Report Industry Investment Rating No relevant content provided. Core Viewpoints - Grasberg's unexpected copper production cut will change the global copper supply pattern in the next 12 - 15 months, and the mid - term allocation value of copper is still optimistic, with consideration of long - term mid - term orders or selling put options below 78,000 [1] - The short - term fundamentals of aluminum are acceptable, and one can hold at low prices in a low - inventory pattern and pay attention to far - month inter - month and domestic - foreign reverse arbitrage [1] - Zinc prices are oscillating this week. The short - term unilateral trend is weakly oscillating, and it is recommended to wait and see; for domestic - foreign arbitrage, partial profit - taking can be made for domestic - foreign positive arbitrage [2] - The fundamentals of nickel and stainless steel remain weak. The short - term macro aspect follows the anti - involution expectation, and the policy side has a certain motivation to support prices [3][4] - Lead prices are expected to oscillate weakly next week, in the range of 16,800 - 17,000 [5] - Tin prices are in a wide - range oscillation. In the short - term, it is recommended to wait and see, and one can lightly short above 275,000 yuan/ton; in the medium - to - long - term, hold near the cost line at low prices [10] - The supply and demand of industrial silicon are balanced in September and October, and in the medium - to - long - term, prices are expected to oscillate at the cycle bottom [11] - The price of lithium carbonate oscillates. With the support of the seasonal peak season and the explosion of energy - storage demand, the monthly balance after CATL's production cut turns to continuous inventory reduction, but the amplitude is average [11] Summary by Metals Copper - Freeport Indonesia's subsidiary's accident delays Grasberg's resumption of production, reducing the 2026 copper production guidance by about 35% (equivalent to about 270,000 tons of copper and about 1.04 million ounces of gold) [1] - The adjusted copper mine supply has no obvious increase this year, and there will be no increase in the mine supply next year if the Panama mine does not resume production [1] - Fund long positions are gradually increasing, but the focus of macro and bulk CTA funds is still on precious metals. The gold - copper ratio is at a low historical quantile [1] Aluminum - Supply increases slightly, and aluminum ingot imports provide an increase from January to August [1] - Downstream construction improves, and the production schedule of photovoltaic modules stabilizes. Attention should be paid to whether overseas demand stabilizes after the decline [1] - There is a slight inventory reduction in September, and a seasonal slight inventory increase is expected in October [1] Zinc - Domestic TC decreases further, and imported TC increases further. The domestic zinc ore supply is tight from the fourth quarter to the first quarter of next year, while the overseas mine supply increased unexpectedly in the second quarter [2] - In October, the smelting end recovers slightly month - on - month. Attention should be paid to the impact of sulfuric acid and silver prices on total profits [2] - Domestic social inventory oscillates, and overseas LME inventory decreases. The current pattern of strong overseas and weak domestic may further diverge, and the export window is close to opening [2] Nickel - The supply side expects a slight resumption of production by steel mills, the demand side is mainly for rigid demand, and the prices of nickel iron and chrome iron remain stable [3] - There is a slight inventory increase in Xifu, and a slight inventory reduction in warehouse receipts [3] Stainless Steel - The supply side expects a slight resumption of production by steel mills, the demand side is mainly for rigid demand, the price of nickel iron remains stable, and the price of chrome iron rises slightly [3][4] - There is inventory reduction in Xifu, and a slight inventory reduction in warehouse receipts [3][4] Lead - On the supply side, the scrap volume is weak year - on - year, the waste battery is in short supply, the recycled lead maintains low - level operation, and the TC quotation is in a chaotic decline [5] - On the demand side, the battery finished - product inventory is high, the battery construction rate increases this week, and the demand turns slightly prosperous [5] - The refined - scrap price difference is - 75, the long - term supply in Henan is tight, and the LME registered warehouse receipts decrease by 20,000 tons [5] Tin - On the supply side, the domestic smelting plants reduce production, and the supply from overseas gradually recovers. The supply side is marginally repaired [10] - On the demand side, the demand for solder is mainly rigid. The downstream restocking intention is strong when the price drops rapidly this week, and the inventory reduction is significant [10] - The domestic fundamentals are short - term in a situation of weak supply and demand. Attention should be paid to the expected changes after October and the impact of interest - rate cut expectations [10] Industrial Silicon - Xinjiang's leading enterprises resume production, and some factories in the southwest may gradually reduce production later [11] - The supply and demand are balanced in September and October, and in the medium - to - long - term, prices are expected to oscillate at the cycle bottom [11] Lithium Carbonate - The raw - material end has strong price - support intention from overseas mines and reluctant selling from traders, but salt factories have low acceptance of high - price lithium mines [11] - The pre - holiday stocking rhythm of the lithium - salt end is strong first and then weak, and the spot basis is weakly stable, with some discounts expanding by 100 - 200 yuan [11] - In the context of strong "anti - involution" commodity sentiment, the price elasticity is high after the supply - side disturbance speculation materializes, and the downward price support is strong before the disturbance materializes [11]

Investment Rating - Investment rating: Positive (maintained) [5] Core Views - The copper market is expected to transition from a tight balance to a shortage due to frequent supply disruptions, with prices likely entering an upward cycle. Recent price changes for copper include +2.08% for LME copper, +3.20% for SHFE copper, and +2.89% for COMEX copper. The Grasberg mine, the world's second-largest copper mine, has faced production halts, with Freeport estimating a recovery to pre-accident production levels by 2027, leading to a projected 35% decrease in copper production in 2026 compared to previous expectations. Domestic copper inventories are decreasing, with LME, COMEX, and SHFE inventories at 144,000 tons, 322,000 short tons, and 99,000 tons respectively, showing changes of -2.2%, +1.7%, and -6.7% [6][4][5]. Summary by Sections 1. Industry Overview - Domestic and international macroeconomic indicators show that initial jobless claims in the U.S. were lower than expected, with 218,000 claims reported against an expectation of 235,000. The core PCE price index for August matched expectations at 2.9% [10]. 2. Market Performance - The non-ferrous metals sector outperformed the Shanghai Composite Index, with a weekly increase of 3.52%, ranking second among Shenwan sectors. The copper, copper products, and cobalt sectors showed the most significant gains, while other small metals and aluminum sectors lagged behind [12]. 3. Valuation Changes - The TTM PE ratio for the Shenwan non-ferrous metals sector is 24.83, with a weekly change of 0.63. The PB ratio is 2.97, with a weekly change of 0.08. The non-ferrous sector's PE ratio is 112% of the overall A-share market, while the PB ratio is 165% [21][24]. 4. Industrial Metals - Copper prices increased, with LME copper up 2.08% and SHFE copper up 3.20%. Copper inventories decreased by 2.20% for LME and 6.65% for SHFE. The smelting fee is reported at -40.3 USD/ton, with copper smelting margins at -2701 CNY/ton [26][39]. 5. Aluminum - LME aluminum prices fell by 1.36%, while SHFE aluminum prices decreased by 0.22%. The inventory situation shows a 0.74% increase in LME aluminum stocks and a 2.43% decrease in SHFE stocks. The price of alumina dropped by 2.15% [39]. 6. Lithium - Lithium carbonate prices rose by 0.14% to 73,600 CNY/ton, while lithium spodumene prices fell by 0.23% to 857 USD/ton. The lithium supply chain is entering a destocking phase due to increased demand [79]. 7. Cobalt - Cobalt prices increased, with MB cobalt up 3.22% to 16.83 USD/pound and domestic cobalt prices rising by 14.80% to 318,000 CNY/ton. The Democratic Republic of Congo is set to implement a cobalt export quota system, which may lead to a tightening of supply and further price increases [92].

