Major A-share indices were in the red today (June 10th), with the non-ferrous metals sector pulling back in line with the broader market. The largest ETF tracking the underlying index, the HuaBao Non-Ferrous Metals ETF (159876), saw its on-exchange price fall over 2% during the session, with real-time turnover exceeding 44 million yuan.
Among its constituent stocks, Grinm Advanced Materials Co.,Ltd. (600206) led gains, rising over 6%. Tongling Nonferrous Metals Group Co., Ltd. gained over 2%, while Shenghe Resources Holding Co., Ltd., Chengxin Lithium Group Co., Ltd., and China Rare Earth Holdings Limited rose more than 1%. On the other hand, Jintian Copper (Group) Co., Ltd. and Yunnan Tin Co., Ltd. fell over 5%, leading the declines and weighing on the index.
Macroeconomic Context
CITIC Securities pointed out that in the short term, the probability of a Federal Reserve rate hike remains low. Market concerns about Fed tightening are primarily at the expectation level, based on assumptions of persistent domestic US inflation and a continuously hot labor market. Data from CME FedWatch indicates that overseas markets currently expect the most likely timing for a Fed rate hike to begin in late October 2026. The current global liquidity tightening and market adjustment are seen as a pre-emptive reaction to expectations of a Fed hike in the fourth quarter.
Some market analysts also note that the market has fallen into a liquidity panic triggered by an "illusion" from the non-farm payrolls data. However, a deeper breakdown shows the surge was largely due to temporary disturbances, including 70,000 temporary hires related to the World Cup and 55,000 local government hires. As the June 18th FOMC meeting approaches, liquidity expectations may revert to fundamentals.
Sector Analysis and Outlook
CITIC Securities has expressed a bullish view on segments like lithium and aluminum within the non-ferrous metals sector.
Regarding the lithium industry, CITIC Securities believes lithium prices are still expected to strengthen in the second half of the year. In Q1 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 begun a wave of resuming and expanding production. However, uncertainties in supply growth stem from capacity ramp-up and strengthened lithium resource development controls in several African countries. Since May, demand concerns and inventory changes have suppressed 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 second half of 2026. The firm suggests paying attention to allocation opportunities following sector adjustments.
For the aluminum sector, CITIC Securities maintains a positive outlook on investment opportunities. Chinese aluminum companies still hold significant leads in valuation, dividends, and growth prospects. As of June 4, 2026, the average valuation of major listed Chinese aluminum companies has retreated to a historical low of 6-8x PE, with some stocks offering standout dividend yields of around 8%. As a Chinese advantage industry, the long-term investment value of Chinese aluminum enterprises deserves close attention.
Market analysts point out that the investment value of the non-ferrous metals sector stems from the optimization of long-term supply-demand dynamics, rather than short-term market speculation. Despite facing short-term market volatility, the sector's long-term performance remains promising, benefiting from industrial structure optimization and sustained demand growth. Based on performance trend model analysis, the current valuation of the non-ferrous sector is reasonable, and a rebound opportunity is anticipated. It is recommended to focus on its potential performance within the industrial chain and seize the investment window presented by oversold conditions.
ETF as a Sector Investment Tool
The HuaBao Non-Ferrous 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 full-category coverage allows for better capture of the sector's beta performance. Simultaneously, this ETF is a margin trading and securities lending target, making it an efficient tool for a one-click allocation to the non-ferrous metals sector.
As of the end of May, the latest size of the HuaBao Non-Ferrous Metals ETF (159876) exceeded 1.5 billion yuan, making it the largest ETF among the three products tracking the same underlying index in the market.
Risk Disclosure
The HuaBao Non-Ferrous Metals ETF passively tracks the CSI Non-ferrous 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, and its back-tested historical performance does not indicate future index performance. The mention of index constituents in this article is for display purposes only; descriptions of individual stocks do not constitute any form of investment advice nor represent the holdings or trading动向 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 above investors. Suitability matching opinions should be based on the selling institution. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any kind to readers, nor is there any responsibility for direct or indirect losses arising from the use of this 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. Fund investment requires caution.
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