Guosen: US tariff policy may continue to trigger gold safe-haven sentiment, and the central gold price is expected to continue to rise this year.

Guosen released a research report stating that after the continuous rise in gold prices and consolidation, there is hope for maintaining strong performance for the rest of the year. Expectations for a soft landing of the US economy are strong, but since Trump took office, he has successively announced imposing a 25% tariff on products imported from Mexico and Canada, an additional 10% tariff on Chinese imports on March 4th following a 10% tariff on February 4th, and a 25% tariff on the European Union. The trade war between the US and the rest of the world is escalating, possibly triggering safe-haven sentiment. Furthermore, from a long-term perspective, the development of deglobalization combined with a decline in US dollar credit is increasing the demand for central banks of various countries to hold gold. It is expected that the central price of gold will continue to rise by 2025. Guosen's main points are as follows: Industrial Metals: Prices are shaking at high levels, with the peak season approaching Copper: The refining processing fees remain negative, and the probability of a reduction in smelting production has increased. Progress on the Panama Copper Mine: Before the shutdown of the Panama Copper Mine in November 2023, the annualized copper production had reached close to 500,000 tons, causing significant disruption to the global copper supply-demand balance. According to an announcement by First Quantum in mid-February, the hearing scheduled for September of this year could be postponed to February 2026, thereby delaying the resumption of copper mining. However, at the end of February, foreign media reported that the President of Panama had relaxed his stance on the restart of the copper mine, and First Quantum continued to engage in activities to promote the restart. By the end of February, the spot TC of copper concentrate had fallen to -14.8 USD/ton, with the price of copper concentrate higher than that of refined cathode copper. Based on this calculation, smelting plants may face losses of over 2000 RMB/ton even taking into account by-product revenue. Such low spot processing fees are not sustainable in the long term, and as time passes, the probability of smelting plant production cuts is increasing. Aluminum: Several cost items are declining, thickening aluminum smelting profits. The monthly average price of alumina dropped rapidly from 5800 RMB/ton in December to 3400 RMB/ton in February, leading to a decrease in aluminum smelting costs by 4800 RMB/ton. The focus of coal prices has shifted downwards, and by early March, the price of power coal at the Bohai Sea fell to below 700 RMB/ton, which calculated the cost of self-generated electricity in Shandong to fall to 0.32 RMB/ton (excluding taxes), a decrease of 500 RMB/ton compared to when coal prices were at 800 RMB/ton. Since the beginning of the year, due to tight supply of petroleum coke, the price of calcined coke has risen significantly, with low-sulfur coke increasing by 1600-3000 RMB/ton and medium-to-high-sulfur calcined coke rising by 600-1500 RMB/ton, leading to an increase in prebaked anode prices. In early March, a large aluminum plant in Shandong purchased prebaked anodes at a benchmark price that was 956 RMB/ton higher than in February 2025, with a spot price of 5066 RMB/ton and an acceptance price of 5093 RMB/ton. After the rapid increase in petroleum coke prices, prices have recently stabilized. Precious Metals: After the continuous rise in gold prices and consolidation, there is hope for maintaining strong performance for the rest of the year due to strong expectations for a soft landing of the US economy, but Trump's imposition of tariffs on imports may continue to trigger safe-haven sentiment. Trump's policy emphasizes: imposing tariffs, reducing taxes internally, promoting fossil fuels, and tightening immigration policies, which are expected to raise inflation data in the US and affect the pace of rate cuts by the Fed. However, since taking office, Trump has successively announced imposing a 25% tariff on products imported from Mexico and Canada, an additional 10% tariff on Chinese imports on March 4th following a 10% tariff on February 4th, and a 25% tariff on the European Union. The trade war between the US and the rest of the world is escalating, possibly triggering safe-haven sentiment. In addition, there is a long-term logic for gold prices: deglobalization combined with a decline in US dollar credit is increasing the demand for central banks of various countries to hold gold. Based on the above, it is expected that the central gold price will continue to rise by 2025. Minor Metals: The "detailed rules" of the rare earth industry have been implemented, and the domestic and international price differences may drive antimony prices to new highs. The Ministry of Industry and Information Technology issued two draft opinions on the rare earth industry to refine the control scope on February 19, 2025. Compared to the previously issued "Regulations," the main changes include: 1) updating the scope of control to include imported rare earth ore and monazite; 2) clarifying the production subjects, stating that the companies involved in mining and smelting should be part of a national rare earth group and its subsidiaries, and that other entities cannot obtain rare earth quotas, therefore, they cannot produce; 3) refining the accountability mechanism, conducting periodic inspections on the production situation of companies, holding companies that exceed production standards accountable, and even involving the public security department. The "detailed rules" for rare earth management strengthen supply-side constraints and management, and are expected to drive commodity prices higher. Antimony: The domestic and international price differences continue to widen or drive antimony prices to new highs. Antimony resources are scarce, difficult to recycle, and with frequent disturbances in the domestic production side leading to a decrease in production, along with obstacles in overseas imports, antimony prices have risen significantly this year. September 24 saw the implementation of export controls, easing the slight shortage of domestic raw materials, while the prices in domestic and overseas markets diverge. The price difference between domestic and foreign antimony ingots continues to expand, with the average price of antimony ingots in the UK spot market on February 26 being 49,050 USD/ton, while the FOB price of Chinese antimony ingots of 99.65% purity is only 24,500 USD/ton. If subsequent applications for antimony-related item export permits are approved, the domestic and foreign price difference will be repaired. Recommended Portfolio: CMOC Group Limited (603993.SH), Zijin Mining Group (601899.SH), Jchx Mining Management (603979.SH), Western Mining (601168.SH), MMG (01208), Henan Zhongfu Industrial (600595.SH), CHINAHONGQIAO (01378), Tianshan Aluminum Group (002532.SZ), Henan Shenhuo Coal & Power (000933.SZ), Aluminum CorporationChina Aluminum (601600.SH), Yunnan Aluminum (000807.SZ), Inner Mongolia Xingye Silver & Tin Mining (000426.SZ), Ningbo Boway Alloy Material (601137.SH).Risk warning Domestic economic recovery is below expectations; foreign monetary policy easing is less than expected; global resource supply increase exceeds expectations.