In Q2 2026, the solid‑state battery industry reached a critical policy and standards inflection point. China’s MIIT designated all‑solid‑state batteries as a key R&D priority, and the world’s first national standard for automotive solid‑state batteries (GB/T 43568‑2026) took effect on July 1.

H1 2026 silver saw a sharp spike to 30,900 yuan/kg in January, then plunged 55% to 13,816 yuan/kg by June, driven by squeezed spot liquidity and Fed policy reversal from easing to hawkish. Supply grew steadily; PV silver demand fell 21% YoY. H2 outlook: wait for inflation signals and Fed pivot, silver likely remains under pressure.

In H1 2026, silver experienced an extreme market trend marked by a sharp-peaked inverted-V and stepwise decline, driven by the interplay of two main themes: a spot silver squeeze anomaly and a shift in US Fed monetary policy. After hitting an all-time high of 30,900 yuan/kg in January, silver prices pulled back trend-wise to 13,816 yuan/kg in June, as interest rate cut expectations reversed and hawkish signals strengthened, representing a 55% pullback from the peak. On the supply side, silver ingot production rose 6.9% YoY, and imports surged before returning to normal. On the demand side, PV silver demand fell 21% YoY, with industrial demand taking over from investment as the main driver. In H2, attention will focus on the inflation turning point and marginal changes in the US Fed's policy; silver prices are expected to consolidate on a subdued note.

Production-wise, China's cumulative production of lithium battery separators from January to June was approximately 17.416 billion m², of which wet-process separators accounted for 15.005 billion m², or 86.16%, and dry-process separators accounted for 2.411 billion m², or 13.84%.

In the second half of last year, ahead of the halving of the NEV purchase tax rebate, ternary cathode orders climbed steadily, hitting record highs month after month. At that time, the market generally expected ternary demand growth for 2026 to be within 10%. But the actual results for the first half of this year came in much stronger. According to SMM, domestic ternary cathode production reached 493,000 metric tons in H1 2026, up 40% YoY, while global ternary cathode output reached 611,500 metric tons, up 24% . Meanwhile, CAAM data shows that NEV sales in China (including exports) reached 7.445 million units in H1 2026, up only 7% YoY, with domestic sales actually contracting by 13%. Given such modest growth in vehicle sales, where did the strong performance of ternary cathode come from? The answer lies in two key factors: a rising share of premium vehicle models and a rapid increase in battery capacity per vehicle . The halving of the purchase tax rebate has had a greater impact on low-priced vehicles. For A00-class models priced under RMB 50,000, the exemption was a major selling point—now, buyers face an additional tax payment of several thousand yuan, significantly eroding their cost advantage. In contrast, for mid-to-high-end models priced between RMB 200,000 and 300,000, the RMB 15,000 rebate cap still covers most of the tax, so the actual cost increase perceived by consumers is limited . At the same time, trade-in subsidy rules shifted from a fixed-amount structure to a tiered system based on the new vehicle price—higher-priced purchases yield subsidies closer to the cap, effectively steering consumer demand toward the premium segment . As a result, the share of B-segment, C-segment, and SUVs in China's NEV passenger car mix rose from 68.3% in 2025 to 73.6% in H1 2026—and these are precisely the models that predominantly use ternary battery cells. The rising share of premium models also directly lifted average battery capacity per vehicle . In May, the average battery capacity of BEV passenger cars reached 62 kWh, up 11% year-on-year, while PHEV passenger cars reached 37 kWh, up 37%. While automakers have been proactively increasing battery sizes to meet market demand, the more significant driver has been the compositional shift toward premium vehicles. This explains the apparent paradox: vehicle sales growth has been moderate, yet cathode material demand has surged—the key lies in the increase in battery capacity per unit . Overseas markets also contributed to the growth. European NEV sales rose approximately 30% year-on-year in the first half of the year, supported by local subsidy policies, high oil prices that favor NEVs, and the aggressive expansion of Chinese brands. Given that ternary batteries still account for more than 60% of Europe's NEV passenger car market , leading battery manufacturers serving the European market—such as CATL, EVE, AESC, and LGES—have maintained high procurement volumes of ternary cathode materials from China this year. Another notable feature of this year's production schedule has been its atypical seasonal pattern, largely influenced by raw material price volatility and policy shifts. On the raw material front, pricing between domestic ternary battery manufacturers and cathode producers is generally settled using a