When the prices of gold, silver, and copper are repeatedly hitting new highs in a frenzy, funds have begun to search for the next low point.
On February 22, Changjiang Securities released a 42-page in-depth strategy report, posing a very straightforward question: In the great era of resources, where is the next strategic variety?
In the past, when commodity prices rose, companies would ramp up factory construction and expansion, ultimately leading to overcapacity and price collapse.
But now, times have changed.
Changjiang Securities pointed out that in the current macro environment, &#34;de-globalization and geopolitical constraints on going abroad + dual carbon controls are giving rise to a second type of scarce resource.&#34;
In other words, even if profits are high now, you can't expand production.
Which industries are becoming this &#34;second type of scarce resource&#34;? The report identified four areas: electrolytic aluminum, chemical petrochemicals, aviation, and oil transportation.
Their common characteristics are very obvious:
<ul>
<li>First, strategic. Either China has absolute pricing power, or it is a high-tech monopoly industry in the United States.</li>
</ul>
<blockquote>
One category is manufacturing with &#34;full industrial chain and cost advantages&#34; in China, which has &#34;successfully captured profits from upstream overseas raw materials and downstream exports,&#34; forming a strategic manufacturing with &#34;supply pricing power&#34; (such as electrolytic aluminum, chemicals &amp; petrochemicals, oil transportation, etc.); the other category is some high-tech industries in the United States, which &#34;have become strategic resources based on tariffs and geopolitical disturbances&#34; (such as civil aviation, chips, etc.).
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</blockquote>
<ul>
<li>Second, global. Demand is spread across the globe, benefiting from global interest rate cuts and inventory replenishment cycles.</li>
</ul>
<blockquote>
Under the paradigm of overseas interest rate cuts, financial liquidity is gradually transmitted to the recovery of the real economy, global manufacturing demand is stabilizing and recovering, and the commodity rotation cycle generally follows &#34;non-ferrous - chemical crude oil,&#34; with potential for subsequent varieties.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a2b365be-872f-4f97-9e00-c58395791c87.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a2b365be-872f-4f97-9e00-c58395791c87.png"/>
</blockquote>
<ul>
<li>Third, and most crucially, prices are low, and profits are highly elastic.</li>
</ul>
<blockquote>
&#34;Compared to the repeatedly hitting new highs of non-ferrous resources, the prices of electrolytic aluminum, chemicals, refining, and aviation are at historically relatively low levels, creating a strong safety margin.&#34; The report bluntly states, &#34;The constrained supply of smelting manufacturing has a significantly lower profit margin than minerals, and once prices rebound, profit elasticity is very prominent.&#34;
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</blockquote>
<h2>Electrolytic Aluminum: The Monetization of &#34;Electric Power Resources&#34;</h2>
Once regarded as a representative of overcapacity, electrolytic aluminum has been given a striking label in the report—&#34;Phoenix Resource.&#34;
Why? Because the essence of aluminum smelting is to package and sell electric energy: buying aluminum is essentially buying the quota of &#34;large-scale electricity and stable power grid.&#34;
<blockquote>
&#34;Large-scale power supply and stable power grid are ultimately the essence of the development of electrolytic aluminum. The dual pressure of domestic capacity ceiling and overseas energy consumption shortage makes aluminum a resource.&#34;
</blockquote>
Changjiang Securities analysis points out that although there are many plans for electrolytic aluminum overseas, actual implementation is extremely difficult. The reasons are:
<ul>
<li>China no longer builds new coal power plants abroad, leading to slow construction of thermal power in Southeast Asia;</li>
<li>The stability of overseas power supply is weak, and most listed companies have not gone abroad;</li>
<li>Industrialized countries have balanced industries, and the proportion of electricity consumption for aluminum has encountered a ceiling.</li>
</ul>
In terms of data, the report makes an interesting comparison: although the UAE in the Middle East is rich in oil and gas, the electricity consumption ratio for electrolytic aluminum has reached 20.6%, while this ratio is only 4%-7% in fully industrialized countries. This means that the elasticity of new capacity overseas is extremely low.
