2Q26 preview: Stronger metals, weaker construction materials

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2Q26 preview: Stronger metals, weaker construction materials

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Basic Materials - Asia-Pacific (H/A)

2Q26 preview: Stronger metals, weaker

construction materials

Price Objective Change

2Q earnings Copper / Aluminum / Lithium in-line & strong 14 July 2026

Copper: Average copper prices rose to US$13,309/t in 2Q26 (+40% YoY, +4% QoQ), Equity

driving strong 2Q earnings per profit alerts. We remain constructive on copper and Asia-Pacific

expect the market to stay in deficit through 2026–27. Chinese copper miners trade at Basic Materials

just 7–9x FY27E P/E, materially below global peers at 13–23x and largely lagging the Matty Zhao >>

copper prices rise. Buy Zijin Mining, Jiangxi Copper, MMG, and CMOC. Research Analyst

Merrill Lynch (Hong Kong)

Aluminum: Our tracker showed 2Q aluminum margin +RMB400/t QoQ. Chalco profit +852 3508 4001

matty.zhao@bofa.com

alert shows 2Q26 NPAT at RMB5.67-6.67bn, +61%-89% YoY/ +3%-21% QoQ. We

estimate Hongqiao 1H26 NPAT at c.RMB17.2bn. Our FY26/27 aluminum price forecasts EdwardResearchLeung,AnalystCFA >>

is RMB23k/21k/t as we expect the aluminum market to be less tight in 2H26-2027 vs. Merrill Lynch (Hong Kong)

+852 3508 3282

2025-1H26, given China producing at 2-3% over 45mnt cap, Middle East supply edward.leung@bofa.com

resumption, and Indonesia supply. Buy on Hongqiao & Chalco. Miriam Chan, CFA >>

Research Analyst

Gold: Gold price -7% QoQ. We forecast Shandong Gold 2Q26 NPAT at RMB1.2bn, - Merrill Lynch (Hong Kong)

30% YoY/ -14% QoQ. We forecast Zhaojin 2Q26 NPAT at RMB830mn, +6% YoY/ -30% +852 3508 7478 miriam.chan@bofa.com

QoQ. Our 2026/27 gold price forecast is US$4,360 / US$4.8k/oz. We see headwinds in

Yibing Xia >>

USD and rates and potential weaker buying interests from ETF, yet a less hawkish fed Research Analyst