M-1 month metal price mechanism. This gives battery makers a strong incentive to build inventories ahead of anticipated price increases . For instance, in January, the SMM average monthly price of lithium hydroxide (coarse grains) surged to RMB 147,100 per ton, but the settlement price referenced the December price of RMB 88,800 per ton. This translated into a cost saving of more than RMB 26,000 per ton of cathode material, which is why production remained robust even during a traditionally slow month. A similar pattern played out in May, when the monthly average lithium hydroxide price rose by about RMB 20,000 per ton from the previous month, prompting another wave of restocking and driving cathode orders beyond expectations. On the policy side, the most significant impact came from the removal of the VAT rebate on ternary cathode exports, which pulled a large volume of export orders forward into Q1, breaking the typical seasonal slowdown. Domestic production in Q1 reached 236,000 metric tons, up 47% YoY. Notably, after the rebate was officially withdrawn, overseas orders did not drop sharply—Q2 still posted 34% YoY growth. This resilience can be attributed to two factors: first, overseas battery makers remain heavily reliant on Chinese cathode suppliers , who offer clear advantages in product quality, stable mass-production capabilities, and cost, making it difficult to switch suppliers in the short term. Second, overseas end-market demand remains solid , with popular models in Europe (Volkswagen ID series, BMW Neue Klasse, Renault, Hyundai IONIQ series, Tesla, etc.) and key models in Japan and Korea (Toyota, Hyundai, Kia, Tesla, etc.) continuing to rely on ternary chemistries. With order books full and procurement needs urgent, customers have little room to qualify new suppliers, which has only reinforced existing partnerships. Looking ahead to the second half of the year, the upcoming removal of the VAT rebate on lithium battery exports next year is expected to bring some orders forward into 2026. However, the market has already priced this in, and battery manufacturers have ample time to plan their inventory strategies, so a concentrated surge similar to the one seen ahead of the ternary rebate cancellation is unlikely. The purchase tax rebate will remain at the halved level next year and will not be fully phased out until the year after, so there is no additional pull-forward effect for Q4 2026. With orders already exceeding expectations in the first half and battery makers continuing to build inventories, the traditional "Golden September-Silver October" peak may be less pronounced this year. Still, seasonal patterns persist, and the market's inherent restocking momentum remains, so Q4 still warrants attention. SMM currently forecasts: 1.02 million metric tons of domestic ternary cathode production for 2026, up 24% year-on-year; 240,000 metric tons overseas, down 2%; and a global total of 1.26 million metric tons, up 18% .

On the macro front , this week the market revolved around the US-Iran situation and US Fed policy expectations. At the start of the week, the US-Iran conflict escalated again, with rising crude oil driving inflation concerns higher. Coupled with the hawkish Fed meeting minutes, the US dollar and US bond yields strengthened, putting copper prices under pressure. Towards the end of the week, as oil prices pulled back and the possibility of progress in US-Iran talks remained, market sentiment partially recovered, and a weaker US dollar drove a rebound in copper prices. Overall, geopolitical tensions and expectations for Fed interest rate hikes repeatedly disrupted the market, with copper prices showing a pattern of first falling then rebounding, consolidating at highs. Fundamentals side , this week spot supply in China remained tight, arrivals of imported and domestic material were limited, and combined with the impact of weather and transportation, downstream users stockpiled in advance, leading to a significant decline in social inventory. As of July 9, SMM copper inventories in mainstream China regions fell by 34,900 mt WoW to 165,000 mt, while spot premiums and the price spread between futures contracts strengthened simultaneously. On the demand side, downstream purchases increased when copper prices pulled back, but trading weakened again after prices rebounded; overall, it remained dominated by restocking for immediate needs. Looking ahead to next week , on the macro front, the focus will be on US CPI, PPI, and retail sales data. If inflation remains strong, expectations for US Fed interest rate hikes heating up could weigh on copper prices; the US-Iran situation and transit through the Strait of Hormuz may still bring fluctuations. Fundamentals side, low inventories and tight supply will provide support for prices, but high copper prices will constrain demand improvement. Copper prices are expected to continue moving sideways at highs next week, with the center tilting slightly upward, while attention should be paid to import arrivals and inventory changes after delivery.

