[Imported Zinc Concentrate Market] Overseas ore supply disruptions have persisted recently. Offers for imported ore remained scarce this week, with some heard quoted at around -$80 to -$90/dmt, but smelters held a strong wait-and-see sentiment, keeping overall trading activity sluggish during the week.

This week, the MHP market was tight overall, with nickel and cobalt coefficients fluctuating at highs. On the supply side, sulfur supply shortages caused some producers to cut production, MHP supply declined, and transaction coefficients edged up slightly. On the demand side, downstream nickel salt prices weakened, the risk of losses persisted, and nickel salt smelters were relatively less accepting of high-priced MHP. However, with some recovery in downstream ternary demand, some producers had rigid purchase needs, supporting the strength of MHP nickel coefficients. Driven by tight supply-demand expectations, the market is expected to hold up well in the short term. The high-grade nickel matte market was also in a pattern of weak supply and demand. Currently, high-grade nickel matte has a clear economic advantage over MHP. However, on the supply side, mainstream suppliers have completed long-term order signing, leaving limited available spot supply. On the demand side, actual consumption capacity was insufficient due to limitations in downstream production line compatibility. Overall, purchase sentiment was weak, trading activity was low, and coefficients remained stable. The international sulfur market saw a shift in supply landscape, with geopolitical premiums gradually being cleared. The US and Iran signed and enacted a ceasefire memorandum on June 17, the Strait of Hormuz is expected to be gradually unblocked, the US has started lifting the sea blockade, and Iran will complete mine clearance within 30 days. However, many shipping enterprises have temporarily suspended the resumption of routes, making navigation recovery a gradual process. Coupled with Turkey's export ban extended to end-September and Russia's ban extended to June 30, short-term supply disruptions persist. As the strait unblocking progresses, sulfur prices are expected to gradually come under pressure and swing wildly at highs in the short term. Going forward, attention should be paid to mine clearance progress, the pace of shipping recovery, and the direction of the final agreement within 60 days. On the nickel price front, as the US-Iran reconciliation gradually progressed this week, market rate hike expectations faded, and non-ferrous metals generally rebounded. Against the backdrop of stable MHP payables and high-grade nickel matte coefficients, the absolute prices of MHP and high-grade nickel matte rebounded as nickel prices rose. Additionally, MHP cobalt prices and refined cobalt prices also rebounded. Overall, the intermediate product market is expected to hold up well in the short term. Cost side, the MHP raw material market remained tight. Under the combined influence of production cuts of intermediates caused by sulfur shortage and just-in-time procurement of ternary materials downstream, MHP payables fluctuated at highs this week. Nickel prices, the US-Iran situation released signals of reconciliation, market rate-hike expectations subsided somewhat, and the previously oversold nickel prices rebounded this week. Overall for the week, nickel prices rebounded, MHP payables held steady, and the spot cost of nickel salt production rose slightly WoW.

(Kitco News) – Even when real yields decline and the dollar weakens, gold prices could struggle to catch a bid as strong equity markets will continue to draw investors to risk assets, according to commodity analysts at Société Générale. The French banking giant cautioned that gold investors may be in for an extended period of muted ETF flows combined with a pause in central bank purchases. “The market is finely balanced, and the path of monetary policy remains the key variable for gold through its impact on real rates and the opportunity cost of holding a non-yielding asset,” they wrote. “Our analyst’s central scenario is driven by persistent inflation, oil-driven price shocks and a clear ‘higher for-longer’ rates regime.” SocGen analysts expect the world’s major central banks will remain cautious, with “the Fed on hold, the ECB still leaning hawkish, and the BoJ gradually tightening.” Going forward, the analysts see two potential macroeconomic paths. The first is “an AI-led, inflationary growth cycle keeping policy tight,” while the second involves “an energy-driven stagflation shock, particularly in the event of prolonged supply disruptions.” “Our analysts expect inflation across the US and Europe to stay elevated into early 2027 before moderating, providing only temporary support to gold’s hedge appeal,” they warned. “Crucially, they view policy stability rather than easing as the baseline, limiting upside for gold in the near term.” SocGen said they do expect some support to emerge later “as real yields gradually decline and the USD initially softens,” but they warned that even then, gold’s upside will be limited by “resilient global growth, strong equity markets and a continued investor preference for risk assets.” “On the demand side, subdued ETF inflows and constrained central bank activity limit the strength of financial demand, though a recovery is anticipated into 2027,” they added. “Physical demand, particularly jewellery, shows resilience in value terms and could provide marginal support as prices consolidate.” Source: https://www.kitco.com/news/article/2026-06-17/persistent-inflation-oil-driven-price-shocks-and-higher-longer-rates-will

June 16, 2026 The price of gold continues its recovery at the start of the week. The prospect of a peace agreement between the U.S. and Iran is pushing the price of oil below $80 per barrel, thereby easing concerns about inflation and interest rates. Despite the strong rebound, however, the technical picture remains weak. Hopes for peace provide relief via falling oil prices The U.S. and Iran plan to sign their peace agreement on Friday. For the price of gold, the resulting price slide in the oil market is currently the decisive driver, even overshadowing the dampening effect of easing geopolitical uncertainty. Falling energy costs reduce inflationary pressure and lessen the risk of further interest rate hikes. Gold has since pulled back significantly from its recent low of around $4,000 per ounce. Analysts, however, urge caution: political risks remain until the agreement is actually signed. A failure of the deal could quickly bring the $4,000 mark back into focus. In addition, the oil supply remains structurally tight. Since many governments drew heavily on their strategic reserves to stabilize prices during the conflict, buffers are now lacking. The oil market is therefore likely to react sensitively to new supply disruptions, which could quickly reignite inflation and interest rate concerns. Technical Analysis: Key Resistance Levels Ahead By successfully defending the $4,000 mark, gold has cleared its first hurdle. However, for a significant stabilization, the price must reclaim the 200-day moving average at around $4,450. Above that, the 50-day line awaits at around $4,581. A breakout above the interim high of May 12 at $4,773 is considered a decisive signal for a sustained upward trend. Focus on the Fed meeting Fundamentally, attention is turning to the Federal Reserve ’s first interest rate meeting under new Chairman Kevin Warsh. While the market continues to anticipate a potential rate hike by early 2027 at the latest, should Warsh signal that the Fed views the peace agreement as price-dampening and overlooks current inflation, this would provide significant relief for interest-rate-sensitive assets such as gold. For now, high real yields are limiting the precious metal’s upside potential. The current recovery of just over 3 percent underscores its high sensitivity to energy prices and interest rate expectations. Whether this leads to a genuine trend reversal now depends on the successful signing of the agreement, stabilization in the oil market, and upcoming signals from the Federal Reserve. Source: https://goldinvest.de/en/gold-continues-to-appreciate-hopes-for-peace-weigh-on-oil-prices-and-interest-rate-concerns

SMM nickel report on June 17: Macro and market news: (1) The US Fed held its FOMC meeting on June 16-17 and will announce its interest rate decision at 2:00 am tomorrow Beijing time. The market widely expects the rate to remain unchanged at 3.50%-3.75%. (2) The 2026 Lujiazui Forum opens in Shanghai today. The two-day forum, themed "Financial Development and Cooperation under the Global Governance Initiative," is co-chaired by the head of the National Financial Regulatory Administration and the mayor of Shanghai. Over 70 Chinese and foreign guests are attending, and multiple financial opening-up policies are expected to be released. Spot market: On June 17, the SMM #1 refined nickel price rose by 300 yuan/mt from the previous trading day. In terms of spot premiums, the average premium for Jinchuan #1 refined nickel was 1,400 yuan/mt, down 100 yuan/mt from the previous trading day. The premium range for mainstream domestic electrodeposited nickel brands was -600 to 400 yuan/mt. Futures market: The most-traded SHFE nickel 2607 contract moved sideways in the morning session, closing the morning session at 135,460 yuan/mt, down 0.22%. The US-Iran deal was reached, significantly easing geopolitical tensions in the Middle East. The tail risk of energy supply disruptions subsided, crude oil pulled back, dragging down global inflation expectations. Once shipping through the Strait of Hormuz resumes and the overseas sulfur supply crisis eases, nickel prices' cost support will weaken. Meanwhile, nickel prices remain capped by high inventory. In the short term, nickel prices are expected to trade in the range of 133,000-140,000 yuan/mt.

