Strong first-quarter earnings ignited a rally on Wednesday, April 29th, with the nonferrous metals sector leading the market. Five stocks, including rare earth leaders China Northern Rare Earth and China Rare Earth, Shenghe Resources, and lithium industry leader Yongxing Special Materials Technology, surged by the daily limit.
Among popular ETFs, Huabao Fund's Nonferrous Metals ETF (159876), which tracks the same underlying index and boasts the largest scale and best liquidity*, saw its intraday gain peak at 4.52%, closing up 4.42%. Capital had already begun positioning itself earlier. Data from the Shenzhen Stock Exchange shows that Huabao's Nonferrous Metals ETF (159876) attracted net inflows for two consecutive days, totaling 9.11 million yuan. Over a longer period, the fund accumulated net inflows of 13.42 million yuan in the past five days.
What is driving the strength in the nonferrous metals sector? Impressive earnings performance appears to be the primary support. Taking Huabao's Nonferrous Metals ETF as an example, among its 60 constituent stocks, 49 have disclosed their Q1 2026 results. Of these, 48 reported profits, with nearly 80% achieving double-digit year-on-year growth in net profit attributable to parent company owners. Leaders like China Northern Rare Earth, China Rare Earth, and Yongxing Special Materials Technology even reported profit growth exceeding 100%. Specifically: 1. The robust performance of lithium industry leaders is closely tied to the high demand from both the new energy vehicle sector for power batteries and the energy storage sector. China's shipments of energy storage lithium batteries reached 215 GWh in Q1 2026, a year-on-year increase of 139%. Leading companies have orders scheduled for production stretching from the end of 2026 into the second quarter of 2027, with capacity saturated and prioritizing high-margin orders. 2. The collective surge in earnings for rare earth leaders is closely linked to the strategic resource value of rare earths. China's new round of strategic action for mineral exploration breakthroughs has achieved significant results. By the end of the "14th Five-Year Plan" period, China's reserves of 14 minerals, including rare earths, ranked first in the world, significantly enhancing resource self-sufficiency capability and solidifying the resource foundation for the long-term stable development of the rare earth industry. Against a backdrop of tight supply and demand dynamics, rare earth prices are expected to remain strong.
Looking ahead for the nonferrous metals sector, Oriental Securities believes that short-term fluctuations do not alter the medium- to long-term positive trend. Before the fundamental resolution of the US long-term debt issue, the long-term bull market for precious metals is not over. Incremental demand driven by "de-globalization," combined with a trend of reduced mineral supply, also provides mid-term fundamental support for price increases in industrial metals and strategic metals.*
[The Nonferrous Metals Trend is Here, the 'Super Cycle' is Unstoppable] Huabao's Nonferrous Metals ETF (159876) and its feeder fund (Class A: 017140, Class C: 017141) track an index that comprehensively covers industries such as copper, aluminum, gold, rare earths, and lithium, encompassing different cycles for precious metals, strategic metals, and industrial metals. This full-category coverage allows for better capture of the sector's beta movements. Additionally, this ETF is a margin trading security, making it an efficient tool for a one-stop allocation to the nonferrous metals sector. As of the end of March, Huabao's Nonferrous Metals ETF (159876) had a latest size of 1.891 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 ranks first in both scale and liquidity.
*Institutional views referenced from Oriental Securities report "Short-Term Volatility Does Not Alter Medium- to Long-Term Positive Trend" published February 8th. Risk Warning: Huabao Nonferrous Metals ETF passively tracks the CSI Nonferrous Metals Index. The base date of 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 historical backtested performance does not indicate future performance. The mention of index constituents herein is for display purposes only; descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading动向 of any fund managed by the 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 sales institution. Any information appearing in this article is for reference only, and investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts herein 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 carries risks; past performance of a fund does not indicate its future performance, and the performance of other funds managed by the fund manager does not guarantee the performance of this fund. Fund investment should be approached with caution.
The MACD golden cross signal has formed, indicating positive momentum for these stocks.
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