I. AI Computing Expansion — Unlocking a Second Growth Curve for Tin The massive global rollout of AI infrastructure and data centers has quietly brought tin into the spotlight as the essential "Computational Solder." "Tin's low melting point (232°C), excellent electrical conductivity, and reliable joint strength make it an irreplaceable baseline material for electronic interconnects. Currently, about 53% of global refined tin is used for solders, with electronics accounting for 70% of that share. This directly covers core AI hardware components, including server chip packaging, high-speed optical modules, and PCB board-level interconnections. According to SMM, every GW of installed AI data center capacity requires approximately 1,200 to 1,500 tons of tin . The breakdown is roughly: · Servers/GPUs/Networking: 500–1,500 tons · Power and Switchgear: 100–400 tons · Control/Comms/Cooling: 50–200 tons Global AI computing installations are projected to grow at a 24% CAGR from 2025 to 2030, with a significant 65% year-over-year jump expected in 2026. The explosive demand for tin stems from a massive gap in usage between AI servers and traditional servers. Driven by massive capital expenditure from US and Chinese cloud giants (AWS, Azure, GCP, Alibaba, Tencent, ByteDance), global AI server shipments are projected to hit 2.13 million units in 2025 and exceed 4 million by 2026. Consequently, data indicate that AI sectors now drive 60–70% of the growth in global tin consumption (including servers, AI PCs, optical modules, advanced packaging etc.), cementing its status as a core computational metal. Data Source: SMM II. Unit Tin Consumption in Computing Scenarios — Volatile Upward Trend and Long-Term Plateau Understanding the demand resilience of tin in computing scenarios requires clarifying a key premise: Over 90% of tin in computing applications exists as solder, primarily lead-free systems such as tin-silver-copper alloys SAC305 and SAC105. This metric dictates two core logics. First, in the board-level soldering process, there is no mature path for aluminum materials or optical interconnect technologies to directly replace tin-based solder. The physical and chemical properties of tin, including a low melting point, high conductivity, and reliable wettability, possess structural rigidity in electronic soldering scenarios. Second, in the short to medium term, HBM stacking increases solder joint density. Even if hybrid bonding scales up in certain advanced packaging after 2030, it will only form localized substitution. Overall, the unit tin consumption curve presents a pattern of a volatile upward trend followed by a long-term plateau: Data Source: SMM → 2025 to 2027: Rapid Upward Phase in Unit Consumption The current phase features a steep increase in unit tin consumption for AI servers. Three parallel technological drivers are overlapping during this period. Jump in PCB Layer Count and Area: AI server motherboard layer counts have increased from the traditional 8 to 12 layers up to 16 to 20 layers, and sometimes 30 layers. The PCB area has reached 3 to 5 times that of traditional machines. Multilayer boards result in a geometric increase in solder joints. Based on high-end AI server motherboard configurations, the incremental tin usage related to PCBs for a single AI server can reach up to approximately 1.32 kg. Generational Upgrades in HBM Stacking: As HBM3E advances to HBM4, the stacking layer count evolves from 8Hi to 12Hi and 16Hi. The number of micro-bumps between a single GPU and HBM reaches the hundreds of thousands, with spacing narrowing to 10 to 15 μm. The usage of BGA solder balls increases multiplicatively with I/O density. Each additional HBM stacking layer adds thousands to tens of thousands of micro-bumps, and every connection consumes tin-based solder. Leaps in Optical Module Speeds: 800G and 1.6T optical modules are entering a period of scaled production. The internal pad spacing of high-speed optical devices is only tens of micrometers, requiring specialized solder paste made from Type 4 to Type 8 ultra-fine tin powder. Although the tin consumption of a single optical module is small, in a 10,000-card intelligent computing center, optical modules are counted in the tens of thousands, providing clear elasticity in total volume. → 2028 to 2029: Unit Consumption Enters a Plateau During this period, the growth of tin consumption will be driven more by the scale of installation volumes. Post-2028, the upward momentum of unit tin consumption is expected to weaken marginally. The penetration rate of integrated AI rack architectures, such as NVL72 and GB200, is projected to rise from approximately 32.5% in 2026 to about 53.8% in 2030. After Scale-Up architectures replace a portion of traditional 8-GPU servers, the tin consumption per rack is expected to stabilize roughly in the 3.7 to 4.7 kg