JPMorgan released a research report stating that China's GDP growth of 5% year-on-year in 2025 meets the target, with growth primarily benefiting from consumption stimulus driven by the trade-in policy. The bank believes the main trends in the commodity market in 2025 will extend into 2026; for instance, globally demanded metals such as gold, copper, and lithium will continue to outperform domestically oriented sectors like coal and steel. Furthermore, supply disruptions and an accelerated pace of industry consolidation are also expected to persist throughout the year.
Looking ahead, the bank anticipates that the trade-in subsidy policy will be extended into 2026. Although the incentives are expected to be more targeted and efficiency-focused compared to 2025, they will still provide substantial support for overall commodity demand.
The bank's preference order for the mainland's basic materials sector in 2026 is gold and copper, followed by aluminum, lithium, coal, and steel. It expects the materials sector to continue outperforming the MSCI China Index in 2026 and recommends that investors buy Zijin Mining (02899, 601899.SH) and accumulate China Aluminum (02600, 601600.SH) and China Hongqiao (01378) on dips. Meanwhile, China Molybdenum (03993) might pause for consolidation due to the issuance of convertible bonds.
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