[SMM Tin Morning Brief: the most-traded SHFE tin contract opened slightly higher in the night session and then pulled back, while spot market trading was overall thin.]

SMM, June 17: Overnight, LME lead opened at $1,970/mt and fluctuated downward during the Asian session. After entering the European session, it dipped to $1,962/mt. On the eve of the US Fed’s interest rate decision, the US dollar index fluctuated lower, and LME lead released pressure and rebounded. It touched a high of $1,983.5/mt late in the session and finally closed at $1,982.5/mt, up 0.71%. Overnight, the most-traded SHFE lead 2607 contract opened higher with a gap at 16,350 yuan/mt, briefly touching a low of 16,320 yuan/mt in early trading. Boosted by the rise in LME lead, it touched a high of 16,425 yuan/mt late in the session. The KDJ opening widened, and it finally closed at 16,415 yuan/mt, up 0.64%. Transactions of cargoes self-picked up from production site at primary lead smelters weakened, while secondary lead smelters added new maintenance, leaving uncertainty on the supply side. Downstream battery producers maintained just-in-time procurement. Some enterprises, as their lead ingot inventory was sufficient for just-in-time production and supplemented by pick-up goods under long-term contract, stopped spot order purchases. With the Dragon Boat Festival holiday approaching, beware of the drag on lead prices from a market with both weak supply and weak demand.

[SMM Zinc Morning Meeting Minutes: LME Zinc Inventory Rises Notably, LME Zinc Center Moves Lower] Overnight, LME zinc opened at $3,579.5/mt, briefly rose to a high of $3,599/mt in early trading, then retreated from highs and fell all the way, dipping to $3,539/mt during the session. Then LME zinc rebounded slightly from the low to near the daily moving average and moved in a narrow range, finally closing down at $3,561.5/mt...

Futures: Overnight, LME lead opened at $1,970/mt, fluctuating downward during Asian trading hours; entering European trading hours, it dipped to a low of $1,962/mt. Ahead of the US Fed's interest rate decision, the US dollar index fluctuated lower, and LME lead shook off pressure and rallied, hitting a high of $1,983.5/mt at the tail end before finally settling at $1,982.5/mt, up 0.71%. Overnight, the most-traded SHFE lead 2607 contract opened higher with a gap at 16,350 yuan/mt, initially touching a low of 16,320 yuan/mt. Boosted by the rise in LME lead, it then touched a high of 16,425 yuan/mt at the tail end, with the KDJ gap widening, and finally settled at 16,415 yuan/mt, up 0.64%. On the macro front: Trump: ready to let the Russian oil sanctions waiver expire and lapse. World Gold Council survey: more central banks indicate plans to increase gold reserves. The Bank of Japan raised its policy rate from 0.75% to 1.00%, the highest level in 31 years; the central bank decided to suspend the reduction of bond purchases from April next year. Chinese Ministry of Foreign Affairs: the safe and free passage of the Strait of Hormuz serves the interests of all parties. China Central Depository & Clearing Co.: plans to reduce the settlement service fee for cash bond trades executed by market makers through market-making from 20% off to 25% off. National Bureau of Statistics: in May, the value-added of industrial enterprises above designated size grew 4.5%; from January to May, total retail sales of consumer goods grew 1.4%. NBS: in May, new home prices in first-tier cities rose 0.2% MoM; second-hand home prices in first-tier cities rose 0.4% MoM. Spot fundamentals: SHFE lead continued to hold up well, with suppliers' quotes remaining unchanged. Meanwhile, transactions for EXW cargoes from some smelters weakened. Mainstream electrolytic lead was quoted at discounts of 25 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price ex-works, with some even at a discount of 50 yuan/mt. In the secondary lead market, smelters showed divergent selling intentions. Secondary refined lead was quoted at discounts of 25 yuan/mt to premiums of 125 yuan/mt against the SMM #1 lead price ex-works. Downstream enterprises only made just-in-time procurement, with some mainly taking delivery under long-term contracts or receiving earlier-arriving cargoes. Spot market trading was sluggish. Inventory: on June 16, LME lead inventory decreased by 1,175 mt to 303,675 mt. As of June 15, social inventory of SMM lead ingots across five regions totaled 67,700 mt, up 3,000 mt from June 8 and up 2,300 mt from June 11. Lead price forecast for today: Transactions for primary lead EXW cargoes weakened. Secondary lead smelters experienced new maintenance, keeping supply-side uncertainties in place. Downstream battery producers maintained just-in-time procurement, and some enterprises stopped spot procurement as their lead ingot inventory was adequate for just-in-time production, supplemented by long-term contract cargo pick-ups. As the Dragon Boat Festival holiday approaches, beware of the drag on lead prices from a weak supply-demand situation.