June 16 (SMM) — Metals market: As of the midday close, base metals on the domestic market mostly rose. SHFE copper fell 0.47%, SHFE aluminum lost 1.69%, SHFE lead gained 0.96%, SHFE zinc added 0.45%, SHFE tin climbed 1.17%, and SHFE nickel edged up 0.27%. In addition, the most-traded bonded aluminum futures contract dropped 1.03%, the most-traded alumina contract fell 0.48%, the most-traded lithium carbonate contract slid 2.4%, the most-traded silicon metal contract lost 1.6%, and the most-traded polysilicon futures contract tumbled 5.01%. Ferrous metals mostly fell. Iron ore dipped 0.2%, rebar declined 0.38%, HRC edged down 0.24%, while stainless steel surged 2.67%. In the coking coal and coke segment, the most-traded coking coal contract fell 0.74%, while the most-traded coke contract rose 0.1%. On the overseas base metals front, as of 11:39, LME metals showed mixed performance. LME copper fell 0.48%, LME aluminum lost 0.71%, LME lead gained 0.18%, LME zinc added 0.14%, LME tin dropped 0.63%, and LME nickel rose 0.34%. In precious metals, as of 11:39, COMEX gold fell 0.21% and COMEX silver lost 0.68%. On the domestic precious metals side, the most-traded SHFE gold contract gained 1.63% and the most-traded SHFE silver contract rose 1.65%. Additionally, as of the midday close, the most-traded platinum futures contract fell 1.44% and the most-traded palladium futures contract lost 1.33%. As of the midday close, the most-traded containerized freight index (European service) futures contract gained 1.42% to 3,834 points. Selected futures midday prices as of 11:39 on June 16: Spot and fundamentals Silver: In the spot market, overall quoted price spreads remained wide today. The consumer market showed overall weakness in mid-to-late June, with the continued rally in silver prices dampening some demand... Macro front China: [National Bureau of Statistics: Value-added of industrial enterprises above designated size grew 4.5% in May; national economy ran generally stable and progressed toward new, higher-quality growth] In May, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all regions and departments earnestly implemented the decisions and arrangements of the Central Committee and the State Council. They adhered to the general principle of pursuing progress while maintaining stability, fully and faithfully applied the new development philosophy on all fronts, accelerated the building of a new development paradigm, earnestly carried out more proactive and impactful macro policies, and effectively addressed external shocks and challenges. Production and supply rose steadily, employment and prices remained generally stable, foreign trade continued to demonstrate resilience, new growth drivers grew stronger, and the national economy sustained a development trend of overall stability while progressing toward new, higher-quality growth. NBS data showed that in May, the value-added of industrial enterprises above designated size grew by 4.5% YoY in real terms, with the growth rate accelerating by 0.4 percentage points from the previous month. On a MoM basis, the value-added of industrial enterprises above designated size increased by 0.40% in May. From January to May, it grew by 5.4% YoY. [From Scale Expansion to Resilience Allocation 《China Bulk Commodity Development Report》 Released] The China Federation of Logistics and Purchasing today (June 16) released the *China Bulk Commodity Development Report (2026)*. According to the report, China remains one of the most important import markets for bulk commodities globally, with imports of crude oil, iron ore, soybeans and other commodities staying at high levels. In the face of challenges, the bulk commodity market has shown enhanced resilience. The report indicates that China's bulk commodity market from 2025 to 2026 has generally exhibited a fundamental pattern of "macro pressure, market divergence, intensifying external shocks, enhanced trade resilience, and accelerated capacity building." China's bulk commodity trade is shifting from scale expansion to resilience-oriented allocation. In 2025, China's merchandise trade scale maintained relatively strong resilience, and major bulk commodity imports remained at high levels. Among them, imports of crude oil, iron ore, soybeans and other commodities continued to demonstrate the global absorption capacity of the Chinese market. (CCTV News) [PBOC Reverse Repo Net Injection Today of RMB 296.5 Billion] The PBOC today conducted RMB 449.5 billion of 7-day reverse repo operations. As RMB 153 billion of 7-day reverse repo matured today, the net injection reached RMB 296.5 billion for the day. As for the US dollar: As of 11:39, the US dollar index rose 0.02% to 99.69. According to the CME "FedWatch": the probability that the Fed keeps rates unchanged in June is 98.5%, with a 1.5% probability of a cumulative 25 bp rate cut. The probability that the Fed keeps rates unchanged through July is 91.3%, a cumulative 25 bp rate hike is 7.4%, and a cumulative 25 bp rate cut is 1.4%. Falconio Leslie, head of taxable fixed income strategy at UBS Global Wealth Management, said that after the US and Iran announced a deal, oil prices pulled back, the US Treasury market strengthened, and pressure on the Fed to raise rates this year was easing. Falconio Leslie said: "Even before the ceasefire agreement was reached, oil prices had already started to pull back, yet the two-year US Treasury yield continued to rise because the market had priced in a near-100% probability of a rate hike in December.""The current situation is that oil prices are falling, and the market is gradually withdrawing these rate hike expectations. As a result, the two-year US Treasury yield has started to pull back." The newly appointed Fed Chairman Wash will chair his first interest rate decision this week. Against the backdrop of earlier crude oil price surges reigniting inflationary pressures, voices within the FOMC supporting rate hikes this year have been increasing. Falconio said she expects the FOMC to formally drop its easing bias at this week's meeting, making the policy outlook more hawkish. But she still believes the Fed's next move will be an interest rate cut, and it will happen in 2027. US asset management company PGIM holds a fringe view, believing the Fed will hike rates three times this year to curb overheating, and then reverse the hikes in 2027 . The company had previously expected in April that the Fed would cut interest rates this year. PGIM stated that the US economy is "exceptionally strong" and inflation remains persistently high, requiring a new approach. Given this backdrop, and considering that the Fed has failed to achieve its 2% target for five consecutive years, PGIM expects the Fed to hike rates three times this year to bolster its credibility and anchor inflation expectations. PGIM said, "If the rate hikes are framed as 'precautionary' measures to address supply-side inflation and recent long-term Treasury yield fluctuations, then Wash will gain political support." However, PGIM said it expects the Fed "will reverse these hikes relatively quickly, with three rate cuts in 2027 and another in 2028, bringing the terminal rate to 3.375% — below the current rate and possibly close to the neutral rate." (Jin10 Data APP) In other currencies: The Bank of Japan raised its key rate by 25 basis points, lifting its target rate from 0.75% to 1.00%, the highest level in 31 years, in line with market expectations, after standing pat at its previous three meetings. The BOJ raised rates to the highest in 31 years on Tuesday, a long-awaited move signaling its commitment to tackling inflation risks from the Middle East conflict. At the end of the two-day meeting on Tuesday, the board voted 7-1 to raise the short-term policy rate from 0.75% to 1.0%. This marked the first rate hike since last December, bringing the BOJ's policy rate to a level not seen since 1995. BOJ Governor Ueda Kazuo was absent from the meeting and did not vote, as he was hospitalized for medical treatment. An afternoon press conference will be led by another BOJ deputy governor, Uchida Shinichi, and his remarks will be closely watched for how the BOJ will continue to assess the negative economic impact of the Iran war. (Jinshi Data APP) [RBA holds rates steady as expected, but warns rate hikes may not be over] The Reserve Bank of Australia kept the cash rate unchanged at 4.35% on Tuesday, saying the economy is slowing despite tighter financial conditions, but warned it could hike again if needed