Looking back at the first half of 2026, commodity prices remained elevated while share prices within the sector generally surged before retreating.
Looking ahead to the second half of 2026, the US-Iran conflict is easing, and expectations for interest rate hikes are anticipated to decline.
Constraints on the supply side for metals remain unresolved, with mine restorations delayed. On the demand side, traditional industries are showing strong resilience, while emerging areas like AI and energy storage are driving marginal demand growth. Consequently, the central price level for metals is expected to move higher.
Copper: Consolidating After a Strong Rally, Awaiting the Next Catalyst
From a financial perspective, the easing US-Iran tensions and the anticipated pullback in rate hike expectations are supportive factors.
On the supply side, production cuts at mature mines persist, and the restart of major mines is generally delayed, keeping supply conditions tight. In the long term, insufficient capital expenditure by copper mining companies, coupled with declining ore grades weakening the resource base, means supply struggles to increase significantly despite high prices. In the short term, delayed restarts at major mines keep supply-demand tensions acute.
On the demand side, power sector demand is robust, domestic social inventory drawdowns have exceeded expectations, traditional demand areas remain resilient, and emerging sectors like AI plus energy storage are building incremental demand. Combined with potential stockpiling demand ahead of anticipated US tariffs, the copper price trend is expected to continue upward.
Top picks include: Western Mining Co., Ltd., Shengmu Mining Industry Co., Ltd., Zijin Mining Group Co., Ltd., China Molybdenum Co., Ltd., Jincheng International Group, China Nonferrous Mining Corporation Limited, and MMG Limited. Also suggested for attention are Tongling Nonferrous Metals Group Co., Ltd. and Jiangxi Copper Company Limited.
Precious Metals: Geopolitical Tensions Easing, Long-Term Bullish Trend Intact
In the short term, resilient US economic data and fluctuating geopolitical negotiations are creating market divergence before events are fully resolved. Oil prices remain volatile, and uncertainties persist in global energy and financial markets. With shifting liquidity and inflation expectations, gold and silver prices are exhibiting a choppy pattern.
From a medium to long-term perspective, the primary drivers for gold will return to the enduring themes of central bank purchases and a weakening US dollar credit system. The outlook remains positive for a rising gold price trend over the medium to long term.
Silver possesses both industrial and financial attributes, with its financial aspect moving in sync with gold but exhibiting greater price volatility.
Top picks include: Chifeng Jilong Gold Mining Co., Ltd., Zijin Mining Group International Co., Ltd., Western Region Gold Co., Ltd., Shandong Gold Mining Co., Ltd., Zhaojin Mining Industry Co., Ltd., Zhongjin Gold Corp., Ltd., Tongguan Gold Group Limited, and IAG Limited. Also suggested for attention are China Gold International Resources Corp. Ltd., Lingbao Gold Group Company Limited, Datang International Gold Mining Co., Ltd., and Jihai Resources Co., Ltd.. For silver exposure, Xingye Silver & Tin Co., Ltd. and Shengda Resources Co., Ltd. are recommended.
Aluminum: Established Peaks and Surging New Chapters
On the supply side, a rigid domestic capacity ceiling limits supply growth. Overseas supply has seen significant reductions due to the US-Iran conflict, while new capacity in countries like Indonesia is being released in phases, making it difficult to reverse the supply deficit in the short term. The aluminum price is expected to trend higher.
On the demand side, domestic new energy vehicle growth is slowing but remains positive, while demand for aluminum in cables and energy storage is growing rapidly. Exports are expected to improve significantly year-on-year. High traditional energy prices overseas are accelerating the uptake of new energy, which is expected to boost aluminum demand.
On the raw materials front, significant new alumina capacity is coming online against limited demand growth, leading to an oversupply and a clear price decline. Expectations for Guinea tightening bauxite policies are strengthening, necessitating attention to resource nationalism's potential disruption to the mining sector.
Top picks include: Aluminum Corporation of China Limited, Zhongfu Industrial Co., Ltd., Hongqiao Holdings Limited, Tianshan Aluminum Group Co., Ltd., Yunnan Aluminium Co., Ltd., Shenhuo Coal & Power Co., Ltd., Chuangxin Industrial Co., Ltd., and China Hongqiao Group Limited.
Key Risk Factors
Potential risks include a downturn in metal price volatility, end-user demand falling short of expectations, and overseas economic development underperforming forecasts.
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