China Galaxy Securities: Bull market cycle of non-ferrous metal commodities on the way, disturbance followed by upward continuation expected.

China Galaxy Securities released a research report stating that in the first half of 2026, the uncertainty of macroeconomics and liquidity expectations under the Middle East conflict intensified, causing prices of non-ferrous metal commodities to rise before falling back, interrupting the upward momentum of the non-ferrous metal industry. In the second half of 2026, the negotiations for a ceasefire between the US and Iran made progress amid setbacks, the situation in the Strait of Hormuz eased, and the market gradually became desensitized to the Middle East conflict. As oil prices fell from their highs, inflationary pressures are expected to ease. The market's expectations for improved liquidity, economic recovery, and improved risk appetite, coupled with the marginal easing expectations of the macro environment and the US Federal Reserve's monetary policy, are expected to drive the non-ferrous metal industry back into an upward trend. Furthermore, the report also mentioned that global geopolitical conflicts intensifying, the intensification of strategic resource competition among major powers in an era of de-globalization, the rise of nationalist resource ideologies in resource-rich countries, and the continuing trend of aging resources and insufficient investment in development are all factors contributing to the upward movement of non-ferrous metal prices. The main viewpoints of China Galaxy Securities are as follows: Precious Metals: Gold prices are expected to rise again after the storm calms Industrial Metals: Tight supply-demand situation supports upward movement of copper prices Industrial Metals: Expansion of global aluminum supply-demand gap due to Middle East conflict Energy Metals: Lithium crosses the bottom and opens a new cycle Minor Metals: Fundamental repair illustrates long-term strategic value, tungsten prices are expected to rise Investment advice was also provided in the report, recommending specific companies to watch given the impact of the Middle East conflict and opportunities in various metal industries. Various risks were also highlighted, including risks related to economic recovery, unexpected interest rate hikes by the Federal Reserve, lower-than-expected downstream demand for non-ferrous metals, significant price drops in non-ferrous metals, and unexpected escalations in the Middle East conflict.