中国之行洞察下游需求状况

Restricted - External European Metals & MiningNEUTRALEuropean Metals & MiningAmos Fletcher, CFA+44 (0)20 7773 2225amos.fletcher@barclays.comBarclays, UKIan Rossouw, CFA+44 (0)20 3555 2620ian.rossouw@barclays.comBarclays, UKTom Zhang, CFA+44 (0)20 3555 1395tom.zhang1@barclays.comBarclays, UK roads/bridges) is seen growing 0-5%. Over the next decade, we expect Chinese infra spend togrow at least 1ppt higher than GDP, driven by China’s 15ppt gap in urbanisation rate vs. DM.Gridinvestment likely to grow at a 7-8% CAGR for the rest of the decade:All the companieswe met in grid-related supply chains expect double-digit (10-12%) revenue growth in 2025.Preparations for the 15thFive Year Plan (FYP) are still being made, but one cable company wemet expects grid capex growth to grow at least 7-8% pa over 2026-30 and potentially accelerateto 10% pa. The main focus of investment is on UHV line buildout and unifying the national gridby 2030.Rapidly growing renewables capacity is driving demand for additional coal-fired power(“Coal 2.0”)as flexible baseloadto enhance grid stability. Existing coal plants were notdesigned to provide flexible generation, so new capacity is needed. Coal-fired power capacity isexpected to grow by at least 60-80GW per year over the next FYP to 2030, according to onepower industry OEM with a sizeable presence in the coal industry. That would translate toCAGRs of 3.8-4.9% over 2025-30.Wind power - bull market in capacity growth to continue out to 2030, pricing improving:China wind capacity grew 80GW last year and is expected to rise 120GW in 2025 (+23% YoY).Wind OEMs we met aim to grow at least in line with the market, with one targeting revenuegrowth of 82% in 2025 and the other 60-70%. Pricing is also up 10% YoY, having troughed inQ4-24. Further growth in capacity is expected in the next FYP, with one OEM expecting 100GWper year to be added over 2026-30 vs. 70GW pa during the 14th FYP. The overseas opportunityfor Chinese players is also material, with ex-China capacity having the potential to triple fromcurrent levels to deliver peak emissions and Chinese OEMs having superior technology, lowercosts and better margins.Commodity conclusions•Copper: grid spend to support China demand.Grid represents 39% of China copperdemand, which has the potential to grow at HSD for the rest of the decade. Appliances (19%of demand, 2nd biggest driver) should continue to benefit from subsidy-driven consumerupgrading demand and strong exports, despite the property downturn. Solid apparentdemand in China YTD, combined with trade flowsshiftingto maximise US copper imports, iscreating tightness in the global copper market, evidenced by falling inventories, risingphysical premiums in all regions, a positive cash-3m spread and narrowing China exportarbitrage. We think copper remains attractive over the longer term, reflected in our $5/lb LTcopper price vs. $4.30/lb consensus and current spot, underpinned by structurally highercapex intensity limiting mine supply growth and deficit markets over coming years (detailshere).Preferred names:Anglo American (OW), Glencore (OW), First Quantum (OW). 2 •Aluminium: also benefits from rising grid spendbut to a lesser extent, with the electricalnetwork accounting for only 15% of China's ali demand vs. 39% for copper. However,substitutability with copper in certain end-use applications has led to aluminium pricesbroadly tracking copper over the longer term. On that basis, aluminium appears to usrelatively undervalued at 3.8x Cu/Al ratio vs. a 3.4x 10yr average. We conservatively assume a4.0x ratio as the basis for our LT aluminium price forecast of $2750/t vs. consensus of $2600/t.A 4.0x ratio is in line with the top end of the historical Cu/Al range, reflecting the need for aprogressively rising ratio over time to incentivise the marginal ton of copper to besubstituted.Preferred names:NHY, S32 and RIO – all Overweight-rated, with upside risk fromhigher alumina prices in the near term due to 40mtpa of Guinea bauxite capacity suspension(equivalent to 10% of alumina supply).•Thermal coal: demandliftingvs. pricing in the cost curve.China's ongoing expansion incoal-fired capacity of 60-80GW per year noted above would equate to 180-240mtpa of coaldemand growth per year, most of which is likely to be met by domestic mine supply (whichhas grown on average by 208mt per year over the last five years). However, seaborne demandshould also benefit in such a scenario and, with pricing at the marginal cost of productionand capacity being shut down, we see thermal coal as likely having bottomed.Preferredname:Glencore (OW).•Iron ore: limited upside/downside.All the increase in China's steel production YTD (+6mt)has gone into higher exports (+7mt), implying flat domestic demand. If direct steel exportscome under pressure due to geopolitical tensions, that could see volumes pushed back intothe domestic market, leading to declining steel prices and margins. Conversely, there ispotential for demand