BofA Securities: Domestic demand remains weak; bullish on copper and AI materials; recommends buying Zijin Mining Group (02899) and CMOC Group Limited (03993)

BofA Securities released a research report stating that domestic demand in real estate, consumption, and automobiles remains weak, and NARI Technology's (600406.SH) guidance of a 6% to 8% year-on-year compound growth in long-term grid investment is insufficient to boost sentiment. SMM expects China's domestic copper and aluminum demand to grow 1% to 2% in 2027, making exports the main source of support. However, rising U.S. bond yields and tariff risks cast doubt on the export outlook. Recently, inventories of tungsten, copper, aluminum, and lithium have all declined rapidly, but downstream restocking willingness is limited amid a weak peak-season demand outlook, constraining room for price increases. CMOC Group Limited (03993), Zijin Mining Group (02899), and MMG (01208) all expect copper supply to remain disciplined, with overseas mines potentially falling below guidance again. U.S. copper tariffs have become a short-term focus. Aluminum Corporation Of China (02600) and SMM expect Indonesia's aluminum production to increase by 1.6 million tonnes in 2027, lower than earlier market concerns; tungsten inventories stand at about 0.5 months. The bank holds a positive view on copper and recommends "Buy" on Zijin Mining Group and CMOC Group Limited. On energy, client interest in coal, oil, and natural gas has risen notably. Third-quarter refined oil product exports were supported by a marked improvement in overseas refining margins and relaxed export controls. PetroChina (00857) and Sinopec (00386) remain constrained by quotas for fourth-quarter exports, and still prioritize domestic sales when supply is tight. The bank recommends "Buy" on PetroChina, as its defensive earnings structure benefits from large-scale low-cost domestic natural gas production and is less sensitive to oil price fluctuations; Yankuang Energy Group (01171) benefits from coal mine safety inspections and is rated "Buy"; KUNLUN ENERGY (00135) is rated "Neutral." On AI infrastructure, AIDC experts remain optimistic about the outlook for mainland AI capital expenditure over the next two years. AI materials supply is tight, with power becoming a bottleneck. The bank recommends "Buy" on Jiujiang Defu Technology (301511.SZ), Sinoma (002080.SZ), and NARI Technology.