In May, China's aluminum fabrication industry recorded an overall PMI of 50.8%, barely staying above the 50 mark but pulling back significantly by 3.1 percentage points from April. Industry sentiment slid from the edge of expansion territory toward the critical threshold, with structural divergence intensifying further.

This week, the operating rate of China's leading downstream aluminum processing enterprises was 64.1%, down 0.3 percentage points WoW.

SMM May 22 update: Metals market: Overnight, base metals generally fell across both domestic and overseas markets. LME lead led the gains with a 1.39% increase, SHFE lead rose 0.57%, and LME aluminum gained 0.29%. LME nickel and SHFE tin both fell over 1%, with LME nickel down 1.21% and SHFE tin down 1.03%. LME tin closed flat at $53,795/mt, while other metals declined less than 1%. The alumina main contract fell 0.37%, and the casting aluminum main contract dropped 0.26%. Overnight, ferrous metals collectively declined, with hot-rolled coil down 0.7%, rebar down 0.5%, and iron ore and stainless steel showing slight fluctuations. Coking coal and coke side, coking coal fell 2.86% and coke dropped 1.53%. Overnight, precious metals side, COMEX gold rose 0.2% and COMEX silver gained 1.09%. In China, SHFE gold rose 0.43% and SHFE silver gained 1.85%. Overnight closing prices as of 6:40 AM on May 22: Macro Front China: [NDRC: To improve policy measures on fair competition, investment and financing, promotion of technological innovation, and business regulation] Li Hui, Director of the Private Economy Development Bureau of the National Development and Reform Commission (NDRC), stated at a press conference held by the State Council Information Office that the NDRC will better leverage its coordination function in promoting private economy development, organize and implement specific measures outlined in the rule-of-law action plan for safeguarding the private economy, and strengthen the implementation of the Private Economy Promotion Law. The NDRC will improve supporting systems, refine relevant policy measures on fair competition, investment and financing, promotion of technological innovation, and business regulation; continue to jointly release typical cases with relevant departments to demonstrate law interpretation through cases; implement policy effectiveness assessments, promote direct and swift delivery of enterprise-benefiting policies, and guide enterprises in enhancing governance capabilities. US dollar: As of the overnight close, the US dollar index rose 0.08% to 99.21. Last week, the number of Americans filing for unemployment benefits decreased, indicating a degree of resilience in the labour market and providing room for the US Fed to focus on addressing rising inflation. Data showed that initial jobless claims fell by 3,000 to a seasonally adjusted 209,000 for the week ending May 16. Although economists expect jobless claims to increase over the summer due to seasonal factors, the labour market currently remains in a holding pattern. Financial markets currently expect the US Fed to maintain the benchmark overnight rate in the 3.50%-3.75% range until next year. Jin Shi Data APP) US Fed's Barkin stated that the ability of enterprises and consumers to absorb the latest round of supply shocks will determine whether the US central bank can continue to "look through" higher inflation without raising interest rates. In remarks prepared for a speech in Raleigh, North Carolina on Thursday, Barkin said: "After inflation has been above our 2% target for more than five years, it's worth asking whether the cumulative effect of so many rounds of shocks might loosen the 'anchor' of inflation expectations." He also said: "For me, the key question is how much more pressure enterprises, consumers, and inflation expectations can bear." Barkin added that he is increasingly concerned that the US may have entered a "new phase" in which supply shocks will become more frequent. These shocks could stem from multiple factors, including heightened geopolitical tensions, fragmentation of the trading system, more extreme weather events, rising government debt, and other structural forces. He also noted that, for now, the US Fed's monetary policy stance is "in a good place" to address risks on both the employment and inflation fronts. (Jin Shi Data APP) According to CME "FedWatch": the probability of the US Fed maintaining rates unchanged through June was 96.8%, with a 3.2% probability of a cumulative 25 basis point rate hike. The probability of the US Fed maintaining rates unchanged through July was 85.4%, with a 14.2% probability of a cumulative 25 basis point rate hike and a 0.4% probability of a cumulative 50 basis point rate hike. (Jin Shi Data APP) On the data front: Data to be released today include the US May University of Michigan consumer sentiment index final reading, US May one-year inflation expectations final reading, US April Conference Board leading indicators MoM, UK May GfK consumer confidence index, UK April public sector net borrowing, UK April seasonally adjusted retail sales MoM, Germany June GfK consumer confidence index, Germany Q1 non-seasonally adjusted GDP YoY final reading, Germany May IFO business climate index, Japan April core CPI YoY, and Canada March retail sales MoM. In addition, 2027 FOMC voter and Richmond Fed President Barkin will deliver a speech, and US Fed Governor Waller will deliver a speech. On crude oil: As of the overnight close, oil prices on both markets fell together, with WTI down 0.26% and Brent down 0.1%. According to the Islamic Republic News Agency (IRNA) citing Al Arabiya, a final draft of the US-Iran agreement has been reached under Pakistan's mediation and is expected to be announced within the coming hours. Rapidan Energy Group stated that if the Strait of Hormuz closure persists through August, downside economic risks will increase, with severity potentially approaching that of the 2008 Great Recession. The consultancy's base-case scenario assumes the waterway will reopen in July, under which daily average oil demand would decline by 2.6 million