Non-ferrous metals are experiencing a valuation re-evaluation; Fuguo Resources Select is seizing the long-term allocation opportunity

Listing | China Investment Network

Review | Li Xiaoyan

Geopolitical conflicts continue to intensify, causing sharp fluctuations in the global commodity markets. International oil and gold prices are both rising. As the “skeleton and bloodline” of modern industry, the supply chain security and pricing logic of non-ferrous metals are undergoing profound reshaping. Compared to the short-term visible volatility of oil, non-ferrous metals, with their risk-hedging, industrial, and strategic attributes, have become an “anchor of value” that cannot be ignored in the current complex environment. Against this backdrop, the GuoFeng Resources Selected Hybrid Fund (Class A 021642, Class C 022167), which focuses on resource themes, leverages full industry chain coverage and precise supply-demand judgment, with long-term value allocation becoming increasingly prominent.

Four Major Categories Build the Core Framework of Resource Investment

Non-ferrous metals encompass four main categories: precious metals, industrial metals, energy metals, and strategic minor metals. These form the core underlying logic for industry research and investment, with different categories exhibiting differentiated characteristics during economic cycles and geopolitical changes.

Precious metals, centered on gold, silver, platinum, and palladium, serve as “safe havens” during geopolitical turmoil and inflation cycles. Gold and silver possess both anti-inflation and risk-hedging properties. The continuous accumulation of gold by central banks worldwide provides long-term support; by 2026, there are no signs of slowdown in global central bank gold purchases. Platinum and palladium are key materials for automotive exhaust purification. As demand for emissions control in new energy vehicles increases, their industrial attributes and strategic value continue to strengthen.

Copper and aluminum, in industrial metals, are macroeconomic “barometers.” Copper, known as the “mother of industry,” is widely used in power grids, infrastructure, and high-end manufacturing. The growth of AI data centers and grid upgrades drives copper demand to grow over 5% annually. Aluminum, the “king of lightweight,” sees strong demand in new energy vehicle lightweighting, photovoltaic supports, and energy storage boxes. The per-vehicle aluminum usage in global new energy vehicles has risen to 250kg, becoming a core driver of industrial metal demand growth.

Energy metals are the “core raw materials” for green transformation. Lithium, cobalt, nickel, and other varieties support the development of new energy industries. A pure electric vehicle uses 3-4 times more copper than a traditional fuel vehicle. Photovoltaic power stations have high demand for aluminum frames, and lithium batteries rely heavily on lithium, cobalt, and nickel resources. With global new energy vehicle sales surpassing 28 million and energy storage installations growing by 60%, demand for energy metals continues to lead growth.

Strategic minor metals, though used in limited quantities, have irreplaceable strategic value. Tungsten, antimony, germanium, and rare earths are widely used in military, chips, and high-end manufacturing. About 79% of tungsten and 76% of cobalt are produced in China and the Democratic Republic of Congo. Coupled with increased export controls in resource countries, strategic minor metals exhibit market characteristics of “easy to rise, hard to fall.”

Triple Geopolitical Transmission Pathways Intensify Industry Differentiation

Recently, geopolitical hotspots have rapidly transmitted through the non-ferrous supply chain via three pathways: risk aversion sentiment, shipping disruptions, and energy costs, leading to industry segmentation with varying impacts across categories.

Risk aversion drives short-term capital into precious metals, with gold and silver prices oscillating upward, becoming core assets for hedging geopolitical risks. Shipping disruptions, especially through key routes like the Strait of Hormuz and the Red Sea, carry large volumes of non-ferrous metals. Blockages increase logistics costs and insurance premiums, significantly raising supply chain costs for base metals like aluminum and copper. Middle Eastern electrolytic aluminum capacity accounts for about 9% of the global total; geopolitical conflicts restrict local capacity and halt alumina transportation, shifting the aluminum market from slight surplus to a deficit of several million tons.

Rising energy costs further squeeze profit margins in non-ferrous industries. Electrolytic aluminum production is highly dependent on electricity; rising energy prices push electricity costs above 50%. Stricter environmental regulations accelerate the exit of high-energy-consuming capacities. Meanwhile, resource nationalism—such as Congo increasing cobalt mining rights fees and Indonesia restricting nickel mining quotas—adds supply-side uncertainty, prompting countries to accelerate resource diversification and supply chain restructuring.

