The nonferrous metals sector tracked the broader market's volatility on Friday, August 14, retreating after an early morning rally before mounting a fresh offensive in the afternoon. The sector saw net inflows of over 6.1 billion yuan in main capital, ranking third among the 31 Shenwan primary industries. The Huabao Nonferrous ETF (159876), the largest and most liquid ETF tracking the same underlying index, peaked at an intraday gain of 1.34%, closing 1.14% higher with a total turnover of 91.85 million yuan, a 24% increase in volume from the previous day.
Driven by strong fundamentals and low valuations, capital actively sought bargains amid the rebound. The Huabao Nonferrous ETF (159876) saw net subscriptions of 31.2 million units on Friday, following a single-day capital inflow of 10.64 million yuan the day before. Over the past 20 trading days, it has accumulated a total of 124 million yuan. Among its constituent stocks, rare earth leaders led the gains, with China Rare Earth hitting the daily limit, while Zhongxi Rare Earth, Shenghe Resources, and Northern Rare Earth all rose over 4%. Likely due to the release of a national standard for liquid cooling, copper processing leader Jintian Copper also hit its daily limit. Other stocks like Huaxi Nonferrous, Sinomine Resource Group, and Xiamen Tungsten followed with gains.
Why the rally in the nonferrous metals sector on Friday?
The rally was primarily supported by two key factors: improved macro liquidity and rising industry sentiment. On the macro front, after the U.S. July CPI data fully met expectations the previous day, Thursday's U.S. July PPI also showed modest overall gains, indicating further easing of inflationary pressures. Following the data release, U.S. stock index futures rose, and U.S. Treasury yields declined. Traders further lowered their expectations for a September rate hike by the Federal Reserve. CICC noted that with cooling U.S. inflation, weakening employment data, and the Fed's dovish policy shift, global liquidity is expected to ease further in the second half of 2026, which should benefit the nonferrous metals sector.
In the focal industry, rare earths are showing a clear 'low volume, high price' pattern. From January to July 2026, China's total rare earth exports were 34,706.3 tons, a 10% year-on-year decline. While export volumes dropped, the average export price doubled year-on-year. This price increase directly boosts company profits. According to SMM, among 10 rare earth-related companies that have released semi-annual reports, performance forecasts, or preliminary earnings, all reported varying degrees of profit growth in the first half of the year. Guosheng Securities pointed out that permanent magnet materials are the most important and highest-growth downstream application for rare earths, accounting for over 60% of total rare earth functional materials. New energy vehicles and embodied robots are key demand drivers.
Investment outlook and fund details
CICC believes that entering the second half of the year, the peak season for production and sales of downstream products like automotive and industrial robots will begin, and raw material procurement is expected to gradually pick up, potentially opening up incremental space. Rare earth prices have fundamental support. BOC International stated that both the macro environment and corporate earnings in the nonferrous sector support a transition from a rebound to a full reversal. If the broader market enters a recovery phase, the high-beta nonferrous sector, with its strong offensive attributes, is likely to outperform the market, presenting high allocation value at the current juncture. The Huabao Nonferrous ETF (159876) and its linked funds (Class A: 017140, Class C: 017141) track an index that comprehensively covers copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, tin, and other sectors, allowing for a better capture of the entire sector's beta movement. The ETF is also a margin trading and short selling target, serving as an efficient tool for a one-click allocation to the nonferrous metals sector. As of August 13, the Huabao Nonferrous ETF (159876) had a latest scale of 1.59 billion yuan and an average daily turnover of 104 million yuan year-to-date, making it the largest and most liquid ETF among the three tracking the CSI Nonferrous Metals Index on the market.
Risk reminder: The Huabao Nonferrous ETF passively tracks the CSI Nonferrous Metals Index. The index's base date is December 31, 2013, and it was published on July 13, 2015. The composition of index constituents is adjusted in accordance with the index compilation rules. Historical back-tested performance does not predict future index performance. The constituent stocks mentioned in this article are for display purposes only and do not constitute investment advice of any form, nor do they represent the holdings or trading strategies of any fund managed by the fund manager. The fund manager assesses the risk level of this fund as R3-Medium Risk, suitable for investors with a balanced (C3) risk profile or above. Please refer to the sales institution for matching advice. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors must be responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice of any form to the reader. The fund manager is not liable for any direct or indirect losses arising from the use of the content herein. Fund investment carries risks. Past performance of a fund does not represent its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Invest in funds with caution.
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