Guosen: The attributes of non-ferrous metal mineral resources are highlighted, and with fragile supply, the price center is expected to steadily increase.

Guosen releases research report stating that critical minerals have become a key focus area for many countries, mainly due to concerns over supply chain security. In this context, the resource attributes of critical minerals will become more prominent, with prices likely to rise and fall. For companies that control critical minerals, there is potential for strategic allocation. Guosen's main points are as follows: Definition of Critical Minerals "Critical minerals" refer to non-fuel minerals or mineral materials that are essential to a country's economy and security and whose supply chains are easily disrupted. The Chinese government often uses the term "strategic minerals" to refer to mineral resources that play an important role in ensuring national economic security, national defense security, and the sustained healthy development of strategic emerging industries. In November 2025, a list of critical minerals compiled by the U.S. Geological Survey was released, adding 10 mineral varieties to the 2022 version, bringing the total to 60. Importance of Research on Critical Minerals 1) China can counter Western countries through export restrictions on strategic minerals. China has abundant mineral resources, especially in various rare metals where it has a clear advantage, such as tungsten (accounting for 82.7% globally) and rare earths (accounting for 69.2% globally). China also controls most of the smelting capacity for these critical minerals, with Chinese rare earth smelting accounting for approximately 90% globally. China currently implements strict export controls on various critical minerals. 2) The U.S. is considering creating market conditions and building mineral resource security through high tariffs. According to U.S. Geological Survey data, the U.S. fully relies on imports for 12 critical minerals, with imports accounting for more than 50% for 29 critical minerals. The U.S. imports at least 29 mineral resources from China, highlighting the vulnerability of its supply chain. Currently, the U.S. government is fully intervening in the critical mineral supply chain. For example, in July 2025, the U.S. Department of Defense invested $400 million in U.S. rare earth producer MP Materials, giving it a 15% stake to help fund the construction of a large rare earth magnet new factory; in February 2026, according to institutional sources, the U.S. plans to launch a strategic critical mineral reserve with an initial funding of $12 billion. 3) Geopolitical risks are on the rise globally, and resource-exporting countries are gradually tightening their resource policies. For countries that control critical minerals, strengthening control over supply rhythm through policy tools is essentially about competing for dominance in global critical mineral pricing. Taking the example of the Congo (Kinshasa), the Congo (Kinshasa) produces approximately 76% of the global cobalt production. To address the long-term low cobalt prices, the Congo (Kinshasa) implemented a long-term ban on cobalt raw materials exports in 2025, which was changed to an export quota system on October 16, 2025. 4) Capital is accelerating into critical mineral chains, and the money-raising effect is significant. Amid macroeconomic uncertainty, the capital market is increasing its allocation to the critical mineral sector, expressing a deep-seated anchoring of the strategic value and resource security logic of critical minerals. Analysis of Fundamental Elements of Critical Minerals Based on the current international political environment, the bank believes that increasing research on critical minerals is highly necessary. The bank has selected 16 varieties and conducted a systematic analysis of their industry chains and fundamentals. For most varieties, supply vulnerabilities exist, with core supply mainly controlled by a few countries, making them susceptible to geopolitical risks. Against the backdrop of a tight supply-demand balance, if supply issues arise, commodity prices are likely to respond quickly. Risk Warning: Supply exceeds expectations; Demand underperforms expectations; Geopolitical risks ease.