Report Industry Investment Rating No information provided in the given content. Core Viewpoints of the Report Copper - Copper has long - term multi - allocation value due to enhanced raw material supply disturbances, and it is expected that the future price center will move up. Both macro and fundamental factors are favorable for the long - term strengthening of copper prices. [6][8] - In the short term, attention should be paid to changes in supply - demand and the macro - aspect. Aluminum - Aluminum is in a grinding phase after a small rebound and then a callback. It is recommended to hold a light position before the holiday. In the medium - term, there is a bullish view on the unilateral price, volatility direction, and smelting profit of aluminum. [81] Alumina - The center of alumina continues to move down. The subsequent downward space depends on the marginal surplus of the supply side. [82] Summary by Relevant Catalogs Copper Trading End - Volatility: The volatility of SHFE copper, international copper, LME copper, and COMEX copper has rebounded. COMEX copper price volatility is around 13%, and SHFE copper volatility has risen to about 16%. [10][14] - Term Spread: The term structure of SHFE copper has weakened, the LME copper spot discount has narrowed, and the COMEX copper C structure has also narrowed. [17][19] - Position: The positions of SHFE copper, international copper, LME copper, and COMEX copper have all increased, with SHFE copper's position increasing by 6.70 lots to 546,000 lots. [20] - Capital and Industry Position: CFTC non - commercial long net positions have decreased, and LME commercial short net positions have also declined. [26] - Spot Premium: Domestic copper spot premiums have weakened, and Yangshan Port copper premiums have declined. The US copper premium remains at a high level, while Rotterdam and Southeast Asian copper premiums are stable. [30][32] - Inventory: The global total inventory has decreased, with domestic social inventory and LME inventory both decreasing, while COMEX inventory has increased. [33][34] - Position - to - Inventory Ratio: The LME copper position - to - inventory ratio has rebounded, and the SHFE copper position - to - inventory ratio is at a neutral level in the same period of history. [38] Supply End - Copper Concentrate: Imports have increased year - on - year, and processing fees have weakened marginally. Port inventories have decreased. [41][43] - Recycled Copper: Imports and domestic production have increased year - on - year. The scrap - refined spread has widened, and import losses have expanded. [44][49] - Blister Copper: Imports have decreased, and processing fees are at a low level. [53] - Refined Copper: Production has increased more than expected, imports have increased, and the import loss of copper spot has expanded. [56][58] Demand End - Capacity Utilization Rate: In August, the capacity utilization rate of copper product enterprises weakened month - on - month. The capacity utilization rate of wire and cable continued to decline in the week of September 25. [61] - Profit: Copper rod processing fees are at a low level in the same period of history, and copper tube processing fees have declined. Copper plate and strip processing fees and lithium - ion copper foil processing fees have also weakened. [63][65] - Raw Material Inventory: The raw material inventory of wire and cable enterprises remains at a low level. [66] - Finished Product Inventory: The finished product inventory of copper rods has rebounded, and the finished product inventory of wire and cable has increased. [69] Consumption End - Apparent consumption is good. The power grid investment, home appliances, and new energy industries are important supports for copper consumption. The power grid investment growth rate has accelerated. [74][76] - Air - conditioner production has resumed growth, and new energy vehicle production is at a high level in the same period of history. [77] Aluminum and Alumina Trading End - Spread: The A00 spot premium has strengthened, and the alumina spot premium has weakened. The near - month spread of SHFE aluminum has remained stable. [85][88] - Volume and Position: The trading volume and position of SHFE aluminum and alumina main contracts have slightly declined. [91] - Position - to - Inventory Ratio: The position - to - inventory ratio of SHFE aluminum has declined, and that of alumina has decreased and is at a historically low level. [96] Inventory - Bauxite: Port inventories and inventory days have increased. The inventory of 43 sample enterprises has increased in August. The port shipping volume of Guinea and Australia has declined, and the sea - floating inventory has increased. The outbound volume shows differentiation, and the inbound volume has declined. [101][106][107] - Alumina: The center of alumina continues to move down, and the inventory has increased. [82] - Aluminum: The social inventory of aluminum ingots has decreased. [81]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the Hong Kong metal and non-ferrous metal industry, highlighting its growth potential and defensive characteristics, making it a quality investment sector [1][2]. Key Insights and Arguments General Market Sentiment - Anticipation of interest rate cuts is driving capital into non-ferrous metals with financial attributes, leading to increased investment interest in the sector [1][2]. - Many mid-cap non-ferrous metal companies in Hong Kong are undervalued and exhibit high elasticity, enhancing their investment appeal [2]. Cobalt Industry - A