Investment Logic:

1. Copper: A new pattern led by supply and demand, ushering in a new era.

   In the medium to long term, insufficient capital expenditure and high uncertainty in new project delivery will likely result in zero or even negative growth in global copper mine supply in 2026 if production recovery falls short of expectations. On the demand side, expanding AI computing power boosts copper demand through power systems, while U.S. grid investment accelerates, widening the supply-demand mismatch. Against this backdrop, the global copper supply-demand gap in 2026 is conservatively estimated at about 830,000 tonnes. Copper prices will need to rise to curb demand and rebalance the market, with the price center expected to shift notably higher and potentially break through 13,000 USD/tonne at the peak.

2. Aluminum: A high-quality dividend asset.

   The cost-reduction dividend is expected to continue in 2026. Tight supply constraints emerge from China’s production capacity ceiling and power limitations. Low inventories combined with diversified demand may outperform expectations. We are optimistic about the continued expansion of high profitability in primary aluminum.

3. Gold: Still driven by a cyclical plus structural bull market.

   Overseas interest rate cuts will continue to fuel cyclical ETF investment demand from households. Concerns over U.S. dollar credit due to high U.S. fiscal deficit will further drive central bank gold purchases.

4. Silver: Bullish on the medium-term upward trend of silver prices.

   Overall supply remains stable. Demand is jointly driven by growing industrial demand and volatile investment demand, with photovoltaics, electrical and electronics sectors as core pillars. Global silver inventories are still trending lower. Amid rigid supply and structural shortages, silver prices still have upside potential in the medium term.

5. Lithium: The peak of capital expenditure has passed, and the downward trend in capacity growth is clear.

   High prosperity in global energy storage investment may drive continuous improvement in the lithium supply-demand balance, with prices expected to rise beyond expectations.

6. Cobalt: Export quotas in the DRC have been implemented, pushing the global market into a shortage.

   Tight raw material supply is unlikely to ease, and cobalt prices will continue to rise.

7. Rare Earths: Supply-side reform and front-loaded exports expected to resonate.

   Rising processing fees for imported heavy rare earth ores indicate a sharp decline in industry buyers, a clear signal of smelting capacity consolidation, with supply-side reform likely to advance further. Booming magnet exports will drive front-loaded external demand. With favorable supply-demand dynamics, we maintain a bullish outlook on the rare earth sector.

8. Antimony: Expected to see a second round of simultaneous price increases at home and abroad.

   Expectations of export recovery are strengthening, and external demand elasticity may be unleashed once export windows reopen. Large overseas shortages, coupled with concentrated capital inflows, will likely push overseas antimony prices higher. We anticipate a second wave of synchronized antimony price rises globally.

9. Tin: Focus on positioning opportunities before new highs.

   Global tin supply disruptions occur frequently. Indonesia’s crackdown on illegal mines may largely offset incremental production from Myanmar. Global tin ingot inventories are at low levels, with the supply-demand gap expected to widen further. The tin-copper ratio still has room to rise. We are bullish on tin prices hitting all-time highs.

10. Tungsten: Prices expected to hit new highs continuously.

    Supported by supply reductions and global strategic stockpiling, tungsten prices have kept rising. Strengthening economic recovery expectations and a PMI rebound above 50 will further boost civilian demand. Tungsten will stay in a supply shortage, with prices likely to keep hitting new highs.

11. Molybdenum: Inventories remain low, with a rising price center.

    Steel procurement is booming and industry inventories stay low. The impact of imported ore since October 2025 is expected to dissipate gradually, sending molybdenum prices back to an upward trend.

12. Uranium: Supply-demand gap to persist, with medium-term prosperity in sight.

    On the supply side, primary uranium supply rebounds short-term driven by mine resumptions but faces sustained decline in the medium to long term. Secondary supply is unlikely to generate effective incremental volume in the near to medium term. On the demand side, nuclear power capacity grows steadily boosted by energy security, clean energy transition and AI power demand. The global natural uranium supply-demand gap will persist. Tight supply expectations drive continuous increases in long-term uranium contract prices.

13. Steel: Possesses defensive odds-option characteristics.

    Raw material supply is loose on the cost side. If matched with steelmaking discipline, arbitrage opportunities will emerge for long-process steelmaking over short-process routes. On the demand side, the focus has shifted from domestic real estate to export manufacturing. On the supply side, multiple administrative measures drive capacity consolidation (ULE non-compliance, disguised expansion via replacement, and steel product data inspections). Looking ahead to 2026, supply-side policies under an anti-involution framework are more likely to be implemented, giving the steel industry defensive odds-option attributes.

Risk Disclaimer:

Stronger-than-expected U.S. tariffs; stronger-than-expected global supply; weaker-than-expected demand in new energy sectors; risks of material substitution, etc.