As for price space, the report proposes the logic of &#34;aluminum-copper ratio repair.&#34;
<blockquote>
&#34;If conservatively based on a copper price of 88,000 yuan/ton, with an accelerating substitution copper-aluminum ratio turning point of 3.5, aluminum prices may reach 25,000 yuan/ton.&#34;
</blockquote>
Even more enticing is that aluminum companies no longer need to spend large sums to expand production, turning into dividend machines. &#34;Based on the high dividend yield of 5% for electrolytic aluminum stocks... the sector's valuation is expected to gradually repair from 8-10X to 12X-15X.&#34;
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/12b6fae1-6525-488e-860c-cad03b78a5d0.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/12b6fae1-6525-488e-860c-cad03b78a5d0.png"/>
<h2>Chemicals and Petrochemicals: Rejecting Involution, Embracing &#34;Positioning&#34;</h2>
China's chemical manufacturing capacity has long been the world's number one, and the report believes that the era of &#34;low-price involution&#34; has ended, shifting towards strong positioning on the supply side.
<blockquote>
In the past, the chemical industry was highly cyclical, with its profit center frequently switching with changes in supply-demand patterns and macro environments. The industry often goes through cycles of &#34;high prosperity - expansion - excess - clearing,&#34; and we believe that China's chemical industry is currently at the bottom and is expected to move towards recovery.
</blockquote>
The report emphasizes that under the dual carbon background, the supply of high energy consumption and high carbon emission bottom varieties will be strictly constrained. Especially for refrigerants, chromium salts, sulfur, and other varieties, due to environmental policy restrictions, they have actually acquired resource attributes.
The most representative is the third-generation refrigerants: the report points out that starting from 2024, China will implement a quota system for third-generation refrigerants, and the notice in July 2024 requires that &#34;no new or expanded controlled-use third-generation refrigerants shall be built in various regions,&#34; with high industry concentration continuing—&#34;CR3 will reach 65% by 2026.&#34;
On the price side, the report provides a set of highly impactful data:
<blockquote>
&#34;The prices of R32, R134a, and R125 have risen from 17,300, 28,000, and 27,800 yuan/ton at the beginning of 2024 to the current (February 1, 2026) 63,000, 58,000, and 50,000 yuan/ton, with increases of 265%, 107%, and 80% respectively.&#34;
</blockquote>
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The conclusion of the report is that refrigerants are forming &#34;functional formulation attributes of essential consumption + global genes,&#34; and &#34;the characteristics of a non-cyclical industry are gradually becoming prominent.&#34;
In addition, in the petrochemical field, strong policy constraints have become the biggest variable on the supply side.
<blockquote>
&#34;Under strong policy constraints, domestic refining supply will be significantly restricted in the future, and global additions are limited, with old capacities gradually being eliminated, leading to a continuous optimization of the future supply pattern.&#34;
</blockquote>
Data shows that domestic refining capacity will be strictly controlled within 1 billion tons, with all vacuum distillation units below 2 million tons being completely eliminated. This &#34;physical clearing&#34; on the supply side means that the industry is moving from surplus to balance, and profit elasticity is about to be unleashed.
<blockquote>
&#34;Continuing to compete for existing space through low-price internal competition is of limited significance; promoting the industry towards high-end upgrades, enhancing technology and added value, is the more certain long-term direction.&#34;
</blockquote>
When a heavy asset industry no longer crazily expands production and old capacities are continuously eliminated, the turning point for recovery is not far away. The report predicts, &#34;2025 will be the last first year of this round of the petrochemical industry's downturn cycle, and it is expected that the industry's prosperity will gradually bottom out and rebound from 2026.&#34;
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/3f20abed-212c-4173-afae-900372128acc.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/3f20abed-212c-4173-afae-900372128acc.png"/>
<h2>Aviation: Supply &#34;Locked&#34; Overseas</h2>
Aviation is the most uniquely logical among all cyclical industries.
For other cyclical products, if domestic demand is good, domestic factories can work overtime to produce. But aviation cannot.
&#34;The demand in the aviation industry is dominated by domestic needs, while supply is controlled overseas.&#34;
This is an extremely extreme seller's market. Changjiang Securities points out, &#34;The technical barriers are high, and Boeing and Airbus monopolize 90% of global manufacturing capacity.&#34;
It's like running a taxi company; no matter how good your business is, there are only two car manufacturers in the world that can sell cars to you. Moreover, these two manufacturers are currently facing major problems.
After 2020, supply chain disruptions have extended the waiting period for buying airplanes from 2-3 years to 5 years. Worse still, the Pratt &amp; Whitney engines, which are the main engines for Airbus, have serious faults, requiring a large-scale global recall for repairs. Each repair takes a year and a half.
