Supply glut, cautious demand, and fading cost support drag the benchmark contract down RMB 205/mt in the week of March 30 – April

Since the beginning of 2026, the lithium battery materials industry has seen a new wave of structural positioning led by chemical giants. In March, Dazhong Mining announced that it planned to sign a tripartite agreement with the Meishan High-tech Zone Administrative Committee and Wanhua Chemical (Sichuan) Battery Materials Technology Co., Ltd. to jointly invest in and build a “200,000 mt/year lithium chemicals project,” with Phase I expected to be planned at 30,000 mt.

In January 2026, the European Union and India reached a historic Free Trade Agreement (FTA), with the elimination of steel tariffs of up to 22% becoming a major market focus. However, clearing the policy fog of "bilateral exemptions" and analyzing actual export and carbon emission data reveals that the steel industry faces a highly asymmetric trade reshaping. This seemingly fair reduction is actually Europe trading a "capped" ticket for India's "uncapped" massive incremental market.

February 2026 proved to be a pivotal month of challenge and adjustment for the global stainless steel market. Driven by the compounding pressures of the Carbon Border Adjustment Mechanism (CBAM), intensifying geopolitical trade friction, significantly tightened raw material quotas, and sudden supply chain disruptions, the market navigated a complex landscape.

[SMM Analysis: Key Anchor in Great Power Rivalry: The U.S. "Project Vault" and the Changing Resource Landscape in Latin America] While the second phase of Chinese company's Mirador copper mine in Ecuador remains mired in a 'completed but awaiting approval' deadlock, 10,000 kilometers away in Washington, the President, alongside the Export-Import Bank of the United States, is announcing a historic supply chain security initiative named 'Project Vault.'

[ChinaIOL Commercial Air Conditioning Latest Data] In 2025, the sales scale of the central air conditioning industry reached 138.68 billion yuan, presenting a distinct pattern of "domestic cold, external hot." Among this, the domestic sales scale was 112.55 billion yuan, down 7.4% YoY, mainly affected by the sluggish real estate market, weak traditional engineering demand, and intensified price wars for equipment, with small and medium-sized brands facing particularly prominent operational pressure.

Although the China-U.S. dialogue in London sent a signal of easing tensions in rare earth magnetic material trade, the current situation in the industry is still marked by a contraction in short-term orders and a strong wait-and-see sentiment in the market. In the long run, Chinese magnetic material enterprises are leveraging this momentum to accelerate their transformation towards high-end and green development, with technological breakthroughs and supply chain restructuring becoming key bargaining chips for restarting cooperation in the future.

