Investment Rating - The investment rating for Zhejiang Huayou Cobalt is "Buy" with a target price of Rmb51.40, implying a potential downside of 21.7% from the current price of Rmb65.610 [6][8]. Core Insights - The lithium output for Huayou Cobalt is projected to increase from 35kt in the first nine months of 2025 to 60-80kt in 2026 due to the ramp-up of the lithium sulfate project in Zimbabwe. The comprehensive production cost for lithium is currently less than Rmb70k/t LCE and is expected to decrease by Rmb10k/t LCE post ramp-up [2][4]. - Nickel intermediate output is not expected to see significant year-over-year growth in 2026, as both Huayue and Huafei projects have achieved over 100% capacity utilization. The Pomalaa project is anticipated to commence operations by the end of 2026 [3]. - Cobalt output primarily comes from MHP projects in Indonesia, with expectations of strong cobalt prices due to quota policies in the DRC, although increased output from Indonesian projects may exert long-term price pressure [4]. - NCM cathode sales volume reached approximately 70kt in the first nine months of 2025, representing an 80% year-over-year increase, with expectations to reach around 100kt in 2025 [5]. Summary by Sections Lithium - Lithium output is expected to rise significantly in 2026 due to the lithium sulfate project ramp-up, with production costs projected to decrease [2]. Nickel - Nickel output is stable with no significant increase expected in 2026, and the Pomalaa project is set to begin operations by year-end 2026 [3]. Cobalt - Cobalt prices are expected to remain strong due to policy impacts, but increased output from Indonesia may create long-term price pressures [4]. Cathode - NCM cathode sales are on a strong upward trajectory, with significant growth expected in 2025 [5].

Core Viewpoint - The board of directors of Huludao Zinc Industry Co., Ltd. convened a meeting to discuss and approve several key proposals related to futures hedging and related transactions for the years 2025 and 2026 [1][2][4][8]. Group 1: Futures Hedging Business - The board approved an increase in the futures hedging business quota for 2025 [2][3]. - The board also approved the proposal to conduct futures hedging business in 2026 [4][5]. - A feasibility analysis report for the futures hedging business was also approved [6][7]. Group 2: Related Transactions and Regulations - The board approved the expected ordinary related transactions for 2026, with related directors abstaining from the vote [8][9][10]. - The board approved the revision of the "Futures Hedging Business Management System" [10][11]. - The board approved the establishment of the "Information Disclosure Postponement and Exemption Management System" [12][13]. Group 3: Shareholder Meeting - The board approved the proposal to convene the second temporary shareholders' meeting of 2025 [14][15].

Core Viewpoint - Jiujiang Bank has transformed its advantages in party building into development advantages, maintaining steady growth over 25 years while focusing on serving the real economy and creating diverse value for customers, employees, and society [1] Group 1: Service to the Real Economy - Jiujiang Bank aims to optimize financial service supply, focusing on the needs of Jiangxi and providing financial support to the real economy, thereby contributing to the construction of a modern industrial system [1] - The bank has innovated a "inventory pledge + supply chain finance" model to address the financing challenges faced by light-asset copper processing enterprises, successfully issuing a loan of 130 million yuan [2] - As of the end of October, the platform for industrial finance has achieved a cumulative transaction amount of 252.6 billion yuan, effectively addressing financing difficulties for small and medium-sized enterprises [2] Group 2: Technological and Green Finance - Jiujiang Bank has introduced a "technical flow" evaluation system and various financial products to support technology enterprises, with a technology loan balance of 44.706 billion yuan, an increase of 11.75% from the beginning of the year [3] - The bank established the first green finance department in the province, creating multiple green financial products to support energy-saving and carbon-reduction initiatives, with a green loan balance of 44.697 billion yuan, up 16.13% year-to-date [4] - The bank has successfully issued 4 billion yuan in green financial bonds and has been recognized for its contributions to green finance [4] Group 3: Commitment to Social Responsibility - Jiujiang Bank has