Summary of Key Points from Conference Call Records Industry Overview: Non-Ferrous Metals Core Insights and Arguments - **Copper Price Expectations**: The anticipated copper price for 2025 is around $10,000 per ton, aligning with current fundamentals. The decline in the spot-futures price spread indicates a rationalization of speculative sentiment, with large enterprises slowing down purchases [1][4]. - **Weakening Fundamentals**: The non-ferrous metals sector has shown a marginal weakening over the past three to four weeks, with inventory levels for copper and aluminum halting their decline and slightly increasing. Downstream operating rates, processing fees, and profitability for copper and aluminum are all on a downward trend [1][6]. - **Seasonal Weakness**: The non-ferrous metals market is expected to enter a traditional off-season from July to early August 2025, with high temperatures and holidays negatively impacting consumption. Previous tariff policies have preemptively exhausted some demand, posing short-term risks of returning to fundamental market conditions [1][7]. - **Valuation and Price Caution**: The current valuation of the non-ferrous metals sector is neutral, with commodity prices and sector valuations reflecting caution [1][8]. Additional Important Insights - **Aluminum Industry Conditions**: The aluminum sector is experiencing weak conditions, with aluminum rod margins at their lowest in nearly a year. While aluminum rod factory inventories have decreased by approximately 16,000 to 17,000 tons, social inventories have increased by over 10,000 tons, indicating weak demand [1][9]. - **Copper Demand and Inventory**: Copper demand is relatively weak, with electrolytic copper production declining for four consecutive weeks while factory inventories are rising, indicating insufficient demand. Downstream copper rod production has also decreased for three weeks, further confirming the downward trend in demand [1][10]. - **Future Price Adjustments**: It is expected that commodity prices may undergo two adjustments in the coming year, influenced by short-term factors such as tariff-related behaviors and seasonal effects, as well as the long-term negative impacts of U.S. tariff policies [1][11]. Industry Overview: Gold Core Insights and Arguments - **Gold Price Stability**: Short-term inflation expectations support gold prices, with significant adjustments unlikely. Long-term support for gold prices is provided by central bank purchases in emerging markets, with expectations for gold prices to fluctuate between $3,100 and $3,400 [2][12]. Additional Important Insights - **Investment Opportunities**: The current investment climate suggests that as other sectors present more opportunities, the opportunity cost of holding gold is high. However, as gold prices adjust to reasonable levels, capital may flow back into gold [2][13]. Industry Overview: Steel Core Insights and Arguments - **Steel Industry Performance**: The steel industry performed well in Q1, with Q2 profitability levels expected to remain similar. Investment opportunities may arise if "anti-involution" policies are extended to the steel sector, potentially improving profit margins [14]. Industry Overview: Minor Metals Core Insights and Arguments - **Investment Opportunities in Tungsten and Cobalt**: There are notable investment opportunities in tungsten and cobalt, with tungsten prices currently stabilizing at high levels. The demand for tungsten is supported by growth in electronics and new energy vehicles, while cobalt may see significant changes in July and August due to inventory dynamics [15].

