The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the probability of the Federal Reserve's interest rate hike in October rose and then fell, and risky assets were able to rest, but the turmoil in the AI market weakened the market's expectations for future economic growth, and assets lacked upward drive. Non-ferrous equity PE such as gold, copper, and aluminum are all at a low level. Their risk-resistant properties attract capital inflows. Gold prices have stabilized, and gold stocks have performed excellently. Basic industrial metals are supported by supply disruptions and low inventories, but macroeconomic expectations are weak, capital is not strong, and equity targets and price expectations are showing a consolidation trend.
CITIC Construction Investment's main views are as follows:
Industry dynamic information
Industrial metals: Prices of copper, aluminum, lead, zinc, and tin in LME this week changed to -1.3%, -1.6%, -0.03%, -3.1%, and -5.3%; industrial metal prices are determined by “financial attributes” and “commodity attributes”. Judging from financial attributes, the Federal Reserve's interest rate hike was implemented as scheduled; judging from commodity attributes, global copper and aluminum inventories are relatively low, and China's economy can be expected to recover. Driven by the new energy industry, the increase in copper and aluminum demand will improve somewhat.
Gold: The probability of an interest rate hike in October declined, and the price of gold rebounded
The US consumer price index (CPI) rose 0.6% month-on-month and 3.7% year-on-year, higher than the 0.4% and 3.4% increase in August, respectively; the core indicator rose 2.6% in September, which was also higher than market expectations. The data boosted the US dollar index and 10-year US Treasury yield, which once pressured the price of gold back to the 4,100 US dollar mark. However, in his Bangkok speech, Walsh made it clear that he would not prejudge the outcome of the interest rate meeting, which prompted traders to lower the probability of raising interest rates in October. Furthermore, AI's high financing costs and concerns about profit fulfillment are driving some capital to flow into the gold market for safe haven, driving the recovery of gold prices. In the long run, major economies' debt is high, the dollar currency is overpaid, and fiscal support continues to be above the historical average. For example, the US federal budget deficit in fiscal year 2026 rose to 1.99 trillion US dollars, higher than 1.78 trillion US dollars in fiscal year 2025, the highest level since the pandemic, leading to an increase in the size of federal debt. Dollar credit concerns supported an upward move in the gold price center.
Copper: Macro expectations weakened, and copper prices fluctuated at a high level
Domestic refined copper stocks accumulated to 113,300 tons this week. After a month change, the stock volume was 700 to 900 yuan, and supplies in the spot market are still tight. The latest copper concentrate TC fell to a record low of minus 238 US dollars/dry ton, the profit contribution of the by-product sulfuric acid was tightened, and the operating pressure on the smelting process continued to rise. From October to November, many domestic copper smelters will carry out planned maintenance, and electrolytic copper production is under pressure to decline. Despite strong commodity attributes, global AI stock performance was volatile, economic growth expectations weakened, and copper prices fluctuated at a high level. Recently, industry participants have loosened their expectations for long-term copper prices. They believe that this is the time when copper fundamentals are at their most tight, including low non-US inventories caused by US copper tariffs, reduction in copper scrap in China, and AI consumption narratives, etc., leading to a decline in willingness to go long, and copper prices fluctuate at a high level.
Aluminum: Expectations of excess formed, distal aluminum prices were suppressed
Domestic electrolytic aluminum spot stocks fell by 50,000 tons to 636,000 tons this week. Rapid storage dragged down aluminum prices in recent months by affecting aluminum prices in recent months. Prior to that, commodity market investors, based on expectations that the global aluminum market would turn excessive next year, went short selling for a long time, and Shanghai Aluminum formed a big backbone structure. Although the global aluminum market is likely to turn oversupply next year under the double impact of overseas production and the resumption of production in the Middle East, this is a slow variable that gradually materializes. The current reality is that both LME and domestic spot inventories are low, effectively resisting short selling forces based on long-term excess. Aluminum prices are supported by 23,000. The equity side is currently pessimistic enough about measuring long-term aluminum prices. According to the high dividend of 20,000 aluminum, the company's dividend is already 6%. Given that aluminum prices are difficult to drop rapidly, investors chasing dividends can consider allocating them at an opportunity.
risk analysis
1. The global economy has declined sharply, and consumption has shrunk in a cliff-style manner; 2. US inflation is out of control, the Fed's monetary tightening has exceeded expectations, and the strong dollar suppresses the price of equity assets; 3. Consumption growth in the domestic new energy sector fell short of expectations, and consumption in the real estate sector continued to be sluggish.