J P M O R G A N North America Equity Research 20 August 2025 Lithium July China Export/Import Data Chemicals: Specialty, Commodity, Agricultural, and Paper & Packaging Jeffrey J. Zekauskas AC (1-212) 622-6644 jeffrey.zekauskas@jpmorgan.com Katie Zhang (1-212) 622-3262 katie.zhang@jpmchase.com Silke Kueck (1-212) 622-6503 silke.x.kueck@jpmorgan.com Lydia Huang See page 6 for analyst certification and important disclosures. J.P. Morgan does and seeks to do business with companies covered in its research repor ...

Financial Data and Key Metrics Changes - The company ended the quarter with cash and cash equivalents of approximately $1.9 million, increasing to about $3.2 million as of the call [11] - The net loss for the quarter was approximately $6.8 million, with a basic and diluted net loss per share of negative $7.44 for 2025 compared to negative $9.94 in 2024 [14] - Year-to-date cash used in operating activities was $5.3 million, showing improvement versus the prior year [15] Business Line Data and Key Metrics Changes - The company produced lithium carbonate with fluorine content below 30 parts per million, a best-in-class result for recycled lithium [6] - Over one metric ton of high purity NMC was produced for qualification sampling with potential partners [7] - Plant operations expenses were $800,000, down from $2.4 million a year ago, and general and administrative expenses were $2.2 million, down from $3.4 million in 2024 [13] Market Data and Key Metrics Changes - The company noted that AquaRefining in the US is cost-competitive with Chinese hydrometallurgical recycling, operating at roughly half the cost of traditional US methods [9] - Recent market activity saw lithium carbonate prices in China increase by around 3% due to a major producer shutting down operations, highlighting the thin supply chains [44] Company Strategy and Development Direction - The company is focused on building a fully domestic closed-loop battery material supply chain in the US, emphasizing collaboration among recyclers, CAM producers, and technology innovators [10] - The design of a modular, scalable commercial arc facility is underway, capable of processing between 10,000 to 60,000 metric tons of black mass annually [8] - The company aims to secure supply and offtake partnerships to enable financing for its first commercial ARC facility [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to define the market for battery material recycling in the US, highlighting the importance of sustainability and competitiveness [10] - The management is optimistic about the potential for policy changes that could support domestic recycling efforts, particularly regarding tax incentives for preprocessors [31][33] - The company is encouraged by the recent patent allowance, which supports discussions with potential partners and enables high-margin licensing opportunities [40][41] Other Important Information - The company completed the sale of the Sierra Art facility, generating approximately $4.3 million in cash proceeds, which were used to eliminate debt [11][12] - A one-for-ten reverse stock split was executed to support compliance with Nasdaq listing requirements [12][52] Q&A Session Summary Question: Can you elaborate on the progress on the technology side? - Management highlighted the reduction of fluorine content in lithium carbonate and the flexibility in the flow sheet design to meet various partner needs [22][23] Question: Can you provide insights on the tech showcase with NAT Battery? - The event generated strong engagement and positive feedback from industry leaders, validating the company's sustainable recycling process [25][26][29] Question: How do you view potential incentives or trade policies impacting competitiveness? - Management emphasized the need for policies that encourage domestic preprocessing of black mass to support local recycling infrastructure [31][33] Question: Can you discuss the flexibility in structuring partnerships? - The company has a strong cash position allowing for strategic partnerships, focusing on collaboration rather than a lone strategy [36] Question: Can you elaborate on the patent allowance received? - The patent allowance supports the business model by enabling high-margin licensing and joint ventures with partners [40][41] Question: What are the next steps and milestones to watch for? - The focus is on securing supply and offtake partnerships to finance the first commercial ARC facility, with ongoing discussions about new feedstocks [47][48] Question: Why did Aqua Metals execute the reverse stock split? - The reverse stock split was aimed at regaining compliance with Nasdaq listing requirements, viewed as a strategic asset for the company [52][53] Question: Can you explain the cost comparison study of AquaRefining? - The study showed that AquaRefining is cost-competitive with Chinese methods and operates at about half the cost of traditional US methods, emphasizing sustainability [54][56]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the lithium industry, particularly the spodumene market, with significant developments in China affecting supply and pricing dynamics [1][11][15]. Core Company