barrels and the benchmark Brent crude oil spot price would peak near $130 per barrel during the summer. (Wallstreetcn) According to informed sources, seven major OPEC+ producing countries may agree to a modest raise in oil production for July when they meet on June 7. Despite the ongoing Iran war currently raging, actual crude delivery channels for several of these countries remain in a state of complete disruption. The monthly combined production target proposed by the seven core OPEC+ members is expected to increase by approximately 188,000 barrels per day. Official OPEC statistics showed that total global OPEC+ oil production plunged sharply from 42.77 million barrels per day in February this year to 33.19 million barrels per day in April. Of that, daily production from Gulf region producing countries alone collapsed by 9.9 million barrels. (Reuters) As the US-Iran conflict has resulted in the loss of millions of barrels of crude oil supply, demand slowdown will be forced to become the primary means of balancing the supply-demand gap. The market is increasingly inclined to believe that oil prices will peak near $100 per barrel over the next year. This was one of the conclusions from a Bloomberg Intelligence survey this month, which received 126 responses from asset managers and other energy market professionals. Amrita Sen, co-founder and head of research at Energy Aspects, stated that the oil market is currently in a state of severe undersupply but has not yet faced a major shortage. The market is currently drawing down inventory and strategic reserves, but Energy Aspects estimates that if the Strait of Hormuz remains closed, shortages could begin to emerge by the end of June. "We are really just barely getting by right now, drawing down those inventories. Global refiners' purchases are low, and if they start buying again, market prices could overshoot. There won't be a global tank-bottoming, but it will certainly happen in some regions — on the crude side, parts of Asia, while the US refined products market is currently heading rapidly in that direction." (Bloomberg)

Overall, the aluminum processing industry achieved a slight edge up in operating rate this week, driven by the recovery of export orders, the surge in energy storage demand, and the recovery of infrastructure-related orders. The industry maintained relatively strong resilience, and going forward, attention should be focused on the sustainability of export orders and the boosting effect of aluminum price trends on demand.

SMM News, May 21: Metals market: As of the midday close, most base metals on the domestic market rose. SHFE copper gained 1.33%, SHFE aluminum rose 0.33%, SHFE lead climbed 1.55%, SHFE zinc advanced 1.47%, and SHFE tin surged 3.21%. SHFE nickel fell 0.57%. In addition, the most-traded casting aluminum futures rose 0.39%, the most-traded alumina contract gained 0.37%, the most-traded lithium carbonate contract rose 1.18%, the most-traded silicon metal contract climbed 0.35%, and the most-traded polysilicon futures rose 0.37%. Ferrous metals mostly rose. Iron ore fell 0.5%, rebar edged up, hot-rolled coil gained 0.23%, and stainless steel rose 0.41%. Coking coal and coke: the most-traded coking coal contract rose 0.33%, and the most-traded coke contract was flat at 1,774.5 yuan/mt. Overseas base metals: as of 11:32, LME metals generally fell. LME copper dropped 0.15%, LME aluminum was flat at 3,629 yuan/mt, LME lead rose 0.71%, LME zinc fell 0.1%, LME tin declined 0.53%, and LME nickel dropped 0.92%. Precious metals: as of 11:32, COMEX gold rose 0.12% and COMEX silver fell 0.26%. Domestic precious metals: the most-traded SHFE gold contract gained 0.89% and the most-traded SHFE silver contract rose 1.85%. In addition, as of the midday close, the most-traded platinum futures rose 0.74% and the most-traded palladium futures gained 0.47%. As of the midday close, the most-traded Europe containerized freight index contract rose 7.66% to 2,957.5 points. As of 11:32 on May 21, midday futures quotes for selected contracts: Spot cargo and fundamentals Nickel: On May 21, SMM #1 refined nickel prices rose 1,550 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 1,200 yuan/mt, down 250 yuan/mt from the previous trading day. Domestic mainstream brand electrodeposited nickel premiums ranged from -600 to 500 yuan/mt. Macro front China: [NDRC: To improve policy measures on fair competition, investment and financing, promotion of sci-tech innovation, and business regulation] Li Hui, Director of the Private Economy Development Bureau of the National Development and Reform Commission (NDRC), stated at a press conference held by the State Council Information Office that the NDRC will better leverage its coordination function in promoting private economy development, organize and carry out specific measures outlined in the action plan for safeguarding the private economy through the rule of law, and strengthen the implementation of the Private Economy Promotion Law. The NDRC will improve supporting systems and refine policy measures on fair competition, investment and financing, promotion of sci-tech innovation, and business regulation. It will continue to work with relevant departments to publish typical cases to illustrate the law through cases, conduct assessments of policy implementation effectiveness, promote direct and swift access to enterprise-friendly policies, and guide enterprises in enhancing their governance capabilities. [China's Enterprise Credit Index Reached 162.41 in April This Year, Maintaining a Positive Trend] According to the State Administration for Market Regulation, China's Enterprise Credit Index stood at 162.41 in April this year, up 0.15 points from March, with enterprise credit levels maintaining a positive trend. In April, the top 5 industries by credit index ranking were finance, electricity/heat/gas and water production and supply, education, manufacturing, and water conservancy/environment and public facilities management. Compared with the previous month, the indices for information transmission/software and information technology