to control inflation. The RBA said inflation remains high and the central bank will do whatever is necessary to bring it down, "including by raising the cash rate target further if needed." Markets had already priced in a hold, as domestic inflation, consumption, and employment data continued to soften; meanwhile, the Middle East peace deal and moves to reopen the Strait of Hormuz have pushed oil prices lower, reducing inflation risks. The Board said in its statement: "The resolution of the Middle East conflict is still at an early stage, and there remain plausible scenarios where inflation is above, and activity is below, the expectations set out in the May baseline forecasts. It will take some time for global oil supply issues to be resolved, which will continue to put upward pressure on global energy prices and inflation." The unanimous decision was largely in line with expectations, with swap markets pricing in around a 30% chance of an RBA rate hike in August and only 16 basis points of tightening for the full year—equivalent to less than one hike. (Jinshi Data APP) On the data front: Today will bring the US weekly ADP employment change for the week ending May 30, US May housing starts annualized, US May building permits, US May import price index month-over-month, the Reserve Bank of Australia's interest rate decision for June 16, Germany's June ZEW economic sentiment index, the Eurozone's June ZEW economic sentiment index, Japan's central bank target rate for June 16, and other data. Also watch for: The State Council Information Office holds a press conference on national economic performance. The China Academy of Information and Communications Technology holds a seminar to launch the High-Quality Token Service Capability Climbing Plan. The RBA announces its rate decision, and RBA Governor Bullock holds a monetary policy press conference. On the crude oil front: As of 11:39, crude prices in both markets fell, with WTI down 0.09% and Brent down 0.26%. With the Trump administration about to complete the plan to release 172 million barrels from the Strategic Petroleum Reserve (SPR) to ease the surge in fuel prices triggered by the Iran war, the US emergency crude stockpile has fallen to its lowest level since 1983. According to data released by the US Department of Energy on Monday, the SPR—established after the Arab oil embargo in the early 1970s—has dropped to about 340 million barrels, near its all-time low. If the plan is completed, this will be the second-largest release in the history of the reserve, leaving about 243 million barrels, which is only around a third of its statutory capacity. The dwindling inventory reduces the US's flexibility in responding to future supply disruptions. A Department of Energy spokesperson said the government is managing the reserve in accordance with its intended use, which is to help stabilize the oil market, protect the US from supply disruptions, and make the US more energy-secure. (Jin10 Data App) Morgan Stanley sharply lowered its oil price forecasts for the coming quarters, as a tentative agreement between the US and Iran to reopen the Strait of Hormuz is expected to restore regional oil production and increase supply. Analysts including Martijn Rats said in a June 15 report that Brent crude is expected to average $90 per barrel in Q3, down from a previous forecast of $100 per barrel, and $80 per barrel in the final three months of the year, a decline of $15 from the earlier estimate. They also noted that the expected timeline for the region's production recovery has been moved forward by one to two weeks. "Many issues still need to be negotiated, and key risks remain, but this is a significant step towards de-escalating the conflict and boosting oil exports through the Strait of Hormuz," they said, adding, "Production is expected to resume gradually from mid-July, with output anticipated to recover to 50% by September, 80% by December, and the remainder early in 2027." (Jin10 Data App) Spot Market Overview: ► ► ► ► ► ► ► ► ► ► ► ►

SMM, June 15: Metal markets: Last Friday’s overnight session saw broad gains across base metals in and outside China, with only LME nickel edging down 0.03%. SHFE tin led the gains, rising 2.19%. LME copper, LME zinc, LME tin and SHFE zinc all gained over 1%: LME copper rose 1.02%, LME zinc rose 1.63%, LME tin rose 1.75% and SHFE zinc rose 1.48%, while the rest of the metals gained less than 1%. In addition, the alumina main contract rose 0.86% and the foundry aluminum main contract rose 0.45%. Last Friday’s overnight session for ferrous metals saw rises across the board except for iron ore, which fell 0.13%. Rebar rose 0.44% and HRC rose 0.59%. On the coking coal and coke front, coking coal rose 0.22% and coke rose 2.73%. Last Friday’s overnight session saw precious metals rebound collectively. COMEX gold rose 3.06% and COMEX silver rose 6.44%. However, due to notable earlier declines, COMEX gold still recorded a weekly loss of 2.87%, marking its second consecutive weekly drop. COMEX silver recorded a weekly loss of 1.42%, marking its fifth consecutive weekly drop. Domestically, SHFE gold rose 2.30% and SHFE silver rose 5.22%. SHFE gold posted a weekly loss of 6.79%, also marking its fifth consecutive weekly drop. SHFE silver plummeted 10.14% for the week, also marking a five-week losing streak. Bank of China issued an announcement, stating that global geopolitics and the US Fed's monetary policy are currently subject to considerable uncertainty. Under the influence of multiple factors, price fluctuations of precious metals in and outside China have further intensified. To protect the interests of clients involved in precious metals-related businesses—such as accumulated gold, accumulated interest gold, account precious metals, two-way account precious metals, and agency services for individual Shanghai Gold Exchange operations—the bank specifically reminds you to guard against market risks, engage in rational investment based on your own financial situation and risk tolerance, reasonably control your precious metals positions, mitigate the impact of short-term price fluctuations through long-term investment, and prevent the risk of capital losses caused by market volatility. As of 8:31 a.m. on June 13, the closing prices from last Friday’s overnight session are as follows: Macro front Domestic front: [PBoC: In the first five months, aggregate social financing rose by 1.748 trillion yuan; new loans stood at 911 billion yuan; May M2 increased 8.6% YoY] PBoC’s preliminary statistics show that the cumulative increase in the aggregate social financing scale for the first five months of 2026 was 17.48 trillion yuan, 1.16 trillion yuan less than the same period last year. Specifically, RMB loans extended to the real economy rose by 9 trillion yuan, a YoY decline of 1.38 trillion yuan; foreign currency loans extended to the real economy, converted into RMB, rose by 115.3 billion yuan, a YoY increase of 211.6 billion yuan; entrusted loans decreased by 103.1 billion yuan, a YoY increase in decline of 91.8 billion yuan; trust loans rose by 5.7 billion yuan, a YoY decline in growth of 57 billion yuan; undiscounted bankers’ acceptances decreased by 17.2 billion yuan, a YoY increase in decline of 151.4 billion yuan; net financing from corporate bonds was 1.67 trillion yuan, a YoY increase of 757.7 billion yuan; net financing from government bonds was 5.67 trillion yuan, a YoY decrease of 634 billion yuan; and domestic stock financing by non-financial enterprises was 230.5 billion yuan, a YoY increase of 79.9 billion yuan. In the first five months, RMB loans increased by 9.11 trillion yuan. By sector, household loans decreased by 631.4 billion yuan, of which short-term loans fell by 694.2 billion yuan and medium and long-term loans rose by 62.8 billion yuan; loans to enterprises and public institutions grew by 9.63 trillion yuan, with short-term loans up 3.77 trillion yuan, medium and long-term loans up 4.99 trillion yuan, and bill financing up 699.9 billion yuan; loans to non-bank financial institutions decreased by 279.7 billion yuan. PBOC data showed that at end-May, broad money (M2) stood at 353.67 trillion yuan, up 8.6% YoY. Narrow money (M1) totaled 114.89 trillion yuan, up 5.5% YoY. Currency in circulation (M0) reached 14.69 trillion yuan, up 11.9% YoY. Net cash injection in the first five months was 590.7 billion yuan. According to the PBOC website, to maintain ample banking system liquidity, on June 15, 2026, the People’s Bank of China will