launched "New Employment Group Service Stations" to provide essential services and financial education to new employment groups, reflecting its commitment to "finance for the people" [5][6] - The bank has developed an elderly-friendly banking service and launched a comprehensive financial service brand for elderly care, demonstrating its focus on meeting diverse customer needs [6] - The bank actively engages in charitable activities, having established a charity foundation and received recognition for its social contributions [6] Group 4: Future Development Strategy - Jiujiang Bank aims to continue its strategic positioning of "party leadership, distinctive operations, quality enhancement, technology-driven, talent empowerment, and strict governance" to achieve high-quality development in the future [7]

1. Report Industry Investment Rating The report does not provide an overall industry investment rating. However, it offers specific investment suggestions for each metal: - Copper: Recommended to gradually buy on dips, with a short - term pressure range of 89,000 - 90,000 yuan/ton and support range of 84,000 - 85,000 yuan/ton. Consider selling near - month slightly out - of - the - money put options [3]. - Zinc: Consider buying on dips and selling out - of - the - money put options. The upper pressure is around 22,800 - 23,000, and short - term support is around 22,300 - 22,400 [4]. - Aluminum Industry Chain: For aluminum, recommended to buy on dips; for alumina, short positions should be held cautiously; for recycled aluminum alloy, take a bullish approach [5]. - Tin: Suggested to wait and see, with an upper pressure range of 290,000 - 300,000 and a support range of 260,000 - 270,000. Consider buying out - of - the - money put options for protection [6][7]. - Lead: Consider a double - selling option strategy, with short - term support around 17,300 - 17,400 and upper pressure around 17,800 - 18,000 [8]. - Nickel and Stainless Steel: For nickel, wait and see the support at the lower range and consider selling out - of - the - money put options on dips; for stainless steel, it is in a weak shock, with support around 12,500 - 12,600 and upper pressure around 13,000 - 13,200 [9]. 2. Core Viewpoints - The overall upward trend of the non - ferrous sector remains unchanged, but the weak manufacturing data in China and the US and the uncertainty of interest rate cuts have affected the upward pace of non - ferrous metals. The recent rebound of the US dollar index has put pressure on risk assets [12]. - Different non - ferrous metals have different supply - demand situations. For example, copper has supply constraints and is expected to enter a demand peak season; zinc has a strong mine end and weak demand; aluminum has production capacity changes and a transition from peak to off - peak season; tin has supply shortages and limited demand recovery; lead has supply recovery and demand decline; nickel and stainless steel have weak supply - demand fundamentals [14][15][16][17][18]. 3. Summary by Directory 3.1 First Part: Non - ferrous Metals Operating Logic and Investment Suggestions - **Macro Logic**: The overall non - ferrous sector is still in an upward trend, but the focus has shifted from macro - narrative to real demand. The weak manufacturing data in China and the US and the uncertainty of interest rate cuts have affected the upward pace. The rebound of the US dollar index has put pressure on risk assets. The voices of the Fed officials after the October resolution are divided on interest rate cuts [12]. - **Investment Suggestions for Each Metal**: See the content in the "Report Industry Investment Rating" section above [3][4][5][6][7][8][9]. 3.2 Second Part: Non - ferrous Metals Market Review - Copper closed at 85,670 yuan/ton with a decline of 0.08%; zinc closed at 22,650 yuan/ton with a decline of 0.09%; aluminum closed at 21,395 yuan/ton with a decline of 0.33%; alumina closed at 2,772 yuan/ton with an increase of 0.07%; tin closed at 282,090 yuan/ton with a decline of 0.58%; lead closed at 17,475 yuan/ton with an increase of 0.34%; nickel closed at 120,030 yuan/ton with an increase of 0.28%; stainless steel closed at 12,535 yuan/ton with a decline of 0.08%; cast aluminum alloy closed at 20,830 yuan/ton with a decline of 0.62% [18]. 3.3 Third Part: Non - ferrous Metals Position Analysis - The report provides the latest position analysis of non - ferrous metals, including the net long - short strength comparison, net long - short position differences, net long - position changes, net short - position changes, and influencing factors of various varieties such as Shanghai lead, industrial silicon, alumina, etc. [21][22]. 