The Zhitong Finance App learned that Open Source Securities released a research report saying that the 2024Q4 US election and the uncertainty of the pace of interest rate cuts by the Federal Reserve may once again dominate commodity price fluctuations, and commodity price volatility may rise significantly. Looking at precious metals, Q4 was once again chaotic with “stagflation or recession transactions” caused by uncertainty about the pace of overseas interest rate cuts, and gold is still the preferred choice for this stage of allocation. In terms of basic metals, supply-side tightening and catalysis of bauxite and alumina continues to ferment, and the aluminum oxide shortage conflict may abate until 2025H2. In the short term, we will continue to be optimistic about integrated aluminum companies and companies with alumina export sales exposure.

The main views of Open Source Securities are as follows:

From top to bottom: In October-November, gold still has points to buy, and the risk-prevention asset stage is superior

October 2024 is a critical month before the US election. Overseas investors may once again compete with expectations of election results and expectations of the pace of interest rate cuts by the Federal Reserve. In December, a test window for the Federal Reserve's interest rate cut appeared, and the market was more sensitive to data on the weakening economy. Considering that interest rates are still falling slowly (expected to be 100 BP during the year), the soft landing of the economy may be falsified, and the market quickly traded and the economy cooled down. As a result, gold is still worth buying in October-November. The 2025H1 gold price may still rise for two periods. Recommended targets: Shanjin International (000975.SZ), China Gold (600489.SH), Shandong Gold (600547.SH); Beneficiary targets: Zhaojin Mining (01818), China Gold International (02099).

Bottom-up: continue to be optimistic about integrated aluminum companies and companies with alumina export sales exposure

Aluminum: Looking ahead to the fourth quarter, the fundamentals of electrolytic aluminum are expected to be marginally restored. At present, the country's electrolytic aluminum production capacity utilization rate has reached a high level, and in the fourth quarter, electrolytic aluminum production in Yunnan is vulnerable to unstable electricity supply, and electrolytic aluminum production may decline marginally; entering the “golden nine silver ten” peak season, there is a marked improvement on the demand side. The rise in alumina prices is a structural contradiction. With the release of production capacity, profit transfers in the industrial chain benefit downstream electrolytic aluminum plants. Recommended targets: China Hongqiao (01378), Tianshan Aluminum (002532.SZ), Yunlu Co., Ltd. (000807.SZ), Nanshan Aluminum (600219.SH), benefiting target: China Aluminum (601600.SH).

Copper: Global upstream copper concentrate stocks continued to be consumed before July 2024. Recently, domestic refined copper inventories have been successfully implemented, downstream price acceptance may have increased, and favorable domestic policies are frequently compounded by interest rate cuts before the holiday season and expectations of falling interest rates have been implemented. Marginal improvements in demand expectations will benefit copper prices. Currently, the driving force hindering copper prices is high overseas copper inventories. We need to pay attention to the inflection point of overseas demand recovery and inventory elimination after interest rate cuts are implemented. Recommended targets: Zijin Mining (601899.SH), Luoyang Molybdenum Industry (603993.SH); Beneficiary targets: Jin Chengxin (603979.SH), Western Mining (), and Zangge Mining (000408.SZ). 601168.SH

Small metals: Molybdenum and tin prices are expected to operate at high levels throughout the year, and the valuation safety margin is strong Molybdenum: Considering the decline in overseas associated mine production and the limited increase in domestic supply, the supply of molybdenum ore is expected to remain tight in 2024. Meanwhile, against the backdrop of domestic interest rate cuts and cuts, steel prices have recently rebounded. Amid improvements in profits and expectations, the willingness of steel mills to reserve stocks has increased, which is beneficial to the rise in molybdenum prices. The recommended target is Gold and Molybdenum Co., Ltd. (601958.SH).

Tin: The substantial impact of the suspension of tin ore production in Myanmar on the supply side has gradually been realized: global semiconductor sales continue to grow, the semiconductor inventory cycle has reached an inflection point, or has entered the active storage stage, focusing on the impact of active downstream production expansion on tin consumption. Overall, the fundamentals of tin supply and demand are still strong, supporting the high level of tin prices. Recommended targets include Tin Industry Co., Ltd. (000960.SZ) and Huaxi Nonferrous Metals (600301.SH).

Risk warning: Global demand for new energy vehicles, energy storage, photovoltaic installations, and semiconductors falls short of expectations; real estate construction and completion area falls short of expectations; progress of various mining projects exceeds expectations; geopolitical risks.