GF Securities: China's small metals account for the world's leading share and focus on future assets under the boom cycle

The Zhitong Finance App learned that GF Securities released a research report stating that it values future assets under the boom cycle. Molybdenum: Stable supply and demand; energy transformation, defense and military industry and future industries are expected to establish a long demand cycle; tungsten: under the trend of strong supply and demand, the price center is expected to rise for a long time; antimony: global supply is tightening and facing restructuring, and energy transformation boosts demand; cobalt: the Democratic Republic of the Congo (Gold) limits cobalt exports, which is expected to quickly boost cobalt prices, and the long-term downward trend in cobalt prices is expected to reverse.

The main views of GF Securities are as follows:

small metal

As a key resource for the future, China will lead the world in the production of small metals such as tungsten, bismuth, gallium, germanium, antimony, and molybdenum. Small metals are widely used in emerging industries, and their long-term strategic significance is increasing. Countries list most small metals as key minerals. Looking at the current types of key resources in the world, China and the US have both strong resources and demand. Russia and India have better resources than demand, resources from South America, Africa, and Australia are far stronger than demand, and demand from Japan, South Korea, England, France, and Germany is far stronger than resources. China leads the world in the production of small metals such as tungsten, bismuth, gallium, germanium, antimony, and molybdenum.

demand

The global energy transition has brought about steady growth, and geographical disturbances reshape the industrial chain and boost defense demand. China's future industry is expected to establish ultra-long-term demand. Energy transformation is the long-term goal of major countries in the world. The construction of new energy sources such as wind power and photovoltaics is expected to bring long-term incremental demand (molybdenum, cobalt, antimony, etc.); the Russian-Ukrainian war accelerates Europe's green transformation process; geographical conflicts superimpose supply controls in resource countries, leading to reshaping global industrial chain demand and increasing overseas defense spending; China plans future industries - future space - future high-end equipment, which is expected to support long-term demand (molybdenum, tungsten, titanium, cobalt, etc.).

supply

Factors such as withdrawal of production capacity, depletion of resources, policy constraints, and insufficient investment limit long-term supply, and countries seek to establish a multipolar global supply chain for resource security. Over the past 10 years, global production of tungsten, molybdenum, bismuth, germanium, antimony, etc. has fluctuated and declined due to multiple factors such as withdrawal of underdeveloped production capacity (molybdenum, tungsten, etc.), resource exhaustion (antimony, molybdenum, tungsten, etc.), policy restrictions (tungsten, rare earth, etc.), and insufficient investment. As an important global producer of tungsten, gallium, germanium, antimony, and cobalt, export controls in countries such as China and the Democratic Republic of the Congo (DRC) will raise the demand for increased overseas supply and production, promote the construction of a resource+deep processing industry chain, and reshape the transformation of the global supply chain to multipolarization.

price

Supply constraints, demand expansion, and geographical disturbances influence each other, which is expected to reinforce the long-term upward trend in prices and amplify volatility. Due to long-term supply-side resource constraints and rising demand from energy transformation, national defense construction, and industrial upgrading, some small metals will maintain a tight supply and demand pattern for a long time; increasingly frequent geographical disturbances (environmental inspections, regional conflicts, export controls in resource countries, etc.) are expected to further amplify price elasticity.

Risk warning: The risk that global macro-demand fluctuations will exceed expectations. The risk of drastic adjustments in resource countries' export policies. The risk that new global production capacity investment will exceed expectations. The risk of a geopolitical conflict exceeding expectations. Technology substitution poses the risk of demand falling short of expectations.