projected shortage of approximately 30,000 tons in the cobalt industry is expected post-2026, with prices potentially rising to around 400,000 CNY/ton from the current 280,000-290,000 CNY/ton [3][4]. - Li Qun Resources is expected to benefit significantly from its wet smelting capacity in Indonesia, with nickel profits projected to exceed 4 billion CNY by 2026 [4]. Gold Market - The gold market outlook remains positive, driven by interest rate cuts and de-dollarization, with prices expected to approach 4,000 USD/oz [5]. - Zijin Mining International is anticipated to be undervalued, with a potential market capitalization exceeding 300 billion HKD post-listing [5][6]. Copper Market - A tightening supply of copper is expected, with several companies lowering production forecasts. The period from 2025 to mid-2026 is anticipated to be the tightest for global copper supply, with prices potentially exceeding 12,000 USD/ton [1][9]. - AI technology is expected to significantly boost copper demand, with an estimated increase of 100,000 tons by 2027 due to data center construction [30]. Tungsten Market - The tungsten market is facing a supply-demand gap due to quota reductions and policy restrictions, with prices expected to remain high from 2025 to 2027 [14][15]. - Jiaxin International is highlighted as a promising investment in the tungsten sector, with significant profit potential due to rising tungsten prices [16]. Additional Important Insights Investment Recommendations - Key stocks to watch include Li Qun Resources and Zijin Mining International, both of which are expected to see substantial profit growth and are currently undervalued [6][8]. - China Hanwang is noted for its potential growth, with expected gold production of 6 to 7 tons by 2027-2028, suggesting a market cap increase to around 200 billion HKD [8]. Market Dynamics - The copper market is experiencing a gradual increase in downstream acceptance of higher prices, with a shift in procurement behavior noted as prices fluctuate [13]. - The aluminum market is expected to see stable prices due to limited supply growth and strong demand, particularly from the construction and photovoltaic sectors [24][27]. Future Trends - The overall sentiment towards the non-ferrous metal sector remains optimistic, with a focus on growth and defensive attributes, making it a differentiated investment choice [32][33]. - Emerging sectors such as innovative pharmaceuticals, VR, AI, and hard technology are also recommended for investment consideration in the Hong Kong market [33].

Summary of Key Points from Conference Call Records Industry Overview - The conference call discusses the Hong Kong stock market's non-ferrous metal industry, highlighting its growth potential and defensive characteristics, making it a quality investment sector [1][2][32]. Key Insights and Arguments Non-Ferrous Metal Sector - Anticipated interest rate cuts are expected to drive funds into non-ferrous metals with financial attributes, leading to increased investment in small to mid-cap companies within this sector [1][2]. - The cobalt industry is projected to face a shortage of approximately 30,000 tons by 2026, with prices potentially rising to nearly 400,000 CNY per ton [1][3]. - Gold prices are expected to rise towards 4,000 USD per ounce, driven by the interest rate cycle and de-dollarization trends [1][5]. - Copper supply is tightening, with several companies lowering production forecasts, leading to expectations of record-high copper prices, potentially exceeding 12,000 USD per ton in the first half of 2026 [1][9]. - Tungsten supply is constrained due to quota reductions and policy restrictions, with a sustained supply-demand gap expected from 2025 to 2027, supporting high tungsten prices [1][14][15]. Company-Specific Insights - **Li Qun Resources**: Expected to benefit from Indonesian wet smelting capacity, with nickel profits projected to reach over 4 billion CNY by 2026 [1][4][6]. - **Zijin Mining International**: Valuation is considered low, with potential market capitalization exceeding 300 billion HKD post-listing [1][5][6]. - **Jiaxin International**: Positioned as a rare tungsten mining stock, with significant investment potential due to its low valuation compared to peers [1][16][18]. - **China Hanwang**: Anticipated to achieve gold production of 6 to 7 tons by 2027-2028, with a projected market capitalization of 200 billion HKD [1][8]. Market Dynamics - The copper market is expected to experience a significant tightening phase, with global supply constraints and increasing demand from AI technology driving future growth [1][30]. - The aluminum market is projected to see a demand growth of 1.5% in 2025, with supply growth slowing, leading to a tighter market and upward pressure on prices [1][27]. - The lithium carbonate market faces uncertainties due to regulatory issues affecting production, but demand remains strong, particularly in the energy storage sector [1][28][29]. Additional Important Insights - The overall sentiment towards the non-ferrous metal sector remains positive, with a focus on both growth and defensive attributes, making it a differentiated investment choice [1][32]. - The call emphasizes the importance of monitoring specific stocks within the sector, particularly those with strong fundamentals and growth potential [1][33]. This summary encapsulates the critical insights and projections discussed during the conference call, providing a comprehensive overview of the non-ferrous metal industry and specific companies within the Hong Kong stock market.