In mid-June 2026, the CAAM and the China Power Battery Industry Innovation Alliance successively released relevant data on the automobile and power battery markets for May 2026. The CAAM stated that in May, auto production and sales rose MoM but edged down YoY. Affected by multiple factors including policy adjustments, changes in market structure, and a macro environment under pressure, the Chinese market continued to show a double-digit decline YoY; meanwhile, exports were strong and sustained rapid growth. .......SMM has compiled the relevant data on the automobile and power battery markets for May 2026, for readers’ reference. Automobile CAAM: May Auto Production and Sales Reached 2.616 Million and 2.629 Million Units, Both Up MoM In May, auto production and sales reached 2.616 million and 2.629 million units, up 1.6% and 4.1% MoM respectively , and down 1.2% and 2.1% YoY respectively. From January to May, auto production and sales totaled 12.235 million and 12.207 million units, down 4.6% and 4.2% YoY respectively, with the declines narrowing further compared with the first four months. CAAM: May NEV Production and Sales Rose 22.4% and 14.4% YoY Respectively; NEV Sales Accounted for 47.5% of Total New Vehicle Sales In May, NEV production and sales reached 1.554 million and 1.496 million units, up 22.4% and 14.4% YoY respectively . NEV sales accounted for 56.9% of total new vehicle sales. From January to May, NEV production and sales reached 5.841 million and 5.802 million units, up 2.5% and 3.5% YoY respectively, and NEV sales accounted for 47.5% of total new vehicle sales. CAAM: NEV Exports More Than Doubled in May and January-May In May, NEV exports reached 446,000 units, up 3.8% MoM and 110% YoY. Of these, passenger NEV exports stood at 435,000 units, up 3.4% MoM and 110% YoY; commercial NEV exports reached 12,000 units, up 21% MoM and 48.1% YoY. From January to May, NEV exports totaled 1.833 million units, up 110% YoY . Of these, passenger NEV exports were 1.792 million units, up 120% YoY; commercial NEV exports were 41,000 units, up 0.6% YoY. The CAAM commented that in May, auto production and sales rose MoM but edged down YoY. Affected by multiple factors such as policy adjustments, market structure changes, and a macro environment under pressure, the Chinese market continued to see a double-digit decline YoY; exports developed robustly, sustaining a rapid growth trajectory. By car model, passenger vehicle sales edged down YoY, commercial vehicle sales maintained growth, and the NEV market stabilized and rebounded. Since the beginning of this year, the auto market has exhibited a pronounced characteristic of "domestic demand under pressure, foreign trade strong." The industry's operations have faced multiple challenges, including insufficient domestic demand, high costs, and external shocks. On the end-user side, policies and market expectations should be stabilized, industry governance deepened, restrictive measures introduced cautiously, and the consumption baseline solidified; on the foreign trade side, it is necessary to deepen international development, effectively address various risks and challenges, and strengthen the stabilizing support role of the international cycle. Meanwhile, the CPCA also released data on the passenger vehicle market for May. From May 1st to 31st, retail sales of passenger vehicles nationwide reached 1.51 million units, down 22.1% YoY, but up 9.2% MoM; cumulative retail sales since the start of the year reached 7.099 million units, down 19.5% YoY. In the NEV segment, May NEV retail sales fell 7% YoY, with domestic brands declining 10%, mainstream joint ventures growing 51%, and luxury brands growing 8%. Domestic retail sales of domestic economy EVs were significantly impacted by the sharp drop in subsidies. Due to strong subsidies for NEV commercial vehicles, the low and mid-end MPV segment experienced a relatively large decline. In terms of NEV exports, passenger NEV exports in May reached 424,000 units , up 112.6% YoY and up 4.4% MoM. These accounted for 54.1% of total passenger vehicle exports, an increase of 9.5 percentage points compared to the same period last year. Among them, BEVs accounted for 59.3% of NEV exports (compared to 66.1% same period last year), with the core focal A00+A0 class BEVs accounting for 53.8% of BEV exports (compared to 