EB SECURITIES: Rate hike expectations largely priced in; bullish on upside in copper and gold prices

EB SECURITIES released a research report stating that rising oil prices have strengthened rate hike expectations, and the market has basically priced in one more rate hike within 2026; the central bank continues to increase gold holdings and is bullish on gold price upside. Global copper mines remain tight; the U.S. copper tariff policy has still not been implemented, and COMEX copper inventories continue to hit new highs. Global copper mine supply remains tight, with China's electrolytic copper smelting operating rate in September hitting a new low for the same period since 2014; domestic wire and cable operating rates rebounded month-on-month, Q4 power grid and air conditioning demand is expected to improve, and the supply-demand tightness in 2026 remains unchanged. The main views of EB SECURITIES are as follows: Event All 2026Q3 fund heavy holdings have been disclosed. Based on fund heavy holdings, the bank compiled active equity funds' heavy holdings in the non-ferrous metals industry. Fund types include ordinary stock funds, equity-biased hybrid funds, balanced hybrid funds, and flexible allocation funds. Industry In 2026Q3, non-ferrous metals heavy holdings accounted for 4.25% of fund heavy holdings, up 0.85pct month-on-month. In 2026Q3, active equity funds' total market value of heavy holdings in the non-ferrous metals industry was approximately RMB80.52 billion, accounting for 4.25% of the funds' overall heavy holdings, up 0.85pct from 3.40% in 2026Q2. Individual Stocks The top ten heavy holdings by market value were concentrated in copper and gold, with Zijin Mining Group still the largest heavy holding. As of 2026Q3, the top ten heavy holdings by market value in the non-ferrous metals industry among active equity funds were Zijin Mining Group (RMB21.2 billion), CMOC Group Limited (RMB4.1 billion), Western Mining (RMB4.1 billion), Chifeng Jilong Gold Mining (RMB3.5 billion), Zhongjin Gold Corp.,Ltd (RMB3.2 billion), Shanjin International Gold (RMB2.9 billion), Jchx Mining Management (RMB2.85 billion), Sinomag Technology (RMB1.6 billion), and Zijin Mining Group (H) (RMB1.5 billion). Increases Mainly concentrated in magnetic materials, superalloys, and gold. Among specific stock holdings, the top ten stocks by the proportion of shares increased by active equity funds in 2026Q3 versus 2026Q2 to the stock's circulating shares were Sinomag Technology (magnetic materials, largest increase), Jchx Mining Management (copper), Shengda Resources (silver), Shanjin International Gold (gold), Jiangsu Longda Superalloy (superalloy), Chifeng Jilong Gold Mining (gold), Jiangsu Toland Alloy (superalloy), Yong Jie New Material (aluminum foil), LINGBAO GOLD (H) (gold), and Zhongjin Gold Corp.,Ltd (gold). Decreases Mainly concentrated in lithium and other minor metals, and materials. Among specific stock holdings, the top ten stocks by the proportion of shares decreased by active equity funds in 2026Q3 versus 2026Q2 to the stock's circulating shares were Jiangsu Boqian New Materials Stock (MLCC nickel powder, largest decrease), Yongxing Special Materials Technology (lithium), Shandong Humon Smelting (gold), China Tungsten and Hightech Materials (tungsten, cutting tools), Zhuzhou Smelter Group (lead-zinc, gold), Ningxia Orient Tantalum Industry (tantalum), Zuxing New Materials (aluminum processing), YOUNGY Co.,Ltd. (lithium), Jiangsu Dingsheng New Materials Joint-Stock (aluminum foil), and China Rare Earth Nonferrous Metals (rare earths). Risk warnings: risk of economic recovery falling short of expectations; rising copper and aluminum prices suppressing downstream demand; risk of the Federal Reserve's rate cut pace falling short of expectations; risk of trade conflict easing.