Huaxi Securities: Bullish on copper prices.

Huaxi Securities pointed out that geopolitical conflicts in the Middle East, Eastern Europe, and other regions have further boosted market risk aversion sentiment. The short-term increase in oil prices is pushing up inflation expectations, significantly dampening expectations for a rate cut by the Federal Reserve in 2026. The US dollar index is strengthening, global risk appetite is falling, jointly suppressing copper prices from remaining at high levels. In the medium to long term, copper, as a key metal in energy transformation, has strategic allocation value under the guidance of the "15th Five-Year Plan". On the supply side, as we enter 2026, major global mines continue to face strikes and closures this year, resulting in a tight supply situation. At the macro level, there is still a probability of a rate cut by the Federal Reserve this year, and in the long term, the macro environment is supportive of copper prices. It is expected that the US dollar will continue to depreciate in the future, further supporting copper prices. Additionally, strong fundamentals of supply and demand support copper prices, and China's macroeconomic policies may continue to strengthen, potentially expanding stimulus measures in the areas of power infrastructure, new energy vehicles, and household appliances consumption.