50.7% same period last year). Alongside the emerging scale advantages of Chinese NEVs and the demand for market expansion, an increasing number of Chinese-made NEV branded products are going overseas, with their recognition outside China continuously improving. Among NEV exports, narrow-body plug-in hybrid vehicles accounted for 36.2% (compared to 31.9% same period last year), and extended-range EVs accounted for 4.4% (compared to 2.0% same period last year). Although external interference from certain countries has occurred recently, the export of domestic narrow-body plug-in hybrids to developing countries has grown rapidly and shows bright prospects. The CPCA stated that the domestic passenger vehicle market in May 2026 presented an operational dynamic of overall volume under pressure, MoM strengthening, and extreme structural differentiation, without achieving a substantive recovery overall. The slight recovery in the auto market in May was mainly attributed to the evident effectiveness of the industry's "anti-involution" efforts, stabilizing automaker sales promotions and weakening the consumer expectation of price cuts. This, combined with the warmth-boosting effect of the Beijing Auto Show, released some pent-up car purchase demand, forming a phased terminal rebound. It said that the core features of the auto market in May were the collapse of internal combustion engine vehicle domestic sales, the strong dominance of new energy vehicles, and the counter-trend growth of exports. The main cause of the domestic auto market decline was the sharp contraction in fuel vehicle sales under the impact of high oil prices. In May, fuel vehicles accounted for a 37.1% share, but their YoY decline contributed 82% of the total decline in passenger vehicles, dragging down the overall market trend. Factors such as high oil prices and consumption transformation accelerated the "fuel-to-electric substitution" process. This month, the retail penetration rate of new energy vehicles continued to exceed 60%, reaching a historical high of 62.9%. The electrification transformation of joint venture brands accelerated. In May, sales of new energy JV car models grew 51% YoY, while fuel vehicle sales fell 41% YoY. Exports continued to be the industry's core growth engine. In May, the share of new energy in exports hit a new high of 54%, but fuel vehicle exports also showed strong performance with 46% growth, forming an exceptionally strong performance of China's all-round export growth. Characteristics of the passenger vehicle market in May 2026: 1. Overall volume was under pressure, with major structural divergence, and "fuel cold, new energy hot" became the biggest focus. The core reason for the decline in domestic retail was the "fuel collapse," which drove the new energy retail penetration rate to break through 60% to 62.9% (a new high), with the pace of electrification substitution exceeding expectations. 2. The electrification transformation of joint venture brands accelerated. In May, domestic retail sales of mainstream JV new energy vehicles grew 51% YoY, while the overall growth rate of domestic new energy vehicles slowed by 10%. JV brands such as Buick (with new energy accounting for 45%) began to show initial results in their shift to new energy. 3. Exports showed explosive growth, with new energy accounting for 54% (a new high) in exports, driven by both new energy and domestic brands, and going global becoming the core growth engine. 4. Clear characteristics of passive destocking and a relatively rapid decline in channel inventories. Listed dealers suffered overall losses, and dealer survival pressure continued to increase. 5. Independent brands made notable breakthroughs in the high-end segment, with retail sales of passenger vehicles in the 200,000-300,000 yuan, 300,000-400,000 yuan, and above 400,000 yuan price segments all exceeding 50%. 