3.4 Fourth Part: Non - ferrous Metals Spot Market - The report lists the spot prices and price changes of various non - ferrous metals, such as copper, zinc, aluminum, alumina, nickel, stainless steel, tin, lead, and cast aluminum alloy [23]. 3.5 Fifth Part: Non - ferrous Metals Industry Chain - The report presents various charts related to the industry chain of each non - ferrous metal, including inventory changes, processing fees, price trends, etc. For example, for copper, there are charts of exchange copper inventory changes and LME copper inventory; for zinc, there are charts of zinc inventory changes and zinc concentrate processing fee changes [25][27]. 3.6 Sixth Part: Non - ferrous Metals Arbitrage - The report shows various charts related to non - ferrous metals arbitrage, such as copper's Shanghai - London ratio changes, the spread between Shanghai copper and London copper, zinc's Shanghai - London ratio changes, etc. [54][56]. 3.7 Seventh Part: Non - ferrous Metals Options - The report provides various charts related to non - ferrous metals options, such as copper option historical volatility, weighted implied volatility, trading volume and open interest changes, etc. [72][73].

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - Last week, the main contract price of Shanghai zinc futures showed a weak rebound. The inflation data was lower than expected, strengthening the expectation of the Federal Reserve to cut interest rates. The Sino - US economic and trade consultations reached a basic consensus, and the market risk appetite continued to recover. Domestically, the probability of achieving the annual GDP growth target of 5% was high, and mild policy support at the end of the year was still expected [3][4]. - Fundamentally, the LME zinc inventory continued to decline, and the LME0 - 3 spot premium soared to $300, raising concerns about a soft squeeze in the overseas market and strongly supporting zinc prices. The decline in the Shanghai - London ratio strengthened the expectation of zinc ingot exports, and the supply growth of refined zinc was limited due to the narrowing profit of smelters. On the demand side, the start - up rate of primary enterprises decreased slightly, and downstream demand was mainly for rigid procurement. Recently, there were small - scale zinc ingot exports, and the weekly inventory decreased slightly [4]. - Overall, the improvement in Sino - US economic and trade consultations, the lower - than - expected US inflation supporting the Fed's interest - rate cut, and the expected mild policy support in China at the end of the year led to the recovery of market risk appetite. The fundamental contradiction centered around the low overseas inventory and strong market structure, as well as domestic zinc ingot exports. It was expected that the zinc price would continue its weak rebound in the short term, but the upside space was cautiously optimistic. The upside space was expected to open up after the large - scale export of zinc ingots [4][11]. 3. Summary by Relevant Catalogs 3.1 Transaction Data | Contract | Price on Oct 17 | Price on Oct 24 | Change | Unit | | --- | --- | --- | --- | --- | | SHFE zinc | 21,815 | 22,355 | +540 | yuan/ton | | LME zinc | 2939.5 | 3019.5 | +80 | US dollars/ton | | Shanghai - London ratio | 7.42 | 7.40 | - 0.02 | - | | SHFE inventory | 109,627 tons | 109,168 tons | - 459 tons | tons | | LME inventory | 38,025 tons | 37,600 tons | - 425 tons | tons | | Social inventory | 16.53 million tons | 16.21 million tons | - 0.32 million tons | million tons | | Spot premium | - 40 yuan/ton | - 60 yuan/ton | - 20 yuan/ton | yuan/ton | [5] 3.2 Market Review - The main contract price of Shanghai zinc futures, ZN2512, rebounded weakly from a low level, with a weekly increase of 3.48%, and fluctuated narrowly at night on Friday. LME zinc stabilized and trended stronger, breaking through the $3000/ton mark again, with a weekly increase of 2.62% [6]. - In the spot market, after the slight rebound of the futures price, downstream procurement became more cautious, mainly for rigid demand, and most transactions were between traders. The spot premium remained weak [7]. - In terms of inventory, as of October 24, the LME zinc inventory decreased by 425 tons to 37,600 tons, and the SHFE inventory decreased by 459 tons to 109,168 tons. As of October 23, the social inventory decreased by 0.32 million tons to 16.21 million tons. The opening of the export window led to some exports [8]. - Macroscopically, the US CPI in September was 3.0% year - on - year, lower than the expected 3.1% and higher than the previous value of 2.9%. The core CPI was 3.0% year - on - year, lower than the expected and previous value of 3.1%. From October 24 to 25, 2025, the fifth round of Sino - US economic and trade consultations was held in Kuala Lumpur, Malaysia. China's GDP in the third quarter of 2025 was 4.8% year - on - year, and some economic indicators in September were weak [8][9]. 