In-depth Analysis of Nonferrous Metals Market Recovery and Baiyin Nonferrous' H1 Profit Turnaround

Keywords: Baiyin Nonferrous; turnaround; nonferrous metals; precious metals; market price; industry analysis

Introduction

In July 2026, Baiyin Nonferrous Group Co., Ltd. (hereinafter referred to as Baiyin Nonferrous) released its H1 2026 performance forecast, expecting net profit attributable to shareholders to turn from loss to profit year-on-year. This positive signal not only reflects the effectiveness of internal business strategy adjustments but also mirrors the overall recovery trend of the nonferrous and precious metals industry. Against the backdrop of enhanced global economic recovery expectations, reshaping of supply-demand dynamics, and continued geopolitical risks, Baiyin Nonferrous successfully reversed its previous losses by leveraging the price uptrend of its core products, injecting strong confidence into the market. This article will analyze the logic behind Baiyin Nonferrous' turnaround from dimensions such as industry background, company fundamentals, market drivers, and future outlook.

1. Nonferrous and Precious Metal Price Uptrend: Macro and Micro Resonance

1.1 Global Economic Recovery Boosts Demand Recovery

Since 2026, major global economies—especially China, the US, and the EU—have gradually absorbed earlier inflationary pressures, with manufacturing PMI indicators showing signs of stabilization and recovery. Expansion in infrastructure construction, new energy industries (e.g., solar, wind), and electric vehicles continues to drive demand for base metals like copper, aluminum, and zinc. Meanwhile, precious metals such as gold and silver, as safe-haven assets, have attracted capital amid expectations of Fed policy shifts and heightened geopolitical uncertainty, pushing price centers steadily upward.

1.2 Supply-Side Constraints Intensify Price Elasticity

In recent years, capital expenditure growth in global nonferrous metal mines has slowed, and new mine commissioning cycles have lengthened. Taking copper as an example, declining ore grades at some large mines, labor strikes, and stricter environmental policies have kept concentrate supply tight. Baiyin Nonferrous, as a key domestic multi-metal mining, beneficiation, and smelting enterprise, benefits from this supply-demand mismatch in its main products (including copper, lead, zinc, gold, silver, etc.). When market prices rise, the company can quickly release profits through its own mines and smelting capacity.

Figure: Schematic trend of major nonferrous metal prices in H1 2026 (source: public data compilation)

As shown in the chart, prices of copper, zinc, silver, etc., are significantly higher than in the same period of 2025, providing solid external support for Baiyin Nonferrous' performance turnaround.

2. Baiyin Nonferrous: Where is the Pressure Relief Valve from Loss to Profit?

2.1 Product Structure Optimization: Core Varieties Contribute Main Profit

Baiyin Nonferrous has a complete industrial chain of mining-beneficiation-smelting-deep processing, covering copper, lead, zinc, gold, silver, sulfuric acid, etc. In H1 2026, the company focused on increasing the production and sales proportion of high value-added products. For example, increased utilization of silver smelting capacity significantly raised the revenue share of the precious metals segment. Since price increases for gold and silver typically exceed those for lead and zinc, this directly improved the company's gross margin.

In addition, the company adjusted its business strategy: using hedging tools to lock in part of production costs, reducing profit erosion from price volatility; simultaneously, cutting non-core business expenses and improving capital turnover efficiency. These internal reform measures have formed a positive resonance with external price increases.

2.2 Cost Control and Mine Restart: Endogenous Growth Momentum Emerges

Baiyin Nonferrous completed technical upgrades at some mines by end of 2025, increasing beneficiation recovery rates and reducing unit production costs. Combined with relatively stable energy and auxiliary material prices in H1 2026, the company's processing costs decreased year-on-year. More importantly, some of the company's mines that had been shut down for environmental rectification in 2025 resumed production in 2026, increasing the proportion of self-produced ore and reducing dependence on purchased raw materials, thereby retaining higher profits.