services, finance, and health and social work showed relatively notable increases, achieving positive growth for three consecutive months, with credit development trends continuing to improve. (CCTV News) [Qiushi Commentary Article: How to Thoroughly Address "Involution-Style" Competition in Manufacturing] The article pointed out that thoroughly addressing "involution-style" competition requires institutional innovation to drive competition toward quality upgrading. Only when government behavior is regulated and market mechanisms are streamlined can enterprises shift from low-price disorderly competition to value-based competition. A unified national market should be built to break down market segmentation, policies hindering fair competition should be resolutely eliminated, outdated capacity should be phased out in an orderly manner in accordance with laws and regulations to prevent "bad money driving out good," and competitive enterprises should be allocated resources commensurate with their competitiveness. Performance assessment reform should be used to correct government behavior, shifting assessment focus toward "quality" indicators such as development quality, technological innovation, and industrial coordination, aligning local government incentives with high-quality development, and curbing the impulse for homogeneous investment attraction at the source. Evaluation mechanism reform should be used to rectify competitive behavior, reversing the "price-only" tendency, establishing comprehensive evaluation mechanisms centered on technology, quality, and service, making premium quality at premium prices a market consensus, and guiding resources toward enterprises with strong innovation capabilities and high product value-added. The PBOC conducted 100 billion yuan of 7-day reverse repo operations in the open market at an interest rate of 1.40%, unchanged from the previous day. Today, 500 million yuan of reverse repos matured. US Dollar: As of 11:32, the US dollar index rose 0.05% to 99.19. The US Fed meeting minutes showed that participants anticipated elevated energy prices would continue to exert upward pressure on headline inflation in the near term. Participants generally expected that the impact of tariffs on core goods inflation would gradually diminish over the course of this year. However, some participants noted that tariff rates could rise further above current levels, resulting in greater upward pressure on inflation. Several participants emphasized that, after inflation had remained above 2% for several consecutive years, elevated inflation could have a greater influence on wage- and price-setting decisions. Almost all participants noted that the conflict in the Middle East could persist for an extended period, or even if the conflict ended, oil and other commodity prices could remain elevated for longer than expectations. In such a scenario, participants anticipated that factors such as supply chain disruptions, elevated energy prices, or the pass-through of higher input costs to other prices would continue to push inflation higher. The vast majority of participants noted that the time required for inflation to return to the Committee's 2% target could be longer than they had previously expected, and that risks had increased. The US Fed meeting minutes showed that regarding the monetary policy outlook, participants generally believed that persistently elevated inflation and uncertainty about the duration and economic impact of the Middle East conflict could necessitate maintaining the current policy stance for longer than expectations. Some participants emphasized that it might be appropriate to lower the target range for the federal funds rate once clear signs emerged that the pullback trend in inflation had steadily resumed, or signs of greater softness in the labour market appeared. However, most participants noted that if inflation remained persistently above 2%, some tightening measures might be necessary. To address this scenario, many participants indicated that they would prefer to remove language from the post-meeting statement that implied the Committee's future rate decisions might lean toward easing. Participants noted that monetary policy was not predetermined and that future policy decisions would be made on a meeting-by-meeting basis. According to the CME "FedWatch" tool: the probability of the US Fed maintaining rates unchanged through June was 97.3%, with a cumulative probability of a 25-basis-point interest rate cut at 2.7%. The probability of the US Fed maintaining rates unchanged through July was 87.2%, with a cumulative probability of a 25-basis-point interest rate cut at 2.4%, and a cumulative probability of a 25-basis-point rate hike at 10.4%. (Jin Shi Data) On the data front: Data to be released today include US initial jobless claims for the week ending May 16, US April annualized housing starts, US April building permits, US May Philadelphia Fed Manufacturing Index, US May S&P Global Manufacturing PMI preliminary reading, US May S&P Global Services PMI preliminary reading, Eurozone May Manufacturing PMI preliminary reading, Eurozone March seasonally adjusted current account, Eurozone May Consumer Confidence Index preliminary reading, France May Manufacturing PMI preliminary reading, Germany May Manufacturing PMI preliminary reading, UK May Manufacturing PMI preliminary reading, UK May Services PMI preliminary reading, UK May CBI Industrial Orders balance, and Australia April seasonally adjusted unemployment rate. In addition, attention should also be paid to the following: Bank of England Governor Bailey delivered a speech, and China's refined oil products were set to enter a new round of price adjustment window. Crude oil: As of 11:32, oil prices in both markets rose, with WTI up 0.94% and Brent up 0.83%. Supply concerns driven by market worries over the uncertain prospects of a US-Iran peace deal continued to support oil prices. In addition, declining US crude oil inventory also lent support to oil prices. EIA report: Commercial crude oil inventory, excluding the Strategic Petroleum Reserve, fell