Orient Securities: The industrial metals supercycle may be here, focusing on the copper, aluminum and gold sector
The Zhitong Finance App learned that Orient Securities released a research report saying that even small supply and demand gaps in real assets during the interest rate cut cycle are expected to generate greater price elasticity. Prices of metals such as copper and aluminum rose markedly last week. In particular, the closing price of LME copper rose 1.88% to a record high of 11,655 US dollars/ton on Friday night. The bank believes that under this round of interest rate cuts, the industrial metals super cycle represented by copper and aluminum may have arrived. The bank is optimistic about the demand for copper in US electricity investment in 2026, the demand for aluminum driven by energy storage and replacement demand, and the sharp rise in industrial metal prices driving inflation expectations. The suggestion is to focus on the copper, aluminum, and gold sector.
Orient Securities's main views are as follows:
Some investors' views
There are doubts about whether the prices of metals such as copper and aluminum will continue to rise in the future. This week (December 1-5, 2025), driven by a sharp rise in copper and other metal prices, the non-ferrous metals sector rose markedly by 5.35%, leading the overall Tier 1 industry index. As copper prices continue to rise, investors' differences over whether the prices of metals such as copper, aluminum, and gold are already high and whether they can continue to rise in the future have increased markedly.
Copper sector: supply shortages, tariff concerns or continued to push up copper prices; continue to be optimistic that copper prices and smelting costs will rise together
On December 3, 56,900 tons of LME copper inventory were cancelled, accounting for about 35% of the total inventory, making it the largest single-day delivery order volume in 13 years. In the short term, it boosted the market's expectations of a shortage of copper spot supply, causing copper prices to rise rapidly. Meanwhile, the Chilean National Copper Company drastically raised COMEX-LME copper premium prices in the 26-year long order price, which also reflects expectations about the US's potential tariff policy and tight supply. As demand for copper continues to increase in traditional transmission and distribution fields and emerging fields such as new energy use, the shortage of supply is expected to support the central upward trend in copper prices. Meanwhile, on the smelting side, the China Copper Raw Materials Joint Negotiation Group (CSPT) announced on November 28 that in order to promote the high-quality development of the copper industry and implement “anti-internal circulation” related policy requirements, members will implement self-regulatory measures such as reducing the copper production capacity load by more than 10% in 26 years. The bank believes that the conflict between supply and demand on the copper mine side and the smelting side may be mitigated in anticipation of an “anti-internal volume” implementation, and that smelting costs are expected to stop falling and stabilize. The bank continues to be optimistic that copper prices and smelting costs will rise sharply in the medium term.
Aluminum sector: Copper takes off with aluminum, strong demand for energy storage pushes aluminum prices to continue to rise
Because of its good heat dissipation and light weight, aluminum is an ideal material for energy storage and heat dissipation. Benefiting from electricity reforms and capacity price subsidy policies, demand in the energy storage market is currently booming. According to SMM research data, the total amount of aluminum materials required for each 1 GWh of installed capacity of energy storage systems is about 2,310 tons. In 2025, the production scale of energy storage battery compartments in China is expected to reach 350 GWh, driving demand for aluminum materials to 800,000 tons. Also, judging from the price ratio of copper and aluminum, the current copper-aluminum ratio in the previous period is still at a high level of 4.15, and demand for aluminum instead of copper is expected to continue to grow under high copper prices. The bank is optimistic that aluminum prices will continue to rise. It is recommended to focus on electrolytic aluminum companies with high profit flexibility when aluminum prices rise, as well as aluminum processing companies that benefit from increased demand for energy storage.
Gold sector: The interest rate cut cycle is a foregone conclusion, and upward inflation has added momentum
Last week, the market's expectations for Hassett to become the new chairman of the Federal Reserve increased. As a result, the probability that the Fed will cut interest rates to the range of 300-325 BP and above by the end of 2026 increased. However, the bank believes that the deepening expectations of interest rate cuts are only a background. As industrial metals prices continue to rise, the bank is optimistic that US inflation expectations will continue to rise, adding new impetus to the rise in gold prices. The bank maintains the view that the price of gold is expected to break through 5,000 US dollars/ounce in 2026, and suggests actively focusing on mineral gold companies that have released better performance.
Investment recommendations and investment targets
Copper sector: On the copper mining side, it is recommended to focus on Zijin Mining (601899.SH, purchase), which has large resource reserves and is expected to continue to expand copper production in the medium term. Other targets: Luoyang Molybdenum Industry (603993.SH, unrated), Gold Chengxin (603979.SH, unrated); on the smelting side, it is recommended to focus on Tongling Nonferrous Metals (000630.SZ, purchase), which is expected to increase the self-sufficiency rate of copper concentrates in the country; other targets: Jiangxi Copper (, unrated). 600362.SH
Aluminum sector: It is recommended to focus on Tianshan Aluminum (002532.SZ, purchase), an integrated electrolytic aluminum company that is expected to see a sharp rise in volume and price in the electrolytic aluminum sector in 2026, and Huafeng Aluminum (601702.SH, purchase), which has a high demand for energy storage. Other targets: Yunlu Co., Ltd. (000807.SZ, unrated), Zhongfu Industrial (600595.SH, unrated), Shenhuo (000933.SZ, unrated).
Gold sector: It is recommended to focus on Chifeng Gold (600988.SH, buy), where mineral gold production continues to improve, and performance may accelerate upward. Other targets: China Gold (600489.SH, unrated), Shanjin International (000975.SZ, unrated).
Risk Alerts
Macroeconomic growth is slowing; tariffs affect demand and industrial chain stability; raw material prices fluctuate; and Sino-US relations are changing.