The Era of Resource Grandeur 2.0: As copper and gold repeatedly hit new highs, who is the next strategic-grade commodity?

As gold, silver, and copper prices soar in a frenzy, funds are already looking for the next low point.

On February 22, Changjiang Securities released a 42-page in-depth strategic report, posing a very straightforward question: In the resource era, where is the next strategic commodity?

In the past, when commodity prices rose, companies would ramp up factory construction and expansion, eventually leading to overcapacity and price crashes.

But now, times have changed.

Changjiang Securities states that in the current macro environment, “de-globalization geopolitics restricting overseas expansion + dual-carbon controls are creating a second category of scarce resources.”

In other words, even if profits are high now, expansion is impossible.

Which industries are becoming this “second category of scarce resources”? The report highlights four sectors: Aluminum electrolysis, chemical petrochemicals, aviation, and oil transportation.

Their common features are very clear:

• First, strategic. Either China holds absolute pricing power, or they are high-end monopolized industries in the US.

One category includes China’s “full industry chain and cost advantages” manufacturing, which “successfully captures upstream overseas raw materials and downstream export profits,” forming “supply-side pricing power” in strategic manufacturing (aluminum electrolysis, chemicals & petrochemicals, oil transportation, etc.); the other includes some high-end US industries, “becoming strategic resources due to tariffs and geopolitical disruptions” (such as civil aviation, chips, etc.).

• Second, global. Demand is worldwide, benefiting from global interest rate cuts and inventory replenishment cycles.

Under the overseas interest rate cut paradigm, financial liquidity gradually transmits to the real economy, restoring manufacturing demand globally. The commodity rotation cycle generally involves “non-ferrous metals—chemicals—crude oil,” with future varieties worth期待。

• The third, and most critical point, is low prices with high profit elasticity.

“Compared to soaring non-ferrous resources, aluminum electrolysis, chemicals, refining, and aviation prices are at relatively low historical levels, building a strong safety margin.” The report bluntly states, “Constrained supply of smelting manufacturing results in profit margins significantly lower than minerals, but once prices rebound, profit elasticity is very prominent.”

Aluminum electrolysis: “Monetizing electricity resources”

Once seen as a symbol of overcapacity, aluminum electrolysis is now given a powerful label in the report—“Nirvana resource.”

Why? Because aluminum smelting is essentially packaging and selling electricity: buying aluminum is fundamentally buying “large-scale electricity and stable grid” quotas.

“Large-scale electricity and a stable grid are ultimately the essence of aluminum electrolysis development. Domestic capacity ceilings + overseas energy shortages suppress production, making aluminum a resource.”

Changjiang Securities points out that despite plans for large-scale overseas aluminum electrolysis projects, actual implementation is very difficult due to:

• China no longer building new overseas coal power plants, leading to slow coal-fired power construction in Southeast Asia;
• Weak stability of overseas electricity supply, with most listed companies not venturing abroad;
• Industrialized countries’ balanced industries, with aluminum power consumption reaching a ceiling.

Data-wise, the report makes an interesting comparison: although the Middle East’s UAE is rich in oil and gas, its aluminum electrolysis power consumption ratio has reached 20.6%, while fully industrialized countries are only 4%-7%. This indicates very low elasticity for overseas capacity expansion.

Regarding price space, the report proposes a “restoration of the aluminum-copper ratio” logic.

“Assuming conservative copper prices at 88,000 yuan/ton, with a copper-aluminum substitution inflection point at 3.5, aluminum prices could reach 25,000 yuan/ton.”

Even more attractive, aluminum companies, no longer needing to spend heavily on expansion, are turning into dividend machines. “With aluminum electrolysis dividend yields as high as 5%, high-quality dividend assets… the sector’s valuation could gradually recover from 8-10X to 12-15X.”

Chemicals and Petrochemicals: Rejecting Involution, Embracing “Positioning”

China’s chemical manufacturing capacity has long been the world’s first. The report believes that the era of “low-price involution” is over, shifting toward strong supply-side positioning.

The chemical industry has historically been highly cyclical, with profit centers shifting frequently with supply-demand patterns and macro environments. The industry often cycles through “high prosperity—expansion—overcapacity—clearing,” but we believe China’s chemical industry is currently at a bottom stage with potential for recovery.

The report emphasizes that under the dual-carbon background, supply of high-energy-consuming, high-carbon-emission bottom-tier varieties will be strictly constrained. Especially for refrigerants, chromates, sulfur, etc., which due to environmental policies, have effectively become resource attributes.

Most representative are the third-generation refrigerants: the report notes that China will implement quota management for third-generation refrigerants starting in 2024, and a notice in July 2024 requires “no new or expanded controlled-use third-generation refrigerant projects,” maintaining high industry concentration—“CR3 reaching 65% by 2026.”