Summary of Key Points from Conference Call Industry Overview - The copper industry is facing significant supply disruptions, with global copper mine supply expected to show no growth in 2025 due to major mining companies reducing output and new projects not compensating for these reductions [1][2][3] - The supply of scrap copper in China is tightening due to policy impacts, with a significant slowdown in import growth observed in the first eight months of 2025 [1][4] Supply and Demand Dynamics - Major mining companies, including Freeport and Glencore, have lowered their production forecasts, leading to a total reduction of approximately 24 million tons [2] - The global copper supply is expected to be extremely tight in the first half of 2026, with a potential shortfall of over 700,000 tons, exceeding market expectations [2][8] - The U.S. has seen a surge in COMEX inventory due to the removal of tariffs on electrolytic copper, but this is expected to peak by the end of September, leading to increased demand pressure outside the U.S. [1][5] Price Forecasts - Copper prices are anticipated to reach historical highs in 2026, potentially between $12,000 and $14,000 per ton, driven by supply constraints and resilient demand [1][11] - High copper prices are expected to impact downstream consumption, but the market is showing an increasing acceptance of higher prices, with strong buying support even at elevated levels [9][10] Demand Segments - The electricity, home appliance, and transportation sectors account for approximately 70% of copper demand, with improvements expected in electricity demand and stable growth in new energy vehicle demand [7] - Despite a slowdown in investment from the State Grid, overall demand in the electricity sector is projected to grow in the coming quarters [7] Company Insights - Tongling Nonferrous Metals is highlighted as a key investment opportunity due to its rapid production growth and commitment to high dividends, with projected profits of 5 to 6 billion yuan [12] - The valuation of the Hong Kong smelting industry has improved from extreme lows, with expectations of better profitability as supply-demand dynamics shift in 2026 [13][15] Regulatory Impact - Domestic anti-dumping policies are expected to restrict new capacity, which could enhance the competitive advantage of leading domestic companies and improve overall industry profitability [19] Investment Opportunities - The copper sector presents significant investment opportunities, particularly with the anticipated tightening of copper supply in late 2025 and early 2026, which is expected to drive prices higher [17][18]

Group 1 - The copper metal concept increased by 1.17%, ranking fifth among concept sectors, with 41 stocks rising, including Naipu Mining at a 20% limit up, and notable gains from Luoyang Molybdenum (9.90%), Tongling Nonferrous Metals (8.12%), and Northern Copper (7.47%) [1][2] - The copper sector saw a net inflow of 1.177 billion yuan, with 41 stocks receiving net inflows, and five stocks exceeding 100 million yuan in net inflow, led by Luoyang Molybdenum with 1.247 billion yuan [2][3] - The top stocks by net inflow ratio included Jingyi Co., Huamao Co., and Naipu Mining, with net inflow ratios of 54.25%, 23.21%, and 16.11% respectively [3][4] Group 2 - The top gainers in the copper sector included Luoyang Molybdenum (9.90%), Northern Copper (7.47%), and Zijin Mining (5.17%), while the biggest losers were Western Gold (down 3.72%), Dezhong Automobile (down 3.64%), and Chifeng Gold (down 3.29%) [1][2][3] - The trading volume and turnover rates for key stocks were significant, with Luoyang Molybdenum having a turnover rate of 3.71% and Northern Copper at 14.72% [3][4] - The overall performance of the copper sector reflects strong investor interest, as evidenced by the substantial net inflows and positive price movements among leading companies [2][3]