Insights Pilbara Minerals (PLS) - PLS has increased its price target by 45% to A$1.60/share due to improved short-term price outlook, despite a strong share price performance [1][7]. - The company reported a strong production quarter with recoveries improving to ~72% and production of 221kt of SC5.1 [7]. - PLS's capex guidance is expected to decline by ~50% YoY, indicating a shift towards operational and cost discipline [2][18]. - The recent site visit highlighted PLS's advanced ore sorting as a competitive advantage, with a strong balance sheet of ~$1 billion in cash [3][18]. - Production guidance for FY26 is set at 820-870kt with cost guidance of A$560-600/t FOB [7][18]. IGO Limited (IGO) - IGO's price target has been raised by 33% to A$4.80/share, but the company retains a Sell rating due to share price performance [1][7]. - The June quarter saw improved performance from the Nova asset, but production guidance for FY26 was disappointing, with expectations of 1.5-1.65mt, below prior estimates [7][16]. - IGO's capex for Greenbushes is higher than expected at A$575-675 million, and the Kwinana refinery is expected to continue operations despite previous assumptions of care and maintenance [7][16]. Patriot Battery Metals (PMT) - PMT's price target has been increased to A$0.65/share and C$5.90/share, with a Buy rating due to an improved funding environment [1][7][20]. - The company is positioned well for long-term production, with a focus on the Shaakichiuwaanaan Project, which is not sensitive to short-term pricing fluctuations [7][20]. - PMT's funding strategy includes a ~60:40 debt-equity split totaling C$1.6 billion, with an increased assumed raise price to C$4.50/share [7][20]. Pricing and Market Dynamics - Spodumene prices have been revised upwards by 17%/27%/27%/16% for 2025-2028, now projected at US$838/950/1,050/1,100/t, respectively [1][11]. - The market is currently pricing in higher spodumene prices than spot prices, indicating potential overvaluation of equities [4][18]. - The long-term price forecast for spodumene remains at US$1,200/t, with current prices expected to recover steadily [11][12]. Additional Insights - The recent crackdown on lepidolite mines in China may lead to supply disruptions, but the actual impact could be less severe than anticipated [1]. - The focus on operational efficiency and cost discipline is becoming increasingly important for companies in the lithium sector as they navigate market fluctuations [2][18]. - The strategic significance of downstream operations, such as IGO's Kwinana refinery, is highlighted, although it faces operational challenges [16][18]. Conclusion - The lithium industry is experiencing significant price adjustments and operational shifts, with companies like PLS, IGO, and PMT adapting to changing market conditions. The focus on cost discipline and strategic investments will be crucial for navigating the evolving landscape.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Lithium - **Key Players**: CATL, Zangge Mining, Australian producers (IGO, PLS, MIN), Rio Tinto Core Insights and Arguments 1. **Supply Disruption Risks**: Recent scrutiny over mining licenses in China has led to supply concerns, particularly after CATL halted operations at its Jianxiawo lepidolite mine due to an expired license, indicating a closure of "at least 3 months" [1][2] 2. **Price Outlook Upgrade**: Due to supply disruptions and updated supply forecasts, lithium price outlooks have been revised upwards, with spodumene prices expected to rise by 16-27% and lithium chemicals (carbonate & hydroxide) by 5-14% across CY25-28E [1][5] 3. **Compliance Issues**: Many lithium miners are not compliant with licensing regulations, with an estimated 229kt LCE of lithium supply at risk and up to 120kt LCE facing high risk of curtailment [2] 4. **Demand Signals**: The demand for electric vehicles (EVs) remains strong, with global EV sales growing 26% year-over-year in June, led by a 31% increase in China [4] 5. **Battery Energy Storage Systems (BESS)**: The global BESS project pipeline is projected to reach approximately 1.6TWh from 2025 to 2030, indicating significant growth in this sector [58] Additional Important Insights 1. **Market Dynamics**: The worst of the lithium price downcycle is believed to have passed, although the company remains below consensus estimates [1][5] 2. **Supply Growth Adjustments**: Supply growth expectations for listed Australian producers have been updated, with delays in projects like Rio Tinto's James Bay [3] 3. **Inventory Management**: Chinese chemical inventories are currently sufficient but may see restocking due to mine supply shutdowns, which could support higher chemical prices [4] 4. **Future Catalysts**: Potential further disruptions in Chinese mine supply and inventory restocking of lithium chemicals are seen as upcoming catalysts for price movements [1][4] Conclusion The lithium industry is currently facing significant supply risks due to regulatory scrutiny in China, which has led to an upward revision in price forecasts. Demand for EVs and BESS remains robust, indicating a strong market outlook despite potential compliance issues among miners.

