Shares in the metals sector saw active trading on June 9th, with the Huabao Nonferrous Metals ETF (159876) rising as much as 0.75% during the session before paring gains to trade up 0.11%. The ETF's turnover exceeded 40 million yuan, indicating robust investor interest.
Among the fund's constituent stocks, copper leader Hailiang Co., Ltd. led the gains, rising over 6%. Lithium industry leader Chengxin Lithium Group Co.,Ltd. advanced more than 4%, with other key players like Yunnan Chihong Zinc & Germanium Co., Ltd., Xiamen Tungsten Co., Ltd., and China Rare Earth Group Limited also posting gains. On the downside, Huafon Aluminum Corp. fell nearly 5% and Mingtai Aluminum Industry Co., Ltd. dropped over 3%, with the weakness in aluminum stocks weighing on the broader index.
Outlook for Lithium Sector
Regarding the lithium sector, CITIC SEC believes lithium prices are still poised to strengthen in the second half of the year. In the first quarter of 2026, production from major overseas lithium resource projects saw a slight decline, while selling price increases expanded. Stimulated by the significant rise in lithium prices, overseas lithium mines have initiated a wave of production resumptions and expansions. However, uncertainties in supply growth stem from capacity ramp-ups and strengthened controls on lithium resource development in several African nations. Since May, concerns over demand and inventory changes have pressured lithium prices, but the tight supply-demand balance is not expected to reverse in the short term. Lithium prices are still anticipated to strengthen in the latter half of 2026. The firm suggests paying attention to investment opportunities following sector adjustments.
Precious Metals and Gold
In gold, precious metals have faced downward pressure due to expectations of liquidity tightening and Federal Reserve interest rate hike pressures. Market analysts note that the market has been gripped by liquidity panic triggered by a 'non-farm payrolls data illusion.' However, a deeper analysis reveals that the surge in payrolls was a short-term disturbance caused by 70,000 temporary hires for the World Cup and 55,000 local government hires. As the June 18th FOMC meeting approaches, liquidity expectations are expected to realign with fundamentals. Guoxin Futures suggests investors look for opportunities to position during gold price pullbacks, especially given the strategic allocation value and preservation function of gold, which are further highlighted in the current turbulent environment, supported by continued gold purchases by global central banks, including the People's Bank of China's 19th consecutive month of increases.
Long-Term Value of the Sector
Market analysts point out that the investment value of the nonferrous metals sector stems from the long-term optimization of supply and demand dynamics, not short-term market speculation. Despite facing near-term market volatility, the sector's long-term prospects remain positive, benefiting from industrial structure optimization and sustained demand growth. Based on an analysis of earnings trend models, the current valuation of the nonferrous metals sector is reasonable, and it may see a rebound. It is recommended to focus on its potential performance within the industrial chain and seize investment windows created by oversold conditions.
An Efficient Tool for Sector Exposure
The Huabao Nonferrous Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers industries including copper, aluminum, gold, rare earths, and lithium. This broad coverage allows for better capture of the sector's overall beta performance. Furthermore, this ETF is a margin trading and securities lending target, making it an efficient tool for gaining exposure to the nonferrous metals sector with a single trade.
As of the end of May, the latest size of the Huabao Nonferrous Metals ETF (159876) exceeded 1.5 billion yuan, making it the largest ETF among the three products in the market tracking the same underlying index.
Risk Disclosure
The 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 composition of the index's constituent stocks is adjusted according to its compilation rules. The index's backtested historical performance does not indicate its future performance. The constituent stocks mentioned in this article are for illustrative purposes only. Descriptions of individual stocks do not constitute any form of investment advice, nor do they represent the holdings information or trading trends of any fund managed by the fund manager. The fund manager assesses this fund's risk level as R3-Medium Risk, suitable for Balanced (C3) and higher risk-tolerance investors. Suitability matching opinions should be based on the selling institution. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for any independent investment decisions they make. Furthermore, any views, analyses, or predictions in this article do not constitute investment advice of any kind to readers, and no responsibility is taken for any direct or indirect losses arising from the use of this article's 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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