JPMorgan bullish on solar glass, copper and refining, more cautious on gold

Overview

This is a JPMorgan weekly report on energy, mining and materials, covering oil and gas, refining, solar, copper, gold and quick takes on multiple companies. The central theme is divergence in resource supply and demand: the marginal improvement in solar glass and copper supply-demand conditions is relatively clear, refining is supported by Russia's export restrictions, while gold has become more cautious due to revised central-bank demand, ETF outflows and cost pressures.

Core views

The core views are: first, the worst phase for China's solar industry may have passed, and policy constraints on low-price competition plus a recovery in 2H26 demand should improve solar glass profitability; second, the extension of Russia's refined product export ban will keep product markets tight, and the market's US$15/bbl assumption for 2H26 GRM may be too conservative; third, low copper inventories, widening spot premiums and a rising share of canceled warrants indicate that copper is currently the tightest metal; fourth, after central-bank gold demand was reclassified and revised lower, combined with ETF outflows and higher AISC, gold price expectations are more range-bound; fifth, India's crude inflows are improving, but LPG remains the main pressure point, while LNG supply risks have eased recently.

Analysis framework

The report combines top-down macro and supply-demand analysis with bottom-up company earnings reviews. It assesses industry direction through policy changes, inventories, imports and exports, spot prices, refining cracks, installations, demand and company financial data, then maps the views to stocks related to solar glass, refining, copper, gold and Indian oil and gas.

Methodology notes

• Industry Supply and DemandSupply-Demand and Inventory Framework

  Assessing commodity and subsector conditions through inventories, capacity suspensions, demand recovery and price signals.

  The report uses China's copper inventories, canceled LME warrants, solar glass prices, Russia's refined product export ban and changes in India's LPG imports to assess supply-demand tightness.

• Earnings and ValuationRating Adjustment Framework

  Determining stock ratings based on valuation levels, expected earnings recovery and target price changes.

  Xinyi Solar and Flat Glass were upgraded to Overweight due to low valuations and tightening supply-demand conditions in 2H26; some upstream solar companies remain under pressure but had their ratings adjusted because of valuation declines.

• Earnings Quick TakesEarnings Variance Analysis

  Comparing actual EBITDA, production, costs, net debt and guidance with JPMe and market consensus.

  The report provides earnings and guidance quick takes on Capstone Copper, Fortescue, Tata Steel, Vedanta, Capricorn Metals and Catalyst Metals.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Xinyi Solar, Flat Glass

  Beneficiaries of upgraded Chinese solar glass ratings

  Strengths

  Valuations are low, production suspensions are improving supply, 2H26 demand is expected to recover sequentially, and high short interest could amplify a rebound.

  Weaknesses

  Target prices were still lowered, most segments of the industry chain remain loss-making, and policy signals are not yet sufficient to confirm a full-cycle reversal.

  Comparison

  Compared with upstream polysilicon and module producers, solar glass is viewed as a more actionable subsector.

  Risks

  Demand recovery below expectations, insufficient implementation of price controls and capacity restarts faster than expected.

• Copper and Capstone Copper

  Tight copper supply-demand conditions and preferred copper miner

  Strengths

  Chinese inventories are falling, spot premiums are widening and the share of canceled LME warrants is rising; Capstone's production exceeded expectations and its cost guidance was maintained.

  Weaknesses

  Some mines still face cost and maintenance issues, with Pinto Valley a weak point.

  Comparison

  The report calls copper the tightest metal, with stronger near-term fundamentals than gold.

  Risks

  Inventory rebuilding, slower demand and mine costs exceeding expectations.

• Refining and SK Innovation

  Russia's export ban supports product markets, while SKI earnings exceed expectations

  Strengths

  Russia extended restrictions on gasoline and diesel exports, and refining cracks and GRM could exceed conservative market assumptions; SKI's battery, chemicals and lubricants contributions exceeded expectations.

  Weaknesses

  SKI's refining profit declined sequentially, and some of the earnings included one-off factors.

  Comparison

  Refining offers greater near-term earnings upside than gold.

  Risks

  Early relaxation of export restrictions, weaker oil product demand and unsustainable one-off profits.

• Gold and gold miners

  Lower gold outlook and cost pressures

  Strengths

  Q2 central-bank demand recovered to 289 tonnes, while gold prices remain in a high range.

