The "molybdenum-for-tungsten" substitution concept has ignited a frenzy, with the A-share molybdenum sector surging to daily limit-up levels. Shenglong Co., Ltd (001257.SZ) saw four consecutive limit-up days, and though it broke the streak on the fifth trading day, its cumulative gain exceeded 40%. CMOC (03993) also saw its A and H shares rise by approximately 20% over five sessions. This sector-wide surge originated from storage chip giant SK Hynix announcing the completion of production verification for its 375-layer 3D NAND flash memory and advancing production line deployment, with this technology utilizing molybdenum material to replace the traditional tungsten for word lines. The storage chip sector, fueled by price hikes and shortages, has been a market hotspot, with related stocks generally doubling in value this year. The "molybdenum-for-tungsten" concept, riding this wave, has attracted rotational capital to shift its focus.
Tungsten and molybdenum both belong to Group VIB transition metals on the periodic table, providing a basis for substitution. However, the absolute volume of molybdenum used in semiconductors is currently very small, offering limited direct pull on total molybdenum demand. The market widely believes its characteristics of high purity, high technological barriers, and high added value could enhance the structural value of molybdenum materials, driving a reassessment of molybdenum from a traditional industrial metal towards high-end manufacturing and semiconductor materials. The strong performance of A-share and H-share targets confirms this market expectation. For CMOC, with a market cap exceeding HKD 400 billion and revenue over CNY 200 billion, what is the potential impact of this "molybdenum-for-tungsten" trend on its performance, and could it aid in a valuation reassessment?
Demand Share from Substitution is Small, Industry Leaders Stand to Benefit First
The properties of molybdenum metal include high thermal conductivity, high electrical conductivity, low thermal expansion coefficient, resistance to molten metal corrosion, compatibility with most glass compositions, resistance to thermal shock, and high rigidity, making it a material of choice for many applications. On the demand side, primary applications are concentrated in steel manufacturing, with engineering steel and stainless steel accounting for approximately 39% and 24% respectively, while chemicals and castings account for about 13% and 8%. Terminal applications for molybdenum are mainly focused on four major sectors: oil/gas (including refining), chemical/petrochemical (CPI), mechanical engineering, and the automotive industry, collectively representing about 53% of the market share. Overall, molybdenum's application in traditional energy and manufacturing still dominates, while its use in emerging fields is gradually expanding.
SK Hynix's "molybdenum-for-tungsten" move accelerates its expansion in the semiconductor field, potentially increasing its absolute volume share. The substitution scenario here is for word lines. Early word line materials used polysilicon, but due to high resistance, mainstream solutions shifted to tungsten with lower resistivity. In recent years, tungsten prices have continued to climb; for instance, as of June, the price of wolframite concentrate was over 140% higher than the average price a year ago, driving up costs. Meanwhile, molybdenum offers lower resistivity than tungsten at equivalent line widths and does not require a barrier layer. Substitution could significantly reduce costs, making it a viable alternative direction for high-layer-count NAND word lines.
From the supply side, China is endowed with molybdenum resources, ranking first globally in molybdenum ore reserves at 7.8 million tonnes, representing a 45.88% market share, more than double that of the second-place United States. Major domestic molybdenum mining producers include Jinduicheng Molybdenum Co., Ltd, CMOC, China Railway Group Ltd, Shenglong Co., Ltd, Daheishan Molybdenum Mine, and Guocheng Industrial. Among these, Daheishan Molybdenum Mine has the highest resource volume at 1.09 million tonnes, but its production is only 8,000 tonnes, indicating relatively low utilization. In comparison, Jinduicheng Molybdenum Co., Ltd's Jinduicheng Molybdenum Mine and Ruyang East Molybdenum Mine have a combined resource volume of 1.0324 million tonnes with production of 25,600 tonnes. CMOC's Sandaozhuang Molybdenum-Tungsten Mine and Shangfanggou Molybdenum Mine have a combined resource volume of 840,300 tonnes with production of 15,400 tonnes, placing both production volume and utilization rates in the industry's leading tier.
The initial beneficiaries of this "molybdenum-for-tungsten" wave are likely to be the industry's leading enterprises. As molybdenum materials continue to expand into emerging fields, particularly with substitution demand validated in the semiconductor sector, industry leaders are poised to welcome a new growth curve driving performance release. As a dual-listed A+H share target, CMOC is well-positioned to benefit fully.