by 7.863 million barrels to 445 million barrels, a decline of 1.74%. The weekly EIA crude oil inventory drawdown for the week ending May 15 was the largest since the week of February 13, 2026. A research report from CITIC Securities noted that global oil inventory was declining sharply, intensifying the risk of energy shortages. The US-Israel-Iran conflict disrupted passage through the Strait of Hormuz, causing global oil inventory to plummet at a record pace and heightening the risk of summer energy shortages. The market temporarily cushioned the pressure by relying on previously surplus inventory, exemptions from Russian oil sanctions, and strategic petroleum reserve releases by multiple countries, while high oil prices also triggered a contraction in global oil demand. International oil prices are currently fluctuating at elevated levels, US refined product prices have hit multi-year highs, oil supplies in multiple energy-importing regions in Asia are on the verge of shortages, dragging down regional economic growth. Oil prices may still have significant upside room, and accelerating the development of renewable energy has become a long-term measure for countries to guard against energy risks. Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company (ADNOC) of the UAE, said on the 20th that the UAE was building an east-west oil pipeline bypassing the Strait of Hormuz. The project was nearly 50% complete and is expected to be completed and operational by 2027. According to the UAE's Gulf News, Al Jaber said at an online event hosted by the US think tank Atlantic Council that a large volume of global energy transportation still relied on a few critical maritime chokepoints, and the UAE hoped to reduce its dependence on the Strait of Hormuz and enhance the security of energy exports through this project. (Xinhua) Goldman Sachs stated that as the Middle East war continued and supply remained constrained, global crude oil and refined product inventory was being depleted at a record pace this month. Goldman Sachs analysts noted in a report dated May 20 that since the beginning of May, visible inventory had been declining at a record rate of 8.7 million barrels per day, nearly double the average pace since the outbreak of the conflict. They stated, "The physical market continues to tighten, and oil exports through the Strait of Hormuz are estimated to remain at only 5% of normal levels." Goldman Sachs analysts noted that two-thirds of the inventory decline in May was driven by a reduction in so-called "oil on water," with exports falling more than imports. The import slump is now "spreading from Asia to Europe," they noted, with European jet fuel imports 60% below the 2025 average. (Jin10 Data) Spot Market Overview: ► ► ► ► ► ► ► ► ► ► ► ►

[SMM Morning Meeting Minutes: Growing Market Concerns over Supply Push LME Zinc to Multi-Year Highs] LME zinc opened at $3,536/mt during the overnight session. Early in the session, a tug-of-war between longs and shorts ensued, and LME zinc swung wildly along the daily average line. Entering the night session, it briefly dipped to a low of $3,524.5/mt. Bulls then increased open interest, driving LME zinc up to a multi-year high of $3,582.5/mt. The center subsequently pulled back slightly, and it ultimately closed higher at $3,552/mt, up $19.5/mt or 0.55%. Trading volume rose to 15,506 lots, and open interest increased by 488 lots to 242,000 lots.

Futures: Overnight, LME lead opened at $1,996.5/mt, briefly touching a low of $1,995.5/mt during the Asian session. LME lead continued to rise firmly after entering the European session, reaching a high of $2,016/mt near the close, and ultimately settled at $2,004/mt, up 0.33%, refreshing a nearly 4-month high. Overnight, the most-traded SHFE lead 2606 contract opened at 16,655 yuan/mt, then moved sideways, with a low of 16,625 yuan/mt and a high of 16,675 yuan/mt during the session, ultimately settling at 16,640 yuan/mt, up 0.15%. On the macro front: US Fed's Collins: If inflation does not ease, rate hikes may be needed. US April PPI surged 1.4% MoM and 6% YoY, both the largest increases since 2022. OPEC lowered its 2026 global oil demand growth expectations from 1.38 million bpd to 1.17 million bpd. US President Trump arrived in Beijing to begin his visit to China. He Lifeng held economic and trade consultations with US Treasury Secretary Bessent in South Korea. China's State Administration for Market Regulation: launched a special campaign to remove obstacles hindering the unified market and fair competition. : SHFE lead remained in the doldrums. Suppliers offered limited quotations, with some waiting for delivery and others seeing rising wait-and-see sentiment. Additionally, cargoes self-picked up from primary lead smelters also saw relatively fewer quotations. Secondary lead side, regional supply disparities persisted, with smelters showing strong reluctance to sell at low prices. Some smelters held prices firm for shipments, with secondary refined lead quoted at premiums of 0~+50 yuan/mt against SMM #1 lead average price on an ex-works basis. Downstream enterprises made just-in-time procurement, with inquiry enthusiasm still present and some purchasing on dips as needed, but market trading activity weakened compared to yesterday. Inventory: On May 13, LME lead inventory decreased by 250 mt to 265,300 mt. As of May 11, SMM five-region lead ingot social inventory increased by approximately 2,200 mt WoW. Lead price forecast for today: Ex-China lead ingot inventory continued to decline, while the LME Cash-3M spread maintained a slight contango. Combined with the persistently tight spot market supply in Southeast Asia, LME lead is expected to hold up well. In addition, uncertainty surrounding overseas geopolitical factors remains significant, and their impact on the market warrants continued attention. Although domestic spot lead prices received a slight boost from LME lead's movement, upward momentum remained insufficient due to weak end-use consumption. Data source statement: Data other than public 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.

