Recently, the copper-aluminum ratio has surged to 4.4. What does this mean? It has exceeded the average of the past 20 years plus two standard deviations.

Interestingly, looking back at historical records, every time this ratio surpasses the mean plus one standard deviation in the past 20 years, aluminum prices tend to outperform copper prices by an average of 6-7%. This phenomenon has occurred 7 times, and the pattern has been quite stable.

Now, let's look at valuation. Assuming copper prices at $11,000 per ton in 2026 and aluminum at 22,000 RMB per ton:

The PE valuation for the copper sector is between 12-14X, while the aluminum sector is only 8-10X. Comparing the two, the aluminum sector indeed has room for a rebound—estimated to be about 40%.

From another perspective, the current valuation of the aluminum sector is clearly undervalued. Once this copper-aluminum ratio relationship recovers, it could be a good time for revaluation.