Industry Overview - The mining sector is currently experiencing significant volatility, highlighted by a recent surge in nickel prices on the LME, which reached a 15-month high of over $18,000 per tonne in January [1] Investment Strategy - The investment strategy focuses on identifying high-upside opportunities in overlooked sectors, particularly small-cap stocks, energy, commodities, and special situations [1] - The approach is based on the CAN SLIM framework, emphasizing fundamental momentum indicators such as EPS, ROE, and revenue, along with price-volume confirmation and macroeconomic filters [1] - Econometric tools like GARCH and Granger causality are utilized to analyze risk, volatility, and the influence of macro data on market cycles [1] - The strategy aims to build conviction through a combination of technical analysis, fundamental data, and market catalysts [1]

Industry Overview - The mining sector is currently experiencing significant volatility, highlighted by a recent surge in nickel prices on the LME, which reached a 15-month high of over $18,000 per tonne in January [1] Investment Strategy - The investment strategy focuses on identifying high-upside opportunities in overlooked sectors, particularly small-cap stocks, energy, commodities, and special situations [1] - The approach is based on the CAN SLIM framework, emphasizing fundamental momentum indicators such as EPS, ROE, and revenue, along with price-volume confirmation and macroeconomic filters [1] - Econometric tools like GARCH and Granger causality are utilized to analyze risk, volatility, and the influence of macro data on market cycles [1] - The strategy aims to build conviction through a combination of technical analysis, fundamental data, and market catalysts [1]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In 2026, the global iron ore industry will enter a deep adjustment period characterized by "intensified supply relaxation, moderate demand recovery, and a downward shift in the price center," with an annual trend of "stable in the front and declining in the back" [2][34]. - The core contradiction in the industry will shift from "supply shortage" to "insufficient demand," and the focus of competition will be on high - grade resources, cost - control capabilities, and green and low - carbon transformation [2][34]. - Policy regulation will continuously guide the high - quality development of the industry, the profit distribution pattern of the industrial chain will tilt towards steel mills, and mining companies will face pressure from profit squeezing and intensified competition [2][34]. - ESG and geopolitical factors are becoming increasingly prominent as important variables in the industry's development [2][34]. 3. Summary by Relevant Catalogs 3.1 Iron Ore Annual Market Review - **Initial Surge Phase (Early January - Mid - February)**: Prices rose from about 780 yuan/ton to nearly 840 yuan/ton. The driving factors were the release of domestic steel mills' post - Spring Festival restocking demand, the decline in the shipment volume of Australian and Brazilian mines due to seasonal weather, and the market's optimistic expectations for the early - year growth - stabilization policies [3]. - **Decline and Adjustment Phase (Mid - February - Early June)**: Prices oscillated and declined from the high level, reaching an annual low of about 710 - 720 yuan/ton in early June. The reasons were the recovery of Australian and Brazilian shipments after the weather impact subsided, the release of new production capacity of the four major mines, the weak demand for construction steel, the squeeze on steel mill profits, and the increase in port inventories [4]. - **Oscillatory Recovery Phase (Early June - December)**: Prices gradually recovered from the low level and approached the high - level range of 830 yuan/ton at the end of the year. The drivers were the acceleration of domestic infrastructure project implementation, the launch of real - estate support policies, the expansion of steel production capacity in India and ASEAN, the slower - than - expected actual shipment volume of the Simandou project, and the market's optimistic expectations for demand recovery in the second half of the year [5]. 3.2 Supply Side - **Mainstream Mines**: In 2026, the supply of mainstream iron ore is expected to grow. In Oceania, Australia's total output is expected to reach 9.86 billion tons, with an increase of 167.8 million tons year - on - year. In South America, Brazil's total output is expected to reach 4.84 billion tons, with an increase of 50.6 million tons year - on - year [8][10]. - **Non - mainstream Mines**: In South Asia, India's iron ore output is expected to continue growing in 2026. With the implementation of the "National Steel Policy 2017," India's iron ore demand and output will be directly boosted, and its imports are expected to grow at an average annual rate of 80% [11]. - **Domestic Mines**: Affected by resource endowment and cost constraints, domestic production shows a slight downward trend. The "Cornerstone Plan" failed to achieve the goal of adding 100 million tons of iron concentrate in 2025, and the domestic mines' substitution effect on imported ores is limited, with the import dependence remaining above 80% [15]. 3.3 Demand Side - **Domestic Demand**: In 2025, China's iron ore demand was weak. The consumption of construction steel decreased significantly, while the demand for manufacturing steel showed structural growth. In 2026, domestic iron ore demand may be further squeezed, but the development of the manufacturing and emerging industries will provide some support [20][21]. - **Overseas Demand**: In 2026, overseas iron ore demand growth is relatively certain. India, ASEAN, and Africa will be the main growth points, while the EU and the US will show a "weak recovery" trend, and Japan and South Korea will have weak demand. The growth quality depends on the policy implementation and production capacity release of emerging economies [26][27]. 3.4 Inventory - The total global iron ore inventory is expected to increase by 8% - 10% year - on - year in 2026, approaching 1.5 billion tons at the end of the year. The inventory pattern will be characterized by "high - level pressure on the total amount and significant structural differentiation," which will continuously suppress prices [2][28]. 3.5 Supply - Demand Balance Sheet The report formulates a supply - demand balance sheet for iron ore to reflect the market supply and demand situation and makes corresponding forecasts for the iron ore supply and demand in 2024 [33]. 3.6 Conclusion and Outlook - **Conclusion**: The industry will enter a deep adjustment period in 2026, with the core contradiction shifting and the competition focus changing. Policy regulation will guide the industry's high - quality development, and ESG and geopolitical factors will have a greater impact [34]. - **Outlook**: The supply will be loose, the global iron ore output is expected to reach 26.78 billion tons, and the price center will decline. The Simandou project will reshape the supply pattern. The demand will show a moderate recovery, mainly from emerging economies. The profit distribution will tilt towards steel mills, and policies at home and abroad will have a complex impact on the industry [35][36].