LITHIUM ARGENTINA / EARNINGS PRESENTATION NYSE & TSX: NYSE & TSX: NYSE & TSX: LARLAR From earth to energy Q2 2025 Earnings Call This presentation contains "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as "forward-looking information"). These statements relate to future events or the Company's future perform ...

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: The conference call primarily discusses the **China Battery & Materials** industry, particularly in relation to electric vehicle (EV) batteries and energy storage systems (ESS) [2][4]. Core Insights and Arguments - **Production Growth**: - Production growth in August is expected to slow, but remains above expectations with a year-to-date growth of over **50% year-on-year** from the top six suppliers [4]. - A **4% month-on-month** increase in production was noted in August, following a **3% month-on-month** increase in July, indicating a recovery trend [4]. - **Demand Concerns**: - Initial concerns about a collapse in ESS demand due to regulatory changes and inventory destocking in the US have been alleviated by better-than-expected production plans [4]. - The demand for EVs in China increased by **33% in the first half of 2025**, with significant exports to the EU [4]. - **Battery Exports**: - ESS battery shipments to the US, EU, and other regions increased by approximately **150-210% year-on-year** in the first half of 2025 [4]. - A notable increase in EU residential ESS demand was observed, with a **220% year-on-year** growth in the first half of 2025 [4]. - **Company-Specific Updates**: - **BYD**: Battery production has stabilized after previous cuts due to high inventory levels [4]. - **CATL**: Adjusted its lithium iron phosphate (LFP) battery production plan down by **10%** in July to focus on faster charging applications [4]. - **Lithium Production**: - Expected to increase by **6kt month-on-month** in August, with a projected **8% month-on-month** growth in total lithium output [4]. - The recent price rally in lithium is viewed as speculative rather than based on fundamental changes, maintaining a bearish outlook on lithium prices [4]. - **Battery Prices**: - EV battery prices remained stable in July after a decline in the second quarter of 2025, while ESS battery prices have shown signs of recovery due to strong demand [5]. - LFP cathode prices increased by **8%**, driven by a **19% rise** in lithium carbonate prices [5]. - **Capacity Utilization**: - Industry capacity utilization has improved, reaching over **80%** in the second half of 2024, leading to a new round of capital expenditure (capex) expansion [5]. - New orders for battery equipment are expected to increase by over **45%** in 2025 compared to a decline in 2023-2024 [5]. Additional Important Insights - **Investment Recommendations**: - CATL is rated as "Overweight," while other battery and material companies are rated as "Neutral" or "Underweight" [5]. - **Upcoming Financial Reports**: - CATL is expected to report its second-quarter results on July 30, with anticipated sales volume of **140-150 GWh** and net profit between **Rmb 15.5 billion and 16.0 billion** [5]. - **Sales Trends**: - NEV sales showed mixed results, with a **1% month-on-month** increase in June but a **9% month-on-month** decrease projected for July [8]. This summary encapsulates the key points discussed in the conference call, highlighting the current state and future outlook of the battery and materials industry in China.