Metal Resources Leader CMOC Continues Bullish Trend
CMOC is a leading metal resources company and a globally significant producer of copper, cobalt, molybdenum, tungsten, and niobium. The company operates on a dual-engine model of "Mining + Trading." The mining segment produces copper, cobalt, molybdenum, tungsten, niobium, and phosphate fertilizers, with plans to begin gold production in 2026 following acquisitions in Ecuador and Brazil. The trading segment, IXM, covers over 80 countries across Asia, Europe, South America, and North America. In 2025, revenue contributions from mining and trading were approximately 30.13% and 69.8% respectively.
The company boasts a rich portfolio of metal resource products, but core revenue from the mining segment primarily comes from copper. Its copper resource volume in 2025 was 33.58 million tonnes, with annual production exceeding 700,000 tonnes. Benefiting from both volume and price increases for copper products, its performance has been climbing steadily. From 2023 to 2025, revenue from this product grew at a compound annual rate of 49.67%, with its revenue contribution exceeding 20%. Notably, the company's share of molybdenum resources is not high. Its molybdenum production in 2025 was 13,900 tonnes, showing a declining trend. Product revenue was CNY 6.33 billion, down 11.2% from 2023, with a revenue share below 2.5%.
In the first quarter of 2026, the company's molybdenum product output was 3,184 tonnes, with sales of 3,198 tonnes, representing year-on-year declines of 4.97% and 6.98% respectively. However, revenue from molybdenum products in the mining segment reached CNY 1.796 billion, a year-on-year increase of 33.11%. This accounted for only 7.39% of mining segment revenue and a mere 2.16% of total operating revenue. Given the company's large revenue base, even molybdenum product revenue reaching billions of yuan contributes relatively little to overall performance.
From an industry demand perspective, according to Antaike data, global molybdenum production in 2025 was approximately 307,000 tonnes, a 3.2% year-on-year increase. Global molybdenum consumption was about 303,000 tonnes, up 4.5% year-on-year. China's consumption accounted for half, at around 152,000 tonnes, a 9.3% year-on-year increase. Demand in traditional stainless steel fields remains steady, orders for molybdenum-containing specialty steels in sectors like wind power have surged, and contributions from emerging fields like semiconductors are expected to keep molybdenum demand growth at a relatively high level.
Leveraging its resource and production capacity advantages, CMOC has the potential to develop a new growth point through the "molybdenum-for-tungsten" trend, but the incremental contribution to its performance is expected to be very limited. In comparison, Jinduicheng Molybdenum Co., Ltd has higher molybdenum product output, with related revenue from molybdenum furnace charge, molybdenum metal, and molybdenum chemicals collectively exceeding 90%. Shenglong Co., Ltd also has substantial output, with its molybdenum products, including molybdenum concentrate and ferromolybdenum, collectively accounting for over 99% of its revenue. These two companies exhibit higher sensitivity to molybdenum prices and demand.
CMOC's main performance increments are expected to come from its copper and gold segments, which have garnered positive outlooks from several investment banks. For instance, China Post Securities noted that as copper and gold price centers steadily rise, the dual-engine drive of copper and gold highlights long-term value. Pacific Securities believes the company's mining copper revenue is growing rapidly, and gold is beginning to contribute to performance, offering broad future growth space. Western Securities stated the company's "copper + gold" dual-core layout provides a clear growth path, driven by both M&A expansion and capacity upgrades.
CMOC has gained recognition in the capital markets. Driven by copper prices and earnings growth, its market value surged over threefold in 2025, marking a fourth consecutive bullish year with a cumulative increase exceeding sixfold. Its valuation continued to rise in 2026, consistently attracting increased holdings from institutional investors. For example, JPMorgan Chase increased its holdings by HKD 418 million on January 28 and May 22, 2026. On March 6, BlackRock increased its holding by CNY 122 million.
The company still has room for upside. On one hand, its valuation remains relatively low within the industry; as of now, its P/E ratio is around 15 times, approximately 12% lower than the Hong Kong-listed non-ferrous metals sector. On the other hand, its gold business is set to contribute new growth points, while soaring molybdenum and tungsten prices, coupled with demand boosts from emerging fields, are also expected to provide incremental contributions. Furthermore, as a leading metal resources company with a diverse product portfolio where multiple products are in upward price cycles, it is likely to continue attracting rotational and cyclical capital inflows.
Comments