2025-07-14 00:36Investment Rating - The report downgrades CMOC-H/A and CNM to Hold from Buy, maintains Hold ratings on MMG and JXC-H/A, and retains Buy ratings on Zijin-H/A [4][7]. Core Insights - The US has announced a 50% tariff on imported copper, leading to a spike in Comex copper prices by over 10% since the announcement [2]. - Post-tariff, copper prices in China and LME are expected to decline as the current excess flow of copper into the US reverses, impacting global supply and demand fundamentals [3]. - The report expresses caution regarding the short-term outlook for the Chinese copper sector due to the normalization of US copper inventory and its effect on demand [4]. Summary by Sections US Tariff Impact - The US imports approximately 50% of its refined copper demand, primarily from Chile, Canada, and Mexico, and the tariff is expected to create a significant market shift [2]. - Comex copper prices have surged, with a current premium of about 25% over LME prices, indicating market expectations of the tariff's impact [2]. Price and Inventory Trends - Following the tariff announcement, the report anticipates a decline in copper prices as the arbitrage opportunity reverses, leading to a normalization of US copper inventory levels [3]. - Global copper inventories have shown divergence, with LME inventories declining significantly while Comex inventories have surged to their highest levels since 2018 [15]. Company Ratings and Valuations - Zijin Mining maintains a Buy rating with unchanged target prices, reflecting strong fundamentals and expected earnings growth [48][49]. - CMOC-H/A's target price remains unchanged, but the downgrade to Hold reflects concerns over short-term demand and pricing pressures [51]. - MMG and Jiangxi Copper maintain Hold ratings, with target prices unchanged, indicating a cautious outlook amid potential price declines [54][57].