GTHT has released a research report indicating that the metal sector is expected to maintain a "volatile uptrend," with multiple independent drivers playing out simultaneously. This market cycle differs significantly from historical patterns, as the core pricing mechanism is shifting from traditional demand driven by real estate and infrastructure to a new dynamic shaped by the structural demand transformation from "New Energy + AI" and rigid supply-side constraints. Five major metal segments each possess their own distinct industrial logic, presenting a structural characteristic of "multiple points of growth." The firm believes the sector as a whole will maintain its volatile upward trajectory following short-term adjustments. GTHT's key views are as follows:
Precious Metals: Inflation Narrative Pressures Prices, Long-Term Uptrend Intact
Amid high oil prices, the inflation narrative is putting short-term pressure on precious metal prices. However, the long-term upward trend for precious metals remains unchanged. Current valuations for the gold sector are still relatively low, and the firm views any pullback as a strategic opportunity for investment.
Industrial Metals: Interplay of Resilient Supply-Demand and Macro Disturbances
GTHT believes the cycle for industrial metals may exceed market expectations. On the demand side, structural changes are occurring due to new energy and AI development (grid upgrades, data centers). The supply side faces rigid constraints including declining ore grades, escalating geopolitical risks, and insufficient capital expenditure.
Copper: Supply disruptions from flooding in the Democratic Republic of Congo, combined with strong demand from AI and grid infrastructure, are expected to create a supply deficit exceeding 200,000 tonnes this year, indicating a tight market balance.
Aluminum: Supply chain concerns triggered by geopolitical conflicts in the Middle East are the core driver of recent price increases. Furthermore, the sector currently trades at low valuations and possesses attributes of a high-dividend-yield asset.
Strategic Metals: Era of Rigidity Begins, Highlighting Resource Scarcity
Rare Earths: This market cycle has completely shifted away from the logic of demand penetration growth and transitioned to a pure supply-driven dynamic. The growth rate of domestic rare earth production quotas has slowed significantly. Coupled with the regulation of unaccounted production and the implementation of a whitelist system, the industry is transitioning from extensive expansion to refined management. Profits within the industrial chain are expected to shift towards the midstream smelting and separation segments, with a significant increase in concentration.
Uranium: As a strategic resource, its supply is extremely rigid. Meanwhile, demand growth for nuclear power driven by AI will significantly widen the supply gap. The firm is optimistic about sustained price increases in the long term.
Niobium: The market faces short-term supply disruptions. On the demand side, AI is driving rapid growth for niobium capacitors, supporting an upward trend in the average price of niobium and its processed products.
Energy Metals: Supply Disruptions Amid a Tight Balance
GTHT believes lithium carbonate fundamentals are strong, with inventory drawdowns continuing. Policy disruptions, such as permit renewals in Jiangxi and export bans from Zimbabwe, create significant structural trading opportunities within the year.
Steel: Gradual Profit Improvement, Focus on Bottom-Fishing Opportunities
The industry bottom has clearly been established. The potential for subsequent upside and its magnitude will depend primarily on substantive policy intervention to address internal competition and the progress of capacity rationalization.
Risk factors include a slower-than-expected pace of Federal Reserve interest rate cuts and unexpected fluctuations in macroeconomic demand.
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