conduct a 600 billion yuan outright reverse repo operation through fixed-quantity, rate-based tender and multiple-price bidding, with a tenor of 6 months (183 days), maturing on December 15, 2026. US dollar: As of the overnight close last Friday, the US dollar index edged up 0.1% to 99.79, posting a weekly decline of 0.28%, with markets closely watching US-Iran peace talks. Multiple US media reported on the 12th that a senior US administration official said that day the US side is “80% to 85%” confident of signing a memorandum of understanding (MoU) with Iran within the coming days. The official also expressed confidence that Israel would support this US-Iran MoU. According to CNN, CBS and others, the official said on a press conference call, “We are not yet fully at the finish line, but we are very close.” The official noted that the specific venue and date for signing the MoU have not been determined, but US President Trump previously suggested signing it in a European country, which could be an option. (Xinhua) Iranian media reported on the 12th that Foreign Minister Abbas Araghchi stated that once the final stage of negotiations between Iran and the US is completed, the MoU will be signed and announced immediately. The first stage will be signed electronically remotely, “possibly within the next few days.” (Xinhua) HSBC analysts noted in a report that the US dollar exchange rate is currently below levels implied by market expectations for US interest rates. They said the dollar’s reaction has been relatively limited as market expectations recently shifted from anticipated rate cuts to potential rate hikes. They believe this may reflect loose financial conditions in the US and hopes for a resolution to the Middle East conflict. They stated that the dollar requires clear stimulus from monetary policy. If the US Fed fails to support rate hike expectations at this week's meeting, the dollar "could be in trouble." (Jin10 Data App) Traders expect the Fed to keep rates unchanged at 3.5%–3.75%, but see a more than 50% probability of a hike before year-end. Market pricing dialed back slightly after Thursday’s comments from Trump on a potential deal. In other currencies: ING analyst Chris Turner noted that for the EUR/USD exchange rate, the Fed’s upcoming policy meeting may matter more than the ECB’s Thursday rate hike decision. The ECB has signaled further tightening, with markets speculating about another hike in July. However, he stated that because the market has already priced in an aggressive ECB tightening cycle and is reluctant to push that expectation higher, EUR/USD remains below 1.16. Moreover, markets see a possible Fed hike later this year. He indicated that unless the Fed pushes back against this expectation at its Wednesday meeting, the dollar should stay firm. (Jin10 Data App) On the data front: This week, from China, the data to be released include China’s May total retail sales of consumer goods YoY, May industrial value-added above designated size YoY, May share of Swift RMB in global payments, May total electricity consumption YoY (TBD), and May total electricity consumption (TBD). From the US, releases will include the US Fed interest rate decision (upper bound) as of June 17, June NY Empire State manufacturing index, May industrial production MoM, June NAHB housing market index, weekly change in ADP employment as of May 30, May housing starts annualized, May building permits total, May import price index MoM, May retail sales MoM, April business inventories MoM, May pending home sales index MoM, initial jobless claims for the week ending June 13, June Philadelphia Fed manufacturing index, and May Conference Board leading index MoM. From the UK, releases will include May CPI MoM, May retail price index MoM, April three-month ILO unemployment rate, May unemployment rate, May claimant count change, Bank of England rate decision as of June 18, June GfK consumer confidence index, and May seasonally adjusted retail sales MoM. From the eurozone, releases will include April seasonally adjusted trade balance, April industrial production MoM, June ZEW economic sentiment index, May final CPI YoY, May final CPI MoM, and April seasonally adjusted current account. From Switzerland, releases will include the May consumer confidence index, May trade balance, and Swiss National Bank policy rate as of June 18. From Japan, releases will include the Bank of Japan target rate as of June 16 and May core CPI YoY. From Canada, releases will include April wholesale sales MoM and April retail sales MoM. Germany’s June ZEW economic sentiment index, Germany’s May PPI MoM, and the Reserve Bank of Australia rate decision as of June 16 will also be published. Additionally, on June 15, China will see the maturity of 218.5 billion yuan in 7-day reverse repos and 600 billion yuan in six-month outright reverse repos, the National Energy Administration is set to release data on nationwide electricity consumption around the 15th of each month, the National Bureau of Statistics (NBS) will publish the monthly report on residential selling prices in 70 large and medium-sized cities, and the State Council Information Office will hold a press conference on economic performance. The China Academy of Information and Communications Technology (CAICT) will convene a seminar to launch the High-Quality Token Service Capability Climbing Plan (tentative), and China's refined oil products will enter a new pricing window. On June 18, the US Fed's FOMC will release its interest rate decision and summary of economic projections, and Fed Chairman Warsh will hold a monetary policy press conference. ECB President Lagarde will deliver a speech. BOJ Deputy Governor Uchida Shinichi will hold a monetary policy press conference, and the BOJ will announce its interest rate decision. RBA Governor Block will hold a monetary policy press conference. The Swiss National Bank will announce its interest rate decision, and the Bank of England will announce its interest rate decision and minutes. The G7 Summit will open, running until June 17. In the Crude Oil Market: Last Friday, oil prices fell overnight in both markets, with US crude dropping 3.9% and Brent crude dropping 3.96%. Expectations for a US-Iran peace agreement continued to rise, putting oil prices under pressure and pulling them back. On a weekly basis, oil prices also declined, with US crude down 6.9% and Brent crude down 6.76%. In early trading in the US stock market, according to CCTV, Iranian Foreign Minister Abbas Araghchi said the Islamabad memorandum of understanding has never been this close to being reached, causing oil prices to plunge and US stock indices to extend intraday gains. Iranian Foreign Ministry Spokesperson Baghaei stated that the two sides have now reached an understanding on most issues, and Iran is in the final stages of consolidating the MOU text. At midday in the US stock market, CCTV reported that Pakistani Prime Minister Sharif Shehbaz said the final agreed peace agreement text has been completed, and the two countries are moving forward to implement the next steps. Oil prices continued to decline. During the session, US stocks briefly fell after Trump criticized Iran for leaking agreement terms, but then Wall Street News mentioned that the UAE has agreed to unlock large-scale funds to Iran, with the first tranche of about $3 billion already transferred, further boosting optimism about reaching an agreement. (Wall Street News) US Energy Secretary Wright stated that currently about 7 million barrels of oil and fuel pass through the Strait of Hormuz each day, a volume that accounts for about half of the stranded cargo when the Iran conflict first erupted. Wright said that no Iranian crude can currently be shipped through the Strait of Hormuz. He added that if an agreement is reached, he expects all products will be able to pass freely through the Persian Gulf. Wright also noted that if no agreement is reached, the US military will resume transportation along the route. Wright stated that the US will not impose an oil export ban to curb oil prices. (Jinshi Data APP) US Energy Secretary Wright stated on Friday local time that US refiners can still absorb more Venezuelan crude oil. Wright said that Venezuela currently sends about half of its total exports of 1.2 million barrels per day to the US, and this proportion could rise in the coming months. Wright also said that Iran is currently not exporting any oil or refined products. During the Middle East conflict, the US has actively filled the gap in oil exports. (Jinshi Data APP) Triggered by the most severe supply disruption on record from the Iran conflict, US emergency stockpile crude exports have surged to an all-time high. Customs data compiled by Kpler Ltd. show that nearly 22 million barrels of crude from the US Strategic Petroleum Reserve (SPR) have been sold to overseas markets so far this year. This volume has already surpassed the previous record set four years ago. Although exports of crude from the US emergency stockpile are not uncommon, the scale of shipments this year shows that, as the near-closure of the Strait of Hormuz triggers supply disruptions, global markets are increasingly relying on US supplies to weather the crisis. For every three barrels of crude released from the emergency stockpile, roughly one barrel is exported. The volume headed overseas could be even higher, as the Trump administration continues to release the full promised 172 million barrels of crude. This is part of a larger effort by the International Energy Agency (IEA) to help buffer the impact of the Iran war on global energy markets. (Wallstreetcn)

