Aluminum industry leader leads the rally! Tianshan Aluminum and Zhongfu Industrial jointly rise over 4%, Huabao Fund's Non-Ferrous Metals ETF (159876) surges 1% during trading, attracting 24.35 million yuan in net inflow over the past five days.

Today (April 7th), the colored metals industry leader ETF Huabao (159876), which covers the leading companies in the non-ferrous metals sector, intraday rose as high as 0.98%, currently up 0.59%. From the daily candlestick chart, since the recent low point on March 23rd, it may have started a sideways upward step. Data shows that this ETF has attracted a total of 24.35 million yuan in net inflows over the past five trading days, reflecting that funds are optimistic about the future performance of the non-ferrous metals sector and are actively investing!

In terms of constituent stocks, the aluminum industry leaders led the gains significantly, with Tianshan Aluminum and Zhongfu Industrial both rising over 4%, Huafeng Aluminum and Shenhuo Co. up more than 3%, and Mingtai Aluminum and others following suit. The rare earth leaders also performed well, with China Rare Earth, Shenghe Resources, and Northern Rare Earth rising over 2%.

In the aluminum sector, the largest aluminum producer in the Middle East, Emirates Global Aluminum’s main smelting plant in Abu Dhabi has been forced to suspend operations. Natixis SA analyst Bernard Dahdahhi pointed out that the solidification of metals during the smelting process could cause damage that may take at least a year to repair. This could turn the aluminum market from a surplus of 200k tons next year to a supply gap of about 1.3 million tons. CITIC Securities reviewed the energy crisis of 2021-2022 and found that aluminum prices and the sector’s largest gains reached 60%/100%. Looking ahead, they remain optimistic about the rising valuation and prices of aluminum.

Guotou Securities stated that considering current factors such as the U.S. economy, employment, and mid-term elections, the probability of Fed rate hikes is very low, and even rate cuts may continue within the year. The central price of crude oil may have already been lifted, which puts pressure on countries heavily dependent on oil (such as Japan and South Korea), but for China, which relies on diversified energy supplies, the impact is relatively small, and it may even catalyze a surprise surge in new energy demand. It is recommended to pay attention to the structural opportunities in rare earths, lithium, strategic metals (tungsten, tantalum), aluminum (due to Middle Eastern supply shocks), and gold, which have a high proportion of new energy demand.

Huatai Securities is optimistic about the rebound opportunity in the undervalued non-ferrous metals sector: Regarding gold, historical patterns show that after geopolitical conflicts end, prices tend to rebound quickly, supported by central bank continued accumulation; for industrial metals, copper supply is tight at the mine level and domestic inventories are being depleted, while Middle Eastern aluminum capacity risks are not fully priced in, supporting the fundamentals; for minor metals, rare earths, tungsten, molybdenum, cobalt, etc., are catalyzed by geopolitical conflicts, with expectations of strategic reserves and military procurement strengthening, supply is highly concentrated domestically, and external shocks are hard to replace, making them more resilient and valuable for medium-term allocation. The overall undervalued recovery opportunity is worth active attention.

【The non-ferrous metal supercycle is here, and the “super cycle” is unstoppable】

The non-ferrous ETF Huabao (159876) and its linked funds (A: 017140, C: 017141) fully cover industries such as copper, aluminum, gold, rare earths, and lithium, including precious metals (hedging), strategic metals (growth), and industrial metals (recovery), spanning different economic cycles. This comprehensive coverage better captures the beta trend of the entire sector. Additionally, this ETF is a margin trading and short-selling target, making it an efficient tool for one-click exposure to the non-ferrous metals sector.

As of the end of February, Huabao Non-Ferrous ETF (159876) had a latest scale of 200k yuan, with an average daily trading volume over 2.43B yuan in the past month. Among the three ETFs tracking the same index in the market, it ranks first in both size and liquidity.

Note: The previous on-market abbreviation of Huabao Non-Ferrous ETF (159876) was “Non-Ferrous Leader ETF.”

Risk reminder: Huabao Non-Ferrous ETF passively tracks the CSI Non-Ferrous Metals Index, which was established on December 31, 2013, and published on July 13, 2015. The index’s constituent stocks are adjusted according to the index’s rules, and past performance does not predict future results. The constituent stocks shown here are for display only; stock descriptions do not constitute investment advice and do not reflect holdings or trading activities of any funds managed by the manager. The risk level of this fund, as assessed by the fund manager, is R3—medium risk, suitable for balanced (C3) and above investors. Suitability matching opinions are subject to the sales institution. Any information in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any form of statement) is for reference only; investors are responsible for their own investment decisions. The views, analysis, and forecasts in this article do not constitute investment advice to readers, and the author is not responsible for any direct or indirect losses caused by using this content. Fund investments carry risks, and past performance does not guarantee future results; the performance of other funds managed by the fund manager does not guarantee the performance of this fund; invest cautiously.