Market Overview - On June 27, the A-share market exhibited structural differentiation, with the Shanghai Composite Index down by 0.70%, while the Shenzhen Component Index and the ChiNext Index rose by 0.34% and 0.47% respectively [2] - The total trading volume across the Shanghai, Shenzhen, and Beijing markets reached 1.58 trillion yuan, with over 3,400 stocks rising and 54 stocks hitting the daily limit [2] Sector Performance - The electronic, non-ferrous metals, and textile sectors attracted significant capital, with Tesla supply chain and military protection stocks showing particularly active performance [2] - In the electronic sector, nine stocks hit the daily limit, with notable inflows into Huaten Technology and Shenzhen Huqiang, which saw net inflows of 5.82 billion yuan and 6.40 billion yuan respectively [2] Non-Ferrous Metals - North Copper achieved a four-day limit increase, closing at 10.31 yuan with a net inflow of 2.57 billion yuan [3] - The sector saw a collective rise in small metal varieties such as zinc, tin, and molybdenum, driven by interest in Tesla's new electric vehicle concepts [3] Military and Defense - The defense sector saw significant activity, with Inner Mongolia First Machinery Group receiving a large net buy of 4.8 billion yuan, while Jihua Group also hit the daily limit [4] - The military protection theme ranked among the top gainers, supported by recent advancements in new equipment development by military enterprises [4] Communication Equipment - The communication equipment sector experienced a net inflow of 12.80 billion yuan, with Hengbao Co. hitting the daily limit at 19.15 yuan and a turnover rate of 54.38% [5] - The sector's activity is linked to the accelerated rollout of 5G-A networks by operators, indicating a potential for valuation recovery in related industries [5] Capital Flow Insights - The main sectors attracting capital included electronic components, communication equipment, and small metals, with net inflows of 19.26 billion yuan, 12.80 billion yuan, and 5.47 billion yuan respectively [5] - As the semi-annual report disclosure period approaches, sectors with strong earnings certainty, such as technology and high-end manufacturing, are likely to continue attracting investment [5]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The copper market shows a steady upward trend with LME copper prices increasing by 2.26% to $9,879.00 per ton, while domestic copper prices rose by 2.47% to 79,900 yuan per ton. Supply-side pressures are evident as the processing fee for imported copper concentrate has dropped to -$44.81 per ton, indicating potential supply constraints [1][13] - The aluminum market is stabilizing at the bottom, with LME aluminum prices up by 1.31% to $2,595.00 per ton. However, the operating rate of leading aluminum cable enterprises has decreased to 61.8%, reflecting ongoing demand challenges [2][14] - Gold prices have decreased by 2.90% to $3,286.10 per ounce, influenced by geopolitical tensions and a reduction in SPDR gold holdings, indicating a temporary decline in gold's safe-haven appeal [3][15] - The rare earth sector is experiencing upward momentum, driven by export controls and stable production levels, with expectations of improved supply-demand dynamics and potential price support [3][27][30] Summary by Sections 1. Overview of Bulk and Precious Metals Market - Copper prices are on the rise, with a slight increase in inventory and a decrease in processing fees indicating potential supply issues [1][13] - Aluminum prices are stabilizing, but demand remains weak as indicated by declining operating rates in the industry [2][14] - Precious metals, particularly gold, are facing downward pressure due to geopolitical factors and reduced investment interest [3][15] 2. Updates on Bulk and Precious Metals Fundamentals 2.1 Copper - The copper market is experiencing a robust demand outlook, with potential supply constraints due to declining processing fees and reduced operating rates in key sectors [1][13] 2.2 Aluminum - The aluminum market is stabilizing, but the demand outlook remains weak, as evidenced by declining operating rates in the aluminum cable sector [2][14] 2.3 Precious Metals - Gold prices are under pressure due to geopolitical tensions and a decrease in ETF holdings, reflecting a temporary decline in its safe-haven status [3][15] 3. Updates on Minor Metals and Rare Earths - The rare earth sector is expected to benefit from improved supply-demand dynamics and stable production levels, with potential price support anticipated [3][27][30] - The antimony market is facing downward price pressure, but upcoming regulatory changes may provide a demand boost [4][31] - Molybdenum prices are stabilizing, with low inventory levels and strong demand from the steel sector indicating a positive outlook [4][32] 4. Updates on Energy Metals - Lithium prices have shown slight declines, but production levels are increasing, indicating a stable supply outlook [5] - Cobalt prices have increased, reflecting strong demand in battery applications, while nickel prices are mixed with slight fluctuations [5]