3.3 Industry News - SMM data showed that the average domestic zinc concentrate processing fee in November was 3000 yuan/metal ton, a decrease of 650 yuan/ton month - on - month; the average imported ore processing fee was $105.54/dry ton, an increase of $18.03/dry ton month - on - month [12]. - ILZSG reported that from January to August 2025, the global zinc market had a surplus of 154,000 tons, compared with a surplus of 138,000 tons in the same period last year. The global refined zinc production from January to August was 9.152 million tons, and the consumption was 8.998 million tons [12][13]. - MMG's zinc ore production in the third quarter of 2025 was 58,700 tons, a year - on - year increase of 26%. Boliden's overall output of lead - zinc concentrates in the third quarter of 2025 increased quarter - on - quarter, but the Tara mine's production ramp - up was slower than expected, and the Odda smelter's refined zinc output decreased [13]. - Vedanta's zinc concentrate metal output in the third quarter of 2025 was 318,000 tons, a year - on - year increase of 6%. Customs data showed that in September, the imported zinc concentrate was 505,400 tons, a month - on - month increase of 8.15% and a year - on - year increase of 24.94%. The imported refined zinc was 22,700 tons, a month - on - month decrease of 11.6% and a year - on - year decrease of 57%. The exported refined zinc was 2500 tons, and the exported galvanized sheet was 1.2262 million tons, a month - on - month increase of 11.73% and a year - on - year increase of 2.27% [14]. 3.4 Relevant Charts The report provides multiple charts, including the price trends of Shanghai and LME zinc, the ratio of domestic and foreign markets, spot premiums, inventory changes, zinc ore processing fees, zinc ore import profits and losses, domestic refined zinc production, refined zinc net imports, and the start - up rate of downstream primary enterprises [15][18][22][23][24][26].

Market Performance - The market experienced a rise and then a pullback, with the ChiNext Index initially increasing by over 3%. By the close, the Shanghai Composite Index rose by 0.63%, the Shenzhen Component Index by 0.98%, and the ChiNext Index by 1.98% [1] Sector Performance - The computing hardware sector was notably active in the morning, with Cambridge Technology hitting the daily limit [2] - In the afternoon, the superhard materials sector surged, with Sifangda and Huanghe Xuanfeng both reaching the daily limit [3] - The coal sector continued to strengthen, with Dayou Energy achieving 11 consecutive trading limits and Antai Group hitting 3 consecutive limits [4] - Gas stocks saw a rapid rise, with Guo Xin Energy achieving 4 limits in 5 days [5] - Conversely, the non-ferrous metals sector experienced significant declines, particularly in gold-related stocks, with Hunan Silver hitting the daily limit down [6] Trading Volume - The total trading volume for the Shanghai and Shenzhen markets was 1.74 trillion yuan, a decrease of 200.5 billion yuan from the previous trading day, marking the lowest trading volume since August 8 [7] Individual Stock Highlights - Zhongji Xuchuang led in trading volume with 24.468 billion yuan, followed by Hanwujing-U, Xinyisheng, and Shenghong Technology [8] - Notable individual stock performances included: - Zhongji Xuchuang: 403.00 yuan, up 29.40 yuan (7.87%), with a year-to-date increase of 227.94% [9] - Hanwujing-U: 1281.12 yuan, up 33.44 yuan (2.68%), with a year-to-date increase of 94.70% [9] - Xinyisheng: 329.24 yuan, up 12.93 yuan (4.09%), with a year-to-date increase of 300.42% [9] - Shenghong Technology: 264.22 yuan, up 4.86 yuan (1.87%), with a year-to-date increase of 530.30% [9]