SMM, April 22: The global new energy and AI industries maintained high prosperity, coupled with traditional consumer electronics entering a seasonal peak, driving a comprehensive recovery in demand for copper foil and high-speed connectivity products. In March 2026, China's copper foil exports hit a single-month record high. The power and ESS sectors maintained high prosperity with steadily growing orders; AI-related orders remained robust, with optimistic demand for copper foil across all specifications, and the operating rate of copper foil enterprises rose both YoY and MoM in March. Supported by these fundamentals, copper cable high-speed connectivity, as a core component of AI computing infrastructure, continued to see improving demand expectations. Combined with resonating capital sentiment in the sector, copper cable high-speed connectivity concept stocks strengthened overall on April 22. As of the close on the 22nd, the copper cable high-speed connectivity concept rose 2.29%. Among individual stocks, Far East Holdings hit the daily limit, while Hengtong Optic-Electric, ZTT, Shenlan Technology, Changxin Bochuang, Zhaolonginterconnect, and Kingsinno led the gains. News [State Council: Advancing Computing Power Layout and Edge Computing Power Development in an Orderly Manner, Improving Intelligent Computing Cloud Service System] The State Council issued the "Opinions on Promoting the Expansion and Quality Improvement of the Service Industry." It mentioned deepening the implementation of the Industrial Internet innovation and development project, advancing the industrial data foundation initiative, cultivating data cooperation consortia, and building a number of high-quality industry datasets. It also called for developing professional services such as data annotation and certification, exploring the establishment of classified and graded mechanisms for data rights confirmation, evaluation, and pricing. Computing power layout and edge computing power development will be advanced in an orderly manner, and the intelligent computing cloud service system will be improved. The application of urban information modeling platforms and building information modeling technologies will be accelerated. [China's Intelligent Computing Power Scale Reaches 1882 EFLOPS] Zhang Yunming, Vice Minister of the Ministry of Industry and Information Technology, stated on the 21st that computing power infrastructure has become a key foundation driving the development of artificial intelligence. As of month-end in March, China's intelligent computing power scale reached 1882 EFLOPS. At a press conference held by the State Council Information Office on the same day, Zhang Yunming said that recently, the Ministry of Industry and Information Technology has been making sustained efforts in key areas such as enabling small and medium-sized enterprises with inclusive computing power and computing-electricity coordination, and the computing power industry has shown a positive development trend. Industrial innovation has become stronger, with the in-depth implementation of the computing power foundation "open competition" initiative, the conduct of policy research and standard formulation for computing-electricity coordination, and the promotion of accelerated implementation of generation-grid-load-storage and green electricity direct connection. Network transmission has become smoother, with over 70 computing power corridors built around computing power hubs over the past two years, and the implementation of the metropolitan "millisecond computing" special initiative, among others. [National Advanced Computing Industry Innovation Center Qingdao Base Officially Launched] According to Sugon, on April 22, the National Advanced Computing Industry Innovation Center Qingdao Base was officially launched in Laoshan District, Qingdao. The National Advanced Computing Industry Innovation Center is a national-level industrial innovation platform established in 2018 with the approval of the National Development and Reform Commission (NDRC), aimed at achieving breakthroughs in core technologies in the field of advanced computing and fostering internationally competitive industrial clusters. The Qingdao base launched this time, co-built with the participation of Sugon, will leverage regional industrial advantages to create an advanced computing innovation platform integrating technology R&D, commercialization of research outcomes, and industrial incubation, further pooling industry resources, driving regional industrial intelligent upgrading, and injecting strong "computing power momentum" into the digital economy development of Qingdao and even Shandong Province. [Yuandong Holdings: Q1 2026 Net Profit of 96.6284 Million Yuan, up 110.36% YoY] Yuandong Holdings disclosed its Q1 2026 report on April 22. The company achieved total operating revenue of 5.325 billion yuan, up 9.26% YoY; net profit attributable to the parent company was 96.6284 million yuan, up 110.36% YoY. [Rickda: Achieved Small-Batch Delivery of 400G/800G Products and Is Driving Capacity Ramp-Up] Rickda released an investor relations activity record announcement. The company is a quality supplier capable of simultaneously providing comprehensive solutions for optical, electrical, microwave, high-speed data, and fluid connections. It has also deployed multiple products for AI applications, including power supply, high-speed transmission, and liquid cooling categories. High-speed copper cable connector-related products are primarily led by Suzhou Richuang Connection Technology Co., Ltd., with planned products mainly including AEC, DAC, and ACC high-speed copper cable products, high-speed board-to-board connectors, high-speed I/O connectors, and other product series. Currently, Richuang has achieved small-batch delivery of 400G/800G products and is driving capacity ramp-up, while multiple products with even higher speeds are also progressing as planned. [Tongguan Copper Foil: The Company's High-Frequency High-Speed PCB Copper Foil Can Be Widely Used in 5G Communication Equipment, High-Computing-Power Servers, and Other Network Equipment and Network Connectors] Tongguan Copper Foil stated on the investor interaction platform on March 23 that the company's high-frequency high-speed PCB copper foil can be widely used in 5G communication equipment, high-computing-power servers, data centers, switches, and other network equipment and network connectors. [Xinhongye: Dedicated Technical Research Has Been Conducted in the High-Speed Copper Cable Connection Field for Intelligent Computing Scenarios] Xinhongye stated on the interaction platform on March 17 that the company pays close attention