Today (June 11th), the nonferrous metals sector led gains across the market. Bo Wei Alloy, Zhe Jiang Hai Liang Co.,Ltd., and Jinmu Co.,Ltd. surged to their daily limit-up, while stocks like Yunnan Chihong Zinc & Germanium Co.,Ltd., Xiamen Tungsten Co.,Ltd., and Hunan Gold Corporation Ltd. followed with substantial gains. The largest ETF by size tracking the same underlying index, Huabao Nonferrous Metals ETF (159876), quickly surged higher, with its on-exchange price currently up 2.53%. It reclaimed its 5-day moving average intraday, aiming for a third consecutive daily gain.
On the news front, the US May CPI rose 0.5% month-on-month (seasonally adjusted) and 4.2% year-on-year, marking the highest increase since 2023. Core CPI rose 0.2% month-on-month and 2.9% year-on-year. This inflationary uptick was primarily driven by the energy component, led by gasoline and fuel oil. Pass-through effects continued to show in areas like airfare and delivery services but did not spread widely. Core inflation remained generally moderate, with demand in oil-sensitive sectors like automobiles being squeezed, and rent increases also narrowed significantly.
CICC maintains its baseline judgment that the Federal Reserve will neither cut nor hike interest rates within the year. CICC believes the current inflation is still dominated by structural factors like energy shocks, with cyclical inflation not yet prominent. However, risks from a rebound in aggregate demand driven by AI capital expenditure expansion and employment improvements warrant vigilance. The Fed's stance is expected to remain hawkish. After Chairman Wash's appointment, his primary task will be to rebuild policy credibility, more likely by reinforcing expectations for balance sheet reduction rather than hinting at rate hikes. A scenario of "balance sheet reduction first, rate cuts delayed" cannot be ruled out.
CITIC Securities points out that the US May CPI largely met expectations, with high oil prices continuing to push up the overall inflation rate while core inflation performed moderately. Risks of a secondary inflation surge in the US are low. The year-on-year headline CPI may have already peaked in this cycle and is expected to decline slowly to around September, followed by a slight rebound, before falling rapidly again by March next year. It is anticipated that the Fed will keep the target rate unchanged for the entire year. There is room for downward revision in the rate hike expectations priced into derivative markets. The focus of the upcoming Fed meeting will primarily be on new Chairman Wash's commentary regarding the current inflation situation and interest rate levels.
Reasons for Today's Nonferrous Metals Surge
Why did the nonferrous metals sector surge today? How does the downward revision of Fed rate hike expectations benefit nonferrous metals? The recent correction in the nonferrous metals sector primarily stemmed from a sharp escalation in rate hike expectations triggered by stronger-than-expected US non-farm payrolls data and inflation concerns, not from a deterioration in supply-demand fundamentals. Following the release of the CPI data, the conclusions of moderate core inflation and the limited spread of energy shocks have effectively alleviated market panic over "economic overheating forcing rate hikes."
Market analysts note that the investment value of the nonferrous metals sector fundamentally stems from the optimization of long-term supply-demand dynamics, not from short-term market speculation. Despite facing short-term market volatility, long-term performance remains promising, benefiting from industrial structure optimization and sustained demand growth. Based on earnings trend model analysis, the current valuation of the nonferrous sector is reasonable, presenting a potential rebound opportunity. It is suggested to focus on its potential performance within the industrial chain and seize the investment window created by oversold conditions.
Nonferrous Metals Tailwind Arrives, "Super Cycle" Momentum Unstoppable
The underlying index of Huabao Nonferrous Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) comprehensively covers industries including copper, aluminum, gold, rare earths, and lithium. Full-category coverage allows for better capture of the sector's beta performance. Furthermore, this ETF is a margin trading and securities lending target, making it an efficient tool for a one-click investment in the nonferrous metals sector.
As of the end of May, the latest size of Huabao Nonferrous Metals ETF (159876) exceeded 1.5 billion yuan, making it the largest ETF among the three products in the entire market tracking the same underlying index.
Risk Disclosure
Huabao Nonferrous Metals ETF passively tracks the CSI Nonferrous Metals Index. The base date for this index is December 31, 2013, and it was published on July 13, 2015. The index constituents are adjusted according to its compilation rules, and its back-tested historical performance does not indicate future index performance. The index constituents mentioned herein are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings information or trading动向 of any fund managed by the fund manager. The fund manager has assessed the risk rating of this fund as R3-Medium Risk, suitable for Balanced (C3) and above investors. Please refer to the sales institution for the final suitability matching opinion. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, any form of表述, etc.) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice of any form to readers, and no responsibility is taken for any direct or indirect losses arising from the use of this content. Fund investment carries risks. The past performance of a fund does not represent its future performance. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest in funds with caution.
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