Impact of Rising Copper Prices on the Valuation of Jiangxi Copper and the Non-Ferrous Metals Sector

Based on the data I’ve collected and analyzed, let me systematically explain the impact of rising copper prices on the valuation of Jiangxi Copper and the non-ferrous metals sector, as well as the core factors driving the sector’s strength.

According to the latest market data,

:

• Copper futures price
  : First broke through the
  $12,000 per tonne
  mark, setting a new historical high [1]
• Year-to-date increase
  : Exceeded
  35%
  , the best annual performance since 2009 [1]
• December surge
  : On December 29, LME copper prices were near
  $13,000 per tonne
  , with a single-day increase of nearly 7% [7]
• Technical analysis
  : The average copper futures price in 2025 was
  $4.86/lb
  , and the latest price is around
  $4.03/lb
  [0]

Chart shows the 2025 copper futures price trend, including 20-day and 50-day moving averages

---

:

As China’s largest copper producer, Jiangxi Copper will benefit from:

• Direct revenue growth from rising copper prices
  : For every 10% increase in copper prices, the company’s gross profit margin can rise by about 2-3 percentage points
• Self-sufficiency advantage
  : The cost of copper concentrate from its own mines is relatively fixed, so rising prices will significantly increase profit per tonne
• Product diversification
  : In addition to copper, the company also produces precious metals such as gold and silver, and the simultaneous rise in these metal prices creates a synergistic effect

shows that Citigroup has raised Jiangxi Copper’s 2025-2027 earnings forecasts by to respectively [8], and:

• Raised Jiangxi Copper’s H-share target price from
  HK$27.9 to HK$39.8
• Raised the A-share target price to
  33.8 yuan
  [8]

:

• P/E expansion
  : When copper prices are in an upward cycle, the market gives higher P/E multiples to copper companies
• P/B re-rating
  : Asset values are revalued with copper prices, driving up P/B ratios
• Cash flow improvement
  : Operating cash flow improves significantly, reducing financial risks

:

Taking global copper leader Freeport-McMoRan (FCX) as an example [0]:

• 2025 stock price increase reached
  40.02%
• Current market capitalization
  $76.16 billion
• P/E ratio:
  37.05x
• ROE:
  11.45%
• Net profit margin:
  7.95%

Chart shows the cumulative return comparison between 2025 copper futures and Freeport-McMoRan (FCX) stock prices. Notably, while copper prices fell 31.78% year-to-date, FCX’s stock price rose 40.02%, indicating that stock prices reflect future expectations rather than just current spot prices

---

:

• Decline in mine production
  : Major global copper mines face problems of declining ore grades and rising mining costs
• Strikes and disruptions
  : Frequent strikes and operational interruptions in major copper-producing countries such as Chile and Peru
• Delays in new mine commissioning
  : New mine projects have long construction cycles and cannot alleviate supply tightness in the short term

:

• Energy transition
  : Demand for copper from electric vehicles, photovoltaics, and wind power has increased significantly
• Grid investment
  : Global grid upgrades and transformations continue
• Recovery in China’s demand
  : China’s economic recovery drives demand for industrial metals

:

• Investors expect the U.S. may impose import tariffs, leading to
  panic buying of copper and other metals in advance
• This will leave buyers in other regions of the world facing supply shortages [2]

:

• Countries are strengthening strategic resource reserves, pushing up demand for non-ferrous metals
• China is promoting self-reliance and control of key mineral resources, increasing domestic exploration and mining

:

• According to data, the U.S. dollar index fell
  38.17%
  year-to-date in 2025 [0]
• A weaker dollar makes dollar-denominated commodities cheaper for non-U.S. currency holders

:

• Non-ferrous metals, as anti-inflation assets, benefit from rising inflation expectations
• Expectations of loose central bank policies support commodity prices

:

• Each electric vehicle uses
  4 times
  more copper than traditional vehicles (about 80 kg vs. 20 kg)
• The global penetration rate of electric vehicles continues to rise, leading to structural growth in copper demand

:

