On Monday, August 17, LME copper prices climbed once more, sitting just roughly $160 shy of the all-time high of $14,527.50 per ton recorded in January of this year. More striking than the price level itself, the spread between LME cash copper and the three-month futures contract has blown out past $500 per ton, marking the largest cash premium since the 2021 short squeeze episode. This market structure, where spot material commands a premium exceeding $500 over forward contracts, is a rare occurrence in normal conditions and serves as a classic signal of acute near-term physical supply tightness.

In a rapid-fire analysis, the index investment research team at Hua宝 Fund explained that this unusually steep cash premium is not driven by a traditional cyclical upswing, nor is it the result of speculative funds orchestrating a deliberate squeeze. Rather, it is a direct consequence of deglobalization. Traders, seeking to preempt potential US tariff impositions, have been proactively shipping copper into the United States. This dynamic means that while global aggregate inventories have not necessarily bottomed out, the volume of deliverable metal outside of North America has contracted sharply. The widening cash premium, therefore, essentially reflects a passive shortage triggered by a consensus reaction across the industry.

Looking across global markets, this same narrative is playing out repeatedly. From rare earths and tungsten, to the indium phosphide countermeasures linked to the optical module sector, and now to the copper squeeze driven by US tariff expectations, the weighting of national security factors in the pricing of resource commodities is rising significantly. This marks an evolution in the commodity research framework, moving from a dual "industry plus financial" attribute model towards a triple-attribute model that now incorporates "industry plus financial plus national security." In the future, more metals are likely to be drawn into the arena as tools in the binary contest of global economic power, with this national security attribute effectively raising the valuation floor for resource-based assets.

As such, Hua宝 Fund suggests that a new pricing factor, the "national security attribute," is being assigned to non-ferrous metals and other resource commodities. These materials form the physical basis for technology and advanced manufacturing, and major power competition is now precisely targeting the supply chain vulnerabilities of rivals (for example, the US's lack of smelting capacity versus China's dependence on raw ore). As supply chain self-reliance becomes a core policy objective for nations worldwide, the logical spillover from rare earths to copper suggests that most non-ferrous resource products will increasingly be valued with a national security dimension in mind. Against this macro backdrop of global supply chain restructuring and the re-rating of this "national security premium" for resources, the medium-to-long-term allocation value of the non-ferrous metals sector is coming into sharp focus.

Within this macro framework, the Non-ferrous Metals ETF Hua宝 (159876), whose underlying index offers comprehensive coverage of precious metals, industrial metals, energy metals, and strategic minor metals, allows investors to access the entire non-ferrous metals complex with a single click. Amid the current wave of "national security premium" re-pricing for resource commodities, this ETF serves both as an efficient tool to capture the overall beta of the sector and as a quality option for positioning in medium-to-long-term allocation value that aligns with the evolution of the global landscape.

Given that different non-ferrous metals have distinct business cycles, tempos, and drivers, divergence is inevitable. For investors bullish on the sector, a more straightforward approach is to seek broad coverage to better capture the sector-wide beta. The Non-ferrous Metals ETF Hua宝 (159876) and its feeder funds (Class A: 017140, Class C: 017141) track an index that comprehensively spans copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. Its key constituents include industry leaders such as Zijin Mining, Luoyang Molybdenum, China Northern Rare Earth, Aluminum Corporation of China, and Zhongjin Gold. This full-spectrum coverage is better suited to capturing the overall beta of the sector. Furthermore, as a designated security for margin trading and short selling, this ETF is an efficient one-stop tool for positioning in non-ferrous metals.

As of August 17, the Non-ferrous Metals ETF Hua宝 (159876) had assets under management of ¥1.669 billion, with an average daily turnover of ¥103 million this year. Among the three ETFs tracking the CSI Non-ferrous Metals Index across the entire market, it stands out as the largest in scale and the most liquid. Sources: Shanghai and Shenzhen stock exchanges, etc., as of August 18, 2026. Regarding ETF fund fees: when investors subscribe for or redeem fund shares, the authorized agency may charge a commission at a rate not exceeding 0.5%. On-exchange trading fees are subject to the actual charges of the securities company. The ETF does not charge a sales service fee.

Risk Disclosure: The Non-ferrous Metals ETF Hua宝 passively tracks the CSI Non-ferrous Metals Index, which has a base date of December 31, 2013, and was published on July 13, 2015. The index constituents are adjusted periodically according to its compilation rules, and its back-tested historical performance is not indicative of future index performance. The index constituents mentioned in this article are for display purposes only; the description of individual stocks does not constitute investment advice of any form, nor does it represent the holdings or trading activities of any fund under the management of the fund manager. The risk level assessed by the fund manager for this fund is R3-Medium Risk, suitable for investors who are at least Balanced (C3) in profile. Please refer to the sales institution for the final suitability matching opinion. 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 solely responsible for their own independent investment decisions. Furthermore, any views, analyses, or predictions in this article do not constitute investment advice of any form to the reader, nor do they assume any responsibility for 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, and the performance of other funds managed by the fund manager does not constitute a guarantee for the performance of this fund. Investors should invest with caution.