[SMM Announcement] Adjustment to Weight Coefficient of Nickel Sulphate Price Index

Dear Users and Partners:

In light of the changes in the structure of market participants along the nickel sulphate industry chain this year, with new capacities from some enterprises being gradually released and a dynamic adjustment in the ratio of spot orders to long-term contracts, we will optimize and adjust the weight calculation rules for the current price index to ensure that it more accurately and promptly reflects the real transaction levels of the industry. This adjustment will be based on the latest capacity distribution, changes in contract structures, and the accuracy of quotations, recalibrating sample weights to enhance the representativeness and flexibility of the index. The new weight scheme will take effect on August 26, 2025.

I. Definition of Nickel Sulphate Index:
The SMM battery-grade nickel sulphate index reflects the most representative battery-grade nickel sulphate prices on the day of the index publication. This index is calculated as a weighted average based on the most likely transaction prices provided by companies across all segments of the battery-grade nickel sulphate industry chain in China (including battery-grade nickel raw materials, battery-grade nickel sulphate, ternary cathode precursor, and ternary cathode material).

II. Benchmark for Price Collection of Battery-Grade Nickel Sulphate Index
Product Form: Crystal
Unit: Yuan/tonnes
Quality: 22% nickel min, conforming to HG/T 5919-2021
Quantity: Min 30 tonnes
Definition: Deliverd to consumer works China
Timing: Within 30 days
Payment Terms: Net 30 days (by cash) after delivery/6-month Acceptance.
Publication: Daily, by 10:30am Beijing Time
Brand Listing: Jinchuan, Jien, GEM, Yinyi, Wanhua, etc.

III. Definition of Index Weights
The initial weights of each enterprise are calculated based on their participation volume of nickel elements in various trading segments of the battery-grade nickel sulphate (including battery-grade nickel raw materials, battery-grade nickel sulphate smelting, precursor production, and cathode material production). SMM regularly reviews the weights of enterprises and the industry chain quarterly, adjusting or maintaining the weights based on changes in the supply-demand structure and feedback from price submitters and the market.
After collecting all prices daily, SMM analyzes the daily price collection and index results, reserving the right to adjust the weights. The adjusted weights are then used to calculate a weighted average with the data collected on the same day to derive the final index for that day. The regressed weights will serve as the initial weights for the next working day.
For enterprises whose quotations have been significantly deviating over a long period, in addition to reducing their weights, SMM will conduct an investigation to determine if there is any misleading behavior in the quotation for the SMM battery-grade nickel sulphate index. Once verified, such an enterprise will be disqualified as a price submitter.

IV. Details of Index Weight Adjustments

Optimization of Enterprise Type Weights: In this weight adjustment, we modified the enterprise type weights for upstream and downstream raw material suppliers, nickel salt smelters, precursor plants, and cathode plants to better reflect the current supply-demand pattern in the nickel sulphate market.

Multi-Dimensional Weight Assessment: Based on the latest production volumes and spot order external purchase data of enterprises, we calculated enterprise weights from two dimensions and performed a weighted average of these two dimensions to achieve a more balanced enterprise weight distribution, avoiding excessive dominance by any single enterprise.

Expansion of Enterprise Coverage: This weight adjustment expanded the sample enterprises included in the index, increasing the sub-weights for certain key nickel salt smelters, precursor plants, and cathode plants to further refine the index system.

Verification of Quotation Data: In this weight adjustment, we reviewed enterprise quotation data in accordance with the price assessment methodology, reassessed potential deviations in enterprise quotations, and adjusted enterprise weights based on quotation accuracy to ensure the index prices remain more objective and reasonable.

We sincerely appreciate your long-term support and trust. We will continue to refine the price formation mechanism to provide market participants with more reliable reference benchmarks.