Does the Surge in Non-Ferrous Metals Sector Have Sustained Upside Potential? — A Comprehensive Analysis Report

Since 2025, the non-ferrous metals sector has shown a strong upward trend, becoming one of the most outstanding sectors in the A-share market. According to the latest market data, on December 26, the non-ferrous metals sector index rose by 1.82%, ranking among the top in the industry sectors of the two markets[1]. In terms of individual stocks, Guocheng Mining and Shenzhen New Star hit their daily limit, Jiangxi Copper surged by 9.97%, and Tongling Nonferrous Metals, Yunnan Copper, Western Mining, etc., rose by more than 5%[1].

From the annual performance perspective, after excluding newly listed stocks this year, the median gain/loss of 134 stocks in the Shenwan Non-Ferrous Metals Industry was as high as 66%, with 43 stocks doubling their share prices this year, accounting for nearly one-third[1]. Eight stocks including Serei New Material, Zhaojin Gold, Zhongzhou Special Material, Industrial Bank Silver Tin, China Tungsten High-Tech, Shengtun Mining, Zangge Mining, and China Molybdenum even rose by more than 200%[1].

In terms of precious metals, COMEX gold rose to a record high of 4561.6 USD/oz, with a cumulative annual increase of 71.84%; COMEX silver hit a record high of 75.495 USD/oz, surging 156.74% this year; COMEX copper reached a new high since July this year at 5.7565 USD/lb, needing only another 3.5% increase to hit its all-time high[1].

As the ‘king of non-ferrous metals’, changes in copper’s supply-demand pattern have an important impact on this round of market. From the supply side, global copper mine supply fell into the most serious structural predicament since 2010 in 2025[2]. According to data from the International Copper Study Group (ICSG), the global refined copper market had a surplus of 122,000 tons from January to October 2025. Although still in surplus, it has narrowed significantly compared to the 261,000-ton surplus in the same period last year, reflecting expectations of a future shortage in copper concentrate supply[2].

Global major copper companies face capacity contraction pressure. In the second quarter of 2025, half of the 20 major global copper companies saw production decline year-on-year, with declining ore grades being one of the main reasons for production cuts[3]. Chile, the world’s largest copper producer, has seen its copper ore grade drop from 1% in 2005 to 0.64% in 2023[3]. Large mining companies such as Freeport, Glencore, Southern Copper, and Anglo American all face capacity shrinkage pressure[3].

From the demand side, the long-term development trend of electrification provides strong support for copper demand. Grid construction, new energy infrastructure construction, and manufacturing development all require a large amount of copper. The demand for copper from AI computing infrastructure is also surging. With its excellent conductivity and thermal conductivity, copper has become a core material for chip interconnection and heat dissipation of computing facilities in the advanced AI industry[2]. According to a BHP report, by 2050, industries related to energy transition will account for 23% of copper demand, compared to only 7% currently[3].

The certainty of the aluminum industry chain is also not to be underestimated. In 2017, four ministries jointly issued the ‘Work Plan for Cleaning Up and Rectifying Illegal and Irregular Projects in the Electrolytic Aluminum Industry’, clarifying the 45 million tons capacity ceiling for electrolytic aluminum[3]. As of July 2025, China’s electrolytic aluminum production exceeded 43 million tons, approaching the regulatory capacity red line[3]. Aluminum prices rose by nearly 16% in 2025, mainly due to the slowdown in China’s aluminum capacity growth and the surge in energy costs in other regions of the world further tightening aluminum supply[4].

Minor metal varieties also face supply disturbances. Antimony prices soared 5 times in European quotes in just over a year, and once rose 2 times in China[3]. As the world’s most important antimony supplier (accounting for 80%), China imposed export controls on antimony in August 2024 and原则上禁止对美出口 in December, eventually detonating antimony prices[3]. Tin prices rose 49% for the year, mainly affected by Indonesia’s crackdown on illegal tin mining in the country[4]. Cobalt prices soared from a low of 160,000 yuan/ton in February 2025 to 290,000 yuan/ton now, mainly due to the Democratic Republic of the Congo (DRC), which supplies nearly 80% of the world’s cobalt, extending the cobalt export ban three times[3].

On September 18, 2025, the Federal Reserve announced a 25 basis point interest rate cut, the first since December 2024, and predicted two more rate cuts within the year[3]. As the central bank of central banks, the Federal Reserve’s restart of the interest rate cut cycle will support global stock markets and commodity markets from the liquidity dimension, which is conducive to the trend performance of copper prices[3]. Founder Securities pointed out that central banks continue to buy gold, and the Federal Reserve’s interest rate cut cycle is expected to drive up investment demand[1].

Before the market started, the PB valuation of the non-ferrous metals sector was only slightly over 2 times, at a low level in the past decade[3]. Against the background of performance reversal and steady rise of the A-share market, non-ferrous metals will naturally usher in valuation repair. Oriental Securities pointed out that the equity side gains of gold, copper, aluminum, and iron lag significantly behind the commodity side, and the sector’s valuation corresponding to next year is also at a low level[2].

The collective surge of non-ferrous metals has strong fundamental support. From the performance data, in the first 11 months of 2025, the non-ferrous metals industry achieved a net profit attributable to parent companies of 151.288 billion yuan, an increase of 41.55% year-on-year, and the profit growth rate of the industrial metals sub-industry reached 32.47%[5].