to the development trends of computing power data centers and the computing-power-and-electricity synergy industry, and will leverage its core business and technological advantages to continuously track industry dynamics and prudently evaluate opportunities for penetration and deployment in related fields. The current AI intelligent computing industry is trending toward the parallel development and synergy of optical and copper solutions. Leveraging its core copper cable technology advantages, the company has launched dedicated technical research in the high-speed copper cable connectivity domain for intelligent computing scenarios. Meanwhile, in line with the industry's technological evolution, the company maintains forward-looking technical research and market tracking in fiber optic-related fields, and is expected to steadily advance related deployments based on industry demand, technological development, and its own strategic planning. AI-Related Orders Remain Red-Hot with Optimistic Demand across All Copper Foil Specifications According to SMM, the operating rate of Chinese copper foil enterprises rose both YoY and MoM in March 2026. Downstream demand recovered rapidly after Chinese New Year, with both production and sales of lithium battery copper foil and electronic circuit copper foil climbing in March, bringing the overall industry operating rate close to 90%. End-use demand side, the power and ESS sectors maintained high prosperity with steady order growth. The traditional consumer electronics industry transitioned smoothly into peak season, AI-related orders remained red-hot, and demand across all copper foil specifications performed optimistically . Global New Energy and AI Industries Show High Prosperity — March Copper Foil Exports Hit a Single-Month Record High According to data from the General Administration of Customs, China's copper foil (HS codes: 74101100, 74102190) imports in March 2026 totaled 8,220.04 mt, up 11.88% YoY and up 27.59% MoM. China's copper foil exports in March 2026 totaled 6,663.48 mt, up 56.19% YoY and up 38.23% MoM. Statistics showed that both China's copper foil imports and exports rose to elevated levels in March 2026, with exports hitting a single-month record high. Global new energy and AI industries exhibited high prosperity, coupled with optimistic demand during the seasonal consumption peak. Voices from Various Parties A Huaxi Securities research report stated that external geopolitical risks persist at the current juncture, and market risk appetite may affect short-term market fluctuations. AI remains a key investment theme in the near term, with attention on domestically produced computing power and computing power leasing driven by supply-demand imbalance, as well as optical module and fiber optic cable segments with strong earnings certainty. Computing power supply-demand imbalance is intensifying, with computing power consumption expanding sharply and the three major cloud providers collectively raising prices. On one hand, the current supply-demand imbalance reflects robust demand in upstream chips and computing power leasing industries, with enhanced bargaining power driving price increases, benefiting domestic AI chip and computing power leasing producers. On the other hand, rising AI service costs will be transmitted to downstream application development, potentially accelerating downstream industry consolidation and improving computing power utilization efficiency. Changjiang Securities believed that geopolitical conflicts were accelerating the restructuring of global supply chains, enhancing China's irreplaceability as the "world's factory," and that related export chain and manufacturing leading assets may command a "scarcity premium." In terms of allocation, regardless of whether the Middle East conflict fluctuated, three main themes should be firmly pursued. First, the AI trend that conflicts could hardly alter — focusing on AI infrastructure such as computing power, storage capacity, and power equipment, as well as "HALO" asset opportunities. Second, the urgency of conflicts accelerating the energy revolution — focusing on new energy sectors such as lithium battery and hydrogen energy, as well as resource commodities including non-ferrous metals, oil, and coal. Third, sectors at cyclical bottoms where earnings were expected to gradually improve, such as chemicals, steel, and condiments. Data showed that the CSI A500 Index, closely tracked by A500 ETF South China, covered high-quality large- and mid-cap leading enterprises in A-shares, evenly distributed across core areas such as emerging manufacturing and consumption upgrading, with a focus on new quality productive forces. Investors could gain exposure through A500 ETF South China and its feeder funds in one step. A Huatai Securities research report believed that, with the rapid increase in demand for 800G and 1.6T optical modules in recent years and the approaching 3.2T era, the development opportunities for upstream core materials of optical modules were promising. It systematically reviewed the growth logic of two major industries — InP substrates and thin-film lithium niobate. InP substrates, as upstream core raw materials for optical chips, benefited from the rapid boost in demand from optical chip producers, with the industry showing an undersupply trend. Modulators made from thin-film lithium niobate, leveraging advantages such as low power consumption and high bandwidth, were expected to enter an adoption window in 3.2T pluggable solutions in the future, with broad growth potential across the industry chain. A Shanxi Securities research report indicated that NVIDIA made a $2 billion strategic investment in Marvell to cooperate on expanding the NVLINKFusion ecosystem. On March 31 local time, NVIDIA and Marvell announced a strategic partnership to connect Marvell with NVIDIA's AI factory and AI-RAN ecosystem through NVIDIA NVLINKFusion. Marvell would provide customized XPUs and NVLINKFusion-compatible expansion networks, while NVIDIA would provide supporting technologies, including Vera CPU, ConnectX NICs, Bluefield DPU, NVLINK interconnects, and SpectrumX switches, as well as rack-scale AI computing. Marvell is one of the world's leading ASIC custom service providers, with clients including AWS, Microsoft, and Google. It is a major global supplier of optical module DSP and EIC, and has focused on CPO deployment through the acquisition of CelestialAI. We believe that NVIDIA's strategic investment in Marvell is expected to enhance Marvell's design capabilities in memory semantics, high-speed SERDES, and super-node systems, and to facilitate the expansion of the NVLINKFusion ecosystem. NVIDIA's