Goldman Sachs China Basic Materials Monitor May 2026: A Good Month
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The May 2026 Goldman Sachs China Basic Materials Monitor indicates improving end-user order books through mid-May, marking a relatively strong month driven primarily by robust exports in automobiles, home appliances, machinery, and power-related sectors. This export strength effectively offset soft domestic demand. Survey responses highlight sequential order improvements across copper processing, aluminum semis, electronics, and textile packaging. Domestic construction demand also experienced a marginal recovery, supported by ongoing infrastructure projects. Notably, 45% of respondents expect orders to improve in May, up significantly from 27% in April. Supply-side dynamics reveal Chinese primary aluminum production exceeding an annualized run rate of 47 million tons, alongside emerging production discipline among select steel mills. Regulatory tightening continues to constrain domestic copper scrap supply. High-frequency data for the first half of May shows divergent demand trends: cement and construction steel fell 3–4% year-over-year, copper dropped 7%, while aluminum and flat steel rose 5–7%. Profitability and pricing improved across coal, copper, steel, and lithium, whereas aluminum softened and cement stabilized. In terms of market calls, Buy ratings include China Coal Energy (1898.HK), Conch Cement (0914.HK), China National Building Material (3323.HK), Jiangxi Copper (0358.HK), MMG (1208.HK), Zijin Mining (2899.HK), and Qinghai Salt Lake (000792.SZ). Sell ratings feature Angang Steel (0347.HK), Ganfeng Lithium (1772.HK), Tianqi Lithium (9696.HK), Huayou Cobalt (603799.SS), and Nine Dragons Paper (2689.HK).
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