Amid fading expectations of a Fed rate cut and a continued sell-off in Japanese government bonds, global markets experienced turbulence. On Friday (November 21), all three major A-share indices closed lower, with the Nonferrous Metals ETF (159876)—which tracks industry leaders—falling sharply by 5.62%. Despite the downturn, trading remained active, with daily turnover exceeding 100 million yuan.
Notably, the ETF recorded net inflows of 85.2 million shares for the day. Data from the Shenzhen Stock Exchange revealed that the fund attracted 175 million yuan over the past five trading days, signaling strong investor confidence in the sector’s rebound potential.
Among its constituents, lithium stocks led the decline, with Chengxin Lithium Group, Ganfeng Lithium, Tibet Mineral Development, and Tianqi Lithium among eight stocks hitting the daily limit-down. In contrast, Hailiang Co. bucked the trend, closing higher.
Macroeconomic data from the U.S. Bureau of Labor Statistics showed September nonfarm payrolls unexpectedly surged by 119,000, far exceeding market expectations of 50,000. This has raised doubts about a Fed rate cut next month.
CITIC Securities noted that even if the Fed pauses a single rate cut, as long as the easing cycle remains intact (with further cuts anticipated), nonferrous metals prices could continue rising, suggesting the sector’s bullish trend is far from over.
On the industrial front, the lithium carbonate futures contract has rallied since November, briefly surpassing 100,000 yuan per ton on Thursday (November 20)—a 67% jump from its yearly low on May 30. To curb speculation, the Guangzhou Futures Exchange swiftly introduced measures, including adjusting trading fees and position limits. The next day, the contract plunged, ending at the daily limit-down.
According to CITIC Securities, Mysteel data indicates a monthly supply-demand gap of 13,000 tons for lithium carbonate in November (supply: 115,000 tons; demand: 128,000 tons). With inventories shrinking and demand outstripping supply, prices may climb further. Off-season consumption remains robust, supported by orders extending into next year, shifting the market dynamic from supply-driven to demand-driven. Long-term growth in energy storage and battery demand is also expected to strengthen lithium’s fundamentals.
Looking ahead, institutions broadly maintain a bullish outlook for nonferrous metals: Zhongtai Securities anticipates a full-fledged bull market, while CITIC Securities projects further gains. Key themes include copper and aluminum (supply-constrained, demand-recovering), lithium and cobalt (energy storage and EV battery boom), and strategic metals like gold and rare earths.
[Cyclical Upswing: Nonferrous Metals Lead the Charge] Given divergent trends across metals, a diversified approach—such as investing in the Nonferrous Metals ETF (159876) and its linked funds (Class A: 017140; Class C: 017141)—offers exposure to copper, aluminum, gold, lithium, and rare earths, mitigating single-commodity risks while capturing sector-wide opportunities.
Risk Disclosure: The ETF tracks the CSI Nonferrous Metals Index (base date: December 31, 2013; launched July 13, 2015). Past performance (2020: +35.84%; 2021: +35.89%; 2022: -19.22%; 2023: -10.43%; 2024: +2.96%) does not guarantee future results. Constituent details are for reference only and do not constitute investment advice or reflect fund holdings. The fund is rated R3 (moderate risk), suitable for balanced (C3) or higher-risk investors. Investment decisions carry inherent risks; historical returns are not indicative of future performance.
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