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Greater China Materials, specifically in the Asia Pacific region [1] - **Market Sentiment**: The industry view is considered attractive by Morgan Stanley [6] Price Movements and Inventory Changes Base Metals - **Copper**: Prices decreased by 1.5% week-over-week (WoW), with inventories down by 1.2% WoW [2] - **Aluminum**: Prices fell by 1.3% WoW, while inventories increased by 1.5% WoW [2] - **Gold**: Price decreased by 1.4% WoW, settling at US$3,290 per ounce [2] Battery Metals - **Lithium Hydroxide**: Prices for industrial-grade and battery-grade lithium hydroxide rose by 9.4% and 8.5% WoW, respectively [2] - **Lithium Carbonate**: Prices for industrial-grade and battery-grade lithium carbonate increased by 1.5% and 2.1% WoW, respectively [2] Steel - **HRC and CRC Prices**: Shanghai HRC prices increased by 0.9% WoW, while CRC prices decreased by 0.2% WoW [3] - **Rebar**: Prices rose by 2.3% WoW [3] - **Long Steel Inventories**: Increased by 3.3% WoW [3] Cement and Coal - **Cement Prices**: Decreased by 0.6% WoW to Rmb323 per ton [3] - **Coal Prices**: QHD5500 coal prices increased by 0.5% WoW to Rmb665 per ton, with inventories dropping by 10.8% WoW [3] Glass - **Glass Fiber Prices**: Average prices declined by 1.3% WoW to Rmb3,850 per ton [4] - **Float Glass Prices**: Increased by 2.8% WoW to Rmb1,317 per ton [4] Regulatory Environment - **NDRC Initiatives**: The National Development and Reform Commission (NDRC) is promoting a unified national market and aims to eliminate 'involution-style' competition [8] - **CISA Recommendations**: The China Iron and Steel Association (CISA) emphasized the need for regional and product self-discipline, urging enterprises to control production and stabilize prices [8] Analyst Insights - **Analyst Team**: The report includes insights from multiple equity analysts at Morgan Stanley, indicating a collaborative approach to research [5] - **Investment Banking Relationships**: Morgan Stanley has disclosed its investment banking relationships with several companies in the materials sector, which may influence research objectivity [6][18] Stock Ratings - **Coverage Universe**: The report lists various companies within the Greater China Materials sector, with ratings ranging from Overweight to Underweight [62][64] - **Notable Companies**: Companies such as Aluminum Corp. of China Ltd. and Ganfeng Lithium Co. Ltd. are highlighted with their respective ratings [62][64] Conclusion - The Greater China Materials sector is experiencing mixed price movements across various commodities, with regulatory efforts aimed at stabilizing the market. Analysts maintain an attractive outlook for the industry, supported by ongoing price adjustments and inventory management strategies.

Core Insights - The company is focusing on operational efficiency following disappointing results in H1 2025, with a commitment to improve performance in the second half of the year [2][4][19] Financial Performance - Adjusted EBITDA (excluding SLN) for H1 2025 was €191 million, down 45% compared to H1 2024, primarily due to reduced contributions from PT WBN and unfavorable product mix [4][19] - Net Income, Group share (excluding SLN) was negative at -€101 million, a decline of €132 million year-on-year [4][19] - Adjusted Free Cash Flow was -€266 million, with liquidity remaining high at €1.7 billion [4][24] Operational Highlights - Safety performance remained strong with a Group TRIFR of 0.6, significantly better than the CSR roadmap target of <1.0 [5] - Manganese ore transported volumes are revised to between 6.5 and 7.0 million tonnes for 2025, with FOB cash costs adjusted to between $2.1 and $2.3/dmtu [4][47] - Nickel ore sales are projected between 36 and 39 million wet metric tonnes for 2025, reflecting revised licensing [4][64] Market Trends - Global carbon steel production declined by nearly 2% in H1 2025, with China experiencing a 3% drop due to reduced domestic demand [33][34] - The price index for manganese ore averaged $4.6/dmtu in H1 2025, down 14% year-on-year, influenced by increased supply from South Africa and Australia [38][39] - Global demand for lithium increased by 29% in H1 2025, driven by electric vehicle sales, while lithium supply also rose, leading to a surplus in the market [81][82] Strategic Initiatives - The company launched an in-depth operational review in June 2025 to enhance performance [4] - A controlled capex plan for 2025 is reiterated at between €400 million and €450 million, focusing on sustaining and strengthening rail transportation capacity [4][97] - The company is actively pursuing health prevention efforts as part of its "Act for Positive Mining" roadmap [8]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **metals industry**, particularly in relation to **China's economic policies** and their impact on commodity prices, including