Xiangcai Securities: Looking at copper and aluminum prices, maintaining the “gain” rating in the non-ferrous metals industry

The Zhitong Finance App learned that Xiangcai Securities released a research report saying that among the four key tracking metals of copper, aluminum, platinum, and palladium, they look more at copper and aluminum prices, carefully view more platinum prices, and are neutral and bearish on palladium prices. In terms of investment targets, the copper sector suggests focusing on leading upstream companies with copper mines and continuous mergers and acquisitions of copper mines. Even in the context of rising stock prices, the bank believes that the pricing of copper metals is not over. The aluminum sector focuses on the process of electrolytic aluminum. The platinum sector focuses on leading domestic platinum metal recycling companies. Maintain the non-ferrous metals industry's “gain” rating.

The main views of Xiangcai Securities are as follows:

copper

Copper prices continued to rise this month but were accompanied by phased spot prices. This phenomenon is more likely to be a short-term adjustment in the context of a rapid rise in copper prices (similar to the situation in mid-2024). Currently, it is too early to judge the shift in copper prices; the supply side maintained growth but the cumulative growth rate declined sequentially. Demand for white electricity continued to decline on the demand side due to declining national subsidies, but overall demand for copper for air conditioners and refrigerators remained stable. The phased core conflict focused on factors such as tariff concerns, power games, and data center capital expenditure. Copper prices have limited impact; in terms of inventories, North America The act of “hoarding copper” has intensified, and global copper inventories continue to be tight. The conflict between supply and demand in the industry has not yet been fundamentally resolved. Overall, supply and demand are tight, so the judgment that copper prices are bullish is maintained.

aluminum

Aluminum prices continued to rise this month, but along with the phased distribution of water, the price difference between electrolytic aluminum and alumina continued to widen, and the pattern of differentiation between the two trends has not yet been reversed. On the supply side, with supply and demand squeezed in the alumina market, with the exception of fine/chemical alumina manufacturing, the industry as a whole will continue to be under pressure, while electrolytic aluminum is affected by domestic production capacity ceilings, overseas production falls short of expectations, supply and demand maintain a tight pattern, and price performance is strong; the overall demand for demand on the demand side continues to grow but the growth rate of the automotive sector is stable, and the growth rate of new energy vehicles and photovoltaic installations slow marginally; aluminum alloy maintains a high growth trend, compounded by emerging demand such as new energy and AI computing power to provide long-term support; The level supports the price of aluminum. In summary, aluminum prices are expected to remain high in 2026, maintaining the judgment that electrolytic aluminum prices are bullish and corporate profits are high; while alumina prices are bearish, putting pressure on the industry as a whole except for a few segments.

platinum

Platinum prices rose rapidly in December. Futures reached a maximum of 700 yuan/gram and maintained a rise in spot prices. On the demand side, the global automobile market is growing steadily. Diesel vehicles and hybrids are booming, forming the core market for platinum demand. Higher year-on-year imports in most months of the year confirm strong demand. However, the growth rate of new energy vehicles and photovoltaic installations declined marginally, and platinum-palladium prices turned negative to suppress demand for “palladium in platinum”, and demand growth slowed from month to month. Supply-side minerals are highly concentrated in South Africa, and there is limited room for growth. Overall, there is a tight balance between strong demand and weak supply. The launch of a new product by the Guangji Institute has triggered a short-term speculative atmosphere. Combined, platinum prices are currently high, and platinum prices are judged cautiously. It is expected that in 2026, the tight balance between supply and demand will improve marginally, supporting the operation of platinum prices at a high level. At the investment level, it is recommended to focus on companies related to platinum recycling, and if there are companies that go overseas to merge and buy platinum ore, they will focus on it.

palladium

Palladium prices rose rapidly in December. Futures prices on the Guangzhou Futures Exchange once approached 600 yuan/gram and maintained an upward trend in spot prices. Short-term trading activity led to a high risk of price fluctuations. The demand side is affected by the decline in the gasoline vehicle market. The core demand momentum for palladium is weak, and its demand structure is concentrated in the field of automotive catalysts, and lacks support from multiple growth points. Compared with platinum, the demand logic is even weaker. In terms of inventories, NYMEX palladium stocks have risen sharply since mid-2025, further reflecting the loosening of the supply and demand pattern. Although there are similarities between the supply side and platinum, there is a neutral and negative view of palladium prices based on factors such as supply and demand, inventory, and demand structure.

Key Metals Opinions Updated

The core trend of tracking metal-related listed companies this month is the global merger and acquisition of metal-related listed companies. Currently in the depression cycle in the fifth round of the Kang Bo cycle, the last round of information technology dividends peaked, while the new round (such as artificial intelligence) technology is still in its infancy. Some commodity assets are expected to benefit during this stage: the leading country, the US faces recessionary pressure, high sovereign debt, long-term trade deficits, and serious industrial hollowing out continues to weaken dollar credit. The world urgently needs new global general assets other than US dollars and US bonds as anchors, so the world urgently needs new global general assets other than US dollars and US bonds as anchors, so the world urgently needs new global general assets other than US dollars and US bonds as anchors, so the world urgently needs new global general assets other than US dollars and US bonds as anchors, so the world urgently needs new global general assets other than US dollars and US bonds as anchors, so the world urgently needs new global general assets other than US dollars and US bonds as anchors, so the world urgently needs new global general assets other than US dollars and US bonds as anchors GM The value of general equivalents is the first to be valued. As the price of gold rises, commodities with tight supply and demand patterns that are not priced by this logic will be re-valued. Typical examples are copper. Non-ferrous metals other than gold and copper that match this logic may all face depreciation; at the same time, interest rate cuts and capital outflows from the US may increase the degree of commodity devaluation. The US has been in a state of trade account deficit+capital account surplus for a long time. In recent years, large amounts of capital have been attracted by high interest rates on US bonds. In the past 3 years, the trade surplus was about 2 trillion US dollars, but clearly had no foreign exchange reserves of about 2 trillion US dollars. Increased, and large surpluses are estimated The flow to the US earns fixed income. As the Federal Reserve cuts interest rates, China alone may have a surplus of nearly 2 trillion US dollars, and globally priced commodities such as gold and copper are expected to further increase in valuation.

Monthly Market Review

The nonferrous metals industry rose 13.68% this month, with a daily increase of 65.05% in the past six months. Both indicators surpassed the Shanghai and Shenzhen 300 Index by a large margin (2.28% and 16.68% during the same period), ranking 2nd in the Shenwan industry; copper, other small metals, and aluminum registered the highest gains in the sub-sector. At the individual stock level, China's uranium industry was at the top of the list of gains this month and the past six months, while the decline was at the top of the list. As of December 31, the industry had a price-earnings ratio of 26.88 times and a price-earnings ratio fraction of 48.4%, respectively, ranked 12th and 19th in the Shenwan industry. The valuation level was significantly higher than Shanghai and Shenzhen 300 (price-earnings ratio 13.45 times, fraction 84.0%); the third-level sub-sector had obvious differentiation in valuation, with sectors such as magnetic materials and other new metallic materials leading the price-earnings ratio, and the copper sector was in a low position with a price-earnings ratio of 22.8 times.

Risk Alerts

US tariffs and Federal Reserve policies have exceeded expectations, demand from key downstream industries such as automobiles, photovoltaics, and power grids fell short of expectations. The international situation and geopolitical risks have exceeded expectations, and the supply side has exceeded expectations.