This afternoon (June 2nd), the nonferrous metals sector saw a sudden surge, with the Huabao Nonferrous Metals ETF (159876), which holds leading companies in the sector, rising 3.17% in its on-exchange price, reclaiming both its 5-day and 10-day moving averages during the session.
In terms of constituent stocks, leaders in the copper and tin industries led the gains together. Boway Alloy, Yunnan Tin Co.,Ltd., Jiangxi Copper Company Limited, and Huaxi Nonferrous Metals all surged to their daily limit-up. Northern Copper rose over 9%, while stocks like Xingye Yintin gained more than 7%. Major weighted stock Zijin Mining Group climbed nearly 5%, and Aluminum Corporation of China Limited increased over 4%.
Market Drivers and Price Forecasts
On the news front, market concerns are rising over potential US tariffs on copper imports, with both Citigroup and Goldman Sachs raising their copper price forecasts. The US Department of Commerce is expected to release its latest recommendations on refined copper import tariffs before June 30th. Citigroup stated that bullish sentiment for copper is heating up due to fears of possible US import tariffs, predicting prices could rise to $14,500 per ton in the coming month. They forecast copper prices reaching $15,000 per ton over the next 6-12 months.
Regarding tin, often referred to as the "computing power metal," prices have shown a significant increase alongside the rapid development of the AI industry. Prices have risen from around 300,000 yuan per ton last November to approximately 420,000 yuan per ton currently, a 40% increase in half a year. Since last year, major tin-producing countries like Myanmar, Indonesia, and the Democratic Republic of the Congo have faced supply shortages due to factors including export restrictions and geological disasters. The industry widely believes that rising tin prices will be a long-term trend over the next one to two years.
Huaxin Futures noted that the rise in tech stocks is essentially the market's optimistic pricing of demand for AI computing power, advanced manufacturing processes, and memory chips. The semiconductor manufacturing process consumes vast amounts of nonferrous and rare metals like high-purity copper, tin solder, tantalum targets, and silicon wafers. Meanwhile, AI data center construction is driving investment in power infrastructure, significantly improving the demand outlook for copper as the "electrification metal." Expansion plans by Japanese and South Korean semiconductor equipment and materials companies have further enhanced demand visibility for minor metals like tin, tungsten, and molybdenum.
Sector Outlook and Investment Perspective
Looking ahead, industry insiders suggest that cyclical resource sectors like nonferrous metals, while facing short-term market volatility, still have promising long-term prospects due to benefits from industrial structure optimization and sustained demand growth. Furthermore, based on earnings trend model analysis, the current valuation of the nonferrous metals sector is reasonable, and it may see a rebound opportunity. It is recommended to focus on its potential performance within the industrial chain and seize the investment window created by oversold conditions.
Accessing the Sector with an ETF
The Huabao Nonferrous Metals ETF (159876) and its linked funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers industries including copper, aluminum, gold, rare earths, and lithium. This full-category coverage allows for better capture of the sector's overall beta performance. Additionally, this ETF is a margin trading and securities lending target, making it an efficient tool for a one-click allocation to the nonferrous metals sector.
As of the end of May, the latest size of the Huabao Nonferrous Metals ETF (159876) exceeded 15 billion yuan, making it the largest ETF among the three products in the entire market tracking the same underlying index.
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