Three Major Trends Drive “Cycle + Growth” Dual Momentum

Beyond short-term geopolitical fluctuations, the long-term investment logic of the non-ferrous metals industry has shifted from purely cyclical to a “cycle + growth” dual driver, supported by three core trends.

Green transformation sustains demand growth, becoming the industry’s main growth engine. The global “dual carbon” goals and explosive growth in new energy industries drive demand upgrades for non-ferrous metals. Beyond EVs and photovoltaics, sectors like energy storage and wind power continue to boost demand for copper, aluminum, and lithium. The energy transition under carbon neutrality is expected to sustain growth for decades. Domestic policies focusing on high-end green consumption further stimulate demand for high-performance copper and aluminum alloys, injecting new momentum into the industry.

Supply-side rigidity is pushing the industry’s price center upward over the long term. Mining exploration and production cycles span 5-10 years. Over the past decade, underinvestment in global mining has led to scarcity of quality mineral resources. Coupled with increased export controls and stricter environmental regulations, supply cannot quickly meet demand growth. By 2026, new copper mine capacity additions will be less than 500,000 tons globally; supply growth for energy metals lags behind demand, gradually widening supply-demand gaps and supporting long-term industry value.

Dual support from monetary and geopolitical environments enhances resource asset allocation value. The global de-dollarization process accelerates, with central banks continuously increasing holdings of gold and other tangible assets. Geopolitical conflicts have become normalized, making non-ferrous metals valuable as inflation hedges and risk diversifiers. The Fed’s rate cut cycle is expected to begin with 3-4 cuts by 2026, weakening the US dollar index and further boosting the financial attributes of non-ferrous metals, with prices of gold, silver, and others steadily rising.

GuoFeng Resources Selectively Seizes Structural Opportunities

For ordinary investors, directly participating in stocks or futures markets requires high expertise. Investing through resource-themed funds is a more efficient approach. The GuoFeng Resources Selected Hybrid Fund primarily invests over 80% of non-cash assets in resource-related stocks and depositary receipts, covering base metals, precious metals, energy metals, and oil, constructing a diversified portfolio.

The fund manager adopts a “rotation of varieties under supply-demand framework” strategy, focusing on core sectors like energy metals to precisely capture structural industry opportunities. For commodities like copper, gold, and aluminum that have experienced significant gains, the fund emphasizes sustainability and risk avoidance; for energy metals like lithium, it relies on supply-demand reversal judgments to position for price elasticity. Morgan Stanley forecasts a global lithium market gap of 80,000 tons by 2026, with a potential reversal in supply-demand dynamics boosting lithium stocks, aligning with the fund’s investment direction.

In terms of performance, the non-ferrous metals sector ranked first among all industries in 2025, with industry prosperity continuing to rise. GuoFeng Resources Selected has leveraged precise sector positioning and risk control to seize excess returns during the industry rally. Its top 10 holdings account for 51.32%, with moderate concentration, balancing yield and stability. The fund manager has extensive resource industry research experience, using a “three-stage analysis + 3×3 matrix” framework to accurately identify cycle β and stock α, navigating through cyclical fluctuations.

2026 Investment Outlook: Optimize Allocation to Capture Structural Opportunities

Looking ahead to 2026, the tight global non-ferrous supply chain is unlikely to loosen. Dual drivers of geopolitical risks and green transformation are expected to sustain a positive overall trend, though differentiation among varieties may intensify, requiring optimized segmentation based on supply-demand dynamics.

In the short term, precious metals, aluminum, and strategic minor metals present phased opportunities. Precious metals benefit from risk aversion and central bank purchases; aluminum is supported by energy costs and supply constraints; strategic minor metals, with concentrated supply and strategic importance, have price advantages. In the medium to long term, the three main logical drivers—green transformation, supply rigidity, and monetary/geopolitical support—will determine the long-term value direction of the industry. Energy metals and high-end manufacturing-related minor metals are expected to continue leading.

Relying on full industry chain coverage and professional research capabilities, GuoFeng Resources Selected aims to precisely grasp industry structural opportunities in 2026. For investors, it is advisable to monitor short-term opportunities arising from geopolitical developments while focusing on long-term fundamentals, participating in the growth of the non-ferrous metals industry through professional fund tools, and achieving steady asset appreciation in complex markets. (Risk reminder: Fund investments carry risks. Investors should carefully read the fund contract, prospectus, and other legal documents before making investment decisions to understand the risk-return profile and choose products suitable for their risk tolerance.)