NVLINK Scaleup technology encompasses an overall solution covering NVLINK SERDES, NVLINK chiplets, NVLINK switches, and rack-scale expansion architecture (including NVLINK SPINE, copper cabling systems, innovative mechanical architecture, power supply, and liquid cooling technologies). NVIDIA unveiled a complete copper-connected rack-scale solution at GTC 2026, including Rubin NVL72, Rubin Ultra NVL144, LPX 256, and ETL 256. Shanxi Securities believed that Marvell's participation is expected to expand the addressable market for copper connectivity. NVIDIA has positioned CPO as one of the most important transformations in Feynman-generation Scaleup technology, and combined with Marvell's silicon photonics technology, we believe the CPO penetration rate is expected to gradually increase. Soochow Securities' research report commenting on Fujida noted: a leading player in China's RF connector industry. The company specializes in the R&D, sales, and services of connectors, cables, cable assemblies, and microwave components, holding a leading position in China and non-China markets. Since its establishment in 1998, the company has been deeply engaged in the RF interconnect field. Backed by AVIC Optronics (its controlling shareholder), it has gradually expanded from traditional general-purpose RF connectors to high-end new product categories, including RF cables (aerospace applications), advanced ceramic products (chip integrated packaging applications), and RF links (active and passive microwave components). In 2025, the company achieved revenue of 881 million yuan and net profit attributable to the parent company of 78 million yuan, up 15.5% and 52.0% YoY, respectively. The company has positioned itself in five core tracks, with broad prospects for high-end connectors: 1) Demand in the defense informatization sector remained strong, with new products showing considerable potential. 2) The civil aerospace satellite sector has become a new growth engine. 3) The semiconductor equipment industry urgently needs high-end RF/electrical connectors. 4) The domestic supply chain for high-end electronic measurement instruments is embracing opportunities. 5) High-speed copper cables and quantum communication cable products are benefiting from the data center construction boom. Large-scale growth in data center infrastructure is boosting high-speed transmission products to gradually evolve toward system-level solutions. The company's high-speed copper cables have achieved product category expansion around 400G components, reaching an internationally leading level; meanwhile, in the quantum communication field, the company has deployed cryogenic superconducting cables, achieved initial small-batch supply, and is expected to gradually achieve commercialization. Recommended Reading:

SMM April 20: Metals Market: As of the daytime close, base metals on the domestic market mostly rose, with only SHFE aluminum and SHFE nickel declining. SHFE aluminum fell 1.49% and SHFE nickel fell 0.9%. The rest of the metals rose, with SHFE zinc up 0.69% and the others gaining less than 0.6%. The alumina front-month contract rose 0.43%, while the casting aluminum front-month contract fell 1.31%. Additionally, the lithium carbonate front-month contract rose 2.6%, the silicon metal front-month contract rose 1.05%, and the polysilicon front-month contract hit the daily limit again during intraday trading, closing at 42,955 yuan/mt with a 9% gain. The Europe containerized freight front-month contract rose 0.38% to 2,103.2. Ferrous metals all rose except stainless steel, which fell 0.47%. Hot-rolled coil, rebar, and iron ore all gained over 1% (hot-rolled coil 1.17%, rebar 1.24%, iron ore 1.16%). Coking coal and coke: coking coal rose 2.77% and coke rose 2.27%. Overseas market, as of 15:07, all metals fell except LME nickel, which led the gains with a 1.36% rise. The rest declined, with LME copper leading the losses at 0.63%. Precious metals, as of 15:07, COMEX gold fell 1.5% and COMEX silver fell 2.67%. In China, SHFE gold fell 0.08% and SHFE silver rose 1.34%. Additionally, the platinum front-month contract fell 0.18% and the palladium front-month contract fell 0.18%. Market Data as of 15:07 Today Macro Front China: [NEA: Total Electricity Consumption Reached 2,514.1 billion kWh, Up 5.2% YoY, January-March] The National Energy Administration released March electricity consumption data. From January to March, total electricity consumption reached 2,514.1 billion kWh, up 5.2% YoY. By sector, the primary industry consumed 33.6 billion kWh, up 7.1% YoY. The secondary industry consumed 1,598.7 billion kWh, up 4.7% YoY; of which, industrial electricity consumption was 1,583.6 billion kWh, up 4.9% YoY, and high-tech and equipment manufacturing consumed 274.6 billion kWh, up 8.6% YoY. The tertiary industry consumed 483.3 billion kWh, up 8.1% YoY; of which, EV charging and battery swapping services and internet data services consumed 37.6 billion and 22.9 billion kWh respectively, with growth rates of 53.8% and 44.0%. Urban and rural residential electricity consumption was 398.5 billion kWh, up 3.4% YoY. [April LPR Unchanged: Both 5-Year and 1-Year Rates Held Steady for the Eleventh Consecutive Month] The April LPR was announced: PBOC kept the 1-year and 5-year LPR at 3% and 3.5% respectively, unchanged for the eleventh consecutive month. [Foshan's Commercial Housing "Trade-in" Policy Is Here! First Batch Involves 22 Residential Projects] Recently, the Notice on Organizing the First Batch of Commercial Housing "Trade-in" Program by the Foshan Municipal Housing and Urban-Rural Development Bureau was officially released. This is not merely an encouraging document; it is a solution that systematically clears bottlenecks in housing replacement through model innovation and a policy package. It aims to drive the real estate market's transition from "one-sided transactions" to a "virtuous cycle between existing and new housing stock," achieving a win-win outcome for residents, enterprises, and the market. The innovation of Foshan's trade-in policy lies in bringing multiple real estate enterprises into the program: Foshan Anju, Chancheng Anju, Nanhai Youju, Shunde Chengtie, Gaoming Airport Construction, and Sanshui Anju serve as acquisition entities, while Foshan Chengfa, Foshan Urban Renewal, Foshan Lianzhi, Heyue Yaji, Shunkong Chengtou, Yongdeli Commerce, Sanshui Chanfa, and Miaohui Real Estate provide new housing sources. This model determines the value of existing homes through negotiation, establishes a "contract termination protection period" to avoid blindly pushing for lower prices, thereby completing the "sell old, buy new" closed loop and