On Thursday, March 12th, major A-share indices closed lower. The Metals ETF (159876), which provides comprehensive exposure to industry leaders across gold, rare earths, copper, aluminum, and other non-ferrous metals, saw its intraday price rise by up to 0.43% in the morning session before paring gains alongside the broader market and ultimately closing down 0.77%. Data from the Shenzhen Stock Exchange revealed that the ETF had attracted a cumulative net inflow of 120 million yuan over the preceding 10 days, indicating that capital is optimistic about the future performance of the non-ferrous metals sector and is actively accumulating positions.
Aluminum industry leaders were notable outperformers. Within the top 10 constituents by gain in the Metals ETF (159876), aluminum companies occupied seven spots. Among them, Shenhuo Co., Ltd. rose over 6%, Aluminum Corporation of China Limited gained more than 5%, and Yunnan Aluminum Co., Ltd. advanced over 4%. Additionally, rare earth leader China Northern Rare Earth gained over 4%, and gold producer Chifeng Gold increased more than 1%. Conversely, copper leader China Molybdenum Co., Ltd., lead-zinc producer Xingye Silver Tin Group, and lithium company Yongxing Special Materials all fell more than 3%, ranking among the top decliners and weighing on the index's performance.
Why has the recent performance of the non-ferrous metals sector been less impressive? On a macro level, against the backdrop of geopolitical conflicts in the Middle East, energy prices have surged, contributing to rising US inflation and diminishing market expectations for Federal Reserve interest rate cuts. Furthermore, a strong rebound in the US dollar index has exerted downward pressure on internationally traded commodities like gold, silver, and copper.
It is important to note that the core fundamental logic supporting the price floor for the non-ferrous metals sector remains intact: 1. The tight supply-demand balance has not been broken. Over recent years, global mining capital expenditure has been chronically insufficient, leading to very limited new capacity for core resources like copper and bauxite. Coupled with frequent geopolitical conflicts causing ongoing disruptions at the mine level, rigid constraints on the supply side persist. The medium to long-term supply-demand gap remains clear. 2. Demand from emerging industries persists. The development of AI computing power is driving demand for power infrastructure, while the rapid growth of industries like new energy vehicles, photovoltaics, and wind power continues to fuel long-term demand growth for metals such as copper, rare earths, and aluminum, solidifying the sector's value foundation. 3. The broader global trend towards monetary easing remains unchanged. Although short-term expectations for Fed rate cuts have fluctuated, the market still widely anticipates one to two rate cuts from the Fed by 2026, which continues to provide medium to long-term support for non-ferrous metal prices.
Looking ahead, Guotai Haitong Securities stated that under conditions of tight supply-demand balance, monetary policy, macroeconomic expectations, geopolitical competition, and supply disruptions will be key factors influencing non-ferrous metal prices. China International Capital Corporation (CICC) believes that looking forward, rising geopolitical risks and a diminishing peace dividend are highly probable. As global re-industrialization accelerates, the upward cycle for non-ferrous metals is expected to continue.
[The Non-Ferrous Metals Opportunity is Here, the 'Super Cycle' is Unstoppable] The Huabao Metals ETF (159876) and its linked funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers industries including copper, aluminum, gold, rare earths, and lithium, encompassing different phases of the economic cycle such as precious metals (safe-haven), strategic metals (growth), and industrial metals (recovery). This full-category coverage allows for better capture of the sector's overall beta movements. Additionally, this ETF is a margin trading security, making it an efficient tool for a one-stop allocation to the non-ferrous metals sector.
As of the end of February, the Huabao Metals ETF (159876) had a latest size of 2.427 billion yuan, with an average daily turnover exceeding 100 million yuan over the past month. Among the three ETF products tracking the same target index in the market, it ranks first in both size and liquidity.
A MACD golden cross signal has formed, indicating positive momentum for some stocks.
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