Citigroup: Copper listed as the preferred material for China's materials industry; mining stocks are expected to follow commodity prices higher.

Citibank said that since the conflict in Iran, the performance of all mining stocks except for lithium has lagged behind underlying commodities and mining peers listed in the United States, which may reflect the stock market digesting the risk of slowing demand. However, it is believed that stock performance should follow commodity prices higher. Analysts such as Jack Shang stated in a report that considering the current underperformance and the possibility of easing tensions in the Middle East, copper ranks first in preference order. Minmetals Resources and Luoyang Molybdenum have been added to the preferred list. If the Strait of Hormuz reopens, it is expected that both will outperform. Jiangxi Copper has performed the worst, but this is mainly due to the rise in sulfuric acid prices; if tensions ease, chemical product prices may fall, so it is not included in the preferred list. Aluminum is still favored in the medium term. Although the reopening of the strait could lead to the recovery of aluminum production capacity in the Middle East, this will take time, and regions outside of China will still be in short supply. Due to the significant lag in the performance of the Chinese aluminum industry, it is kept on the list. China Hongqiao is removed from the list, but its dividend and share buyback are still favored in the medium term. Ganfeng Lithium, Hunan Yunneng, and CATL have been retained as the upward cycle in battery prices is expected to continue until 2026. The new preference order is: copper > aluminum > lithium > lithium iron phosphate cathode > batteries > gold > coal > steel > cement.