2.3 Financial Indicator Improvement: Specific Data from the Forecast

According to the company announcement, H1 2026 net profit attributable to shareholders is expected to be positive (compared to a loss in the same period of 2025). Although specific figures are not fully disclosed yet, by estimating performance of comparable companies and price elasticity, the price increases of copper, zinc, and silver contributed the main incremental profit. In particular, Baiyin Nonferrous' copper smelting business was under pressure in 2025 due to low treatment charges. In 2026, treatment charges rebounded slightly, and with stable prices of by-products like sulfuric acid, the overall loss narrowed significantly.

3. Multiple Factors: Why is the Market Optimistic about Nonferrous Metals?

3.1 Policy Dividends: Green Transition and Infrastructure Investment

China's 14th Five-Year Plan and the dual-carbon goal drive the energy structure transition, generating substantial demand for metals such as copper, aluminum, and zinc. Baiyin Nonferrous, located in Gansu Province and the northwestern region—an important area for national new energy bases—can supply products locally to wind and solar component manufacturers. In addition, national infrastructure projects like urban village renovation and water conservancy also support zinc, aluminum, and other construction metals.

3.2 Safe-Haven Value Return of Precious Metals

In H1 2026, although global inflation expectations cooled slightly, geopolitical risks (e.g., regional conflicts, trade barriers) still drove capital into gold and silver markets. Baiyin Nonferrous' silver mine output ranks among the top in the country, and silver prices, driven by demand from the photovoltaic industry (silver paste raw material), rose even more than gold at times. This dual attribute of industrial and financial use gives Baiyin Nonferrous a unique competitive advantage in the precious metals sector.

3.3 Increased Industry Concentration: Leading Companies Benefit

In recent years, stricter environmental and safety production regulations in the domestic nonferrous metals industry have accelerated the exit of small mines, concentrating market share towards large state-owned enterprises and listed companies. Baiyin Nonferrous, as a listed company controlled by the Gansu Provincial SASAC, has advantages in resource acquisition, financing capability, and technological upgrades, allowing it to consolidate its position amid industry reshuffling.

4. Risks and Challenges: What Variables Affect Performance Sustainability?

Despite Baiyin Nonferrous' positive turnaround in H1, investors should be aware of the following potential risks:

1. Price Volatility Risk: Nonferrous metal prices are affected by multiple factors such as macro economy, USD trends, geopolitics. If demand falls short of expectations or the Fed raises rates beyond expectations in H2, prices may correct, eroding the company's profits.
2. Cost Pressure: Energy prices, environmental investment, and labor costs are on a long-term upward trend. If internal cost-cutting measures cannot fully offset these increases, gross margin may come under pressure.
3. Mine Production Uncertainty: Some of the company's mines are located in high-altitude or complex geological areas. Production may be disrupted by weather, safety incidents, etc., affecting actual output.

5. Conclusion and Outlook: How Will Baiyin Nonferrous' Second Half Unfold?

Overall, Baiyin Nonferrous' achievement of net profit turning from loss to profit in H1 2026 is the result of both the upward industry cycle and internal improvements. In the short term, copper, zinc, and silver prices remain relatively high, supporting a positive performance trend in H2. In the medium to long term, the company has growth potential in green industry-related metal demand, precious metal safe-haven value, and resource integration.

However, the market should also recognize the typical cyclical nature of the nonferrous metals industry. Companies cannot rely solely on price increases but must build core competitiveness through technological innovation, cost control, and industrial chain extension. If Baiyin Nonferrous can continue to optimize its product structure, improve mine capacity utilization, and seek incremental growth in new energy materials (e.g., copper foil, silver paste), its performance sustainability and risk resistance will significantly enhance.

For investors, the turnaround signals an inflection point for the company. However, quarterly earnings reports should be closely monitored for output, cost, and price changes to judge whether this trend can translate into sustained value growth. With favorable industry winds and its own efforts, Baiyin Nonferrous stands at a new starting point, and its future development deserves continued market attention.