range, lacking clear upward catalysts. In advanced packaging, Chiplet and 2.5D/3D CoWoS continue to penetrate, but tin usage for single-chip micro-bumps is already approaching the tens of grams level, slowing the marginal increment. → Post-2030: The Primary Downward Risk Path is Hybrid Bonding In current technological roadmaps, Hybrid Bonding technology poses a potential downward risk to tin consumption. This technology removes tin-silver solder caps and adopts direct copper-to-copper bonding, theoretically reducing a portion of tin usage in the packaging process. However, its actual impact requires objective assessment. Hybrid bonding is currently applied only in the most advanced process nodes, such as the back-end of HBM4+ and CIS image sensors. Scaled production is expected after 2030, and the penetration speed depends on yield improvements and cost convergence. The key constraint is that board-level SMT soldering , which accounts for approximately 97% of total AI supply chain tin usage, currently cannot be replaced by hybrid bonding. Board-level soldering involves the electrical connection of thousands of components across the entire board, relying heavily on reflow soldering with solder paste and wave soldering with solder wire. These processes do not yet have a direct copper-to-copper replacement route. Therefore, even if hybrid bonding gradually penetrates the advanced packaging sector, its impact on total tin consumption will be largely confined to the chip packaging stage, accounting for roughly 5% to 12%, rather than causing a systemic demand shock. Data source for these projections is SMM. III. Tin Material Categories and Supply Chain Validation Data Source: SMM Based on SMM data, the market is divided into the following categories: 1. Solder Paste: Approximately 50% to 55% Solder paste is the main consumable for SMT. Both AI server motherboards and optical module PCBs use solder paste reflow soldering as the core process. High-end categories are SAC305 (Sn96.5/Ag3.0/Cu0.5) and SAC105, which comply with RoHS lead-free requirements. Ultra-fine powder specifications, from Type 4 to Type 8, are used for microscopic optical module pads. This is currently the specification with the tightest production capacity, reflecting new requirements for tin powder processing precision driven by computing upgrades. 2. Preformed Solder Preforms and Solder Wire: Approximately 20% to 25% These are used in processes like wave soldering, manual rework, and optical module shell sealing. The consumption per rack is not large, but the total volume grows linearly with installation scale. This is a volume-driven category with relatively moderate price elasticity. 3. BGA Solder Balls (6N High-Purity Tin): Approximately 15% to 20% This is the core consumable for GPU, HBM, and CPU packaging ball placement, holding the highest unit price among all tin material categories. The number of BGA solder balls on a single high-end AI chip ranges from thousands to tens of thousands. The supply landscape for 6N high-purity tin is highly concentrated. Tin Industry Shares holds the largest global market share, with Malaysia Smelting Corporation and Yunnan Chengfeng serving as primary supplementary suppliers. The growth of this category benefits from both the increase in AI chip shipment volumes and the continuous rise in single-chip solder ball density caused by HBM stacking increasing I/O density. This classifies it as a category with simultaneous growth in volume and price. 4. Tin Bars and Tin Anodes: Approximately 5% to 10% Tin anodes are used in the PCB electroplating process. The tin consumption for electroplating increases with high-layer-count AI server boards. Compared to other categories, the technical barriers and added value of tin anodes are low, making it a follower-growth category. IV. Breakdown of Core Tin Usage in Computing Centers Tin consumption in computing centers is concentrated in several clear segments. PCB board-level soldering is the absolute primary driver. Advanced packaging offers the highest growth elasticity despite its limited total volume proportion. Tin usage in power supply and distribution is extremely limited. The details are as follows. PCB Board-Level Soldering: 85% to 92% All components on AI server motherboards, which have 16 to 30 layers and 3 to 5 times the area of traditional machines, are electrically connected via SMT and wave soldering. From GPU chips to surface-mount capacitors and resistors, this process relies entirely on tin-based solder, primarily paste and secondarily wire. Within the incremental tin usage for AI, PCB electroplating and SMT contribute over 97%, acting as the true carrier of tin demand. For example, a 10,000-card AI computing center requires 2.5 to 3.2 tons of PCB solder alone. This indicates that tin consumption during the data center construction cycle features