Xiangcai Securities released a research report suggesting investors focus on the copper sector, where supply is constrained in the short-to-medium term due to overseas mine suspensions and long-term capital expenditure shortages, while demand is supported by domestic grid investments, overseas demand growth, and AI and new energy trends. The report highlights a potential widening supply-demand gap and copper's strong financial attributes amid the Fed's rate-cut cycle.
For precious metals, gold prices are expected to rise long-term due to increasing Fed rate-cut expectations, a weakening dollar from rising U.S. debt pressures, and central banks' diversification into gold reserves. The firm recommends
Key takeaways: - The nonferrous metals sector has significantly outperformed benchmarks in 2025, with cobalt, rare earths, and tungsten showing strong performance. - The sector's revenue and profit growth stabilized in Q3, with midstream smelting and processing seeing profit recovery. - Energy metals posted substantial improvements, while precious metals and minor metals led in revenue and earnings growth.
**Copper Sector**: Revenue growth turned positive YoY in the first three quarters, with net profit up 46.17% YoY. Margins improved, though capital expenditure contracted sharply. **Precious Metals**: Revenue and profits surged, driven by rising gold and silver prices. Profitability rose while capex declined. **Rare Earth & Magnets**: Rare earth revenue turned positive, with significant profit recovery. Magnet revenue also rebounded, with profit growth outpacing sales. **Tungsten**: Revenue and profits jumped on higher tungsten prices, with margins improving and capex shrinking.
**Risks**: Price volatility, weaker-than-expected demand, policy changes, capex fluctuations, and substitution risks from new technologies/materials.
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