[Ford Motor: Temporary Production Halt at Some Plants Due to Rare Earth Supply Deficit] Ford Motor CEO Jim Farley stated that the company is still facing a supply deficit of rare earths, leading to temporary production halts at some plants. He revealed that after China implemented a new export approval mechanism, the supply of relevant materials has slowed down significantly, and the current situation is challenging. Ford's Explorer SUV plant in Chicago halted production for a week last month due to a shortage of raw materials. Although there has been positive news from the US-China trade negotiations, Farley noted that there has been no significant improvement in the supply of rare earths so far. He also mentioned that the company has submitted multiple export license applications to China's Ministry of Commerce, which are currently being reviewed one by one. (Gelonghui) [Yahua Group: Plans to Integrate Lithium Business Equity and Transfer It to Yahua Lithium Group] Yahua Group (002497.SZ) announced that to promote the rapid development of its lithium business, it plans to use its wholly-owned subsidiary, Sichuan Yahua Lithium Technology Co., Ltd., as a platform, rename it "Yahua Lithium Group," and transfer the equity of five subsidiaries involved in the lithium business to Yahua Lithium Group without compensation. (Cailian Press) [XTC New Energy Materials (Xiamen): Sales of New Energy Material Products Increased by Approximately 20.95% YoY from January to May] XTC New Energy Materials (Xiamen) (688778.SH) announced that from January to May 2025, the company's new energy material products achieved sales of approximately 47,600 mt, up approximately 20.95% YoY. Among them, LCO sales were approximately 22,300 mt, up approximately 53% YoY, and sales of ternary cathode materials (including LFP and others) were 23,600 mt, up approximately 2% YoY. (Cailian Press) [US Retail Sales in May Record Largest Decline Since the Beginning of the Year] US retail sales in May recorded the largest decline since the beginning of the year, indicating that new tariffs have curbed consumer spending, particularly on automobiles. Data released by the US Department of Commerce on Tuesday showed that after April's data was revised to a 0.1% decline, retail sales in May, unadjusted for inflation, fell by 0.9% MoM. Retail sales excluding automobiles declined by 0.3%. (Cailian Press) [Baoneng Auto Denies Being Liquidated and Dissolved] Baoneng Auto's customer service center WeChat official account issued a statement claiming that recently, some media have distorted facts and maliciously reported that the company and its affiliates have issued dissolution and liquidation announcements, disrupting online order and infringing on the company's legitimate reputation. 1. Although some companies are shown on the National Enterprise Credit Information Publicity System as "the enterprise has issued a dissolution announcement," "the enterprise has filed for liquidation group registration," or "the enterprise is making a business license invalidity declaration," among others, the company's operations remain normal, and new vehicles are expected to be launched soon. 2. Although some senior executives such as directors and supervisors have resigned, it does not affect the company's normal operations and business, and all operations are proceeding as usual without any impact. 3. Please refer to the group's official website for all business information and updates. (Cailian Press) [Xiaomi Auto: No Official Bulk Order Channels or Cash Subsidies Currently Available] Xiaomi Auto stated in its latest Q&A session with netizens on the evening of June 16 that there are currently no official bulk order channels or cash subsidies for Xiaomi Auto. The public is advised not to believe such information or engage in monetary transactions to avoid financial losses. For similar sales-related information, please carefully verify and refer only to official Xiaomi Auto channels. (Cailian Press) Related Reading: Major News in the Auto Market! May Passenger Vehicle Retail and Production Hit Record Highs—Is the Price War Sustainable? [SMM Analysis] Three Questions to Instantly Understand ESS [SMM Analysis] Official HS Codes for Black Mass Imports/Exports—How Will It Impact Domestic Lithium Battery Recycling Firms? [SMM Analysis] Automakers Cut Payment Terms to 60 Days—A Major Shift in the Auto Supply Chain [SMM Analysis] Breakthrough in Portugal’s Lithium Mine Project—Europe’s Largest Spodumene Deposit Enters Fast-Track Development Weekly Summary of the LFP Market in June [SMM Lithium Battery Market Analysis] [SMM Analysis] Behind the 60-Day Payment Promise—Suppliers’ Bittersweet Expectations Cobalt Product Prices Continue to Fall—Co3O4 Drops $7,650 in a Single Week—Will the Decline Stop Next Week? [Weekly Review] [SMM Analysis] Rio Tinto Partners with Codelco to Enter Lithium Triangle—$900 Million Investment in World-Class Salt Lake Project [SMM Analysis] Separator Prices Remain Stable [SMM Analysis] Raw Material Drags Prices Down—Policy Window May Trigger a Rebound Battery and Solid-State Battery Sectors Rally Again—Multiple Automakers Announce Latest Progress—Lopal Shares Surge Nearly 6% [Hot Stocks] [SMM Analysis] May Cathode Material Production Rises MoM—Weak End-Use Demand Growth [SMM Analysis] Rising Demand—May Anode Material Production Increases [SMM Analysis] May Co3O4 Production Rises MoM—Industry Adopts Cautious Wait-and-See Approach Cobalt Product Prices Fall Across the Board—Cobalt Chloride Smelter Quotes Hold Firm—Will High Volatility Continue? 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SMM Analysis：As Q2 draws to a close, SMM has learned that the operating rate of domestic galvanized sheet production in May declined by 1.1% MoM. With the arrival of the off-season, what are the market expectations for June? Can the relevant operating rates be sustained.....

[SMM Analysis: "How is the performance of galvanized sheet in June amid the ongoing digestion of 'rush to export' orders?"] As Q2 draws to a close, SMM has learned that the operating rate of domestic galvanized sheet production declined by 1.1% MoM in May. With the arrival of the off-season, how is the market expecting June to perform? Can the relevant operating rates be sustained?...