The World Bank notes in its latest Global Economic Prospects report that global economic growth is expected to slow down, weighed down by the impact of the Iran war, specifically with the 2026 growth rate projected to decline from 2.9% last year to 2.5%. The report also warns that if energy supply disruptions intensify, accompanied by significant financial stress, global economic growth in 2026 could slide further to 1.3%.

On June 9, a fire broke out at Chemical Grade Plant 3, or CGP3, at the Greenbushes lithium operation. The fire was quickly extinguished, no injuries were reported, and CGP1 and CGP2 continued to operate as normal. The following day, IGO confirmed that its FY2026 spodumene concentrate production guidance of 1.375–1.425 million tonnes remained unchanged. Chemical Grade Plant 4, or CGP4, is scheduled to commence construction in 2027. Viewed in isolation, this was a well-contained operational incident. However, the location of the fire deserves closer attention. CGP3 is not part of Greenbushes’ existing production base. It represents incremental supply currently ramping up at the far-left end of the global lithium cost curve. The project involved approximately A$880 million of investment and is designed to add around 500,000 tonnes per year of spodumene concentrate capacity. First ore was fed into the plant in December 2025, and the facility had originally been expected to reach nameplate capacity around mid-2026. The damage assessment is still under way. Neither the repair cost nor the recovery timeline has been quantified. The fact that production guidance remains unchanged should therefore be understood as an initial assessment rather than a definitive conclusion. The key question is not whether IGO has immediately revised its annual guidance. It is whether the CGP3 ramp-up schedule will be delayed. Should the market be concerned when an incremental production line at the world’s lowest-cost lithium mine experiences an operational disruption? To answer this question, it is useful to examine the role of Australian lithium mines in the broader lithium pricing mechanism. Note on the CGP3 ramp-up timeline: At IGO’s FY2026 second-quarter results briefing in late January 2026, management stated that CGP3 had received first ore in December 2025 and would require approximately five months to ramp up to nameplate capacity. Some English-language transcripts recorded management as referring to completion “by the end of the calendar year.” However, based on the timing of first ore feed, a five-month ramp-up period would imply completion around mid-2026, before the end of Australia’s FY2026 financial year. This is also consistent with the company’s previous guidance. The transcript may therefore have intended to say “by the end of the financial year.” This article adopts the mid-2026 ramp-up assumption. The timing is relevant because the June 9 fire occurred only weeks before the originally expected completion of the ramp-up. The actual impact should become clearer in IGO’s fourth-quarter report, which is expected in late July. Greenbushes: A Reference Point at the Bottom of the Cost Curve Greenbushes’ most important advantage begins with ore grade. It is one of the world’s largest and highest-grade hard-rock lithium mines currently in production. Its ore grade is approximately twice the industry average. For a spodumene operation, grade directly affects processing efficiency. To produce one tonne of SC6 concentrate, Greenbushes needs to process materially less ore than a typical mine. This provides a structural advantage across mining, beneficiation, energy consumption and tailings management. Greenbushes also benefits from scale. The operation currently has several processing facilities, with combined nominal ore-processing capacity of around 6.5 million tonnes per year and spodumene concentrate capacity of up to approximately 1.5 million tonnes per year. Once CGP3 completes its ramp-up, the mine will add a further 500,000 tonnes per year of concentrate capacity. With the mine life extended to 2045, Greenbushes combines low costs with long-term supply capacity. This explains the mine’s resilience during the lithium price downturn. During 2024 and 2025, lithium prices declined sharply. A number of higher-cost Australian mines and Chinese lepidolite projects faced production cuts or temporary shutdowns. Greenbushes, however, continued to maintain relatively strong profitability and moved ahead with the CGP3 expansion. Greenbushes does not represent the industry’s average cost. It represents the most competitive end of the global hard-rock lithium cost curve. For that reason, Greenbushes is better understood as a reference point for the bottom of the cycle. As lithium prices fall, higher-cost supply exits first, while low-cost assets remain in operation. The closer prices move toward the cost range of Greenbushes, the fewer marginal producers remain capable of operating normally, and the more advanced the supply-side clearing process becomes. This does not mean that lithium prices can never fall below the cost level of Greenbushes. In the short term, inventory pressure, liquidity conditions and market sentiment can push prices below the cost levels implied by the marginal supply curve. Greenbushes is not an absolute price floor. Its significance is that it provides a structural reference point for assessing how far supply-side clearing has progressed. Greenbushes: The Largest Producer, but with Limited Freely Traded Supply Although Greenbushes produces large volumes of spodumene concentrate, relatively little of that material enters the open spot market directly. The mine is operated by Talison Lithium. Talison is owned by Tianqi Lithium Energy Australia, or TLEA, and Albemarle. TLEA is in turn jointly owned by Tianqi Lithium and IGO. Greenbushes concentrate is primarily distributed through shareholder offtake arrangements and supplied into the downstream conversion systems of Tianqi, Albemarle and their respective partners. Under normal conditions, the material is not sold directly into the open market. Greenbushes therefore provides a useful example of why lithium supply should be analysed through several different layers: Resources → Design capacity → Actual production → Saleable volume → Freely traded spot volume Greenbushes ranks among the world’s largest producers by actual output. However, because most of its concentrate is locked into shareholder offtake arrangements, the amount available for open-market trading remains relatively limited. This means Greenbushes affects lithium pricing mainly through indirect channels. First, it determines the size of the lowest-cost portion of global lithium supply and therefore plays an important role in shaping the lithium chemical cost curve. Second, its operating costs, offtake pricing mechanism and expansion schedule provide reference points for long-term contract negotiations and price assessments in the spodumene market. By contrast, short-term spot prices are often more directly influenced by marginal resources that are not fully locked into shareholder arrangements and must actively seek buyers in the market. These include certain Australian mines, African lithium resources and trader-held cargoes. This explains an apparent paradox. An additional 500,000 tonnes of Greenbushes concentrate capacity can materially change the medium-term supply-demand