Today, February 6th, the Huabao Nonferrous Metals ETF (159876), which aggregates leading companies in the nonferrous metals sector, staged a strong rebound from earlier losses, with its market price climbing against the broader trend to gain as much as 0.9%. This follows two consecutive days of significant net inflows totaling 40.93 million yuan, indicating strong investor confidence in the sector's outlook and active accumulation of positions through the ETF.
Among its constituent stocks, Guocheng Mining and Hunan Gold led the gains, each rising over 5%. Shengtai Lithium Energy, Xiamen Tungsten, China Mineral Resources, and Yahua Group also saw increases exceeding 4%. Key weighted components such as Aluminum Corporation of China (Chalco) rose over 2%, while Zijin Mining Group, China Molybdenum, and Northern Rare Earth traded in positive territory.
Fundamentally, the synchronous advancement of strategic copper reserve development by both China and the United States underscores copper's critical role in manufacturing security systems. Dongfang Securities notes that China is exploring the inclusion of copper concentrate in its national strategic reserves to address a high import dependency of 75%. Concurrently, the United States has initiated a $12 billion "Project Vault" for critical mineral reserves, covering over 50 minerals including copper. Against a backdrop of declining global copper ore grades and insufficient capital expenditure, supply constraints are intensifying, potentially enhancing copper's strategic value as a core metal for the energy transition.
Copper has been particularly prominent in this recovery phase. A fundamental shift in market perspective is underway: copper is transforming from a traditional cyclical commodity into a "new infrastructure metal" defining the future. Analysts emphasize that massive construction of AI data centers, global power grid upgrades, and the widespread adoption of electric vehicles are establishing long-term demand pillars for copper. Simultaneously, major global copper mines face challenges from declining ore grades and inadequate investment in new capacity, leading to sluggish supply growth. This dynamic of "new demand" meeting "tight supply" has led many institutions to predict the copper market is entering a prolonged phase of supply deficits.
China Galaxy Securities believes that China's push to build a copper resource reserve system aims to enhance the resilience and security of its domestic copper supply chain. Amidst a century of global changes, major powers' efforts to secure critical mineral supplies and build independent supply chains could widen the global copper deficit. Copper prices are expected to rise due to a "security premium." In the short term, copper prices, impacted by misinterpretations of Federal Reserve policy expectations, possess some rebound potential. A recovery in downstream demand is solidifying fundamental support, and certain core A-share copper mining stocks currently show high valuation safety margins for 2026, highlighting their investment appeal. The outlook for further copper price increases is positive.
Guosheng Securities argues that a confluence of supply-demand mismatches, accommodative macro policies, and industrial upgrading suggests the "metals feast" is not a short-term spike, and high profitability could be sustained for 3-5 years. While the market is broadly bullish on nonferrous metals, Dongfang Jincheng cautions that short-term risks include profit-taking by speculative funds, which could increase volatility. Huatai Securities recommends a moderate allocation to the nonferrous metals sector—around 10%-20% of a fund portfolio—to capture potential upside while maintaining risk diversification.
Investors are reminded that recent market volatility may be significant, and short-term price movements are not indicative of future performance. Investment decisions should be made rationally based on individual financial circumstances and risk tolerance, with careful attention paid to position sizing and risk management.
ETF Fee Information: Brokerages may charge a commission of up to 0.5% for subscribing or redeeming fund units. Trading fees for on-market transactions are subject to the rates set by the securities firm. The ETF does not charge a sales service fee. Connected Fund Fee Information: The Huabao CSI Nonferrous Metals ETF Feeder Fund (Class A) charges a subscription fee of 1,000 RMB per transaction for amounts of 2 million RMB or more, 0.6% for amounts between 1 million and 2 million RMB, and 1% for amounts below 1 million RMB. 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 Huabao CSI Nonferrous Metals ETF Feeder Fund (Class C) charges no 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 annually.
Risk Disclosure: The Huabao Nonferrous Metals ETF and its feeder funds passively track the CSI Nonferrous 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 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 methodology rules. Past performance of the index does not guarantee future results. The mention of specific constituent stocks herein is for illustrative purposes only and does not constitute investment advice of any form, nor does it represent the holdings or trading intentions of any fund managed by the fund manager. The fund manager assesses this fund's risk level as R3-Medium Risk, suitable for investors with a Balanced (C3) or higher risk profile. Suitability matching opinions should be based on the selling institution's assessment. All information presented (including but not limited to stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are solely responsible for their independent investment decisions. Furthermore, no views, analysis, or forecasts herein constitute investment advice of any kind to the reader, and no liability is accepted for any direct or indirect losses resulting from the use of this content. Fund investment carries risks. Past performance of a fund is not indicative of its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Investors should exercise caution.
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