The nonferrous metals sector continued its upward trajectory today (July 30), with the Nonferrous Metals ETF (159876), the largest and most liquid fund tracking the same index, seeing its intraday price climb 1.76%, currently up 1.32%, aiming for a second consecutive daily gain. Against a backdrop of positive earnings forecasts and low valuations, capital appears to be seizing a "bounce-back opportunity from oversold conditions," accelerating its deployment into the nonferrous metals sector via ETFs. Data indicates that the Nonferrous Metals ETF (159876) attracted 118 million yuan in net inflows yesterday alone, and over the past 20 trading days, it has accumulated a total of 239 million yuan. In terms of constituent stocks, gold leaders Shanjin International Gold and Western Gold rose over 7% and 6%, respectively; aluminum giant Huafon Aluminium gained more than 5%. Among heavyweight stocks, Zijin Mining Group and Aluminum Corporation of China (Chalco) increased over 2%, while Shandong Gold and Zhongjin Gold both rose more than 4%.
On the news front, the Federal Reserve's FOMC announced early Thursday morning as expected that it would "hold steady," maintaining the federal funds rate target range between 3.5% and 3.75%. This decision marks the Fed's fifth consecutive pause, with the last rate cut dating back to December 2025. Huatai Securities stated it reiterates a high probability of a rate hike in September, forecasting 1 to 2 rate increases this year. The market's discussion on the Fed's rate path continues to intensify, with current expectations leaning towards a gradual pace of hikes. The Index Research and Investment Department of Hwabao WP Fund pointed out that gradual rate hikes act as a short-term headwind but are a medium-to-long-term positive. Historical analysis reveals that copper prices typically rise during Fed rate hike cycles. The core reason is that gradual hikes are a response to an overheating economy, robust manufacturing, and an investment boom in AI. While liquidity concerns may suppress the nonferrous sector's performance around the time of rate hikes, the commodity attribute (supply-demand fundamentals) of nonferrous metals ultimately outweighs the financial attribute (interest rates/dollar) over the medium to long term.
Essence Securities believes that, considering previous rate hike expectations have already been priced in, future movements in nonferrous metals may be primarily driven by fundamental trading. It recommends focusing on allocation opportunities for industrial metals like copper and tin, maintaining a positive outlook for sectors with upward industrial trends. CITIC Securities notes that global inventories of copper and aluminum are at relatively low levels. China's economic recovery, coupled with demand from the new energy sector, is expected to improve copper and aluminum demand growth. From a sub-sector perspective, institutions are highlighting medium-to-long-term allocation value. Regarding tungsten, CICC points out that Chinese tungsten leaders are poised for both volume and price increases. Rapidly growing demand from emerging sectors like AI and high-end equipment is continuously improving profit margins in key downstream and midstream segments of China's tungsten industry chain. After stabilizing and declining in July, domestic tungsten prices are showing signs of rising again, while overseas premiums have hit record highs. CICC believes that Chinese tungsten leaders are set for a volume-price upswing, and current valuation levels are highly attractive. For the copper sector, CITIC Securities suggests capturing valuation recovery opportunities driven by rising price expectations and improving sentiment. Multiple positive factors are driving copper prices higher, and core drivers such as falling inventories and supply disruptions are expected to persist. Most potential tariff scenarios remain favorable for copper, with neutral assumptions seeing copper prices potentially hitting $15,000 per ton within the year. The copper sector is currently in the early stages of valuation recovery, with the formation of price hike expectations and improved market sentiment likely to continue fueling this recovery. For aluminum, Morgan Stanley highlights the dual rigidity in electrolytic aluminum supply: China's permanent production capacity ceiling and high overseas electricity costs suppressing new smelting capacity. Competition for power resources and ongoing geopolitical conflicts continue to impact overseas production capacity. Even with higher aluminum prices, the world cannot quickly add significant new supply, leading to a persistent structural shortage in the aluminum market during 2026-2027.
It is noteworthy that there are four structural barriers to expanding nonferrous metals production. The first is the cycle barrier, where mine exploration, approval, construction, and commissioning take 5-15 years, with a 3-5 year lag for capital expenditure, meaning price increases cannot quickly translate into new capacity. The second is the policy barrier, which includes total volume control, capacity caps, and dual energy consumption controls for strategic minerals domestically, along with resource nationalism, environmental/ESG concerns, and export restrictions overseas locking down supply. The third is the cost barrier, characterized by declining ore grades and rising per-ton costs for mining, environmental assessment, and ecological restoration, which lowers project returns and weakens corporate incentives to expand. The fourth is the geopolitical barrier, where conflicts in producing countries, community protests, and obstacles to cross-border project financing lead to long-term shelving of planned mines and persistent shortfalls in actual production additions. In summary, with long-term supply rigidity for nonferrous metals and demand persistently benefiting from AI computing power, energy storage, and new energy, the sector's high prosperity combined with low valuations suggests ample room for valuation recovery.
Positive earnings expectations and low-level consolidation present an opportunity for a potential rebound from oversold conditions. Different nonferrous metals have varying prosperity levels, paces, and drivers, making divergence inevitable. For investors bullish on the sector, a simpler approach is to gain full coverage to better capture the overall beta of the nonferrous metals sector. The Nonferrous Metals ETF (159876) and its linked funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, tin, and other sub-sectors. This full-category coverage is an efficient tool for a one-stop layout of the nonferrous metals sector. As of the end of June, the Nonferrous Metals ETF (159876) had a latest net asset value of 1.345 billion yuan, with an average daily turnover of 107 million yuan over the past six months, making it the largest and most liquid ETF among the three tracking the CSI Nonferrous Metals Index. Source: Shenzhen and Shanghai Stock Exchanges, etc., as of July 30, 2026. Regarding fees, investors may be charged a commission of up to 0.5% by agents during subscription or redemption of fund shares. On-exchange trading fees are subject to the actual charges by securities companies. The ETF does not charge sales service fees. Risk Disclaimer: The Nonferrous Metals ETF (159876) passively tracks the CSI Nonferrous Metals Index. The index base date is December 31, 2013, and it was published on July 13, 2015. The index's constituent stocks are adjusted according to its compilation rules. Historical back-tested performance does not guarantee future index performance. Constituent stocks mentioned in this article are for display purposes only; descriptions of individual stocks do not constitute investment advice of any form and do not represent the holdings or trading activity of any fund under the manager's umbrella. The risk rating assessed by the fund manager for this fund is R3-Medium Risk, suitable for investors with a balanced risk profile (C3) and above. Please refer to the sales institution for suitability matching opinions. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any forms of expression) is for reference only. Investors must be solely responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts herein do not constitute investment advice of any form to the reader and shall not be held 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, and 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.
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