Changjiang Securities·2025-11-10 08:13Investment Rating - The report maintains a "Positive" investment rating for the industry [7] Core Views - The overall industrial metal prices have experienced a decline, particularly in the overseas market, primarily due to liquidity issues in the US banking system. The government shutdown has led to a tightening of cash balances, impacting global risk assets. Concerns over power shortages in North America due to data center developments have raised fears of production halts in high-energy-consuming sectors like aluminum and zinc, resulting in relatively strong prices for these commodities. The lithium industry has seen a turnaround, with improving supply-demand fundamentals. The uncertainty in overseas resource development and weak profitability due to low lithium prices have peaked capital expenditures in the industry by 2024-2025, with a confirmed trend of declining supply growth from 2026 to 2028. By 2026, equity values are expected to outperform commodity prices, potentially leading the market out of a downturn [2][4][5]. Summary by Sections Precious Metals - The ongoing US government shutdown has heightened risk aversion, which is expected to drive gold prices higher in the short term. The report emphasizes that gold prices are currently stabilizing rather than indicating a trend reversal. Historically, gold prices tend to peak early in a rate-cutting cycle, and the current macroeconomic environment suggests that gold may not have reached its peak yet. The report maintains a positive outlook for gold, suggesting that the market is entering a phase of systematic re-evaluation [4]. Industrial Metals - The report highlights a long-term positive outlook for copper and aluminum. Recent price adjustments in these metals are attributed to liquidity issues in the US. The report notes that copper inventories have increased by 4.68% week-on-week and 25.01% year-on-year, while aluminum inventories have decreased by 0.49% week-on-week and 13.31% year-on-year. The report suggests that despite short-term fluctuations, the long-term economic outlook and supply-demand structure will favor a strong cycle for copper and aluminum [4][5]. Energy and Minor Metals - The lithium sector is expected to see a supply inflection point and a new demand cycle. The report indicates that the darkest period for the lithium industry has passed, with a clear trend of improving supply-demand fundamentals. The demand for lithium is projected to grow significantly due to stable domestic power needs and the acceleration of solid-state battery industrialization. The report also highlights the strategic importance of rare earths and tungsten, with expectations of a new upward trend in prices due to supply constraints and increased demand [5][24]. Supply Dynamics - The report discusses the high concentration of supply in cobalt and nickel, with specific attention to the Democratic Republic of Congo's cobalt quotas and Indonesia's tightening supply policies for nickel. These factors are expected to support long-term price increases for both cobalt and nickel, benefiting resource-oriented companies [5][24].