balance, yet its immediate impact on the spot market may be limited. Meanwhile, the shutdown or restart of a marginal mine producing only 100,000–200,000 tonnes per year can quickly influence spot quotations and market sentiment if its output is sold on a market basis. Short-term pricing is not determined solely by total production. It is also shaped by the volume of material that is freely available for negotiation and immediate transaction. The same logic applies to lithium carbonate. Price elasticity depends not only on total inventory but also on how much inventory is genuinely available for circulation. The largest producer does not necessarily exert the most direct influence over the spot market. Short-term marginal pricing is usually driven by the resources that are tradeable, negotiable and available for immediate delivery. However, shareholder offtake does not mean that Greenbushes material is completely isolated from the market. If lithium conversion plants within the Tianqi or Albemarle systems reduce operating rates, or if downstream conversion assets experience operational issues, part of the concentrate originally intended for internal consumption may re-enter the market indirectly through tolling, resale or inventory adjustments. These volumes are rarely captured in public statistics, but they can affect the actual liquidity of the spodumene market. Tracking this material requires a broader set of indicators, including shareholder conversion-plant operating rates, concentrate inventories, tolling arrangements and import flows. This type of “shadow spot supply” is harder to observe than nominal mine production, yet it can become relevant at specific points in the cycle. SC6 and Lithium Chemicals: The Direction of Price Transmission Reversed Within a Year The relationship between Australian spodumene concentrate prices and Chinese lithium chemical prices has completed a full cycle over the past year. During the first half of 2025, spodumene prices followed lithium chemical prices downward. Australian miners reduced costs materially in the first quarter but largely avoided production cuts. Mining companies remained willing to ship material, and the price of SC6 concentrate fell to around US$620 per tonne. Falling concentrate prices then placed additional pressure on lithium chemical prices, reinforcing the downward cycle. At the time, the key market question was straightforward: When would the mining sector finally reduce supply? The direction of transmission reversed in the end of third quarter. The announcement that 27 mining licences in Yichun could be cancelled, together with the suspension of the Jianxiawo mine, tightened expectations around domestic Chinese lithium supply. Lithium chemical prices moved first. SC6 prices then followed, with greater elasticity. By December, the monthly average price had recovered to around US$1,300 per tonne. Formula-based pricing mechanisms linked to lithium chemical prices allowed mining companies to capture a large share of the upside, while Chinese converters saw their processing margins squeezed. At the same time, the impairment and expansion adjustments at the Kwinana lithium hydroxide project highlighted the challenges facing Australian downstream conversion. The project has faced difficulties in cost control, production ramp-up and operational stability. TLEA’s Kwinana lithium hydroxide refinery was fully impaired in mid-2025, the second train was suspended, and IGO made clear that it would prioritize mining. These developments reinforce Australia’s role as a supplier of spodumene concentrate rather than a major lithium chemical conversion hub. As a result, the relationship between SC6 prices and Chinese lithium chemical prices is likely to remain strong. However, the speed and magnitude of transmission will continue to depend on inventories, contract formulas, shipping cycles and converter operating rates. One of the most useful indicators is the implied conversion margin between SC6 concentrate and lithium chemical spot prices. When the implied conversion margin turns negative, Chinese converters purchasing third-party concentrate are effectively losing cash on incremental production. The market then needs to rebalance through at least one of three channels: Spodumene concentrate prices decline; Lithium chemical prices rise; Converters reduce operating rates. This indicator provides a useful way to judge whether bargaining power currently sits with the mining segment or the conversion segment. Australian Mine Restarts: Lithium Prices Develop an Upper Constraint The key theme for Australian lithium mines during 2024 and 2025 was supply-side clearing. In 2026, the theme has shifted toward reactivation. As lithium prices recovered during the first half of the year and futures briefly exceeded RMB 200,000 per tonne, a series of restart decisions emerged across May and June. Project Action Timing Key Point Bald Hill, Mineral Resources Restart after approximately 18 months of suspension Restart announced in May; first concentrate expected in July Restart cost of around A$20 million Ngungaju, PLS Processing plant restart Planned for July Approximately 200,000 tonnes per year of restored output Finniss, Core Lithium Final investment decision approved; financing secured Targeting first ore in the third quarter Financing package of approximately US$205 million Kathleen Valley, Liontown Expansion under assessment Ongoing Further details pending Mt Cattlin, Rio Tinto Remains suspended Suspended since March 2025 Restart conditions remain unclear Taken together, these cases show that the true threshold for mine restart is more complex than a simple comparison between lithium prices and cash costs. Bald Hill moved from restart announcement to expected first concentrate production in around two months. The mine had remained in a production-ready care-and-maintenance state, and Mineral Resources has its own mining-services platform, allowing it to mobilize mining, crushing and haulage internally without relying heavily on external contractors. This type of asset represents the fastest-reacting segment of supply when prices recover. Finniss is a different case. The project first monetized inventories through Glencore to improve liquidity, then assembled a financing package involving convertible debt, additional borrowings and equity issuance before reaching a final investment decision. For miners with weaker balance sheets, a restart is not simply an operational decision. It is a financing event. A low-price cycle does not eliminate the resource base. It eliminates the ability to finance production. The market impact of the restart wave is already visible. Lithium carbonate futures reached a two-year high of RMB 200,500 per tonne on May 13 before retreating to around RMB 160,000–170,000 per tonne in June. One reason for the pullback is that the market has begun to price in the return of idle supply. The mechanism is straightforward: Prices rise → Idle capacity restarts → Expected supply increases → Prices come under pressure The list of suspended Australian mines, once ranked by restart economics and response time, effectively becomes an upside supply curve for lithium prices. The CGP3 fire and the restart wave represent two sides of the same market. At the low-cost end of the curve, incremental Greenbushes supply has experienced an operational disruption, creating a bullish signal. At the higher-cost end, idle assets are returning to production, creating a bearish signal. From a resource perspective, lithium prices in 2026 are searching for equilibrium between these two forces. Lithium Prices in 2026 May Become More Volatile, but One-Way Trends Could Be Shorter Once prices rise, the factor that ultimately limits the upside is the speed at which idle capacity returns to the market. Bald Hill, Finniss and Ngungaju represent a broader pool of suspended or standby assets that can respond when lithium prices move sufficiently above their cash-cost thresholds and remain there for long enough. However, restart supply is not instantaneous. From the moment a restart is announced, companies need to remobilize personnel, inspect equipment, resume mining and processing, build concentrate inventories and arrange shipments. Depending on the asset, concentrate may enter the market within two months or only after several quarters. This delay creates a window during which supply disruptions can push prices higher. The suspension of the Jianxiawo mine and the CGP3 fire at Greenbushes