Group 1 - U.S. copper stocks strengthened on Tuesday, with Freeport-McMoRan (FCX.US) rising over 3%, Southern Copper (SCCO.US) up more than 3%, BHP (BHP.US) increasing by over 1.9%, and Teck Resources (RECK.US) gaining over 3% [1] - The rise in copper stocks is attributed to the historical milestone of London copper futures reaching $13,000 per ton, marking a continuation of the upward trend for this key industrial metal into 2026 [1]

Group 1 - The core viewpoint of the article highlights the strong performance of U.S. copper stocks, with notable increases in share prices for companies such as Freeport-McMoRan Copper & Gold (FCX.US), Southern Copper Corporation (SCCO.US), BHP Group (BHP.US), and Teck Resources (RECK.US) [1] - Freeport-McMoRan Copper & Gold (FCX.US) saw an increase of over 3%, while Southern Copper Corporation (SCCO.US) also rose by more than 3% [1] - BHP Group (BHP.US) experienced a rise of over 1.9%, and Teck Resources (RECK.US) increased by more than 3% [1] Group 2 - The article notes that copper futures in London reached a historic milestone, touching the $13,000 per ton mark for the first time, indicating a continuation of the upward trend for this key industrial metal into 2026 [1]

Core Viewpoint - U.S. financial markets are experiencing a pause for the New Year's Day holiday, with trading set to resume on January 2nd, 2026. Despite a recent pullback, 2025 was a strong year for major stock indexes, which posted significant gains. Market Performance - On December 31st, 2025, major U.S. stock indexes closed lower, continuing a four-session losing streak. The Dow Jones Industrial Average fell 0.6% to 48,063.29, the S&P 500 declined 0.7% to 6,845.50, and the Nasdaq Composite dropped 0.8% to 23,241.99. Trading volume was light as many institutional investors had closed their books for the year [2][3]. - Sector performance was predominantly negative, with technology stocks being a major drag. The Energy Select Sector SPDR rose 0.8%, while the Information Technology Select Sector SPDR, Financials Select Sector SPDR, and Industrials Select Sector SPDR all declined by 0.3% [4]. Notable Stock Movements - Ares Management Corporation saw a share decline of 3.4%. Micron Technology and Western Digital experienced drops of 2.5% and 2.2%, respectively. Corcept Therapeutics shares plunged significantly after the FDA did not approve its treatment. Conversely, Nike shares rose 4.1% following the CEO's purchase of approximately $1 million in company stock [5]. Year-End Market Drivers - The strong performance in 2025 was largely driven by optimism surrounding artificial intelligence, with companies like Micron Technology, Palantir, Advanced Micro Devices, Alphabet, and Nvidia being significant contributors. The S&P 500 finished 2025 up approximately 16.4%, the Nasdaq Composite surged around 20.4%, and the Dow Jones Industrial Average added roughly 13% [6]. Upcoming Economic Data - Key economic data releases are scheduled for early January, including Initial Claims data and Construction PDF on January 2nd, ISM Manufacturing index on January 5th, and various employment reports on January 7th. Important inflation indicators like the Consumer Price Index and Producer Price Index will be released on January 13th and 14th, respectively [8]. Federal Reserve Meeting - The U.S. Federal Reserve's Federal Open Market Committee meeting is set for January 28th, where market participants will seek guidance on monetary policy for 2026, particularly regarding inflation and potential interest rate adjustments [9]. Upcoming Earnings Releases - The earnings season for Q4 2025 will begin to gain momentum later in January, with notable companies like BHP Group, JPMorgan Chase, and Bank of America expected to report. These earnings will provide critical insights into corporate performance and outlooks for the new year [10].

