The nonferrous metals sector continued its upward momentum on Friday, August 7, steadily gaining market attention. The largest and most liquid ETF tracking the same underlying index, HuaBao Nonferrous Metals ETF (159876), saw its intraday price surge 3.13%, closing at the day's high and securing a fourth consecutive daily gain.
From a daily chart perspective, since hitting its year-to-date low of 0.831 on July 20, the ETF appears to have formed a steady upward channel. With strong fundamentals and low valuations, capital is actively positioning for a rebound. Over the past four trading days, HuaBao Nonferrous Metals ETF (159876) has attracted net inflows of 74.5 million yuan, and over the last ten sessions, cumulative inflows have reached 180 million yuan.
Among its constituent stocks, the indium phosphide concept stock Yunnan Geranium surged to hit its fourth consecutive daily limit. China Rare Earth and YouYan New Materials also hit their daily limits. Sirei New Materials rose 10%, Zhuzhou Smelter Group gained over 9%, and copper sector leaders Western Mining and Hailiang Shares both climbed more than 8%. Jiangxi Copper advanced over 7%.
On the news front, the Democratic Republic of Congo, the world’s second-largest copper producer, is set to impose a comprehensive ban on the export of copper and cobalt concentrates. Upstream mineral supplies for computing metals like copper and tin are highly dependent on imports, making overseas supply disruptions a new normal for the industry. The United States has added copper to its critical minerals list, using trade barriers to boost domestic production capacity while competing for global spot resources. This has sparked a "copper rush" in the U.S. for two consecutive years.
The accelerated global buildout of AI data center infrastructure is driving concentrated demand for nonferrous metals such as copper, tungsten, tin, tantalum, and indium, pushing prices significantly higher and creating a "computing metals" market trend. Industry insiders point out that while AI data centers have a construction cycle of just 2-3 years, increasing the supply of computing metals takes over 15 years. This supply-demand gap is expected to peak around 2028, driving prices even higher.
In the rare earth sector, among the 50 major bulk commodities monitored by the China Federation of Logistics and Purchasing, 14 saw month-on-month price increases in July. Notably, the price of praseodymium neodymium oxide rose 6.4% month-on-month, confirming a tightening of rare earth supply. A significant and persistent price gap exists between domestic and international rare earth markets, rooted in China's monopoly over the midstream smelting and separation capacity, with no quick overseas alternatives. The midstream smelting and permanent magnet segments are the supply chain's bottlenecks, with their scarcity continuously validating the sector's value revaluation potential.
In the gold market, the People's Bank of China has increased its gold reserves for the 21st consecutive month, pushing spot gold above $4,300 per ounce. CITIC Securities predicts that the impact of the Strait of Hormuz situation on gold prices will shift from a suppressor to a booster. The Federal Reserve's monetary policy may be more accommodative than market expectations, and with soaring U.S. military spending driving up deficits, gold prices are expected to return to an upward trajectory within the year.
Given the strong fundamentals and low valuations of nonferrous metals, the Index Investment and R&D Department of HuaBao Fund recommends paying attention to the right-side allocation value of the sector. Overall, the suppressing factors that caused the sector's decline since March have largely been eliminated. With stable commodity prices supporting corporate earnings and leading companies still contributing to production growth, sector profitability is highly certain. The combination of low valuations and high growth potential makes this an optimal window for investing in nonferrous metals.
Different nonferrous metals exhibit varying levels of prosperity, rhythms, and drivers, making divergence inevitable. For those bullish on the sector, a more straightforward approach is to use full coverage to capture the overall beta of the sector. The underlying index of HuaBao Nonferrous Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) comprehensively covers copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. Full coverage across all categories allows for better capture of the sector's beta. Additionally, this ETF is a margin trading and short selling target, serving as an efficient tool for one-click investment in the nonferrous metals sector.
As of August 6, HuaBao Nonferrous Metals ETF (159876) had a net asset value of 1.668 billion yuan and an average daily turnover of 104 million yuan this year, making it the largest and most liquid ETF among the three tracking the CSI Nonferrous Metals Index on the market. Sources: Shanghai and Shenzhen stock exchanges, etc., as of August 6, 2026. The institutional views referenced are from the CITIC Securities report "CITIC Securities: $4,000 is Likely the Bottom of This Cycle; Gold Prices Expected to Return to Uptrend Within the Year," published August 5. Fees related to the ETF: When subscribing or redeeming fund shares, agency brokers may charge commissions up to 0.5%. Intraday trading fees are based on the actual charges of the securities firm. The ETF does not charge sales fees. Risk Warning: The HuaBao Nonferrous Metals ETF passively tracks the CSI Nonferrous Metals Index, which was based on December 31, 2013, and published on July 13, 2015. The index's constituent stocks are adjusted according to its compilation rules. Historical back-tested performance is not indicative of future index performance. The constituent stocks mentioned in this article are for display purposes only and do not constitute investment advice of any form, nor do they represent the holdings or trading activities of any fund managed by the fund manager. The fund manager has assessed the risk level of this fund as R3-Medium Risk, suitable for Balanced (C3) and above investors. Please refer to the sales institution for suitability matching opinions. Any information in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must be responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers, and the provider is not liable for any direct or indirect losses arising from the use of this content. Fund investment carries risks. Past performance of a fund does not represent its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Invest in funds with caution. A MACD golden cross signal has formed; these stocks are showing strong upward momentum!
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