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Views of the Report - For copper, maintain a callback buying strategy, considering the continuous tightness in the mining end and the growth in infrastructure and power demand in Southeast Asia and the Middle East. Pay attention to the support around $10,300 for LME copper, and consider selling put options below $10,000 or gradually building virtual inventories [1] - For aluminum, the short - term fundamentals are acceptable, and it is advisable to hold at low prices in the long term [1] - For zinc, due to the poor domestic fundamentals but potential export opportunities, and increased macro uncertainties, it is recommended to wait and see. Consider gradually taking profits on domestic - foreign positive spreads and pay attention to reverse spreads in the far - month contracts. Also, pay attention to the positive spread opportunity between December and February contracts [2] - For nickel, the short - term real - world fundamentals are weak, but with potential policy - supported price increases from Indonesia [3][4] - For stainless steel, the fundamentals remain weak, with increased short - term trade friction uncertainties and potential price - support policies from Indonesia [9] - For lead, the price is expected to maintain a high - level oscillation between 17,000 and 17,400 next week, with a potential weakening trend in the future [12] - For tin, follow the macro sentiment in the short term, wait and see, and consider holding at low prices near the cost line in the medium - to - long term [15] - For industrial silicon, the supply - demand is balanced in Q4, and the price is expected to oscillate at the cycle bottom based on the seasonal marginal cost in the long term [16] - For lithium carbonate, the price has high elasticity after supply - side disturbances are realized and strong downward support before such disturbances [16] Group 3: Summary by Metal Copper - Price data shows changes in various indicators from September 29 to October 13, such as a 55 increase in spot premium and a 2926 increase in SHFE warehouse receipts [1] - Macro - level: Trump's tariff announcement led to a 4.5% drop in LME copper on Friday. The impact may be less than the Qingming Festival disturbance. There is still room for negotiation, and the progress of the South Korea negotiation should be monitored [1] - Fundamental: Smelting production cuts exceeded expectations, and there was medium - level inventory accumulation this week. After the price drop on Friday, the volume of pricing and receiving goods is expected to increase next week, leading to inventory reduction. Pay attention to the stability of copper cable production [1] Aluminum - Price data shows changes in aluminum prices, alumina prices, and inventory from September 29 to October 13, such as a 190 decrease in the Shanghai aluminum ingot price [1] - Fundamental: The operating capacity is increasing slightly. The production of photovoltaic modules has stabilized, and the proportion of molten aluminum has rebounded in September. There is seasonal inventory accumulation due to the holiday effect. The global economic recovery and Fed's rate - cut expectations coexist with Sino - US trade uncertainties, causing a divergence in domestic and foreign market trends [1] Zinc - Price data shows changes in zinc prices, inventory, and other indicators from September 29 to October 13, such as a 100 decrease in the Shanghai zinc ingot price [2] - Supply: Domestic TC is decreasing, and imported TC is increasing. Domestic mines will be tighter from Q4 to Q1 next year, while overseas mines had an unexpected increase in Q2. The smelting end is slightly recovering in October [2] - Demand: Domestic demand is seasonally weak, and overseas demand in Europe is average. Some overseas smelters face production difficulties due to processing fees [2] - Strategy: The domestic fundamentals are poor, but the export window may open. Due to increased macro uncertainties, it is recommended to wait and see [2] Nickel - Price data shows changes in nickel - related prices from September 29 to October 13, such as a 1300 decrease in the SHFE nickel spot price [3] - Fundamental: Pure nickel production remains high. Demand is weak, and inventory is stable domestically but increasing overseas. The short - term fundamentals are weak [3][4] - News: The protests in Indonesia have subsided, but there are still disturbances in the mining end, and the policy side has a motivation to support prices [4] Stainless Steel - Price data shows a decrease in stainless - steel prices from September 29 to October 13, such as a 50 decrease in the 304 cold - rolled coil price [9] - Fundamental: Steel mills' production in October is slightly increasing. Demand is mainly for rigid needs. Costs are stable, and inventory has increased during the holiday [9] - Policy: There is potential price - support from Indonesian policies, and trade