Boc International released a research report stating that as the market enters the second phase of a bull market characterized by earnings-driven growth in 2026, the narrative of domestic reflation is expected to strengthen, driven by efforts to counter internal competition and expand domestic demand. The strong cyclical nature of nonferrous metals is likely to become evident, while financial attributes and industry trends present opportunities for sector revaluation. In terms of allocation, the firm recommends focusing on industrial metals and strategic minor metals as growth drivers, with precious metals serving as a defensive hedge. For industrial metals, copper prices are anticipated to receive solid support amid a tight supply-demand balance in the medium term, and a weaker U.S. dollar cycle could further enhance industry trends. Regarding strategic minor metals, the investment theme is shifting from event-driven speculation to systematic revaluation based on long-term strategic value. Taking rare earths as an example, rigid policy constraints on the supply side, coupled with recovering exports and sustained growth momentum on the demand side, have created strong synergy. The upward trend in rare earth prices is expected to continue, with current increases being more moderate compared to the 2020-2022 period, leaving further room for profit expansion among industry leaders. As for precious metals, gold prices are likely to remain elevated over the medium to long term, with short-term fluctuations offering entry opportunities. In terms of stock performance, leading companies demonstrate strong earnings visibility this year, supporting sector valuation recovery. The nonferrous metals sector is poised for dual improvement in both earnings and valuation in 2026.
Comments