matter not because global lithium resources have suddenly become scarce, but because short-term freely available supply has tightened while idle capacity has not yet fully returned. Compared with the previous cycle, this risk-premium window appears to be shortening. An increasing number of mines are being placed on care and maintenance rather than permanently closed. Mining-services companies, traders and downstream customers are also becoming more involved in restart financing and offtake arrangements. Once prices move back above the relevant breakeven levels, some idle assets can return more quickly. This does not necessarily mean lithium prices will become more stable. Supply disruptions can still trigger rapid price increases. However, the duration and magnitude of one-way rallies are likely to face stronger constraints from restart expectations. Prices may become more volatile in the short term, but sustained unilateral trends could become shorter. Conclusion Australian lithium mines influence lithium prices through several distinct channels. Greenbushes provides a structural reference point at the bottom of the hard-rock lithium cost curve. However, because most of its output is absorbed through shareholder offtake arrangements, it does not directly determine short-term spot pricing. Spot-market tightness is more directly influenced by marginal saleable supply: Australian mines, African resources and trader-held inventories that are available for negotiation and immediate transaction. Once lithium prices rise, the speed at which suspended assets restart becomes the key constraint on the duration of the rally. The framework can therefore be summarized in three lines: Low-cost mines provide a structural reference point for the bottom of the cycle. Freely traded supply determines short-term spot-market tightness. The speed of mine restarts determines how long an upside cycle can last. The CGP3 fire and the restart wave sit at opposite ends of this framework. One represents a disruption to low-cost incremental supply. The other represents the return of higher-cost idle capacity. Lithium prices in 2026 will continue to seek equilibrium between these two forces. Lesley Yang Senior New Energy Analyst, SMM yangle@smm.cn

On June 9, a fire broke out at Greenbushes Chemical-Grade Beneficiation Plant 3 (CGP3). The fire was quickly extinguished with no casualties, CGP1 and CGP2 continued normal operations, and IGO confirmed the next day that its FY2026 concentrate guidance of 1.375 million to 1.425 million mt remained unchanged. CGP4 is planned to commence in 2027. Judging solely by the announcement, this was a well-handled operational incident. However, the location of the fire warrants closer attention: CGP3 is not existing capacity but incremental capacity being ramped up at the far left of the global cost curve – with a total investment of about AUD 880 million, designed to add approximately 500,000 mt/year of concentrate capacity, and which only achieved first feed in December 2025 and was originally expected to reach full production by mid-this year. The damage assessment is still ongoing, repair costs and timetable are yet to be quantified, and the so-called "guidance maintained" is based only on information from the initial stage of the incident. What merits tracking going forward is not the guidance itself, but whether the timing of reaching full production will be delayed. At the world's lowest-cost mine, a new production line has had a minor incident – should the market be concerned? Today, I aim to break down and clarify this mechanism by analyzing the role of Australian ore in the lithium price formation. Note: Clarification on the timeline for CGP3 reaching full production. At its FY26 Q2 results briefing in late January 2026, IGO stated that CGP3 achieved first feed in December 2025 and that ramp-up to nominal capacity would take approximately five months. Some English transcripts recorded management's remarks as "completing ramp-up before the end of the calendar year" (end of the calendar year). However, based on the timing of first feed, five months corresponds to mid-2026, i.e., before the end of the Australian financial year (FY26), which is consistent with the company's previously disclosed guidance of "reaching full production in mid-2026." The transcript likely mistook "end of the financial year" for "end of the calendar year." This article adopts the "mid-2026 full production" timeline. This timing implies that the June 9 CGP3 fire occurred a few weeks before the originally scheduled full production, and the actual impact will be confirmed in IGO's Q4 report (expected in late July). Greenbushes: A Benchmark at the Bottom of the Cost Curve Greenbushes' most fundamental advantage lies first in its ore grade. It is one of the world's largest and highest-grade hard-rock lithium mines in production, with raw ore grade roughly double the industry average. For spodumene mines, grade directly determines mining and processing efficiency. To produce one tonne of SC6 concentrates, Greenbushes needs to process significantly less raw ore than typical mines, giving it natural cost advantages in mining, beneficiation, energy consumption, and tailings management. Building on its high-grade ore, Greenbushes also benefits from economies of scale. The mine site now hosts multiple beneficiation plants with a combined nominal processing capacity of approximately 6.5 million mt/year, supporting a maximum lithium concentrate capacity of up to 1.5 million mt; once CGP3 has fully ramped up, it will add roughly 500,000 mt of additional concentrate capacity. With the mine life further extended to 2045, Greenbushes not only possesses low-cost advantages but also strong long-term supply capability. This is why Greenbushes has demonstrated significant resilience during the lithium price downturn. From 2024 to 2025, as lithium prices continued to pull back, many high-cost Australian mines and Chinese lepidolite projects faced pressure to suspend or cut production, yet Greenbushes maintained relatively sound profitability and continued to advance the CGP3 expansion. It represents not the industry's average cost, but the most competitive end of the global hard-rock lithium ore cost curve. Therefore, Greenbushes serves as a useful benchmark for observing the industry bottom. When lithium prices fall, high-cost capacity exits first, while low-cost capacity continues to produce. The closer prices move to Greenbushes' cost range, the fewer marginal units of capacity can sustain normal operations in the market, and the nearer supply exits are to completion. Greenbushes Has the Largest Production, but Limited Free-Float Volume Although Greenbushes has a very large production scale, relatively little of its concentrates can enter the spot market directly. Greenbushes is operated by Talison Lithium, whose shareholders include TLEA and Albemarle, with TLEA jointly held by Tianqi Lithium and IGO. The spodumene concentrates produced at the mine are primarily allocated under shareholder offtake arrangements, flowing to lithium chemical production lines within the shareholder systems of Tianqi, Albemarle, and others, and are not normally offered for direct sale to the market. Viewed through the framework of [Resources – Designed Capacity – Actual Production – Saleable Volume – Available Spot Volume], Greenbushes is a very typical case. Its actual production ranks among the world's largest, but since most of its concentrates are locked up within its shareholder system, the volume truly available for market-based transactions is relatively limited. This also means Greenbushes' influence on market prices is mostly indirect. On one hand, it defines the scale of global low-cost lithium resource supply, which has an important impact on the lithium chemical cost curve; on the other, its operating costs, offtake pricing, and expansion pace also serve as key references for long-term lithium ore contract negotiations and price assessments. By contrast, what really influences spot lithium ore prices in the short term are typically the marginal resources not fully locked up by shareholder offtake agreements and needing to find buyers on the market. These include some Australian mines, African lithium ore, and saleable cargo held by traders. Therefore, while the addition of approximately 500,000 mt of concentrate capacity at Greenbushes will alter medium and long-term supply-demand expectations, its short-term impact on the spot market may not be