Since the start of this year, the nonferrous metals sector has continued its high growth momentum from 2025, staging a major rally in the capital markets. As copper prices surged past 100,000 yuan per ton, tungsten prices remained elevated, and gold and silver hit record highs, a deeper industrial narrative is emerging: nonferrous metals are evolving from cyclical commodities tied to macroeconomic fluctuations into strategic scarce assets critical to energy transition and national security.

This year's Government Work Report proposed building emerging pillar industries such as integrated circuits, aerospace, biopharmaceuticals, and low-altitude economy. These sectors represent core application scenarios for non-ferrous metals like copper, aluminum, lithium, nickel, and rare earths, directly driving demand for high-end, high-performance non-ferrous materials and creating structural growth opportunities for the industry.

From the “backbone of industry” to the “strategic lifeline,” a profound transformation concerning pricing power, resource perspectives, and development paradigms has already begun.

Nonferrous Metals Face Value Reassessment

For a long time, nonferrous metals were regarded as the “backbone of industry,” with the market accustomed to reverse-engineering demand based on real estate construction rates, infrastructure growth, and home appliance shipments.

However, unlike the traditional cycle where “economic cycles determine metal prices,” the cyclical nature of nonferrous metals is undergoing a metamorphosis. “This round of price increases isn't merely short-term speculation but the result of three factors resonating together: a cyclical bottom, industrial qualitative transformation, and strategic revaluation,” a nonferrous metals analyst at a listed company told Securities Daily. The core change lies in the underlying logic of nonferrous metals demand. “Simply put, this isn't a rebound but a ‘value reassessment’ of the non-ferrous metals sector.”

The source of this shift points directly to the new technological revolution. The rapid development of emerging industries like artificial intelligence (AI) and new energy has made more investors realize: the limit of AI isn't code but electricity, and the carriers of electricity are non-ferrous metals like copper, aluminum, tin, and nickel.

According to the International Energy Agency (IEA), supporting the widespread adoption of AI will require annual investments of up to $3 trillion by 2030 in related sectors including power generation, energy storage, power grids, and data centers.

AI data centers not only consume staggering amounts of electricity but also demand higher power stability, a requirement that directly impacts the non-ferrous metals industry. Particularly as tech giants' computing power race intensifies, AI computing—dubbed the “super copper-guzzler”—is propelling global copper demand to unprecedented heights. Industry estimates suggest data centers and AI servers consume two to three times more copper than traditional equipment. High-density cabling and high-power supply requirements are unlocking long-term incremental demand for copper.

JPMorgan's latest analysis projects a global copper supply deficit of approximately 130,000 metric tons by 2026. The bank also provided phased price forecasts: $13,500 per metric ton in Q2 2026 and $13,000 per metric ton in Q3 2026.

Supply contraction pressures in copper mining form a critical backdrop to this assessment. Major copper mining companies, including U.S.-based Southern Copper Corporation, have successively lowered their production forecasts for 2026 and 2027, casting uncertainty over the growth of global copper concentrate supply. In a nonferrous metals industry research report released in early February, China Post Securities indicated that due to the downward revisions in 2026 production expectations by companies like Southern Copper, a supply-demand tightening scenario is anticipated for copper in 2026.

Industry experts believe that in the new industrial era, while the cyclical patterns of nonferrous metals persist, their drivers have undergone a fundamental structural shift. Growth potential now overlaps with cyclicality as a defining characteristic. “Previously, demand hinged on real estate, infrastructure, and home appliances. Now it centers on AI computing power, new energy, power grids, commercial aerospace, and high-end manufacturing,” said the aforementioned researcher. Nonferrous metal demand has evolved from “cyclical pulses” to long-term structural growth.

Transformation Anchored in “Green” and ‘Technology’

As the underlying logic of demand shifts toward “AI and new energy,” different non-ferrous metals are diverging along distinct trajectories. This divergence has been vividly reflected in price movements this year, with precious metals and strategic minor metals leading the gains, followed by base metals, each unfolding distinct value narratives.

Emerging industries' extreme demands for material performance have sketched a distinctive demand landscape for nonferrous metals. On one hand, “green metals” have become the core support for energy transition. For instance, copper, as the core of electrification, has highly certain demand growth in areas like power grids, charging piles, and wind/solar power.

On the other hand, “cutting-edge metals” have become a key driver for technological breakthroughs. A representative from Yunnan Tin Co., Ltd. told Securities Daily: “As a ‘computing power metal,’ tin is widely used in semiconductors, AI servers, advanced packaging, and other fields. The iteration of AI computing hardware has led to a significant increase in tin consumption per unit compared to traditional equipment, driving continuous expansion in market demand.”

Additionally, strategic minor metals like tungsten, molybdenum, antimony, and indium—though used in smaller quantities—play critical roles in technological R&D. They have become indispensable materials in high-end manufacturing, defense, and semiconductors, exhibiting characteristics of highly concentrated supply and significant price elasticity.

This value differentiation driven by emerging industries is not only reshaping the nonferrous metals pricing system but also compelling the entire sector to seek new growth drivers. Leading mining companies, leveraging advantages in resources, capital, and technology, will further consolidate their industry positions as production capacity expands. With the sustained development of AI and new energy industries, the importance of strategic metals like copper, lithium, and rare earths will grow, driving the mining sector toward high-end and green transformation.

Today, companies along the nonferrous metals supply chain are no longer merely passive followers of cyclical shifts but are proactively becoming the implementation vehicles for green and intelligent transformation.

Multiple Measures to Break Supply Bottlenecks

Behind the bright demand outlook lies the industry's urgent need to accelerate breaking the “shackles” on the supply side.

Historically, the cyclical nature of nonferrous metals follows a fundamental iron law rooted in an unresolvable contradiction: rapid demand changes versus slow supply adjustments. “Given that mine construction cycles span 5 to 10 years, even if metal prices surge dramatically, new capacity cannot be released in the short term.”

This rigid supply constraint, compounded by geopolitical rivalry in global resource domains, elevates “resource supremacy” to the core logic of non-ferrous metals industry development. Resource security directly determines a company's future market share and competitive strength. Whoever controls the resources holds the core competitive advantage.

Supply Gap Difficult to Fill in the Short Term

As the world's largest LNG producer, the United States currently operates its export facilities near full capacity. Most output is locked into long-term contracts, leaving only about 5% of additional supply capacity available to address sudden shortages. This means that even if the U.S. wishes to fill the supply gap left by Qatar, it lacks the capacity to do so in the short term. While some U.S. LNG export projects do possess operational flexibility to slightly increase output by raising load factors, this incremental capacity is negligible compared to Qatar's annual production of 77 million tons.

Multiple LNG export projects are under construction along the U.S. Gulf Coast, including Plaquemines, Corpus Christi Phase III, Golden Pass, Rio Grande, and Port Arthur. Collectively, these will add over 65 million tons of annual capacity—roughly 60% of the U.S.'s current output. However, most of these projects won't come online until around 2030, making them too distant to address immediate needs. Other potential suppliers like Australia, Nigeria, and Malaysia have also reached near-capacity limits for LNG production, making significant short-term increases difficult. This means the global LNG market will remain under sustained pressure until Qatar resumes exports.

The global LNG market is entering a period of heightened uncertainty. Qatar's resumption timeline hinges on multiple factors, and market rebalancing will be a protracted process. For economies reliant on LNG imports, this crisis underscores the critical importance of diversifying energy sources and maintaining strategic reserves. This disruption may prompt importing nations to reassess contract structures, inventory strategies, and backup capacity arrangements to bolster resilience against sudden supply disruptions.

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