Policy support combined with pre-holiday inventory restocking demand has driven a recovery in rare earth prices. Under the dual influence of government policies and revived pre-Spring Festival inventory demand, rare earth prices have rebounded, with medium and heavy rare earth prices showing more significant gains. The firm maintains a positive outlook on the investment value of rare earths as a critical strategic resource. Looking ahead to 2026, the firm believes that central bank gold purchases and rising holdings in gold ETFs will continue to be key factors supporting gold prices. Guotai Haitong's primary views are as follows:
Precious Metals: Geopolitics Support Precious Metal Prices. Geopolitical situations in Venezuela and the Middle East are supporting gold price trends, while US unemployment data remains strong. For 2026, central bank gold buying and increased ETF holdings are expected to remain crucial supports for gold prices. Regarding silver, London silver lease rates have declined and inventories have risen, with prices following gold's trend in the short term. Platinum has strengthened due to expectations of US tariffs. Related targets: Zhongjin Gold, Chifeng Gold, Shandong Gold, Zhaojin Mining, Shanjin International.
Copper: From Commodity to Strategic Asset. Despite being mixed, US December employment data still reflects the resilience of the US economy. Concurrently, strikes at Chile's Mantoverde copper mine persist. Positive macro expectations combined with supply disruptions are keeping copper prices strong with an upward bias. Future market focus should be on the impact of Trump's nomination for the next Fed Chair on copper prices. Mine supply tightness continues, and while demand faces headwinds from high prices, low non-US regional inventories and the strategic reserve logic under the potential return of the US "Monroe Doctrine" will amplify upward price elasticity. Recommended: Zijin Mining Group. Related targets: CMOC Group, JCHX Mining Management, China Nonferrous Mining.
Aluminum: Strong Macro Performance Keeps Aluminum Prices High. Robust macro expectations, loose liquidity, and catch-up rallies are jointly driving aluminum prices higher. Fundamentally, on the supply side, daily production is increasing as new electrolytic aluminum projects in China and Indonesia ramp up. On the demand side, thanks to the lifting of environmental controls in central China after New Year's Day, operating rates for aluminum sheet, strip, and foil have rebounded significantly, leading to a slight 0.2 percentage point increase in the operating rate of leading domestic aluminum downstream processors to 60.1%. Recommended: Yunnan Aluminium, Tianshan Aluminum, Aluminum Corp of China (Chalco). Related targets: China Hongqiao, Shenhuo Group.
Tin: Supply Bottlenecks Persist, Providing Strong Support for Tin Prices. The resumption of mining operations in Myanmar's Wa State is delayed, and uncertainty remains regarding the approval pace of Indonesia's RKAB, limiting supply-side flexibility. Although the Fed's interest rate cut path has been adjusted, tin prices are still underpinned by expectations of loose liquidity. Coupled with semiconductor industry-driven demand for solder, the tight supply-demand balance for tin continues, providing ample upward momentum for prices. Recommended: Yunnan Tin Co. Related targets: Xingye Silver Tin, Huaxi Color Metals.
Energy Metals: Export Tax Rebate Reduction Policy May Pull Forward Demand. Lithium Carbonate: Last week (January 9th), lithium carbonate inventories accumulated, production increased, and demand marginally weakened but remained at a relatively good level. The impending reduction in export tax rebates for battery products is expected to pull forward battery demand, potentially making off-season demand appear stronger. Last week, lithium carbonate production rose by 115 tonnes, showing a continuous upward trend. Significant disagreement exists in the market regarding whether key mines in Jiangxi can release production as scheduled due to operational disruptions. Recommended: Yahua Industrial Group, Tibet Summit Resources, Ganfeng Lithium Group, Tianqi Lithium Corporation, Chengxin Lithium Group. Related targets: Kedali Industry, Tibet Mineral Development.
Cobalt Sector: Upstream prices remain high due to tight raw material supply, while downstream purchasing is cautious. Cobalt companies are increasingly extending into the new energy downstream, creating an integrated cost advantage from cobalt-nickel precursors to ternary materials, thereby enhancing competitive barriers. Recommended: Huayou Cobalt. Related targets: GEM Co., Ltd.
Risk Warning: Downstream demand weaker than expected; substantial supply-side releases; Fed interest rate cuts falling short of expectations.
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