friction uncertainties have increased [9] Lead - Price data shows changes in lead - related prices and inventory from September 29 to October 13, such as a 9293 decrease in the SHFE inventory [12] - Supply: The scrap volume is weak year - on - year. The profit of recycled lead has recovered, and the production is expected to increase by 30,000 tons in October. The primary lead production may decrease partially, and the recycled lead production will increase, with a total increase of 20,000 - 30,000 tons [12] - Demand: The battery production rate increased this week, but the finished - product inventory is high. After the National Day holiday, the demand may weaken [12] - Price forecast: The price is expected to oscillate between 17,000 and 17,400 next week and may weaken in the future [12] Tin - Price data shows changes in tin - related indicators from September 29 to October 13, such as a 4990 decrease in the tin position [15] - Supply: The processing fee of tin ore is low, and some domestic smelters have cut production. Overseas supply is expected to recover in October, and Indonesian exports have resumed [15] - Demand: The solder market has slightly recovered during the peak season. Domestic inventory has decreased slightly, and overseas LME inventory is oscillating at a low level [15] - Strategy: Follow the macro sentiment in the short term, wait and see, and consider holding at low prices near the cost line in the medium - to - long term [15] Industrial Silicon - Price data shows changes in industrial - silicon - related basis and warehouse receipts from September 29 to October 13, such as a 120 decrease in the 421 Yunnan basis [16] - Supply: A leading enterprise in Xinjiang has resumed production, and the production in Sichuan and Yunnan is stable. There is a strong expectation of production cuts in November [16] - Outlook: The supply - demand is balanced in Q4, and the price is expected to oscillate at the cycle bottom based on the seasonal marginal cost in the long term [16] Lithium Carbonate - Price data shows changes in lithium - carbonate prices, basis, and warehouse receipts from September 29 to October 13, such as a 450 decrease in the SMM electric - grade lithium carbonate price [16] - Supply: Overseas mines are reluctant to lower prices, and traders are reluctant to sell. Salt plants are less willing to accept high - priced lithium ore [16] - Demand: The pre - holiday inventory - building has almost ended. The spot basis is weak, and most transactions are at a discount [16] - Outlook: The price has high elasticity after supply - side disturbances are realized and strong downward support before such disturbances [16]

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Traditional Materials in the Asia Pacific region, specifically gold, copper, aluminum, steel, and coal [1][7]. Core Insights and Arguments Gold - **Price and Volume Growth**: Strong prices and above-peer volume growth are expected for Chinese gold miners, with projected double-digit volume growth from 2024 to 2027, while global production is anticipated to be flat or declining. This is expected to lead to strong earnings growth for Chinese gold miners [2]. Copper - **Super Cycle Factors**: A combination of supply disruptions, loose liquidity, and a weak dollar is expected to widen the global copper supply deficit in 2026. The macroeconomic environment is supportive, with abundant liquidity in the US and China, US rate cuts, and a weakening dollar, leading to a bullish outlook for copper equities [3]. Aluminum - **Sustainable Margin Expansion**: The expansion of bauxite supply from Guinea and other countries is leading to an oversupply of alumina globally. China's aluminum capacity is capped at 45 million tons, resulting in higher margins for aluminum smelters, estimated at around Rmb4,000 per ton year-to-date, which is expected to be sustainable. New supply additions for 2025-26 are estimated at 1.6 million tons and 1.0 million tons, respectively, which is less than the demand growth [4]. Steel - **Production Cuts and Export Strength**: Current steel margins are in the Rmb150-200 per ton range. There is resistance from steel mills and local governments regarding production cuts, which are part of anti-involution measures. Actual cuts are expected to be lower than the previously anticipated 30 million tons, primarily occurring during the winter slow season. Steel exports remain strong as mills adapt to new markets and product types [5]. Coal - **Support for Thermal Coal Prices**: The National Energy Administration's overproduction