  Weaknesses

  1Q26 central-bank demand was sharply revised lower, ETFs saw outflows and miners broadly raised AISC.

  Comparison

  Compared with copper and refining, gold's fundamental signals are more mixed and sentiment is more cautious.

  Risks

  Higher probability of Fed rate hikes, continued cost increases and central-bank buying below expectations.

• Indian oil and gas, LPG, LNG

  Indian energy supply-demand and downstream risks

  Strengths

  Crude availability is improving marginally, and LNG imports have recovered to pre-conflict levels, supporting stable gas volumes for GAIL/PLNG and others.

  Weaknesses

  LPG consumption, supply and imports remain under pressure, with imports still sharply lower year over year.

  Comparison

  LNG risks have eased recently, but LPG remains the largest pressure point in India's oil and gas chain.

  Risks

  Persistent LPG shortages, narrowing discounts on Russian oil, declining global inventories and escalation of geopolitical conflict.

Key data

• China solar installations in 1H2672.1GWDown 66% year over year, below 212.2GW in 1H25; JPM expects sequential improvement in 2H26.
• China 2026/2027 solar demand forecast200GW/220GW AC; 242GW/266GW DCThe demand forecast was lowered, but a seasonal recovery in 2H26 remains the key near-term trading theme.
• Xinyi Solar rating and target priceNeutral→Overweight; HK$2.8The target price was lowered from HK$3.1 to HK$2.8, but the rating was upgraded.
• Flat Glass rating and target priceNeutral→Overweight; HK$8.8The target price was lowered from HK$9.8 to HK$8.8, but the rating was upgraded.
• China copper inventories111ktDown 23kt over the past several weeks, indicating a tight copper market.
• Share of canceled LME copper warrantsapproximately 60%Approximately 35% three weeks ago and approximately 10% around 3.5 months ago.
• Russia's refined product export banGasoline through 2027-01-31, diesel through 2026-09-01The report believes the policy will support refining cracks and GRM over the coming months.
• SK Innovation Q2 operating profitKRW 3.5trnApproximately 250% above the Bloomberg consensus of KRW 1trn; still significantly above expectations after excluding one-off items.
• Revision to central-bank gold demand1Q26 revised down from 244 tonnes to 57 tonnes187 tonnes were reclassified as OTC and other demand.
• Q2 gold ETF outflows45 tonnesTogether with the revision to central-bank demand, this weighed on gold sentiment.
• India LPG consumptionDown approximately 14% year over year in JuneImports were still down approximately 50% year over year, making LPG the main risk point in India's oil and gas chain.
• Capstone Copper EBITDA$354mAbove JPMe of $340m and market consensus of $339m; FY26 production and cost guidance unchanged.

Impact & implications

From an investment perspective, the report favors subsectors with clear supply-demand improvement or earnings support, including Chinese solar glass, copper and refining, while remaining cautious on gold miners and India LPG-related risks. The solar glass upgrades could trigger short-covering trades, tight copper inventories may continue to support copper prices and valuations of high-quality copper miners, and Russia's refined product export restrictions could benefit refining margins and related refinery earnings.

Risks

• Central-bank gold demand and ETF flows remain weaker than expected.
• Insufficient implementation of solar policies or a weaker-than-expected demand recovery prevents prices and profitability from improving.
• Changes in Russia's refined product export ban or weaker demand weaken refining cracks.
• Continued shortages in India's LPG imports and supply trigger downstream and macroeconomic disruptions.
• A renewed buildup in copper inventories or a slowdown in global manufacturing demand could weaken support for copper prices.
• Iran-related geopolitical risks concerning fees and payment mechanisms around the Strait of Hormuz could increase shipping, insurance and settlement compliance costs.

What to watch

• The enforcement strength of Chinese regulators' guidance on solar prices, cost accounting and restrictions on sales below cash costs.
• The pace of China's solar installation recovery in 2H26 and changes in solar glass prices.
• The duration and exemption scope of Russia's export bans on gasoline, diesel and other refined products.
• China's copper inventories, the share of canceled LME warrants and changes in Yangshan copper premiums.
• Subsequent revisions to central-bank gold demand, ETF flows and gold miners' AISC guidance.
• The recovery of India's LPG imports, the stability of alternative LNG sources and gas volume performance at GAIL/PLNG.
• Subsequent guidance and cost changes from Capstone Copper, Fortescue, Tata Steel, Vedanta, Capricorn Metals and Catalyst Metals.