highly concentrated release characteristics. Advanced Packaging (CoWoS/HBM/Chiplet): 5% to 12% Processes such as GPU die-to-substrate bonding, HBM stacking and interposer interconnection, and micro-bumps between Chiplet dies widely use solder balls, micro-bumps, and ultra-fine solder paste made from 6N high-purity tin, which has a 99.9999% purity. The packaging tin usage for a single high-end AI chip can reach tens of grams, and the premium for 6N high-purity tin is significantly higher than that of standard tin ingots. Statistics show that the chip segment, including advanced packaging and EUV lithography, accounts for only 2% to 3% of the total AI supply chain tin consumption. However, its leading growth rate and high unit price present a structural opportunity for the tin industry. Currently, major suppliers of 6N high-purity tin include Tin Industry Shares, Malaysia Smelting Corporation (MSC), and Yunnan Chengfeng, reflecting a highly concentrated supply landscape. 800G and 1.6T High-Speed Optical Modules: 2% to 5% The interconnection of optical chips, lasers, and detectors with optical module substrates requires ultra-micro solder paste to achieve micrometer-level precision soldering. Optical module shell sealing and conductive soldering for high-speed connectors also use tin-based solder preforms. The upgrade from 800G to 1.6T means pad spacing shrinks further, ensuring continued demand growth for ultra-fine tin powder specifications of Type 6 and above. Power Supply, Distribution, and Grounding: Under 1% Only the auxiliary solder joints in data center low-voltage distribution cabinets, UPS systems, and grounding copper grids use a small amount of solder. This does not constitute a main consumption scenario for tin. The proportion of the power distribution segment in total tin consumption is small. Tin's role in the computing chain is essentially connection rather than transmission, making the solder joint the true carrier of tin. V. Conclusions First, the pull of AI computing expansion on tin consumption is structural rather than cyclical. Traditional servers consume about 0.5 kg of tin per unit, whereas AI servers have reached 4 to 5 kg. This 8 to 10-fold jump is a reconstruction of the demand function rather than a gradual upgrade. SMM forecasts a 24% CAGR for global newly installed computing capacity from 2025 to 2030. This growth rate, combined with the continuous rise in per-unit consumption, indicates that tin's consumption elasticity in the AI computing chain will be noticeably higher than that of most industrial metals. Second, PCB board-level soldering is the absolute primary demand source for tin in AI computing. PCB board-level soldering accounts for 85% to 92% of AI tin usage. From an incremental perspective, PCB electroplating and SMT placement contribute over 97%. A 10,000-card AI computing center requires 2.5 to 3.2 tons of PCB solder alone, while the power supply and distribution segment accounts for less than 1%. Tin's role in the computing chain is essentially connection rather than transmission. Solder is the fundamental identity of tin and the root source of its demand resilience. Third, the unit tin consumption curve moves upward in the short term, plateaus in the medium term, and faces structural substitution risks in the long term, though the substitution scope is limited. The years 2025 to 2027 represent a rapid upward phase for unit consumption, driven by increased PCB layers, HBM stacking, and optical module speeds. The years 2028 to 2029 enter a plateau phase as Scale-Up architectures lock in per-rack tin usage. Post-2030, hybrid bonding may form localized substitution in the advanced packaging segment, which accounts for 5% to 12% of AI tin usage. However, board-level SMT soldering, holding the absolute majority share at roughly 97%, has no substitution path. Finally, there is distinct divergence among tin material categories. Solder paste, accounting for 50% to 55%, benefits from PCB area expansion and layer count increases, categorizing it as a volume-driven product. BGA high-purity solder balls, accounting for 15% to 20%, benefit from increased chip packaging density and the 6N premium, classifying it as a volume-and-price growth product. Preformed solder preforms and tin anodes are follower-growth categories. Within the AI computing investment cycle, solder paste and BGA solder balls are the categories with the highest elasticity. Overall, tin's position within the computing metal narrative is systematically undervalued by the market. While the hardware demand for computing infrastructure has been fully priced in, tin serves as the computational solder. From server motherboards to chip packaging and optical module interconnections, it covers the interconnection needs of nearly every key link in AI hardware. The re-evaluation of its value has just begun.

