On July 14, the non-ferrous metals sector experienced a significant surge in afternoon trading. The largest ETF tracking this sector, HuaBao Non-ferrous Metals ETF (159876), saw its on-exchange price jump sharply by 4.91%, closing at the day's high. With the market at a low point and strong corporate performance, capital is accelerating its deployment into the sector. Data shows this ETF has attracted a substantial 2.2 billion yuan in net inflows over the past 10 trading days.
Among its constituent stocks, leading aluminum producers Zhongfu Industrial and Tianshan Aluminum hit the daily limit-up, while lead-zinc leader Chihong Zinc & Germanium also reached the limit-up. Rare earth leader China Rare Earths & Metals surged over 9%. Key heavyweight stocks also performed strongly, with Aluminum Corporation of China (Chalco) rising over 9%, China Molybdenum Co., Ltd. gaining over 8%, and Zijin Mining Group advancing more than 6%.
Key Catalysts Driving the Rally
Market attention is focused on the active rare earth and aluminum segments.
Firstly, regarding rare earths, customs data released on July 14 showed China's rare earth exports in June surged by 178.82% year-on-year, becoming a core driver of export growth. Notably, since June, rare earths have been included in the strategic mineral catalog, with expectations strengthening for tighter controls on key mineral resources. Analysis suggests that supply constraints, combined with rising domestic and international demand and low inventory levels, could catalyze a price increase for light rare earths. Furthermore, rising demand for high-capacity MLCCs driven by AI and geopolitical tensions may fuel a price rally for heavy rare earths like dysprosium oxide and yttrium oxide.
Secondly, in the aluminum sector, industry leader Aluminum Corporation of China (Chalco) issued an announcement on July 13. The company forecasts its net profit attributable to shareholders for the first half of 2026 to reach between 11.2 billion and 12.2 billion yuan, representing a significant year-on-year increase of 58% to 73%. This marks a substantial improvement in operational performance, achieving the best level in its history for the same period. Analysis indicates that rigid domestic capacity ceilings are constraining supply growth while overseas supply is shrinking noticeably, which is expected to push aluminum prices higher. Additionally, high-speed growth in demand for aluminum in cables and energy storage is anticipated to further boost overall aluminum demand.
Strong Underlying Fundamentals
Regarding fundamentals, among the 60 constituent stocks of the index tracked by the HuaBao Non-ferrous Metals ETF (159876), 27 listed companies had disclosed their H1 2026 earnings forecasts as of July 14. All 27 companies that have issued guidance project both profitability and growth. Zijin Mining Group leads with a projected highest net profit of 39.1 billion yuan, followed by China Molybdenum Co., Ltd. and Aluminum Corporation of China (Chalco), with projected highest net profits of 16.5 billion yuan and 12.2 billion yuan, respectively.
Institutional Outlook on the Sector
Institutional analysis points out that while the non-ferrous metals sector is currently experiencing high景气 (prosperity), its relative valuation remains at a historical low, suggesting significant potential for valuation recovery. Another view posits that the non-ferrous metals sector, having been among the hardest hit previously, is poised for a rebound. Coupled with positive mid-year earnings expectations, the duration and intensity of this rebound cycle could potentially exceed previous ones.
Strategic Investment Vehicle for the Sector
The HuaBao Non-ferrous Metals ETF (159876) and its feeder funds provide comprehensive exposure to industries including copper, aluminum, gold, rare earths, lithium, tungsten, molybdenum, and tin. This broad coverage allows investors to capture the overall beta of the sector. Furthermore, this ETF is a margin trading and securities lending标的, making it an efficient tool for gaining exposure to the non-ferrous metals sector. As of July 13, the ETF's latest size was 1.412 billion yuan, making it the largest ETF tracking its underlying index among the three available in the market.
Note: The previous on-exchange简称 (abbreviation) for HuaBao Non-ferrous Metals ETF (159876) was "有色龙头ETF" (Non-ferrous Leaders ETF). Investors should be aware that申购 or赎回 fund shares may involve commissions charged by代理机构, typically up to 0.5%. On-exchange trading fees are subject to the rates charged by securities firms. The ETF does not charge a sales服务费.
Risk Disclosure: The ETF passively tracks the CSI Non-ferrous Metals Index. The index's base date is December 31, 2013, and it was launched on July 13, 2015. The index's performance over the past five full calendar years has varied: +35.89% in 2021, -19.22% in 2022, -10.43% in 2023, +2.96% in 2024, and +91.67% in 2025. Its annualized volatility over these years was 39.43%, 31.41%, 19.44%, 30.12%, and 27.94%, respectively. Index constituents are adjusted per its rules. Past performance does not predict future results. Constituent stock mentions are for illustrative purposes only and do not constitute investment advice or indicate fund holdings. The fund manager assesses this fund's risk等级 as R3-Medium Risk, suitable for Balanced (C3) and above investors. Suitability matching should be verified with销售机构. All information presented is for reference only. Investors are responsible for their own investment decisions. Views, analysis, and forecasts do not constitute investment advice, and no liability is accepted for losses arising from the use of this content. Fund investment carries risks. Past performance does not guarantee future results. The performance of other funds managed by the manager does not guarantee this fund's performance. Invest with caution.
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