On Friday, March 13th, the market experienced consolidation, with major A-share indices closing in negative territory. The Base Metals ETF (159876), which provides comprehensive exposure to leading companies in sectors including gold, rare earths, copper, and aluminum, saw its intraday price rise by 1.37% during the morning session. However, it later pulled back with the broader market, and the decline accelerated towards the close, resulting in a final drop of 2.41%.
Data from the Shenzhen Stock Exchange revealed that the Base Metals ETF (159876) attracted a net inflow of 110 million yuan over the past ten days. This indicates that capital continues to flow into the fund despite market fluctuations, reflecting firm confidence in the future performance of the base metals sector and strategic positioning ahead of potential gains.
Among the constituent stocks, Hailiang Co., Ltd., a leading copper producer, led the gains with an increase of over 5%. Lithium industry leaders Shenzhen Senior Technology Material Co., Ltd. and Tianqi Lithium Corporation also rose by more than 1%. Conversely, Xiamen Tungsten Co., Ltd., a major tungsten producer, fell over 8%. Other significant decliners dragging on the index included leading copper producer Baiyin Nonferrous Group Co., Ltd. and gold leader Hunan Gold Corporation, both down more than 4%.
On the macroeconomic front, escalating geopolitical conflicts in the Middle East have driven energy prices higher, contributing to rising US inflation and diminishing market expectations for interest rate cuts by the Federal Reserve. Concurrently, a strong rebound in the US dollar index has put downward pressure on internationally traded commodities like gold, silver, and copper. Analysts at China Securities noted that a key macro backdrop previously supporting the "bull market" in base metals was a globally accommodative fiscal and monetary environment. The current contraction in rate-cut expectations is now acting as a drag on base metal prices.
However, from an industry perspective, the market holds some anticipation for the traditional peak consumption season often referred to as the "Golden March, Silver April" period. The Purchasing Managers' Index (PMI) for manufacturing in the Northern Hemisphere remained generally stable in February, suggesting that manufacturing activity could soon transition into its seasonal upswing. Furthermore, expectations of accelerated exports in sectors like lithium batteries and photovoltaics are providing support for demand for certain metals.
Notably, supply constraints for aluminum have intensified due to Middle Eastern conflicts, lending relative strength to aluminum prices. The Middle East accounts for approximately 9% of global primary aluminum production capacity. Analysts from CITIC Securities indicated that a prolonged blockade of the Strait of Hormuz could lead to sustained and significant increases in oil, gas, and consequently overseas electricity prices. As aluminum production is highly energy-intensive, the industry is particularly sensitive to changes in energy costs.
Looking ahead, analysts from China Securities Futures pointed out that if inflation stemming from geopolitical conflicts can be contained within a reasonable range, the base metals sector could still maintain a relatively optimistic trajectory for the year under a generally accommodative macro environment. The extent of price increases for individual metals will depend on the severity of supply constraints at the mine level and their linkage to emerging demand trends.
[The Base Metals Trend is Here, A 'Super Cycle' Appears Imminent] The Base Metals ETF Huabao (159876) and its linked funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers industries such as copper, aluminum, gold, rare earths, and lithium. This includes exposure to precious metals (for hedging), strategic metals (for growth), and industrial metals (for recovery), spanning different phases of the economic cycle. This broad coverage allows for better capture of the overall sector's beta movements. Additionally, this ETF is eligible for margin trading, making it an efficient tool for gaining targeted exposure to the base metals sector.
As of the end of February, the Huabao Base Metals ETF (159876) had a net asset value of 2.427 billion yuan. Its average daily turnover over the past month exceeded 100 million yuan, ranking it first in both size and liquidity among the three ETFs tracking the same underlying index in the market.
*Institutional views referenced from: 1) China Securities Futures commentary dated March 13th; 2) CITIC Securities report titled "Metals | Escalating Middle East Situation May Catalyze Aluminum Prices to Exceed Expectations" published on March 4th.
Note: The Huabao Base Metals ETF (159876) was previously known by the ticker symbol '有色龙头ETF' on the market.
ETF Fee Information: When investors subscribe for or redeem fund shares, subscription/redemption agents may charge a commission of up to 0.5%. Fees for场内 trading are subject to the rates charged by the securities firm. The ETF does not charge a sales service fee.
Linked Fund Fee Information: For the Huabao CSI Base Metals ETF Feeder Fund (Class A), the subscription fee is 1,000 RMB per transaction for subscription amounts of 2 million RMB or more; 0.6% for amounts between 1 million RMB (inclusive) and 2 million RMB; and 1% for amounts below 1 million RMB. The redemption fee is 1.5% for holdings less than 7 days, and 0% for holdings of 7 days or more. No sales service fee is charged. For the Huabao CSI Base Metals ETF Feeder Fund (Class C), there is no subscription fee. The redemption fee is 1.5% for holdings less than 7 days, and 0% for holdings of 7 days or more. A sales service fee of 0.3% applies.
Risk Disclosure: The Huabao Base Metals ETF passively tracks the CSI Base Metals Index. The base date for this index is December 31, 2013, and it was published on July 13, 2015. The index's performance over the past five full calendar years is as follows: 2021: +35.89%; 2022: -19.22%; 2023: -10.43%; 2024: +2.96%; 2025: +91.67%. The index's constituent stocks are adjusted according to its compilation rules, and its past performance is not indicative of its future results. The mention of individual stocks in this article is for illustrative purposes only and does not constitute investment advice in any form, nor does it represent the holdings or trading动向 of any fund managed by the asset manager. The fund manager assesses this fund's risk rating as R3-Medium Risk, suitable for investors with a Balanced (C3) or higher risk profile. Suitability matching opinions should be based on the selling institution's assessment. All information appearing in this article is provided for reference only, and investors are solely responsible for their independent investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice to readers and shall not be held liable for any direct or indirect losses resulting from the use of this content. Fund investment carries risks. The past performance of a fund is not indicative of its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest with caution.
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