6. Micro EVs were under pressure, A-class cars shrank, entry-level consumption badly needed support, and the launch of economy EV standards was eagerly anticipated. Power Battery Update In April, power and ESS battery sales grew 47.4% YoY. January-May cumulative sales grew 48.5% YoY. In May, China's power and ESS battery sales reached 182.2 GWh, up 11.0% MoM and 47.4% YoY . Among them, power battery sales were 127.0 GWh, accounting for 69.7% of total sales, up 16.6% MoM and 45.2% YoY; ESS battery sales were 55.2 GWh, accounting for 30.3% of total sales, down 0.1% MoM but up 52.7% YoY. From January to May, China's cumulative power and ESS battery sales reached 783.4 GWh, up 48.5% YoY . Of this, cumulative power battery sales reached 527.9 GWh, accounting for 67.4% of total sales, up 34.9% YoY; cumulative ESS battery sales were 255.5 GWh, accounting for 32.6% of total sales, up 87.7% YoY. May China power battery installations up 25.9% YoY, LFP share at 81.2% In May, China's power battery installations reached 71.9 GWh, up 15.2% MoM and 25.9% YoY . Ternary battery installations were 13.4 GWh, accounting for 18.6% of total installations, up 15.9% MoM and 27.3% YoY; LFP battery installations were 58.4 GWh, accounting for 81.2% of total installations, up 14.9% MoM and 25.4% YoY. From January to May, cumulative power battery installations in China reached 259.1 GWh, up 7.3% YoY . Ternary battery cumulative installations were 50.8 GWh, accounting for 19.6% of total installations, up 13.3% YoY; LFP battery cumulative installations were 208.2 GWh, accounting for 80.4% of total installations, up 6.0% YoY. May: Leap Motor dominated among NEV startups; BYD's export growth impressive In early June, May domestic NEV sales/delivery figures were released. BYD continued to lead the global NEV market with sales exceeding 380,000 units. Among domestic NEV startups, Leap Motor's outstanding performance once again ignited market enthusiasm, setting a new monthly delivery record with over 80,000 units! Details are as follows: BYD: According to its announcement, BYD sold a total of 383,453 vehicles in May, including 376,990 passenger vehicles. By brand: Dynasty/Ocean series sold 330,215 units; Fang Cheng Bao sold 30,186 units; Denza sold 16,303 units; Yangwang sold 286 units. From January to May, BYD's cumulative sales reached 1,405,039 units. The company's cumulative NEV sales surpassed 16.5 million units. BYD's sales recovery was mainly supported by exports. Data shows that in May, BYD's overseas sales reached 161,000 units, up 80.4% YoY. NEV Startups: In May, Leap Motor delivered 81,569 vehicles across its entire lineup, up 81% YoY, setting a new historical high for monthly deliveries. The company's NEV sales grew steadily, maintaining its lead. Leap Motor also performed excellently in Italy's pure electric vehicle market, with monthly registrations reaching 4,765 units, up 1,278% YoY, and its pure electric market share reaching a record high of 34.5%. NIO delivered a total of 37,705 new vehicles in May, up 62.3% YoY and 28.4% MoM. Specifically, NIO brand deliveries reached 20,013 units, up 50.8% YoY; Ledao brand delivered 12,029 units, up 91.5% YoY and 124.8% MoM; and Firefly brand delivered 5,663 units, up 53.9% YoY and 13.7% MoM. In the first five months of this year, NIO delivered a total of 150,526 new vehicles, representing a 68.7% YoY increase. To date, NIO's cumulative deliveries have reached 1,148,118 units. Li Auto ranked third among NEV startups with monthly deliveries of 33,350 units this time. As of May 31, 2026, Li Auto's cumulative deliveries reached 1,702,792 units. Li Xiang, Chairman and CEO of Li Auto, said that since Q1 this year, Li Auto's deliveries have entered a growth trajectory, reclaiming the top spot among Chinese brands in the NEV market priced above 200,000 yuan. As of May 31, 2026, Li Auto had 498 retail centers across China, covering 160 cities; and 543 after-sales repair centers and authorized service centers, covering 222 cities. Li Auto has put into use 4,088 Li Auto supercharging stations nationwide, equipped with 22,563 charging piles. XPeng Motors delivered 32,158 new vehicles in May. On May 20, the new technology flagship XPeng GX was officially launched and began deliveries. Within 12 hours of launch, firm orders reached 24,863 units, with the Ultra flagship edition accounting for over 80% of orders. Showroom traffic and test drive volume hit a record high for the same period of any new car launch, making it one of the most popular products among users in the high-end luxury car market and a key step in XPeng Group's brand elevation. In the global market, XPeng maintained strong momentum. In April, overseas deliveries of the P7+ commenced, and monthly overseas sales exceeded 6,000 units for the first time. As of the end of Q1, XPeng