On December 22, major A-share indices collectively rose, with the nonferrous metals sector outperforming. The largest nonferrous metals ETF by AUM, Huabao Nonferrous ETF (159876), gapped up sharply, surging as much as 2.26% intraday and currently holding a 2.15% gain. Notably, the ETF’s price is now just shy of its all-time high of 0.958 yuan since listing.

Copper and gold leaders led the rally. Among copper producers, Hailiang Co. and Baiyin Nonferrous surged over 6%, while Zijin Mining (02899) climbed more than 4%. Gold heavyweights like Zhongjin Gold, Chifeng Gold, and Shandong Gold each gained over 3%.

In 2025, the A-share nonferrous metals sector has dominated with a staggering 70%+ year-to-date return. As of December 16, it outpaced the second-ranked communications sector by 0.7 percentage points.

Fundamentally, driven by rising commodity prices and structural demand growth downstream, the sector exhibits clear strength upstream versus mid-to-downstream, with overall earnings improving markedly. Listed companies’ performance reflects this boom: the 141 constituents of the Shenwan Nonferrous Index reported total revenue of 2.82 trillion yuan (+9.3% YoY) and net profit of 151.29 billion yuan (+41.55% YoY) for the first three quarters.

Policy tailwinds are also supportive. In 2025, guidelines emphasized high-quality development in metals, with "anti-involution" and "stable growth" as key themes. A joint policy by eight ministries, including MIIT, targets 5% annual value-added growth and 1.5% output growth for ten major nonferrous metals by 2026, with recycled metal output exceeding 20 million tons.

Looking ahead, CICC projects nonferrous and precious metals as top performers in 2026. Goldman Sachs, JPMorgan, and Bank of America see gold potentially testing $5,000/oz, buoyed by central bank demand. Citigroup expects copper to rally further in 2026, supported by improving fundamentals and macro conditions.

**Cyclical Upswing: Nonferrous Bull Run May Extend** Given divergent drivers across metals, a diversified approach via broad-based ETFs like Huabao Nonferrous ETF (159876) and its feeder funds (Class A: 017140; Class C: 017141) — which cover copper, aluminum, gold, rare earths, and lithium — can help capture sector beta while mitigating single-commodity risks.

*Risk Disclosure: The ETF tracks the CSI Nonferrous Metals Index (base date: 2013.12.31; launched: 2015.7.13). Past annual returns: +35.84% (2020), +35.89% (2021), -19.22% (2022), -10.43% (2023), +2.96% (2024). Constituent adjustments follow index rules; historical performance is not indicative of future results. Stock mentions are illustrative and not investment advice or indicative of fund holdings. The fund is rated R3 (moderate risk) for balanced (C3) or higher investors. Investment decisions carry risks; past performance does not guarantee future returns.*