GTHT released a research report stating that the metals industry is expected to maintain a "volatile upward" trend, with multiple segments demonstrating independent growth drivers. The current market cycle differs significantly from historical patterns, as the core pricing mechanism shifts from traditional demand driven by real estate and infrastructure towards a reshaping of structural demand from "new energy + AI" coupled with rigid supply constraints. The five major metal sectors each possess distinct industrial logics, exhibiting a structural characteristic of "multiple segments flourishing." The firm believes the overall sector will maintain a volatile upward trajectory. Key views from GTHT are as follows:
Precious Metals: Dual Drivers of Geopolitical Hedging and Inflation Concerns Against the backdrop of frequent geopolitical conflicts in regions like the Middle East, safe-haven attributes and inflation concerns are the core short-term drivers for gold price increases. The current valuation of the gold sector remains relatively low, and the firm views any price pullbacks as favorable opportunities for strategic positioning.
Industrial Metals: Reshaping Demand Structure and Tightening Supply-Demand Balance GTHT believes the cycle for industrial metals may extend longer than market expectations. Demand is undergoing structural changes due to new energy and AI development (power grid upgrades, data centers), while the supply side faces rigid constraints including declining ore grades, heightened geopolitical risks, and insufficient capital expenditure. For copper, flooding disruptions in the Democratic Republic of Congo, combined with robust demand from AI and grid infrastructure, are expected to create a supply deficit exceeding 200,000 tonnes this year, indicating a clearly tight balance. For aluminum, supply chain concerns triggered by Middle East conflicts are the core driver of recent price increases, and the sector currently trades at low valuations with high-dividend yielding asset characteristics.
Strategic Metals: Era of Rigid Supply Highlights Resource Scarcity For rare earths, the current market cycle has completely diverged from logic driven by demand penetration rates, transitioning to a pure supply-driven narrative. China's rare earth quota growth has slowed significantly, coupled with the implementation of regulations on unregulated production and a whitelist system, shifting the industry from extensive expansion to refined control. Profits within the industrial chain are expected to shift towards midstream smelting and separation segments, with a notable increase in concentration. For natural uranium, as a strategic resource, supply is extremely rigid, while demand growth for nuclear power driven by AI is expected to significantly widen the supply gap, leading to a long-term bullish outlook on sustained price increases.
Energy Metals and Steel: Bottoming Fundamentals and Structural Opportunities For energy metals, GTHT believes lithium carbonate fundamentals are strong, with inventories continuing to decline. Combined with policy disruptions such as licensing renewals in Jiangxi and an export ban in Zimbabwe, there are significant structural trading opportunities within the year. For steel, a clear bottom has formed in the industry, but the extent and momentum of any subsequent recovery will primarily depend on substantive policy interventions to address internal competition and the elimination of trailing capacity.
Risk factors include a slower-than-expected pace of U.S. Federal Reserve interest rate cuts and unexpected fluctuations in macroeconomic demand.