EB SECURITIES has maintained an "overweight" rating on the steel/non-ferrous metals sector, with industry attractiveness ranked as copper/aluminum > gold > steel.
(1) Steel: Steel-listed companies are prioritizing investor returns. After 2026, as major ordinary steel enterprises complete ultra-low emission upgrades, capital expenditures are expected to decline gradually, and dividend payouts may further increase, highlighting long-term investment value.
(2) Copper/Aluminum: Global copper supply remains tight, with refined copper shortages intensifying in 2025–2026, potentially driving prices to new highs. Aluminum prices are also expected to rise in 2026, supported by expanding profit margins and dividend potential.
(3) Gold: A U.S. rate-cutting cycle and continued central bank purchases are likely to sustain upward momentum in gold prices.
**Key Views:** Supply constraints for steel, copper, and aluminum persist, with demand determining price ceilings. In 2026, supply growth for these metals will remain limited, while price elasticity hinges on economic recovery. Gold benefits from Fed easing and central bank demand.
**Supply Outlook:** - **Steel:** Long-term supply will be capped by energy consumption and carbon policies. Crude steel output faces pressure amid anti-overcapacity measures. - **Copper:** Major producers like Freeport and Teck Resources have lowered 2026 output guidance, with global refined copper production expected to dip 0.1%. - **Aluminum:** China’s primary aluminum output may grow just 1.6% due to capacity ceilings.
**Demand Outlook:** - **Steel:** Weakness in real estate persists, with the World Steel Association forecasting a 1% drop in China’s 2026 demand. - **Copper:** New energy sectors will drive demand, with global growth projected at 1.5%. - **Aluminum:** Manufacturing (EVs, power, consumer goods) may offset property declines, lifting China’s demand by 1.8%.
**Gold:** ETF inflows and central bank accumulation underpin bullish price trends amid global uncertainty and de-dollarization.
**Top Picks:** - **Steel:** Baoshan Iron & Steel, Jiuli Hi-Tech Metals; monitor Inner Mongolia ERDOS, CITIC Special Steel, Hunan Valin Steel. - **Copper:** Zijin Mining, CMOC; track Tongling Nonferrous Metals, Western Mining, JCHX Mining. - **Aluminum:** China Hongqiao; watch Yunnan Aluminium, Shenhuo Group, Zhongfu Industrial. - **Gold:** Zijin Mining; monitor Chifeng Gold, Zijin Mining International.
**Risks:** Slower-than-expected economic recovery; unexpected supply surges in steel/copper/aluminum; rapid price hikes curbing downstream demand.