Group 1 - The market performance this week exceeded expectations, driven by factors such as increased interest rate cut expectations from the Federal Reserve, appreciation of the RMB, stabilization of military conflicts in the Middle East, and anticipated visits from Trump to China [1] - Incremental capital sources include a marginal recovery in newly issued active equity public funds, rapid follow-up from leveraged funds, and a potential acceleration of insurance capital entering the market since mid-June [1] - The market's future performance will be dominated by capital and valuation, with a bullish long-term outlook for the index, although short-term fluctuations are expected rather than a continuous surge [1] Group 2 - In terms of industry allocation, a better strategy is to position at low levels and utilize odds thinking, with ongoing high-low switching being a key market signal [2] - The sectors that have shown relative underperformance since March 2020 but have seen marginally improved profit expectations recently are worth attention, including semiconductors, solid-state batteries, power grid equipment, industrial metals, and beer [2] - Caution is advised regarding short-term volatility risks in the banking sector as capital accelerates and the cost-effectiveness of stock-bond spreads decreases [2]

Investment Rating - The industry rating is "Recommended" [4] Core Insights - The macroeconomic sentiment and supply shortages have driven copper prices to their highest levels since March [6][17] - Precious metals have seen fluctuations due to geopolitical tensions easing and the signing of agreements between China and the US, leading to a correction in gold prices [1][40] - The overall sentiment in the basic metals sector is positive, with prices generally increasing across various metals [6][11] Summary by Sections Precious Metals - Gold prices decreased by 2.90% to $3,286.10 per ounce, while silver prices increased by 0.60% to $36.17 per ounce [1][25] - The gold-silver ratio fell by 3.48% to 90.86, indicating a shift in market dynamics [26] - SPDR Gold ETF holdings increased by 147,420.08 troy ounces, while SLV Silver ETF holdings rose by 3,726,451.20 ounces [26] Basic Metals - Copper prices rose by 2.26% to $9,879.00 per ton on the LME and by 2.47% to ¥79,920.00 per ton on the SHFE [6][48] - Aluminum prices increased by 1.31% to $2,595.00 per ton on the LME and by 0.56% to ¥20,580.00 per ton on the SHFE [6][48] - Zinc prices saw a significant rise of 4.89% to $2,778.50 per ton on the LME [6] - The overall sentiment in the basic metals market is buoyed by macroeconomic factors and supply constraints [6][11] Copper - The market is currently focused on copper inventory shortages, with LME copper stocks decreasing and COMEX stocks reaching historical highs [7][72] - Supply-side challenges include high costs and shortages of copper concentrate, with potential production disruptions from mining operations [7][72] - Demand expectations are improving, although domestic copper rod production rates have slightly declined [7][72] Aluminum - The aluminum industry is experiencing supply-demand imbalances, with production capacity remaining stable despite some regional maintenance [10][75] - Demand from downstream sectors is weakening, particularly in traditional off-peak seasons, affecting purchasing behavior [10][75] - Future aluminum prices are expected to be supported by ongoing demand in sectors like new energy and power [10][75] Zinc - Zinc prices are being supported by expectations of supply disruptions due to labor strikes at key production facilities [11] - The overall demand for zinc is facing pressure from declining activity in downstream sectors [11] Lead - Lead prices are experiencing upward pressure due to tightening supply from primary smelters and recovering production from recycled lead facilities [12] Small Metals - Magnesium prices have increased due to low inventory levels, while demand remains cautious [13][14] - Molybdenum and vanadium prices are under pressure from downstream demand weakness, leading to price declines [15]

Group 1 - The core viewpoint of the article highlights the performance and valuation of Luoyang Molybdenum Co., Ltd., noting its recent stock price increase and low rolling PE ratio compared to the industry average [1][2] - As of the first quarter of 2025, Luoyang Molybdenum reported a revenue of 46.006 billion yuan, a slight decrease of 0.25% year-on-year, while net profit surged by 90.47% to 3.946 billion yuan, with a gross margin of 22.33% [1] - The company ranks fifth in the small metals industry based on PE ratio, with an average industry PE of 53.16 and a median of 48.90 [1][2] Group 2 - Luoyang Molybdenum's total market capitalization is approximately 178.44 billion yuan, with 166 institutions holding shares, including 160 funds [1] - The company's main business includes mining and processing of base and rare metals, with key products such as molybdenum, tungsten, copper, cobalt, and niobium [1]