serving as a market stabilizer. (Foshan Release) US Dollar: As of 15:07, the US dollar index rose 0.03% to 98.26. According to a CITIC Securities research report, US Fed Governor Miran and three other economists recently co-published a working paper titled "A User's Guide to Restructuring the Federal Reserve's Balance Sheet," whose structure bears similarities to the previously widely discussed "A User's Guide to Restructuring the Global Trading System." The paper challenges the conventional view that the US Fed cannot significantly reduce its balance sheet, arguing that reserve demand is largely determined by the regulatory environment and that balance sheet reduction can be achieved without causing unexpected market stress by adjusting the regulatory framework, curbing precautionary motives, and addressing other sources of reserve demand. Using Monte Carlo simulations, the paper estimates the potential balance sheet reduction space at $1.2 trillion to $2.1 trillion. We believe the "balance sheet reduction guide" has a certain degree of real-world feasibility, but some options are somewhat idealistic. (Jin10 Data APP) According to the CME "Fed Watch": the probability of the US Fed raising interest rates by 25 basis points in April was 0.5%, while the probability of keeping rates unchanged was 99.5%. The probability of a cumulative interest rate cut of 25 basis points by June was 4.5%, the probability of keeping rates unchanged was 95%, and the probability of a cumulative rate hike of 25 basis points was 0.5%. (Jin10 Data APP) On the macro front: Germany's March PPI month-on-month rate, Canada's March CPI month-on-month rate, and other data were to be released today. Also worth noting: German Chancellor Merz and European Central Bank President Lagarde delivered speeches; Trump said a US delegation would arrive in Islamabad on the evening of the 20th for negotiations, while Iran denied reports of a second round of talks being held in Islamabad. Crude oil: As of 15:07, oil prices in both markets surged, with WTI up 6.42% and Brent up 5.9%. Iran had once again closed the Strait of Hormuz, driving oil prices sharply higher. On the 19th local time, an Iraqi oil ministry official said the closure of the Strait of Hormuz would block the export of nearly 4 million barrels of Iraqi crude oil over the next three days. The Iranian Islamic Revolutionary Guard Corps Navy issued a statement on the 18th saying that, due to the US violating ceasefire commitments and failing to lift the naval blockade on Iranian ports and vessels, the Strait of Hormuz would be blocked starting that evening. (CCTV News) Gary Pedersen, head of trading house Gunvor, warned that the oil market was facing more turbulence as Middle East tensions collided with seasonal slowdown in crude oil demand, increasing the likelihood of further sharp and unpredictable fluctuations in crude oil prices. (Jin10 Data) The International Energy Agency forecast that global crude oil demand would decline by 1.5 million barrels per day in Q2, the largest drop since the COVID-19 pandemic. OPEC's forecast was relatively mild, projecting a daily decline of 500,000 barrels. (Jin10 Data) A CICC research report noted that as the Iran situation entered its 7th week, the situation saw a further turning point. Although the first round of peace talks "collapsed," both the US and Iran "announced" the reopening of navigation through the Strait of Hormuz, which still largely boosted optimistic sentiment in the market, despite subsequent reversals. This was largely in line with our base case assumption: while short-term reversals remain possible, a complete loss of control over the medium term is not the base case scenario, as Trump still has midterm elections to consider, and a comprehensive and uncontrollable escalation serves neither side's interests. Under this scenario, the Brent crude oil price center would gradually pull back to around $80 in Q2 and Q3, and the US Fed could still cut interest rates. (Jin10 Data APP) SMM Daily Review ► ► ► ► ► ► ► ► ► ► ► ►

According to analysts and Reuters calculations, in the nearly 50 days since the Iran war broke out, more than $50 billion worth of crude oil has failed to be produced globally , and the repercussions of this crisis will continue to manifest in the coming months and even years. According to Kpler data, since the crisis erupted at the end of February, more than 500 million barrels of crude oil and condensate have disappeared from the global market — the largest energy supply disruption in modern history. According to Reuters estimates, this is equivalent to nearly one month of US oil demand, or more than one month of oil consumption for all of Europe. Based on the US military's annual consumption of approximately 80 million barrels in fiscal year 2021, this would be enough to supply the US military for roughly six years. This fuel would be sufficient to sustain the global international shipping industry for approximately four months. Key facts: Gulf Arab states lost approximately 8 million barrels per day of crude oil production in March , nearly equivalent to the combined production of the world's two largest oil companies — ExxonMobil (XOM.N) and Chevron (CVX.N). According to Kpler data, jet fuel exports from Saudi Arabia, Qatar, the UAE, Kuwait, Bahrain, and Oman fell from approximately 19.6 million barrels in February to just 4.1 million barrels combined in March and April to date. According to Reuters estimates, the lost exports would be enough to support approximately 20,000 round-trip flights from New York's JFK Airport to London's Heathrow Airport. Johannes Rauball, senior crude oil analyst at Kpler, said that since the conflict broke out, crude oil prices have averaged around $100 per barrel, and the missing production represents approximately $50 billion in lost revenue . This is equivalent to 1% of Germany's annual gross domestic product, or roughly the entire GDP of relatively small countries such as Latvia or Estonia. Even if the Strait of Hormuz can be reopened, the recovery of production and shipping is expected to be very slow. According to Kpler data, global onshore crude oil inventory has declined by approximately 45 million barrels so far in April. Since late March, the scale of production shutdowns has reached approximately 12 million barrels per day. Rauball said that heavy oil fields in Kuwait and Iraq may take four to five months to return to normal production levels, which will lead to continued inventory drawdowns throughout the summer. Damage to refining capacity and Qatar's Ras Laffan liquefied natural gas complex means that a full recovery of regional energy infrastructure could take years.