particularly pronounced. In contrast, the suspension or resumption of a marginal mine with an annual output of over 100,000 mt that primarily sells on the open market could rapidly influence spot quotes and market sentiment. It is well known that short-term prices are not entirely determined by total output; rather, they depend more on the volume of material freely available for trading in the market. For example, lithium carbonate's price elasticity hinges more on the current available volume in the market. The mine with the largest output does not necessarily hold the most direct pricing power in the spot market; what truly dictates short-term marginal prices are typically resources that are available, negotiable, and require immediate transaction. However, shareholder offtake does not mean such concentrates are completely isolated from the market. When smelters within the frameworks of shareholders like Tianqi and Albemarle reduce their operating rates, or when some smelting lines operate erratically, concentrates originally intended for internal consumption may indirectly enter the market through toll processing, resales, or inventory adjustments. These cargoes are usually not publicly tallied but affect the actual circulating volume in the lithium ore market. Their tracking requires assessment by combining shareholder smelter operating rates, concentrate inventory, toll processing arrangements, and import flows. In analyzing Australian ore supply, such shadow spot cargoes are often harder to observe than a mine's nominal production, yet can significantly influence the market during specific phases. SC6 and Lithium Chemicals: Transmission Direction Reversed Once Within a Year The price transmission relationship between Australian ore concentrates (SC6, CIF China) and China's lithium chemicals has completed a full round trip over the past year. In H1 2025, ore prices followed the downtrend. In Q1, Australian mines aggressively cut costs but did not reduce production, showing a strong willingness to sell. SC6 fell all the way to around $620/mt, and the lower concentrate prices, in turn, pressured lithium chemicals downward, forming a spiral. The market's concern at the time was: When would mines finally be willing to cut? The situation reversed starting at the end of Q3. The announcement of Yichun's plan to cancel 27 mining rights, along with the suspension at Jianxiawo, tightened expectations for domestic resource supply. Lithium chemical prices moved first, and SC6 followed with an uptrend that proved even more elastic—by December, the average price had already returned to around $1,300/mt. Formula pricing, linked to lithium chemical prices, allowed the mining side to capture the bulk of the upside gains, while the tolling margins of Chinese smelters were instead compressed. Meanwhile, the impairment and expansion adjustments at the Kwinana project reflect that lithium chemical conversion in Australia continues to face high hurdles in terms of cost control, production ramp-up, and operational stability. TLEA's Kwinana lithium hydroxide plant was fully impaired in mid-2025, with the second-phase construction halted, and IGO has clearly shifted its priority to mining. The role of Australian ore in the industry chain has been refixed as a supplier of concentrates, and the linkage between SC6 and Chinese lithium chemical prices will only tighten going forward, not decouple. The implied smelting margin—calculated by multiplying SC6 by the processing coefficient and comparing it to spot lithium chemical prices—has turned negative, meaning Chinese smelters using externally purchased ore are losing cash. Either ore prices must pull back or lithium chemical prices must rise; one of the two is inevitable. This indicator is the most powerful gauge of whether mines or lithium chemicals hold more pricing power. Australian Mine Production Resumptions: Price Breaks Through the Ceiling The key words for Australian ore in 2024-2025 were market exits, while in 2026 they have become revivals. Lithium prices have been climbing steadily since the beginning of the year, with futures prices once surpassing 200,000 yuan/mt, triggering a series of production resumptions in May and June: Project Action Timing Notes Bald Hill (MinRes) Resumed production after an 18-month shutdown Announced in May, first concentrates expected in Jul Restart cost approximately A$20 million Ngungaju Plant (PLS) Restart Planned for Jul Resuming roughly 200,000 mt/year Finniss (Core Lithium) FID approved, financing secured Targeting first ore in Q3 Financing approximately $205 million Kathleen Valley (Liontown) Evaluating expansion In progress — Mt Cattlin (Rio Tinto) Remains shut down From Mar 2025 to present Restart conditions not yet clarified Looking at these cases together, the real threshold for resuming production is more complex than simply having prices exceed cash costs. Bald Hill took only about two months from announcement to first ore because it had maintained a production-ready state throughout the shutdown, and MinRes's own mining services division could internally mobilize all operations—mining, crushing, and transport—without needing to wait for external contractors. Assets of this type are the quickest-responding supply when prices rise. Finniss, by contrast, was an entirely different situation: it first sold inventory to Glencore in exchange for liquidity, then cobbled together three financing instruments—convertible bonds, debt, and a share placement—before reaching FID. For mines with fragile balance sheets, resuming production is not an operational decision but a financing event; what low-price cycles destroy is not resources, but financing capacity. The market consequences of the resumption wave are already visible. Lithium carbonate hit a two-year high of 200,500 yuan/mt on May 13, then pulled back to the 160,000–170,000 yuan range in June, partly because the market saw resumption supply coming back. The logic is straightforward: when prices rise, idle capacity resumes production, supply expectations increase, and prices pull back. That list of idle capacity in Australia, when sorted, essentially forms the supply curve above lithium prices. The CGP3 fire and this wave of production resumptions are actually two sides of the same market: disruption to the incremental supply at the far left of the cost curve is bullish, while idle capacity at the right end accelerating its return is bearish. Looking at lithium prices this year from the resource perspective, equilibrium is being sought between these two forces. Lithium prices in 2026 are expected to fluctuate more frequently, but one-sided market moves will be shorter. After prices rise, what truly caps the height of the rally is the speed at which idle capacity re-enters the market. Projects under care and maintenance or on standby, such as Bald Hill, Finniss, and Ngungaju, essentially constitute elastic supply above lithium prices. When lithium prices return above the cash costs of these projects and stay there long enough, mines have the incentive to resume production. But production resumptions do not happen instantly. From the announcement of a restart to the rehiring of personnel, equipment maintenance, resumption of mining and processing, inventory buildup, and finally, the entry of concentrates into the market, it typically takes from two months to several quarters. This time lag is the window during which supply disruptions can drive prices higher. The suspension at Jianxiawo and the CGP3 fire at Greenbushes were able to affect market sentiment not because of a sudden global shortage of lithium resources, but because of a reduction in short-term available supply while idle capacity had yet to return. Compared to the previous cycle, it is worth noting that the window for risk premiums arising from resource-side disruptions is shortening. A growing number of mines are opting for care and maintenance rather than permanent closure; mining service companies, traders, and downstream enterprises are also participating in restart financing and offtake arrangements. As long as prices return above the break-even line, some idle capacity can resume more quickly. This means that in the future, lithium prices may still rise rapidly following supply disruptions, but the duration and height of one-sided market moves will be more easily constrained by production resumption expectations. Prices may not necessarily become more stable, but supply feedback could be faster. SMM New Energy Analyst Yang Le