When Tech Sector Diverges, Can Nonferrous Metals and Lithium Take Over the Market Mainline?
When the highly concentrated tech sector shows signs of divergence, other sectors become active.
On June 9, the long-adjusted lithium mining sector rebounded sharply, with Shengxin Lithium Energy hitting the daily limit, Tianhua New Energy and Ganfeng Lithium rising over 8%. On June 11, the minor metals sector performed strongly, with stocks like Xianglu Tungsten, Zhangyuan Tungsten, Jinmu Shares, Shenglong Shares, and Guiyan Platinum hitting the daily limit; Dongfang Tantalum, Yunnan Germanium, and Xiamen Tungsten followed. On June 12, over 10 stocks in the nonferrous metals sector hit the daily limit. Whether the nonferrous metals sector can "take over" from the tech sector has become a hot topic of debate.
How Solid Is the Rebound After Adjustment?
Following a broad rally in 2025, the nonferrous metals sector performed strongly in Q1 2026. But from mid-to-late March, due to Middle East geopolitical conflicts, the sector began a sustained pullback.
Regarding this, China Asset Management analyzed that the pullback in nonferrous metals was mainly due to a confluence of multiple macro bearish factors. Specifically, potential risks are threefold:
- Repeated global macro expectations and high interest rates suppressing valuations. US inflation remains high, and after the new Fed chair takes office, market expectations for monetary policy may fluctuate. If expectations shift back from rate cuts to rate hikes, it would directly push up US Treasury real yields and the US dollar index, suppressing valuations of non-yielding precious metals and dollar-denominated commodities.
- Supply-side "unexpected release". Goldman Sachs and other institutions' research data show that from late 2026 to 2027, new capacity for some nonferrous metals like aluminum and nickel will gradually come online, with a significant increase in new electrolytic aluminum capacity, possibly capping price upside.
- Demand falling short of expectations.
Some believe the nonferrous metals story is not over. "First, expectations of Fed rate hikes have been largely digested; second, inflation itself supports resource prices; third, central banks continue to buy gold," said a senior market professional. He believes the long-term logic for nonferrous metals remains, especially in supply-constrained copper, aluminum, and minor metals, making them attractive for allocation. But compared to the broad rally in 2025, the divergence within the nonferrous metals sector in 2026 will significantly increase.
New Energy Sector Back in Focus
Recently, the lithium mining sector has drawn widespread attention.
On June 9, CITIC Securities released a report saying lithium prices are still expected to strengthen in H2 2026, maintaining a target price of 250,000 yuan/ton, about 50% above current lithium carbonate prices. Goldman Sachs released a report on April 30 saying lithium carbonate prices would peak at around $21,000/ton (about 164,000 yuan) in H1 this year, then enter a multi-year downtrend. The two institutions' views have drawn market attention.
The market is also watching whether lithium carbonate is actually in short supply. Regarding this, Lin Pushu, secretary of the board of Dazhong Mining, recently said that since H2 2025, energy storage industry growth has far exceeded expectations. The main incremental demand for lithium carbonate comes from energy storage, which is why lithium carbonate prices have risen since H2 2025. If solid-state batteries experience explosive growth, lithium supply will fall into shortage.
Industry leaders Ganfeng Lithium and Tianqi Lithium recently said the global lithium supply-demand relationship will be in a tight balance in 2026, possibly extending into 2027, providing effective support for lithium prices.
Fund managers are also closely watching lithium fundamentals:
- Ye Peipei, fund manager of Zhong Ou Resource Select, believes the main disagreement on lithium prices is: the industrial side, due to tight spot supply and low inventory, is optimistic about future price trends; while the stock market shows a wait-and-see attitude as lithium prices approach 200,000 yuan/ton, worrying that downstream companies may not be able to bear this price level, leading to a certain divergence between stock prices and spot prices. Overall, in the short term, the lithium carbonate sector has clear supply-demand windows driving prices up; medium term there is growth support for valuations, but close attention should be paid to downstream acceptance at the 200,000 yuan/ton price level and the pace of supply recovery after August.
- Jin Ye, fund manager of Galaxy Value Growth Mixed Fund, believes that as the Middle East geopolitical conflict repeats, the vulnerability of traditional oil and gas imports becomes apparent, making energy independence a rigid demand, and lithium is the cornerstone of building a new energy safety net. The current export boom of new energy vehicles is the base for lithium demand, while AI computing-driven energy storage has become the largest contributor to lithium demand growth, with the supply-demand gap widening. September is the traditional peak season for lithium battery demand; whether lithium prices will hit new highs again is worth watching.
- Liu Yuanhai, Chief Investment Officer and General Manager of Equity Investment Headquarters at Soochow Asset Management, said that the inflection point for the lithium battery industry in the new energy sector is relatively obvious, combined with AI data center energy storage demand, future global lithium battery demand may exceed market expectations. Moreover, Q3 may enter the peak season for global lithium battery demand, with valuations currently at a relatively low level, presenting some investment opportunities in the lithium battery industry.