• The copper content per installed capacity of photovoltaic and wind power projects is much higher than that of traditional energy
• Global carbon neutrality goals drive a boom in renewable energy investment

:

• Rising geopolitical risks lead to capital inflows into hard assets such as commodities
• Precious metals (gold, silver) prices hit new highs simultaneously, driving the non-ferrous metals sector [3][4]

:

• Commodity ETFs and index funds continue to inflow
• Macro hedge funds increase their allocation to commodities

---

:

• Copper prices hit a record high, opening up upside space
• Liquidity is relatively loose at the end of the year and beginning of the next, making the sector easily attract capital attention
• The window for listed companies’ annual report performance pre-increases is approaching

:

• Large short-term gains, risk of technical correction
• Pay attention to changes in global macroeconomic data
• Uncertainty about the Federal Reserve’s monetary policy path

:

1. Supply-demand fundamentals
   : The copper market is expected to remain in short supply in 2026, supporting high prices
2. Energy transition
   : Rising penetration rate of new energy vehicles and continuous renewable energy investment
3. China’s policies
   : Pro-growth policies take effect, infrastructure and manufacturing investment recover
4. Valuation repair
   : Compared with historical highs, the non-ferrous metals sector still has some valuation room

:

• As an industry leader, it will fully benefit from the rising copper price cycle
• Business diversification (copper, gold, silver, sulfuric acid) provides additional growth momentum
• Relatively stable dividend yield, with defensive properties

---

1. Slowdown in global economic growth
   : May lead to lower-than-expected demand for non-ferrous metals
2. Unexpected strengthening of the U.S. dollar
   : Suppresses commodity price performance
3. Downward trend of China’s real estate
   : Affects copper demand for construction
4. Changes in new energy policies
   : Adjustments to subsidy policies in various countries may affect new energy demand
5. Unexpected recovery on the supply side
   : Accelerated commissioning of new mines may alleviate supply tightness

---

:

1. Profit level
   : For every 10% increase in copper prices, the profits of copper companies such as Jiangxi Copper can increase by 20%-30%
2. Valuation level
   : The sector’s valuation center is expected to be re-rated with rising commodity prices
3. Stock price performance
   : From international benchmarks, the stock price growth of leading copper companies often exceeds the growth of commodity prices (e.g., FCX rose 40% in 2025 vs. copper price fluctuations during the year) [0]

: Multiple favorable factors such as supply-demand imbalance, geopolitics, energy transition, and liquidity environment resonate, forming a solid foundation for the strength of the non-ferrous metals sector. The sector may experience increased volatility in the short term, but in the medium-to-long term, against the backdrop of global energy transition, the strategic value of non-ferrous metals, especially copper, will continue to rise.

---

[0] Gilin API Data - Copper futures prices, FCX stock prices, U.S. dollar index and other related data
[1] Bloomberg - “Copper Tops $12,000 as Mine Woes, Tariff Trade Tighten Supplies” (https://www.bloomberg.com/news/articles/2025-12-23/copper-hits-12-000-for-first-time-as-tariff-trade-upends-market)
[2] Bloomberg - “Copper Poised for Best Year Since 2009 After December Surge” (https://www.bloomberg.com/news/articles/2025-12-24/copper-set-for-best-year-since-2009-after-december-surge)
[3] Forbes - “Copper, Gold And Silver Prices Are Up. Here’s Why.” (https://www.forbes.com/sites/martinacastellanos/2025/12/03/copper-gold-and-silver-prices-are-up-heres-why/)
[4] Bloomberg - “Silver rises to record, gold near all-time high as risks persist” (https://www.bloomberg.com/news/articles/2025-12-25/silver-rises-to-record-gold-near-all-time-high-as-risks-persist)
[7] Bloomberg - “Copper Rallies to Record Near $13,000 in London After UK Holiday” (2025-12-29)
[8] Yahoo Finance (HK) - Citigroup Research Report: Raises Jiangxi Copper’s Target Price (https://hk.finance.yahoo.com/news/花旗升江銅00358-hk-目標價至39-023037558.html)