Investment Rating - The industry investment rating is maintained as "Recommended" [7] Core Viewpoints - The report highlights that the recent rise in gold prices is supported by increased risk aversion due to global geopolitical conflicts and inflation data from the US. Additionally, the temporary ban on cobalt exports from the Democratic Republic of Congo has tightened supply, making precious metals and rare earths key investment opportunities [5][4]. Summary by Sections Market Review (2025.6.09-2025.6.20) - The Shenwan Nonferrous Metals Index increased by 0.08%, outperforming the CSI 300 Index and ranking 5th among 31 Shenwan primary industries. Energy metals (1.54%) and metal new materials (0.90%) saw the highest gains, while precious metals and small metals changed by 0.54% and -2.00%, respectively [2][14]. Precious Metals - As of June 20, COMEX gold closed at $3,384.40 per ounce, up 1.60% over the past two weeks and 26.70% year-to-date. COMEX silver closed at $35.95 per ounce, down 0.50% over the same period but up 19.89% year-to-date. The report suggests that geopolitical tensions and trade uncertainties will continue to support gold prices, while silver may have further upside potential due to its undervaluation [3][22][25]. Industrial Metals - LME copper settled at $9,945 per ton, up 1.53% over the past two weeks and 14.50% year-to-date. LME aluminum closed at $2,529 per ton, up 4.01% over the same period but down 0.28% year-to-date. The report indicates that copper's supply-demand dynamics remain supportive, while aluminum faces challenges from seasonal demand fluctuations [29][32]. Small Metals - As of June 20, black tungsten concentrate (≥65%) was priced at 172,000 CNY per ton, down 0.58% over the past two weeks but up 20.28% year-to-date. LME tin closed at $32,690 per ton, up 1.35% over the same period and 15.82% year-to-date. The report notes that the antimony market is experiencing weak demand, while tungsten prices may trend higher due to stable consumption [35][36]. Rare Earths - The rare earth price index was reported at 182.17, down 0.70% over the past two weeks but up 11.23% year-to-date. The report highlights a mixed performance in rare earth prices, with light rare earths showing slight declines while others remain stable due to steady demand from traditional sectors [46][47]. Energy Metals - As of June 20, the average price of electrolytic cobalt was 234,500 CNY per ton, down 0.02% over the past two weeks but up 36.73% year-to-date. The report emphasizes the impact of the extended cobalt export ban from the Democratic Republic of Congo on supply dynamics [53][56].

Investment Rating - The report rates the non-ferrous metals sector as "Positive" [4] Core Insights - The small metals market is experiencing a significant price increase due to limited strategic metal reserves, high extraction difficulty, and insufficient supply elasticity, coupled with rapid growth in downstream demand from sectors like new energy, semiconductors, and military industries. Geopolitical tensions and China's export controls on tungsten, antimony, and rare earths have exacerbated supply-demand conflicts, leading to a sustained upward price trend for small metals [12][15][17] - In May 2025, the overall non-ferrous metals sector saw a moderate increase, with precious metals (gold) and strategic small metals (rare earths, tungsten) leading the gains. The geopolitical situation has intensified, causing a decline in risk appetite in international financial markets, which has driven gold prices higher as a traditional safe-haven asset [12][15] Summary by Sections 1. Focus Areas: Supply-Demand Conflicts and Geopolitical Impact - The small metals market is currently hot, with prices rising due to limited reserves and high extraction difficulty. The rapid growth in demand from new energy and military sectors, along with geopolitical tensions, has intensified supply-demand conflicts [12][15] 2. Small Metals Price Increase Cycle and Strategic Resource Valuation - Small metals are experiencing a significant price increase, with tungsten concentrate prices reaching historical highs of 169,000 yuan/ton, and antimony concentrate prices increasing by 57.02%. The main drivers include limited reserves, high extraction costs, and increased demand from various industries [15][17] 3. Market Trends: Macroeconomic Sentiment Recovery and Non-Ferrous Sector Growth - The non-ferrous metals sector showed a recovery in May, with small metals leading the way. The report highlights the importance of monitoring the Federal Reserve's interest rate decisions and China's economic recovery [12][46] 4. Policy Changes: Global Policies on Key Mineral Resource Protection and Development - Multiple countries are implementing policies to protect and develop key mineral resources, including the U.S. signing a "mineral agreement" with Ukraine and South Africa launching a critical minerals strategy. China is also taking measures to combat smuggling of strategic minerals [13][27] 5. Key Industry and Company Developments - Harmony Gold's acquisition of Macarthur Copper for $1.03 billion and other significant mergers and acquisitions in the mining sector are noted. Companies are using diverse capital strategies to strengthen resource control and optimize capacity [14][15]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **metal industry**, particularly **strategic