Old airplanes are grounded in large numbers, and new airplanes cannot be delivered.
<blockquote>
&#34;Due to production defects, Pratt &amp; Whitney, the core engine manufacturer for Airbus's most popular A320NEO series, has requested a rolling recall of 1,800-1,900 engines globally for inspection and repair from 2023 to 2026.&#34;
</blockquote>
This has led to a rare phenomenon: aviation capacity is actually shrinking. The report estimates, &#34;The actual supply growth rates for 2026-2028 are expected to be -0.7%, -0.7%, and -0.1%, respectively, with real supply growth rates gradually declining.&#34;
However, the demand side is exploding. The power of visa-free policies is becoming evident. &#34;In 2025, the growth rate of foreign entry and exit numbers is expected to be about 27%, far exceeding the total demand growth rate of the industry.&#34;
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On one side are the continuously influxing foreign tourists and the recovering domestic business travel, while on the other side is the gradually decreasing number of airplanes.
This is called an extreme &#34;supply-demand mismatch.&#34; The report concludes:
<blockquote>
“Starting in 2026, the industry is expected to achieve a supply-demand mismatch, with the profit inflection point approaching, and profit elasticity continuously being released…”
“At the current moment, demand is determined to rise, supply is on a downward trend, prices urgently need to reverse, and elasticity is being released year by year, with profits expected to reach new historical highs starting in 2026.”
</blockquote>
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/e17bfe45-deca-4cb1-9f65-7d92d48fc96b.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/e17bfe45-deca-4cb1-9f65-7d92d48fc96b.png"/>
<h2>Oil Transportation: A Capacity Black Hole Under Geopolitical Games</h2>
In recent years, the oil transportation market has been lukewarm. However, the impact of geopolitical events is reshaping the underlying logic of this industry.
Due to sanctions, global crude oil transportation has effectively been torn into two parallel universes: the compliant market and the &#34;shadow fleet&#34; market composed of Russia, Iran, and Venezuela.
The &#34;shadow fleet&#34; is extremely inefficient. The report provides a shocking set of data:
<blockquote>
“The non-compliant market uses at least 21% of global capacity (‘shadow fleet’), but only transports 15% of global crude oil maritime volume.”
</blockquote>
Now, the turning point has arrived.
Earlier this year, the U.S. implemented a crackdown on Venezuela, meaning that Venezuela's oil must return to the compliant fleet for transportation. Following that, the situation in Iran became turbulent, and the U.S. and India reached an agreement allowing India to resume importing U.S. oil.
These major geopolitical events are forcing crude oil transportation demand to become &#34;compliant.&#34; The report's core judgment on subsequent incremental demand is based on &#34;demand compliance&#34; and &#34;inventory replenishment&#34;:
<blockquote>
<ul>
<li>Compliance: If the demands from Venezuela, Iran, and Russia become compliant, it will bring an additional 33.12 to 53.73 million, or 9.0% to 14.5%, of compliant capacity demand, while the compliant capacity increment for this and next year is 2.4% and 6.7%, respectively.</li>
<li>Inventory Replenishment: The report states that once the crude oil futures spot price differential moves towards contango, it often corresponds to an oil transportation bull market; using China as an example, it provides an elasticity calculation—“For every additional 10 days of crude oil inventory available, it corresponds to an additional 1.1% demand for crude oil turnover.”</li>
</ul>
</blockquote>
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With fewer ships and more cargo, the gap is enormous.
Additionally, leading shipowners like Korea's Changjin Shipping are aggressively buying ships, monopolizing capacity. “As the concentration of leading VLCC shipowners increases, their bargaining power during prosperous cycles may mean a higher price center.”
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Changjiang Securities pointed out that under the constraints of de-globalization and dual carbon goals, certain manufacturing chains are becoming "second-class scarce resources," with selection criteria being "strategic + global + low position high elasticity." The report specifically mentions electrolytic aluminum, refrigerants, aviation, and oil transportation: aluminum is constrained by domestic capacity ceilings and overseas power restrictions, while refrigerant quotas drive up prices; aviation is projected to see supply turn negative from 2026 to 2028, while demand continues to grow; oil transportation focuses on the compliance of shadow fleets and the capacity gap caused by inventory replenishment

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