The Nonferrous Metals ETF (159876), which aggregates leading companies in the nonferrous metals sector, showed strong performance in early trading today (March 10), with its intraday price rising by 1.6%. It is currently up 1.03%. As of this report, the ETF saw a net subscription of 3.6 million units and has attracted a total of 130 million yuan over the past five consecutive trading days.
Among its component stocks, Yunnan Chihong Zinc & Germanium led gains with an increase of over 5%, followed by Boway Alloy and Xingye Silver & Tin, both up more than 4%. Other advancing stocks included Hunan Silver, China Rare Metals & Rare Earths, Yahua Group, and Yunnan Tin.
According to China Securities Co., Ltd., ongoing conflicts in the Middle East are threatening the stability of electrolytic aluminum supply in both the Middle East and Europe. Historically, aluminum prices failed to break through the 25,000 yuan barrier in May 2006, October 2021, March 2022, and January 2026, causing the valuation of the electrolytic aluminum sector to be suppressed to 7-8 times earnings. By 2026, China's electrolytic aluminum output is expected to peak, while new capacity overseas is being released slowly. It is only a matter of time before aluminum prices successfully challenge the 25,000 yuan level amid tight supply-demand conditions. Current geopolitical friction in the Middle East is accelerating the deterioration of the supply-demand balance, suggesting that aluminum prices may not only reach but also stabilize above the 25,000 yuan mark. Once the 25,000 yuan level becomes a standard price rather than a historical peak, the electrolytic aluminum sector is poised for a valuation rebound, targeting a price-to-earnings ratio of 10 times based on the 25,000 yuan anchor.
How are Middle East geopolitical events pushing aluminum prices higher? ① On the supply side, the Middle East's electrolytic aluminum capacity is approximately 6.92 million tons per year by 2025, accounting for 9% of global production. Any attacks on energy infrastructure could lead to production cuts or shutdowns. ② In terms of transportation, the Strait of Hormuz is a vital lifeline for raw material imports in the Middle Eastern aluminum industry. A blockade would completely disrupt alumina supplies to countries like Oman, Qatar, and Bahrain. ③ Regarding energy, electrolytic aluminum is highly energy-intensive and extremely sensitive to energy prices. Sustained sharp increases in oil, gas, and overseas electricity prices could trigger a secondary energy crisis, driving up aluminum prices due to rising costs overseas.
A review of the 2021-2022 energy crisis by CITIC Securities revealed that in 2021, the shutdown of nuclear power in Europe combined with reduced natural gas supplies from Russia caused electricity prices to surge. Following the outbreak of the Russia-Ukraine conflict in February 2022, the energy crisis worsened further, leading to maximum gains of 60% in aluminum prices and 100% in the sector. Currently, escalating tensions in the Middle East are heightening supply concerns in the aluminum industry chain, which may cause aluminum prices to rise beyond expectations. Coupled with strong medium- to long-term supply-demand dynamics for aluminum, the sector is expected to see both price and valuation increases.
Notably, the HALO trade has become a core theme in global capital markets. The nonferrous metals sector, characterized by heavy asset attributes, strategic resource scarcity, and essential demand from AI infrastructure, stands as a key beneficiary of the HALO trade.
Looking ahead, can the nonferrous metals sector continue to rise? Industrial Securities believes that the sector may regain momentum for an upward trend by mid-year. The broader logic suggests that the current nonferrous metals cycle is driven by overseas manufacturing restructuring and unconventional inventory building against a backdrop of deglobalization. Unlike traditional monetary cycles, this trend is expected to be more prolonged and persistent.
[The Nonferrous Metals Boom Has Arrived: A "Super Cycle" Is Unstoppable]
The Nonferrous Metals ETF Hua Bao (159876) and its feeder funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers industries such as copper, aluminum, gold, rare earths, and lithium, spanning different cycles including precious metals (safe-haven), strategic metals (growth), and industrial metals (recovery). Full category coverage allows for better capture of the sector's beta performance. Additionally, the ETF is a margin trading target, making it an efficient tool for gaining exposure to the nonferrous metals sector.
As of the end of February, the Nonferrous Metals ETF Hua Bao (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 underlying index in the market, it leads in both size and liquidity.
Note: The Nonferrous Metals ETF Hua Bao (159876) was previously known as the Nonferrous Metals Leaders ETF.
ETF fee information: When subscribing for or redeeming fund units, subscription and redemption agents may charge a commission of up to 0.5%. Trading fees are subject to the actual charges by securities firms. The ETF does not charge a sales service fee.
Feeder fund fee information: The Hua Bao CSI Nonferrous Metals ETF Feeder Fund (Class A) charges a subscription fee of 1,000 yuan per transaction for subscription amounts of 2 million yuan (inclusive) or more, 0.6% for amounts between 1 million yuan (inclusive) and 2 million yuan, and 1% for amounts below 1 million yuan. The redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days or more. No sales service fee is charged. The Hua Bao CSI Nonferrous Metals ETF Feeder Fund (Class C) does not charge a subscription fee. The redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days or more. A sales service fee of 0.3% is charged.
Risk warning: The Nonferrous Metals ETF Hua Bao passively tracks the CSI Nonferrous Metals Index, which has a base date of December 31, 2013, and was launched on July 13, 2015. The index's performance over the past five full years is as follows: 2021, +35.89%; 2022, -19.22%; 2023, -10.43%; 2024, +2.96%; 2025, +91.67%. The index's constituent stocks are adjusted according to its compilation rules, and its past performance does not indicate future results. The mention of index constituents in this article is for illustrative purposes only and does not constitute investment advice or represent the holdings or trading activities 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 are subject to the sales institution. Any information appearing in this article is for reference only, and investors are responsible for their independent investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice of any kind to readers, and no liability is accepted for any direct or indirect losses arising from the use of this content. Fund investment involves risks; past performance of a fund does not predict its future results, and the performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest with caution.
A MACD golden cross signal has formed, and these stocks are performing well.
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