Core Viewpoint - The non-ferrous metal sector experienced a significant surge in early trading on September 25, with copper leading the gains, indicating a positive market sentiment towards copper-related companies [1] Company Summary - Northern Copper and Jingyi Co. saw their stock prices hit the daily limit up, reflecting strong investor interest and confidence in these companies [1] - Jiangxi Copper, Electric Alloy, Yunnan Copper, Luoyang Molybdenum, and Tongling Nonferrous also recorded notable price increases, showcasing a broad rally in the copper industry [1]

Core Viewpoint - The article maintains a positive outlook on copper prices, anticipating an upward trend due to various macroeconomic and supply-demand factors [4]. Macroeconomic Factors - Following a 25 basis point interest rate cut in the US in September, the dollar index experienced a short-term rebound, leading to a temporary decline in copper prices. However, the interest rate cut cycle is not over, suggesting a potential further weakening of the dollar index [4]. Supply and Demand - The inventory adjustments caused by US copper tariffs are nearing completion, with expectations that the accumulation of inventories on LME and COMEX will gradually end. The supply of copper from mines and scrap remains tight, with a slight decrease in electrolytic copper production in August. Demand for electricity and air conditioning is expected to rebound in Q4, supporting higher copper prices [4]. Inventory Levels - Domestic copper social inventory increased by 3.2%, while LME copper inventory decreased by 3.2%. As of September 19, 2025, domestic port copper concentrate inventory stood at 725,000 tons, up 4.6% from the previous week. Global electrolytic copper inventory totaled 557,000 tons, up 2.6% [5]. Raw Material Prices - The price difference between refined copper and scrap copper decreased by 193 yuan/ton compared to the previous week. In May 2025, China's refined copper production was 158,000 tons, up 22.7% month-on-month and 11.2% year-on-year [6]. Smelting and Processing - In August 2025, China's electrolytic copper production was 1.1715 million tons, down 0.2% month-on-month but up 15.6% year-on-year. The TC spot price as of September 19 was -40.64 USD/ton, reflecting a 0.8 USD/ton increase from the previous week, remaining at historically low levels [7]. Demand Trends - The cable industry's operating rate decreased by 1.8 percentage points week-on-week, while the production of household air conditioners in August exceeded expectations, showing a year-on-year increase of 9.4% [8][9].

Investment Rating - The report maintains an "Overweight" rating for the non-ferrous metals industry [6]. Core Views - The report is optimistic about the upward trend in copper prices, driven by tightening supply and improving demand in the upcoming quarters [4][6]. Supply and Demand Summary - **Supply**: Domestic copper social inventory increased by 3.2%, while LME copper inventory decreased by 3.2%. Domestic port copper concentrate inventory reached 725,000 tons, up 4.6% week-on-week [2][26]. - **Demand**: In August, domestic air conditioning production increased by 9.4% year-on-year, outperforming previous expectations of a 2.8% decline. The cable industry, which accounts for approximately 31% of domestic copper demand, saw a slight decrease in operating rates [3][78][97]. Price and Market Summary - **Copper Prices**: As of September 19, 2025, SHFE copper closed at 79,910 CNY/ton, down 1.42% from September 12, while LME copper closed at 9,997 USD/ton, down 0.71% [1][19]. - **Futures Market**: SHFE copper active contract positions decreased by 35%, while COMEX non-commercial net long positions increased by 11% [4][33]. Investment Recommendations - The report recommends stocks such as Jincheng Mining, Zijin Mining, Luoyang Molybdenum, and Western Mining, while suggesting to pay attention to Tongling Nonferrous Metals [4].