On the price side, the report provides a striking data set:

“Prices of R32, R134a, R125 rose from early 2024 at 17,300, 28,000, 27,800 yuan/ton to current levels (February 1, 2026) at 63,000, 58,000, 50,000 yuan/ton, increases of 265%, 107%, and 80% respectively.”

The conclusion is that refrigerants are forming a “functional additive with non-cyclical industry features + global gene,” gradually revealing non-cyclical characteristics.

Additionally, in the petrochemical sector, policy constraints have become the biggest variable on the supply side.

“Under strong policy constraints, domestic refining and chemical supply will be significantly limited, with limited global new capacity additions, and old capacity gradually phased out, leading to ongoing supply-side optimization.”

Data shows that domestic refining capacity will be strictly controlled within 1 billion tons, with over 2 million tons of simple distillation units phased out. This “physical clearing” on the supply side means the industry is shifting from excess to balance, with profit elasticity imminent.

“Continuing to compete for existing space through low prices is of limited significance; upgrading to high-end, improving technology and added value is a more certain long-term direction.”

When a heavy-capital industry ceases reckless expansion and old capacity is continuously phased out, the turning point for recovery is near. The report estimates that “2025 will be the last year of this downturn cycle in the petrochemical industry, with a gradual rebound starting from 2026.”

Aviation: Supply “Locked” Overseas

Aviation is the most unique among all cyclical industries.

Other cyclical commodities, if domestic demand is good, factories can work overtime. But not aviation.

“Aviation demand is led domestically, but supply is controlled overseas.”

This is an extremely extreme seller’s market. Changjiang Securities points out, “High technical barriers, Boeing and Airbus monopolize 90% of global manufacturing capacity.”

It’s like running a taxi company where, no matter how good your business, only two car manufacturers can sell you vehicles. And these two are now facing major issues.

Post-2020, supply chains have been disrupted, with aircraft delivery wait times extending from 2-3 years to 5 years. Worse, Airbus’s flagship engine, the PW1000G, has experienced serious faults requiring large-scale recalls. Each recall takes about a year and a half.

Old aircraft are grounded in large numbers, and new aircraft cannot be delivered.

“Due to manufacturing defects, the core engine manufacturer for Airbus’s most popular A320NEO series, Pratt & Whitney, requires a rolling recall of 1,800-1,900 engines worldwide from 2023 to 2026 for inspection and maintenance.”

This has led to a rare phenomenon: airline capacity is actually shrinking. The report estimates that “actual supply growth from 2026 to 2028 will be -0.7%, -0.7%, and -0.1%, with real supply gradually declining.”

But demand is exploding. The power of visa-free policies is becoming evident. “By 2025, the growth rate of foreign arrivals and departures is about 27%, far exceeding the industry’s overall demand growth.”

On one side, increasing foreign tourists and recovering domestic business travel; on the other, a gradually decreasing number of aircraft.

This is a classic case of “demand-supply mismatch.” The report concludes:

“Starting in 2026, the industry is expected to experience demand-supply mismatch, with the turning point for profits approaching, and profit elasticity continuously releasing…

At present, demand is upward, supply is downward, prices are overdue for reversal, elasticity is gradually releasing, and profits are expected to reach new highs from 2026.”

Oil Transportation: Capacity Black Hole Under Geopolitical Games

In recent years, the oil transportation market has been lukewarm. But geopolitical shocks are reshaping the industry’s underlying logic.

Due to sanctions, global crude oil transportation has effectively split into two parallel worlds: compliant markets and the “shadow fleet” operated by Russia, Iran, and Venezuela.

The “shadow fleet” is extremely inefficient. The report provides shocking data:

“At least 21% of global capacity (the ‘shadow fleet’) is used in the non-compliant market, transporting only about 15% of global crude oil sea freight.”

Now, a turning point has arrived.

Earlier this year, the US sanctions on Venezuela’s oil industry meant Venezuelan oil had to return to compliant fleets. Soon after, Iran’s situation became unstable, and the US-India agreement allowed India to resume US oil imports.

These geopolitical events are forcing crude oil transportation demand to “become compliant.” The report’s core judgment on future incremental demand is:

• Compliance: If Venezuela, Iran, and Russia’s demand becomes compliant, it will bring an additional 33.12 to 53.73 million TEUs, or 9.0% to 14.5% of additional compliant capacity demand, while the incremental compliant capacity in the next two years is 2.4% and 6.7%.
• Restocking: The report states that once crude oil futures prices enter contango, it often corresponds to a bull market in oil shipping; using China as an example, it estimates—“Every 10-day increase in available crude oil inventory days corresponds to an additional 1.1% in crude oil turnover demand.”**

Ships are few, cargoes are many, and the gap is huge.

Plus, leading shipowners like Korea’s Longjin are aggressively buying ships, monopolizing capacity. “As the concentration of top VLCC owners increases, their bargaining power during the cycle may lead to higher freight rates.”

Risk Warning and Disclaimer

Market risks exist; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions herein are suitable for their particular circumstances. Invest accordingly at your own risk.