metals** and **new materials** for the first half of 2025, highlighting the revaluation of strategic metals and opportunities in new materials due to technological iterations [1][3][29]. Core Insights and Arguments - **Strategic Metals Pricing**: By mid-2025, the pricing of strategic metals has fully reflected actual metal prices, influenced by global uncertainties and U.S. tariff policies [1][3]. - **Focus on Key Metals**: Emphasis on rare earth magnets, tungsten, and antimony, which have strong domestic resource control [1][3]. - **Export Controls**: China has implemented export controls on gallium, germanium, antimony, tungsten, bismuth, molybdenum, and indium to counter U.S. technology restrictions, leading to significant price increases in overseas markets compared to domestic prices [1][6][9][11]. - **Supply-Demand Dynamics**: The supply-demand balance is expected to improve gradually, potentially shifting from surplus to shortage, which will drive prices upward [2][12]. Specific Metal Insights - **Tungsten**: - The tungsten quota has decreased for two consecutive years due to resource depletion, with demand linked to macroeconomic conditions and growth in sectors like 3C and military, pushing prices to historical highs [4][15][16]. - Current tungsten prices exceed 170,000 yuan per ton, with production challenges due to low ore grades [14][15]. - **Antimony**: - Antimony market is strong, with domestic supply accounting for over 60% of global production. The photovoltaic industry is a major driver of demand, expected to grow as installation capacity expands [4][17][18]. - **Molybdenum**: - Molybdenum prices are expected to remain high due to stable production and lack of new mining projects, with demand primarily from stainless steel and special steel applications [19][22]. New Materials Sector - **Growth Opportunities**: The electronic and military sectors are highlighted as key areas for growth in new materials, driven by advancements in AI and electronic components [5][23][24]. - **Technological Upgrades**: The demand for upgraded electronic materials is increasing, particularly for components like capacitors and inductors, which require smaller particle sizes and higher performance [23][24]. Geopolitical and Market Impacts - **China's Dominance**: China holds a significant advantage in the smelting of strategic metals, with over 90% of rare earth separation occurring domestically, despite U.S. technology restrictions [1][10][11][12]. - **U.S. Dependency**: The U.S. remains highly dependent on China for strategic metals, with significant portions of its tungsten, antimony, and rare earth needs met by Chinese imports [11]. Emerging Trends - **Military Sector Recovery**: The military industry is showing signs of recovery, particularly in aerospace, with increased demand for strategic metals [26]. - **New Applications**: The demand for tantalum, niobium, and titanium in high-temperature applications and aerospace is expected to grow, driven by advancements in technology and military needs [28]. Conclusion - The strategic metals market is poised for growth, supported by strong demand fundamentals and geopolitical factors. Companies in this sector, such as Jinchuan Group and Xiamen Tungsten, are recommended for their promising outlooks [29].

Group 1 - The article emphasizes the importance of focusing on industries with marginal structural changes as the earnings forecast period approaches, suggesting that sectors with inventory depletion and contract liabilities are likely to see performance improvements [4] - The North American AI hardware supply chain is highlighted as a preferred investment area, along with sectors expected to report good earnings and reasonable valuations such as wind power, gaming, and pet industries [1][3] - The article discusses the potential for a rebound in the Hong Kong stock market, particularly in electric vehicles, innovative pharmaceuticals, and new consumption sectors, despite recent weakness due to liquidity tightening and increased share placements [1][3] Group 2 - The article notes that external risks, such as the potential for tariffs from the U.S. and the impact of tax legislation, could negatively affect non-U.S. markets [2] - It suggests that the trend of the U.S. dollar depreciating may benefit Chinese assets, with the Hong Kong market expected to see increased liquidity and investment opportunities as a result [5][6] - The article indicates that the A-share market is likely to experience a volatile upward trend in the second half of the year, supported by policy measures and the expansion of equity funds [8] Group 3 - The article highlights the importance of structural investment opportunities, particularly in sectors that are experiencing growth due to economic transformation and rising consumer income [9] - It suggests that the A-share market is currently in a phase of consolidation, with external uncertainties and domestic demand issues impacting performance [10][13] - The article recommends focusing on defensive assets and sectors with high dividend yields, as well as technology and consumer sectors that are expected to benefit from policy support [8][12]