inspections are expected to reduce coal production in the second half of 2025 to approximately 2.25 billion tons, down 7% quarter-on-quarter and 9% year-on-year. This reduction, combined with the traditional peak consumption season in winter, is expected to support high thermal coal prices [6]. Additional Important Insights - **Price Target Adjustments**: Various companies within the materials sector have had their price targets adjusted based on updated commodity price forecasts. For example, CMOC's price target has been raised to Rmb18.60 from Rmb12.1, reflecting a 6% increase in EPS forecasts for 2025-27 [20]. - **Market Capitalization and Liquidity**: The report includes detailed market capitalization and liquidity data for various companies, indicating a healthy trading environment for the sector [12][14]. - **Long-term Commodity Price Forecasts**: The report provides updated long-term forecasts for commodity prices, indicating expected increases in prices for gold, copper, and aluminum, among others [17][18]. Conclusion - The overall outlook for the traditional materials sector in Asia Pacific is positive, with specific bullish sentiments for gold, copper, and aluminum driven by macroeconomic factors and supply-demand dynamics. The steel and coal sectors face challenges but also show resilience through export strength and seasonal demand.

Summary of Conference Call Notes Industry Overview - **Industry**: Greater China Materials - **Market Condition**: A liquidity-driven bull market is ongoing, supported by supply disruptions, which is positively impacting commodity prices [1][2][17] Key Insights Commodity Preferences - **Preferred Commodities**: Gold, copper, and aluminum equities are favored in the current market environment due to their strong performance and demand [1][2][17] - **Gold Outlook**: Anticipated further upside in gold prices driven by a weakening USD, strong ETF buying, and central bank purchases, alongside safe haven demand amid uncertainty [2][18] - **Copper Supply Dynamics**: Supply disruptions are expected to widen the global copper supply deficit in 2026, with a supportive macro environment of abundant liquidity and a weak dollar [19] - **Aluminum Margins**: Higher margins for aluminum smelters are projected due to capped capacity in China and limited ability to restart idled capacity in the US/Europe [20] Demand and Supply Trends - **Retail Demand**: Retail growth in autos and home appliances has weakened, attributed to a high base and early demand from trade-in subsidies [3] - **Construction Activity**: Property sales and construction remain subdued, with expectations for a major policy pivot requiring endorsement at the 4th Plenary Session [3] - **Anti-involution Policies**: Industries such as coal, cement, glass, and steel are facing production controls to curb overproduction, with specific guidelines issued to stabilize prices [4][21] Specific Sector Insights - **Cement Industry**: Policies to control overproduction are expected to lead to a 20% capacity exit during 2025-26, benefiting industry leaders through consolidation [21] - **Late-cycle Building Materials**: Demand for late-cycle building materials is expected to remain soft, although improvements may arise from secondary home sales and government programs [22] - **Lithium Demand**: Strong demand for lithium is noted, with potential supply disruptions due to resource reclassification at several mines [23] Price Forecasts - **Commodity Price Projections**: - **Gold**: Expected to rise to $4,400/oz by 2026, a 33% increase from current estimates [15] - **Copper**: Projected to reach $10,650/ton by 2026, reflecting a 9% increase [16] - **Aluminum**: Anticipated price of $2,750/ton by 2026, an 8% increase [16] Investment Recommendations - **Overweight Stocks**: CMOC, Hongqiao, Chalco, Anhui Conch, CNBM, and Baosteel are highlighted as preferred investment choices in the materials sector [2][17] - **Underweight Stocks**: Companies such as China Coal, Asia Cement, and Yancoal are recommended for underweight positions due to unfavorable market conditions [14] Additional Considerations - **Uranium Market**: Strong price momentum is expected in uranium, supported by major investment vehicles and contracting from utilities [24] - **Rare Earths**: Prices are anticipated to remain strong due to good downstream demand and tightened supply-side controls in China [25] This summary encapsulates the key points from the conference call, providing insights into the current state and future outlook of the Greater China materials industry.