[Platinum & Palladium Price Review and Forecast] This week (July 3 – July 9), platinum and palladium prices retreated after rapid rise with the price center moving lower, ending the week lower overall. On July 3, driven by the much weaker-than-expected US June non-farm payrolls data, market expectations for rate hikes cooled rapidly, and platinum and palladium surged sharply in a single day, with the most-traded platinum contract rising 3.27% to hit the week's high. However, market sentiment gradually faded. Additionally, the renewed US-Iran conflict flared up again, as US forces struck Iranian military targets for several consecutive days, and the first meeting minutes after Warsh took office were released, showing that the AI investment frenzy would significantly influence interest rate decisions. The minutes were broadly interpreted as hawkish. Futures prices for platinum and palladium fell continuously starting Monday, extended losses on Tuesday, recovered slightly on Wednesday before weakening again on Thursday, overall forming a retreat-after-rapid-rise pattern of "one day of gains and four days of declines," with the weekly price center clearly shifting lower. The most-traded platinum futures contract on GFEX reached a high of 415.85 yuan/g, dipped to a low of 392 yuan/g, and closed at 400.45 yuan/g on July 9; palladium weakened in tandem, with the most-traded contract hitting a high of 309.7 yuan/g, a low of 290.3 yuan/g, and closing at 295.25 yuan/g on July 9, falling more than platinum. On the spot side, mainstream spot premiums for platinum and palladium remained around parity with GFEX futures. Spot premiums for palladium were slightly higher than those for platinum, but overall consumption stayed weak, downstream enterprises held strong wait-and-see sentiment, and actual transactions leaned towards the lower end of quotes, mostly around a discount of 1 yuan/g to parity with the most-traded GFEX contract. Overall, spot premiums for platinum and palladium were relatively stable and did not show significant fluctuations alongside futures. Looking ahead, macro headwinds returned this week. Combined with a lack of strong short-term fundamental support, elevated US bond yields and the US dollar index will continue to limit upside room for platinum and palladium, and they are expected to continue witnessing wild swings and consolidation. For spot premiums, market premiums are likely to edge up in the near term as the August contract delivery approaches. [Platinum & Palladium Weekly Data Review] In overseas exchange inventories, platinum extended its one-sided destocking trend, with inventories falling to about 420,000 ounces by end-June, a decline of over 40% from the high at the start of the year. Palladium inventories saw a slight destocking, with current inventories still at a high for the past year. In terms of imports, platinum imports edged up in May, with the overall level similar to that of the same period last year, while palladium imports pulled back slightly, but the overall level remained significantly higher than from 2023 to 2025. [Platinum Group Compounds] Chloroplatinic acid prices declined continuously this week from 166 yuan/g on Monday to close at 164.5 yuan/g on Friday, losing 1.5 yuan/g for the week, a decline of about 0.90%. Palladium chloride prices were also under pressure. It opened at 190 yuan/g on Monday and closed at 186.5 yuan/g on Friday, down 3.5 yuan/g for the week, a decline of about 1.84%. This week, downstream players made just-in-time procurement but no large-scale shipments, and trading was relatively stable.

Brazil's SECEX has initiated an AD investigation into welded carbon steel pipes from China, requested by local producer Confab Industrial S.A. (Tenaris Confab). The products are circular welded pipes with outside diameter ≥14 inches (355.6 mm) and ≤48 inches (1,219.2 mm) and yield strength below 60 ksi, under NCM codes 7305.11.00, etc. The dumping investigation covers July 2024 to June 2025, with injury analysis from July 2020 to June 2025.

[SMM Tin Futures Commentary: Amid intertwined bullish and bearish factors, the most-traded SHFE tin contract experienced wild swings during the day.]