The Zhitong Finance App learned that China Galaxy Securities released a research report saying that global copper production continued to be disrupted. The copper production of the world's major copper companies all declined year-on-month in the third quarter. Copper supply became tight and smelting processing fees continued to decline, causing domestic copper smelters to increase maintenance and shutdown after October. Domestic refined copper production may decline further in 2026Q4, and the mine side shortage will accelerate transmission to the smelter end, which is expected to support copper prices. The Democratic Party took back both houses of Congress in the US midterm elections. Democratic leaders in the US Senate and House of Representatives clearly stated that they want to push for an end to the war against Iran. Once the US war with Iran ends, oil prices and US inflation expectations may decline. Combined with the market's unsustainable return on AI investment and debt, and growth concerns caused by the Democratic Party's policy delays in AI construction, expectations of the Fed's interest rate hike may decrease, which is expected to drive a rebound in gold prices.
The main views of China Galaxy Securities are as follows:
Industry sentiment declined, and the overall performance growth rate of the 2026Q3A non-ferrous metals industry declined
The escalation of the US-Iran conflict and the blockade of the Strait of Hormuz and the rise in oil prices continued to have a negative impact on the nonferrous metals industry in the third quarter. The threat of inflation brought about by the rapid rise in oil prices to a high level caused the Federal Reserve to change its monetary policy and enter a cycle of interest rate hikes in the third quarter. The marginal tightening of market liquidity suppressed the prosperity of the non-ferrous metals industry and non-ferrous metal commodity prices. Meanwhile, the rise in energy, transportation, and other costs due to rising oil prices also showed in the third quarter that further eroded industry profits and weakened the profitability of non-ferrous metals companies. Coupled with the rise in the base figure, the overall performance growth rate of the non-ferrous metals industry in 2026Q3A shares declined markedly. Specifically, the A-share nonferrous metals industry's revenue for the first three quarters of 2026 increased 26.64% year on year, and the performance increased 85.98% year on year; the revenue of the A-share nonferrous metals industry in the single quarter of 2026Q3 increased 17.75% year on year, and the performance increased 56.31% year on year.
Profitability weakened, and the overall ROE level of the 2026Q3A non-ferrous metals industry declined for the first time after 2024
The overall ROE of the A-share nonferrous metals industry fell from 5.00% in 2026Q2 to 4.14% in 2026Q3, down 0.86 percentage points from month to month, the first decline since 2024. Among them, the overall sales profit margin of the A-share nonferrous metals industry fell from 8.27% to 7.33%, affecting the ROE decline by 0.53 percentage points, which is the core factor for the increase in the overall ROE level of the non-ferrous metals industry in 2026Q3. The decline in the overall gross margin of the A-share nonferrous metals industry in 2026Q3 became the main reason for the decline in the sales profit margin of the A-share nonferrous metals industry in the third quarter of 2026. As the US-Iran conflict continued, the Strait of Hormuz was blocked. The threat of inflation brought about by higher oil prices caused the Federal Reserve to tighten monetary policy and increase interest rates in the third quarter. Under the margins of market liquidity, non-ferrous metal commodity prices fell in the third quarter; the combined increase in oil prices spread to rising energy costs, transportation costs, and accessories costs in the third quarter, increasing the production and sales costs of non-ferrous metal products, and further reducing the profitability of non-ferrous metals companies and the gross margin level of the industry.
2026Q3A shares The overall operating cash flow situation of the non-ferrous metals industry continues to improve
The overall net operating cash flow of the A-share nonferrous metals industry in 2026Q3 increased 35.12% year-on-year compared to 2025Q3 and 19.18% month-on-month compared to 2026Q2. The overall operating cash flow of the 2026Q3A share nonferrous metals industry increased month-on-month compared to 2026Q2, and achieved year-on-year growth for three consecutive quarters after 2025Q4, indicating that the cash situation of A-share non-ferrous metals companies continued to improve.
Risk warning: 1) the risk that domestic macroeconomic recovery will fall short of expectations; 2) the risk that the Fed's monetary policy will be tightened and interest rate hikes will exceed expectations; 3) the risk of a sharp decline in non-ferrous metal commodity prices; 4) the risk that the Middle East geopolitical conflict will continue to ferment and evolve beyond market expectations.