had entered over 60 countries and regions worldwide, with 393 overseas sales outlets. Starting from Q2, international business revenue contribution is expected to exceed 20%. In H2 this year, XPeng plans to deliver four global car models, aiming to achieve sustained monthly overseas sales of over 10,000 units in Q4 and more than double full-year overseas sales. Xiaomi Auto's monthly deliveries continued to exceed 30,000 units in May, and its cumulative deliveries surpassed 139,000 units from January to May. On June 13, the latest news, Lei Jun, Chairman of Xiaomi Group, posted on Weibo that Xiaomi Auto attaches great importance to testing, with massive investment and scale. Currently, the testing team consists of over 800 members, of which over 45% are experts with more than 10 years of experience. This team has conducted tests in more than 300 cities and completed over 35 million kilometers of cumulative testing. Xiaomi Auto has 126 laboratories across four cities—Beijing, Nanjing, Shanghai, and Wuhan—covering a total area of over 65,600 m². It has also rented two full-vehicle comprehensive testing grounds in Yancheng, Jiangsu, and Guangde, Anhui. There is a dedicated team of around 500 personnel for extreme environment testing. This team is split into summer testing and winter testing units and is mainly responsible for four major extreme environment tests: Heihe (extreme cold), Turpan (extreme heat), the Kunlun Mountains (high altitude), and Hainan (high humidity). Overall, Cui Dongshu, Secretary General of the CPCA, noted that the key features of the auto market in May were “sluggish domestic sales of internal combustion engine vehicles, strong dominance of new energy vehicles, and YoY growth in exports amid headwinds.” Based on the current industry situation, the CPCA adjusted market expectations, revising the decline in full-year domestic passenger vehicle retail sales to 11%, from the 1% decline forecasted at the start of the year. Cui Dongshu stated that the auto market will gradually stabilize and improve in Q3, return to a growth trajectory in Q4, and the full-year decline in domestic passenger vehicle retail sales is expected to narrow to 11%, with the market still holding recovery potential. If the global situation stabilizes, commodity and oil prices return to reasonable ranges, transportation costs subsequently pull back, domestic consumer confidence in car purchases will gradually recover, and the auto retail market will also see a sustained recovery. Looking ahead to June, the CPCA projects that China’s domestic passenger vehicle market in June 2026 will present a weak recovery pattern of “MoM recovery, YoY pressure,” with the market slowly mending based on its own fundamentals. As a month-end period, June sees automakers pushing for their semi-annual sales targets, with OEMs and end-user stores increasing order replenishment efforts, a key positive factor supporting MoM recovery. There will be 21 working days this month, forming a YoY advantage of one extra working day compared to the base of 20 working days in June last year, providing a positive boost to overall production and sales. However, based on past experience, during months when the World Cup is held, the auto market’s sequential performance tends to be weaker. It fell 7% MoM in June 2018, and by 4% MoM in both June 2010 and June 2014. The negative impacts from the previous reduction in passenger vehicle trade-in subsidies and the cooling of the industry price war have been largely absorbed, marking an end to negative policy factors and providing a foundation for market recovery. End-user pace, the auto market showed a “front-loaded and then stabilizing” trend. Combined with the month-end semi-annual sales push effect, the overall monthly trajectory was relatively steady. Notably, the Dragon Boat Festival holiday fell on June 19 this year, significantly later than its May 31 date last year. The concentrated disruption from holiday foot traffic and diverted consumer spending affected the market this month, slightly suppressing mid-month car ordering enthusiasm and partially offsetting some of the benefits from the semi-annual month-end sales push and extra working days. This emerged as a key seasonal factor influencing the monthly trend. It is worth noting that geopolitical conflicts have driven international oil