on the company's operations is relatively small. In terms of inventory management, the company adheres to a "short lead time, fast turnover" business strategy, building a robust raw material supply chain. Public information shows that XTC New Energy Materials (Xiamen)'s main products include LCO, ternary cathode material (including high-nickel ternary), and LFP, with its ternary cathode material firmly positioned in the industry's first tier. In 2025, the company actively seized demand growth opportunities from national device trade-in subsidy policies and increased battery capacity in 3C consumer devices driven by AI functions, closely addressing core client needs, fully leveraging its leading high-voltage LCO technology advantages, supplying first-tier smartphone and laptop brands, achieving full-year LCO sales of 65,300 mt (of which 4.5V and above high-voltage products accounted for 58%), with sales up 41.31% YoY. Tengyuan Cobalt mentioned its existing capacity in a previously released investor activity record. It stated that as of the end of Q1 2026, the company had capacity of 31,500 mt in metal content for cobalt products (including 8,000 mt in metal content for refined cobalt), 10,000 mt in metal content for nickel products, 10,000 mt in metal content for manganese products, 60,000 mt for copper products, 20,000 mt for ternary cathode precursor, 10,000 mt for Co3O4, and 5,000 mt for lithium carbonate. Additionally, when investors asked about the company's outlook on cobalt market trends this year, Tengyuan Cobalt stated that the strategic value and demand potential of cobalt are being redefined, with its resource attributes being continuously strengthened. Furthermore, as AI drives the emergence of new sectors such as humanoid robots, low-altitude economy, and robotic dogs, the accelerated industrialisation of ternary solid-state batteries will become the core new engine for cobalt demand growth, opening up medium and long-term, certain, and substantial incremental cobalt demand. Combined with cobalt's essential demand attributes, its growth potential will continue to shift upward.