Today (December 18), the market consolidated as all three major A-share indices dipped into negative territory. However, the Leading Nonferrous Metals ETF (159876), which tracks top players in the nonferrous metals sector, defied the downtrend, climbing as much as 0.77% intraday before settling at a 0.44% gain. Currently trading above all key moving averages, the ETF shows strong upward momentum from a technical perspective.
Among its constituents, Huayou Cobalt led gains with over 4%, followed by Baoji Titanium, Huaxi Nonferrous Metals, and Yunnan Tin, each rising more than 3%. Other notable gainers included Huayu Mining, Chihong Zinc & Germanium, and Silvercorp Metals, all up over 2%. Heavyweights like Zijin Mining, CMOC Group, Aluminum Corporation of China, and China Northern Rare Earth also edged higher against the broader market.
Looking ahead to 2026, Huabao Fund suggests three macroeconomic themes could further elevate nonferrous metal prices:
1. **Greenflation (Copper, Aluminum, and Base Metals)**: During the 15th Five-Year Plan and beyond, emerging sectors like AI, renewables, robotics, and semiconductors are expected to outpace traditional industries such as steel and construction materials. Metals like copper and aluminum—critical for AI computing and green energy—face sustained demand growth against constrained supply, likely fueling price rallies through 2026–2027. Investors are particularly bullish on electrolytic aluminum (nearing capacity limits) and copper (with underfunded mine expansions).
2. **Anti-Involvement (Lithium and New Energy Metals)**: Key industries like coal, lithium batteries, solar, and energy storage are entering a phase of price stabilization and capacity consolidation. As policies curb overcapacity risks, lithium carbonate—a focal point of this trend—could rebound from oversupply toward equilibrium. With production cuts and rising costs, lithium prices may bottom at 90,000–100,000 yuan/ton in 2026 before climbing toward 120,000 yuan.
3. **Rate Cut Wave (Gold and Precious Metals)**: Accelerated Fed easing in 2026 and potential political interference in monetary policy could weaken the dollar, enhancing gold’s appeal as a hedge. Alongside gold, silver, platinum, and palladium may also rally, benefiting from their monetary attributes.
Analysts broadly maintain a bullish outlook: Zhongtai Securities anticipates a full-fledged nonferrous metals bull market, while CITIC Securities and China Securities Co. expect sustained commodity investment momentum.
How long might this supercycle last? Industry experts highlight three factors: the dollar’s credibility, strategic stockpiling progress, and anti-involvement policy efficacy. Given supportive conditions—weak dollar trends, policy tailwinds, and industrial upgrades—the cycle could extend through 2026, offering attractive risk-adjusted returns ahead of the seasonal "spring rally."
**[Riding the Cyclical Upswing: A Diversified Approach]** Given divergent drivers across metals, investors may consider broad exposure via the Leading Nonferrous Metals ETF (159876) and its linked funds (Class A: 017140; Class C: 017141). Covering copper, aluminum, gold, rare earths, and lithium, this ETF mitigates single-commodity risks while capturing sector-wide opportunities.
*Note: As of December 16, the ETF’s AUM stood at 840 million yuan, ranking it the largest among three ETFs tracking the same index.*
**Risk Disclosure**: The ETF passively follows the CSI Nonferrous Metals Index (base date: Dec 31, 2013; launch: Jul 13, 2015). Past annual returns: +35.84% (2020), +35.89% (2021), -19.22% (2022), -10.43% (2023), +2.96% (2024). Constituent changes reflect index rules; historical performance doesn’t guarantee future results. Stock mentions aren’t recommendations or indicative of fund holdings. Rated R3 (moderate risk) for balanced (C3) or higher investors. Investment decisions carry inherent risks; past fund performance doesn’t predict future returns.
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