prices to fluctuate at highs, causing the cost of using fuel vehicles in China to keep climbing. This not only directly suppresses the willingness to purchase fuel vehicles but also adds to residents' expenditure pressure, further weakening overall car purchase consumption power and becoming a core factor constraining significant YoY growth in the auto market. At the same time, however, high oil prices have also been continuously accelerating the transition to vehicle electrification. Coupled with the momentum of pushing for half-year targets at the end of June, automakers have introduced compliant concession policies such as interest subsidies and car purchase gift packages for new energy models. Together with the concentrated delivery of multiple new NEV models, the industry's product portfolio has been continuously improved, and strength on the supply side has increased substantially. Currently, industry inventory is being gradually and orderly digested, the vicious price war has largely subsided, and terminals are clearing inventory through mild sales promotions, making market competition trend toward a benign state. Driven by multiple favorable factors, the passenger NEV penetration rate is expected to remain firmly above 60%, with the electrification process continuing to accelerate, becoming the core pillar supporting the resilience of the auto market. Against the backdrop of sluggish domestic demand, automobile exports have become the core pillar of industry growth, creating a pattern of "weak domestic demand, leading overseas demand." Chinese automakers continue to deepen their presence in overseas markets, focusing on diverse markets such as Latin America and Europe, effectively offsetting the impact of declining demand in the Middle East, with export sales maintaining high growth. Relying on the mature domestic new energy industry chain and high-quality products, automobile exports continue to move upscale and upgrade across all categories, effectively offsetting the growth pressure in the Chinese market and supporting the overall stable operation of the industry. Overall, the Passenger Vehicle Association estimates that the auto market's recovery momentum in June will be limited, structural potential remains large, and the overall weak recovery trend will persist.

[Mg Market Trading Sluggish; Short-term Doldrums Persist Amid Supply-demand Stalemate]Today, 99.90% magnesium ingot prices in main production areas were quoted at 16,300-16,400 yuan/mt, a decline of 50 yuan/mt from the previous working day.

[SMM HRC Daily Trading Volume] On June 16, the total daily trading volume of hot-rolled coil among sample enterprises in SMM's four cities (Shanghai, Lecong, Tianjin, Ningbo) was 13,990 mt, down 1,000 mt day on day, or -6.8%, with Gregorian calendar YoY at -9.45% and lunar calendar YoY at +46.65%

HRC futures prices were in the doldrums today, with the most-traded contract closing at 3,382, up 0.29%. In the spot market, spot HRC prices saw a slight correction in many regions during the day, while cold galvanized prices were largely stable. On the news front, Zhangjiagang HRC inventory this week was 271,000 mt, down 2,000 mt WoW, a 0.73% decline. The pace of inventory decline in Zhangjiagang slowed WoW, with destocking gradually slowing recently due to weakening downstream demand. From a fundamental perspective, HRC inventory is expected to continue destocking this week. The accumulation of supply-demand imbalance in sheets & plates is limited. The market will likely follow raw material prices to trade sideways this week, awaiting inventory turning to build or a drop in hot metal output to trigger a supply-demand imbalance in raw materials.

[SMM Chrome Daily Review: Market Expectations Pessimistic, Transactions Continue Weak] June 16, 2026 – Ferrochrome and chrome ore markets fluctuate slightly...

While upstream MHP payables stayed high, auxiliary material prices such as sulphur and sulphuric acid continued to climb, and downstream ternary production schedules remained at high levels, the performance of battery-grade nickel sulphate prices was not optimistic. SMM believes this was driven by multiple factors, including weakening cost support, front-loaded downstream stockpiling, increased import supplementation, and higher volumes of nickel sulphate converted from refined nickel.