Geopolitical factors are fueling strategic reserve catalysts and military industry replenishment expectations, Yunnan Geology Industry hits the daily limit.

(Source: Finance News)

          Huatai Securities believes that small metal varieties such as rare earths, tungsten, molybdenum, and cobalt are catalyzed by geopolitical conflicts, with expectations for strategic reserves and military stockpiling continuing to strengthen. The supply side is highly concentrated domestically, and external shocks are difficult to replace, making their resilience and mid-term allocation value more prominent. The overall repair opportunities after significant declines are worth actively关注.

In the afternoon of March 24, the small metal sector saw a short-term surge, with Yunnan Zinc Industry (002428.SZ) hitting the limit up, followed by Guocheng Mining (000688.SZ), Haotong Technology (301026.SZ), Huayang New Materials (600281.SH), Xingye Silver Tin (000426.SZ), and Baoti Shares (600456.SH) rising as well.

On the news front, the institutional research summary released by Yunnan Zinc Industry on Thursday indicated that due to increased demand in the downstream optical communication market and rising raw material prices, the price of indium phosphide chips has recently increased. The company has an annual production capacity of 150,000 chips (2-4 inches), and its holding subsidiary, Yunnan Xinyao Semiconductor Materials Co., Ltd., has achieved bulk supply and maintains long-term stable cooperation with downstream customers.

During the national two sessions in 2026, experts in the rare earth industry actively offered suggestions and gathered consensus for the high-quality development of the industry. National Committee member and Vice President of the China Nonferrous Metals Industry Association and President of the Rare Earth Branch, Ao Hong, stated that during the “14th Five-Year Plan” period, the demand for rare earth application materials in China will experience a structural leap, with growth focusing on five core areas: high-end manufacturing equipment, green low-carbon energy, intelligent transportation and electricity, consumer electronics, and critical infrastructure. Relevant documents and expert proposals systematically reinforced the strategic position of rare earth permanent magnets.

After China implements export controls on medium and heavy rare earths starting in April 2025, overseas heavy rare earth prices have surged, with the domestic and international price difference essentially being a premium paid for “supply chain security.” Considering that the rigid demand from end-users such as military applications is difficult to replace, the United States, European Union, Australia, and others are actively promoting the establishment of commercial reserves and joint procurement mechanisms, with some already setting a price floor for rare earths, indicating a clear trend of overseas “reverse stockpiling.”

Huatai Securities believes that small metal varieties such as rare earths, tungsten, molybdenum, and cobalt are catalyzed by geopolitical conflicts, with expectations for strategic reserves and military stockpiling continuing to strengthen. The supply side is highly concentrated domestically, and external shocks are difficult to replace, making their resilience and mid-term allocation value more prominent. The overall repair opportunities after significant declines are worth actively关注.

Dongfang Securities’ research report pointed out that in 2025, China’s total export volume of rare earth magnetic materials is expected to reach 59,600 tons, a year-on-year increase of +2%. Among them, exports from July to December will account for 35,500 tons, a year-on-year increase of +16%, confirming that the demand for reverse stockpiling is substantively being transmitted domestically. Against the backdrop of increasing global geopolitical risks and the continued strengthening of rigid supply on the rare earth side, the price center of rare earths has a foundation for upward movement, and the strategic value of the sector continues to stand out.

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