A recent research report from Wall Street financial giant Bank of America states that, despite an environment of rising market volatility, it maintains a strongly bullish directional stance on China's equity metal markets, including gold, copper, aluminum, and lithium. The core logic centers on "tighter supply + structural demand driven by electrification/AI mega-trends," with copper and aluminum markets expected to face severe supply deficits persistently. Consequently, even with short-term fluctuations, the overarching trend framework remains intact. Regarding corresponding equity assets, the "core recommendations" for the metals sector in the Chinese stock market and the preferred stock list explicitly include popular metal stocks such as Zijin Mining, Zijin Gold, CHALCO, CHINAHONGQIAO, and Huayou Cobalt. Bank of America is broadly optimistic about the structural opportunities in China's metals sector. The institution's core rationale focuses on "demand resilience from electrification/AI infrastructure + supply constraints/capacity bottlenecks pushing up profit margins," leading to a preference for allocating to leading metal and resource stocks even during phases of increased volatility.
Bank of America's strategy team indicated that the key investment thesis for the gold market remains "bullish pillars intact": expectations of a weaker US dollar, "strategic reserve" demand arising from policy/geopolitical uncertainties, and structural support from ETF and robust central bank buying. This leads them to believe the path towards $6,000 per ounce remains unchanged, with the central gold price for 2026-27 still around $4,900-$5,000 per ounce. The bank views the copper market as more "commodity-driven," forecasting a global copper supply deficit of approximately 500,000-600,000 tonnes in 2026/27. It emphasizes demand is pulled by "Electrification" – underpinned by strong expansion in power grids, electric vehicles, energy storage systems, and AI computing infrastructure. For the Chinese market, they project copper demand growth of about +2.5% in 2026, suggesting potential government "inventory rebuilding/reserve" activities could also act as a strong catalyst.
Bank of America is most optimistic about the profit resilience in China's aluminum market. The institution anchors its 2026 aluminum price forecast for China at RMB 23,000 per tonne and believes industry profits could remain in the historically high range of RMB 6,000-7,000 per tonne. The bank breaks down the drivers behind the aluminum bull market into five points: (1) China's capacity is nearing an approximate 45 million tonne "ceiling"; (2) Expansion in Indonesia is constrained by issues like power supply, slowing overseas supply growth; (3) Demand resilience from AI data center power grids, energy storage, and EVs; (4) A copper-to-aluminum price ratio exceeding 4 times encouraging material substitution; (5) New load demand from "powering large-scale AI inference systems" combined with potential supply rationalization and China's power cost advantages.
For specific stock allocation, Bank of America's strategy team clearly lists CHALCO and CHINAHONGQIAO as top picks within the aluminum theme. They have raised profit expectations for both for 2026 and provided valuation anchors: approximately 10x 2026E P/E for CHALCO with about a 5% dividend yield, and approximately 9x 2026E P/E for CHINAHONGQIAO with about a 7% dividend yield. Bank of America has set a target price of HKD 48 for CHINAHONGQIAO, up from the previous HKD 45 optimistic target. Core reasons include: aluminum prices remaining firm under the bank's revised upward framework, the company's unparalleled vertically integrated model keeping it persistently in the lowest cost quartile globally, a structurally high dividend payout (the report mentions a payout ratio greater than about 60%, with a 2026 dividend yield of about 7%), and support from share buybacks.
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