Core Viewpoint - The non-ferrous metals industry is undergoing unprecedented changes driven by the global energy revolution, with traditional pricing models being disrupted by the Federal Reserve's anticipated interest rate cuts in 2025, leading to intensified competition between liquidity-driven premiums and supply-demand fundamentals [2][3]. Group 1: Copper Market - The global copper ore grade is continuously declining, and new discoveries are sharply decreasing, resulting in a significant supply constraint with a development cycle of 8-10 years [2]. - The Grasberg copper mine accident in Indonesia in 2025 is expected to widen the global copper concentrate supply-demand gap to 268,000 tons [2]. - Demand remains robust in traditional sectors like electricity and construction, while AI data centers require six times more copper per unit than traditional equipment, and electric vehicle charging stations require 0.8 kg of copper per kilowatt installed [2]. - LME copper prices increased by 11.4% year-on-year in Q1 2025, reaching a historical high of $10,857 per ton in May 2025, before a rapid decline of 19% due to overextension of interest rate cut expectations [2]. Group 2: Aluminum Market - The domestic aluminum industry is facing a "ceiling" policy limiting production capacity to 45 million tons, shifting the competitive focus to cost control and industry chain collaboration [6]. - The price drop of alumina has led to an expansion of profits by 300 yuan per ton for electrolytic aluminum, with companies like Shenhuo and Yun Aluminum benefiting from integrated self-supplied electricity, achieving over 27% year-on-year net profit growth [6]. - The demand for aluminum in lightweight transportation and electric vehicles is expected to grow by 15%, supported by government policies [6]. - Technological advancements, such as the AI-driven Gemini-2.0-Flash project, aim to reduce energy consumption in aluminum production by 200 kWh per ton [6]. Group 3: Rare Metals and Strategic Commodities - The pricing logic for rare metals like rare earths, antimony, and tungsten has evolved beyond supply-demand dynamics, becoming strategic assets in global competition [6]. - After the consolidation of China's rare earth industry, six major groups control 90% of global supply, with a 40% reduction in price volatility due to the 2025 export quota system [6]. - Antimony, essential for photovoltaic glass, faces supply chain anxiety due to a three-week global inventory and export bans from the Democratic Republic of the Congo [6]. - Future demand for lanthanide elements is expected to surge due to solid-state batteries, with a 50% increase in neodymium-iron-boron usage for robotics and a 70% reliance on magnesium alloys for low-altitude economic aircraft [6]. Group 4: Industry Risks and Challenges - Resource nationalism is rising, leading to frequent adjustments in mining taxes in resource-rich countries like Indonesia and Chile, with compliance costs for companies like Zijin Mining increasing by 12% annually [7]. - Domestic electrolytic aluminum companies face increased green electricity requirements, rising from 10% to 30% by 2030, which pressures short-term profits due to necessary technological upgrades [7]. - When copper prices exceed $10,000 per ton, downstream cable and appliance manufacturers may see profit margins drop below 5%, potentially leading to policy interventions due to imbalanced profit distribution across the industry [7]. - Global mining investment is projected to grow by 6.2% in 2025, but less than 1% of that is allocated to deep processing and R&D, indicating a structural mismatch that could limit long-term industry resilience [7]. Group 5: Overall Industry Outlook - The non-ferrous metals industry stands at a crossroads, facing both opportunities and challenges brought by the energy revolution, with the ability to navigate volatility and risks determining the sustainability and success of companies and the industry as a whole [9].