Zijin Mining: Net profit attributable to parent companies increased by 55% year-on-year in the first half of 2025, with Hong Kong stocks rising nearly 159% this year, and the market value reaching 935.4 billion Hong Kong dollars[6].

China Molybdenum: The net profit attributable to parent companies has achieved a compound high growth of more than 50% in the past four years, and Hong Kong stocks soared nearly 285% this year[3][6]. From the perspective of stock price performance, China Molybdenum broke through the historical high set in 2018 only in July 2025, and its stock price doubled in 2025, which is more of a catch-up for the performance growth in the past few years[3].

Shandong Gold: Net profit attributable to parent companies more than doubled in the first half of 2025[3].

Chifeng Gold: Net profit attributable to parent companies increased by 55% year-on-year in the first half of 2025[3].

MMG Limited: Mid-term net profit attributable to parent companies surged more than 15 times[6].

Citigroup predicts that copper prices will break through $13,000 per ton at the beginning of 2026, and may even reach $15,000 per ton in the second quarter of 2026[2].

Founder Securities believes that the current era is the golden age of non-ferrous metals[1].

Hualong Securities pointed out that against the background of escalating geopolitical confrontation and rising resource nationalism, the prosperity of industrial metals continues to improve, and the price center of major metal varieties such as copper continues to rise[5].

Oriental Securities believes that the shortage of copper mine supply is expected to continue from Q4 2025 to Q1 2026, and the tight supply pattern of copper mines in 2026 is basically determined. It is expected that the growth rate of copper mines will be about 0.9% in 2026, the growth rate of refined copper supply will be about 1.3%, and the growth rate of refined copper demand will be about 2.2%. The difference between supply and demand growth rates is expected to continue to push up copper prices[1].

Hualong Securities predicts that refined copper will see an inflection point in supply-demand relations and turn into a shortage around 2026[5].

Oriental Securities believes that as commodity prices continue to hit new highs in the future, market expectations for the medium-term price rise of gold, copper, aluminum, and iron are expected to continue to strengthen. After the short-term fluctuations last week, the equity sector is expected to maintain a medium-term rise driven by demand, and investors can actively pay attention to investment opportunities in related sectors[2].

Although the fundamentals are strongly supported, investors still need to pay attention to the following risk factors:

1. Macroeconomic Uncertainty
   : Slowdown in global economic growth may affect the demand for industrial metals.

2. Price Volatility Risk
   : Commodity prices are highly volatile and may correct in the short term.

3. Valuation Digestion Pressure
   : Some individual stocks have risen sharply this year and need time to digest valuations.

4. Supply-Side Variables
   : Factors such as mine capacity recovery and changes in geopolitics may affect supply expectations.

5. Monetary Policy Changes
   : The pace of the Federal Reserve’s interest rate cuts may affect liquidity expectations.

Based on the above analysis, the collective surge of the non-ferrous metals sector has a relatively solid basis for sustained growth, mainly reflected in the following aspects:

1. Supply-Demand Pattern Support
   : The supply-demand structure of major metal varieties such as copper and aluminum is tight, supply-side growth is weak, and demand-side benefits from long-term trends such as electrification and new energy.

2. Sufficient Performance Verification
   : The overall industry performance has increased significantly by 41.55%, leading enterprises have significant profit growth rates, and valuation repair and performance growth form a dual driving force.

3. Favorable Liquidity Environment
   : The Federal Reserve has started an interest rate cut cycle, and expectations of loose liquidity support commodity prices.

4. Institutions Generally Optimistic
   : Mainstream institutions believe that copper prices are expected to continue to rise in 2026, and the sector’s valuation is still in a reasonable range.

5. Clear Upward Trend
   : The six basic metals listed on the London Metal Exchange all achieved annual increases in 2025, and the market trend has been formed.

From a medium-term perspective, against the background of supply support and demand recovery determining price elasticity, the non-ferrous metals sector is expected to maintain a medium-term upward trend. Investors can focus on investment opportunities in leading enterprises of industrial metals such as copper and aluminum, and also pay attention to periodic market conditions of minor metal varieties.

[1] Sina Finance - ‘Non-Ferrous Metals Surge! Gold, Silver, Copper Hit New Highs; Over 40 Stocks Double This Year’ (https://finance.sina.com.cn/roll/2025-12-26/doc-inheayzm8138580.shtml)

[2] 21st Century Business Herald - ‘Another New High! LME Copper Breaks Through 12282 USD, 7 Concept Stocks Double This Year’ (https://www.21jingji.com/article/20251224/herald/f505e0115234d47a9546b61eaa433798.html)

[3] Weikehao - ‘Collective Surge: Where is the Cycle of Non-Ferrous Metals?’ (https://mp.ofweek.com/finance/a356714129587)

[4] Sina Finance - ‘Copper Prices Surge Sharply in December; Copper Market May迎来 Its Best Annual Performance Since 2009’ (https://finance.sina.com.cn/stock/usstock/c/2025-12-24/doc-inhcwxmi9806394.shtml)

[5] National Business Daily - ‘Mining ETF (561330) Rises Over 2%; Net Inflow Exceeds 60 Million Yuan Yesterday’ (https://www.nbd.com.cn/articles/2025-12-26/4196290.html)

[6] Sohu - ‘[Top 100 Perspective] Boom Surges! Stock Prices and Performance Soar; Can Non-Ferrous Metal Concepts Continue to Rise?’ (https://m.sohu.com/a/969213408_522913)