iron ore, coking coal, and lithium [1][3][11]. Core Insights - **Sentiment Shift**: There has been a notable shift in sentiment regarding China's supply-side reforms, steel production cuts, and infrastructure projects, which has positively influenced the metals market [3][11]. - **Price Movements**: Since July, iron ore prices have increased by **11%**, coking coal futures have surged by **51%**, alumina by **16%**, spodumene by **28%**, and lithium carbonate by **18%** [4][11]. - **Fundamental Lag**: Despite the positive sentiment, the underlying fundamentals have not yet aligned, as significant structural changes in China's economy are required to support these reforms [5][11]. - **Iron Ore Positioning**: Managed money positioning in iron ore has shifted from **245 kilots net short** to **39 kilots net short**, indicating a significant change in market sentiment [5][11]. Price Forecasts and Market Dynamics - **Iron Ore Outlook**: The forecast for iron ore prices is expected to remain rangebound between **$95 and $100 per ton** through the second half of the year, with a recent overshoot to **$105 per ton** viewed as excessive [6][11]. - **Met Coal Challenges**: Met coal fundamentals are under pressure, with imports to China down **8% year-to-date** [6][11]. - **Infrastructure Investment**: The launch of the Tibet hydropower project is anticipated to drive further infrastructure investment, which could bolster demand for metals [3][11]. Additional Considerations - **Production Cuts**: Production cuts in China could potentially increase seaborne demand for met coal, while the lithium supply-demand balance is improving, although rapid price rebounds could disrupt supply discipline [11][13]. - **Monitoring Future Developments**: Attention is being paid to upcoming policy meetings in China, with expectations of limited stimulus due to robust GDP growth [14][11]. - **China's Steel Production**: Recent data indicates that China's steel production has decreased more than expected, which may lead to higher port inventories of iron ore [6][11]. Conclusion - The metals industry is currently experiencing a sentiment-driven rally, primarily influenced by China's policy signals and infrastructure projects. However, the sustainability of this rally is contingent upon actual demand growth and the alignment of market fundamentals with the optimistic sentiment observed in recent weeks [11][5].

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Greater China Materials, specifically in the Asia Pacific region [6][62] - **Current Industry View**: Attractive, indicating positive expectations for performance over the next 12-18 months [6][33] Key Market Movements Base Metals - **Copper**: Prices increased by 1.2% week-over-week (WoW) to Rmb79,640/t, with inventories down by 13.2% [2][10] - **Aluminum**: Prices rose by 0.4% WoW to Rmb20,780/t, while inventories increased by 6.4% [2][10] Battery Metals - **Lithium Hydroxide**: Domestic industrial-grade prices rose by 6.5% WoW to Rmb55,370/t, and battery-grade prices increased by 5.4% to Rmb60,520/t [2][10] - **Lithium Carbonate**: Industrial-grade prices saw an 8.8% increase WoW to Rmb68,900/t, while battery-grade prices rose by 8.6% to Rmb70,550/t [2][10] Steel - **Hot Rolled Coil (HRC)**: Prices increased by 1.5% WoW to Rmb3,400/t [3][10] - **Cold Rolled Coil (CRC)**: Prices rose by 4.0% WoW to Rmb3,914/t [3][10] - **Rebar**: Prices increased by 1.3% WoW to Rmb3,296/t [3][10] - **Tangshan Billet**: Prices rose by 5.4% WoW to Rmb3,120/t [3][10] Cement and Coal - **Cement**: Prices decreased by 1.0% WoW to Rmb324/t [3][10] - **Coal**: Prices for QHD5500 increased by 0.3% WoW to Rmb662/t, with inventories up by 1.2% to 5.85 million tonnes [3][10] Glass - **Float Glass**: Prices increased by 2.4% WoW to Rmb1,281/t [4][10] - **Glass Fiber**: Prices remained stable at Rmb3,900/t [4][10] Regulatory and Infrastructure Developments - **Regulatory Actions**: NDRC and SAMR are working to improve standards for recognizing low-price dumping and regulating market price order [8] - **Infrastructure Investment**: Construction of a hydro station in the Yarlung Tsangpo River in Tibet has commenced, with a total investment of Rmb1.2 trillion [8] Analyst Insights - **Analysts Involved**: Rachel L Zhang, Chris Jiang, Hannah Yang, and Davven Xu are the key analysts providing insights on the Greater China Materials sector [5][62] - **Investment Banking Relationships**: Morgan Stanley has received compensation for investment banking services from several companies in the materials sector, indicating potential conflicts of interest [17][20] Conclusion - The Greater China Materials sector is experiencing positive price movements across various commodities, with a favorable outlook for the coming months. Regulatory actions and significant infrastructure investments are also shaping the market landscape.