Upgrades - Argus upgraded BHP Group (BHP) to Buy from Hold with a price target of $68, citing firming prices for iron ore, copper, and coal as the global economy improves [1] Downgrades - Jefferies downgraded Mereo BioPharma (MREO) to Hold from Buy with a price target of $0.50, down from $7, due to Setrusumab missing primary endpoints in trials [2] - RBC Capital downgraded DigitalBridge (DBRG) to Sector Perform from Outperform with a price target of $16, down from $23, following SoftBank's acquisition announcement at $16 per share [3] Initiations - Stephens initiated coverage of Commvault (CVLT) with an Overweight rating and a $162 price target, highlighting its evolution in data protection and transition to Software-as-a-Service [4] - Stephens initiated coverage of Rubrik (RBRK) with an Overweight rating and a $105 price target, noting its attractive growth outlook in data protection and data security [4] - Stephens initiated coverage of Varonis (VRNS) with an Equal Weight rating and a $40 price target, emphasizing its growth potential in data security as a Software-as-a-Service platform [4] - Freedom Capital initiated coverage of Ero Copper (ERO) with a Buy rating and a $32 price target, citing its high-grade, low-cost asset portfolio in Brazil [4] - H.C. Wainwright initiated coverage of Terra Innovatum (NKLR) with a Buy rating and a $25 price target, believing its use of off-the-shelf components will reduce regulatory barriers [4]

Group 1: Stocks Added to Zacks Rank 1 (Strong Buy) List - Baytex Energy (BTE) has seen a 33.3% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - BHP Group Limited (BHP) has experienced a 13% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Samsara Inc. (IOT) has had an 8.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3] - Gitlab (GTLB) has seen a 7.2% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [4] - Cummins (CMI) has experienced a 6.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [5]

Core Viewpoint - The article discusses China's significant progress in gaining pricing power over iron ore, transitioning from a passive role to an active one in the global market, particularly by the end of 2025 [3][11][23]. Group 1: Historical Context - Since the establishment of the global iron ore long-term contract mechanism in 1981, China, as the largest consumer, has been dominated by Western countries like the US and Australia in pricing power, leading to substantial profit losses [1][3]. - The pricing system centered around the US S&P iron ore index has constrained Chinese enterprises for over four decades, limiting their negotiation power [5][7]. Group 2: Recent Developments - In December 2025, major mining companies, including Rio Tinto and Fortescue Metals Group, announced a shift from the US S&P index to pricing standards more aligned with China's market realities, marking a significant change in the pricing dynamics [11][13]. - This shift is a result of long-term negotiations with China's Mineral Resources Group, which has consolidated purchasing power, allowing China to negotiate on equal footing with global mining giants [9][11]. Group 3: Impact of Renminbi Internationalization - The move towards Renminbi (RMB) settlement for iron ore trade, initiated by BHP in October 2025, has opened avenues for reducing reliance on the US dollar, enhancing China's bargaining position [17][19]. - The transition to RMB settlement not only mitigates exchange rate risks for Chinese companies but also creates a closed-loop system for raw material imports and finished product exports, lowering transaction costs [19][21]. Group 4: Significance of Pricing Index Change - The adoption of local pricing indices, such as the "My Steel" index, reflects a shift in the international mining community's recognition of China's market influence, allowing China to move from being a price taker to a price maker [21][23]. - This change in pricing benchmarks is seen as a milestone, as it aligns more closely with China's actual supply and demand, benefiting the local steel industry [21][23].

Core Viewpoint - The recent refusal of China to accept iron ore shipments from BHP signifies a shift in the long-standing dynamics of the iron ore market, where China, previously a passive buyer, is now asserting its negotiating power [1][5][7]. Group 1: Market Dynamics - China's rejection of BHP's iron ore is not merely a technical return but a clear statement of changing attitudes towards the iron ore supply chain [5][10]. - Historically, China has been a submissive buyer in the iron ore market, accepting subpar quality and high prices due to its dependency on steel production [3][12]. - The iron ore pricing power has been concentrated in the hands of a few Western mining companies, leading to a structural imbalance in profit distribution [8][14]. Group 2: Strategic Shifts - The refusal to accept BHP's shipment is a signal of a new phase in negotiations, where China is willing to challenge the old rules of engagement [10][16]. - The development of the Simandou iron ore project in Guinea is pivotal, as it offers higher quality ore and gives China a controlling stake, thus altering the supply dynamics [18][19]. - Simandou's strategic importance lies in its ability to provide a viable alternative to existing suppliers, enhancing China's bargaining position [19][22]. Group 3: Industry Implications - The shift in procurement strategy aims to reclaim lost bargaining power and support domestic steel companies, particularly smaller firms struggling with high costs [16][24]. - By emphasizing quality and introducing alternatives like Simandou, China is gradually reducing the excessive profits of mining companies, forcing them to adapt to a more competitive pricing environment [22][24]. - The evolving landscape indicates a move away from the previously accepted norms, suggesting that the era of passive acceptance in the iron ore market is coming to an end [24].