As the high-temperature off-season for domestic manufacturing winds down, downstream magnetic material companies are seeing a pickup in operations. Expectations are building for the "Golden September and Silver October" peak consumer season, and with a continuation of tight supply constraints across the industry this year, the rare earth sector is approaching a critical juncture for marginal supply-demand improvement. This has attracted attention from some market capital, boosting trading activity for products like the Rare Earth ETF Huatai-PineBridge (516780).

Wind data shows that as of August 13, the Rare Earth ETF Huatai-PineBridge (516780) has seen an average daily turnover of 118 million yuan since the start of August, crossing the 100 million yuan threshold. On the demand side, the logic of seasonal industry recovery is clear. Multiple downstream sectors are accumulating rigid demand, which is expected to lead to month-on-month improvements. As a core material for new energy vehicles, wind power, and high-end equipment manufacturing, rare earth permanent magnets follow a clear seasonal production and sales pattern. The peak production and sales period is annually from September to December, with midstream and downstream companies generally starting raw material stockpiling 1-2 months in advance. This creates a traditional industry cycle of stockpiling in July and August, followed by fulfillment in September and October.

Looking long-term, the rapid development of downstream emerging industries is also expected to drive long-term growth in rare earth demand, reshaping the industry's growth narrative. In the core demand area of new energy vehicles, production and sales are growing steadily, and the high penetration rate of permanent magnet synchronous motors remains elevated. The year-end vehicle delivery push will continue to boost demand for NdFeB materials. In the wind power sector, the second half of the year is the concentrated grid-connection period for projects, and the penetration of direct-drive permanent magnet turbines is increasing, providing solid rigid demand support. Meanwhile, industrial robots and humanoid robots are emerging as new growth engines for the sector. The continued expansion of the high-end manufacturing industry is driving marginal demand increases for medium and heavy rare earths, potentially opening up long-term growth space for the sector.

Rigid constraints on the supply side suggest the supply-demand mismatch pattern is likely to strengthen. This year, domestic regulation of the rare earth industry has tightened. The full implementation of the Rare Earth Management Regulations has further highlighted the strategic resource nature of rare earths. The annual rare earth mining and smelting separation quotas have seen minimal growth, with extremely limited supply increases. The quota clearance system prevents hidden increases, locking in supply rigidity from the source. At the same time, upgraded export controls on rare earths, new regulations on recycled material recovery, and unstable supply from overseas mines create a closed-loop supply constraint. Industry inventory levels are low, meaning that once downstream restocking begins, it can easily create a temporary supply-demand gap.

At the market level, peak season expectations are gradually transmitting to rare earth prices. Wind data indicates that since August, the price of mixed rare earth metals has fluctuated in a narrow range of 260,000-272,000 yuan per ton, ending the previous period of consolidation. CITIC Construction also noted in a research report that the "Golden September and Silver October" period is the traditional peak season for rare earth consumption. Market expectations for demand recovery remain strong. Downstream stockpiling is expected to restart in the second half of August, potentially breaking the current pattern of weak supply and demand and pushing prices to stabilize and rise.

Against this backdrop, the Rare Earth ETF Huatai-PineBridge (516780) could be a useful tool for capturing opportunities in the rare earth industry during the peak season. The ETF closely tracks the CSI Rare Earth Industry Index, which selects listed companies involved in rare earth mining, processing, trading, and application as its sample to reflect the overall performance of securities in the rare earth industry. Its top five constituent stocks are Northern Rare Earth, Baoshan Iron & Steel, Aluminum Corp of China (Chalco), China Rare Earth Resources, and GEM Co., Ltd., all of which are competitive leading enterprises in their respective fields. The Rare Earth ETF Huatai-PineBridge (516780) and its linked funds (Class A: 014331, Class C: 014332) are managed by Huatai-PineBridge Fund, one of China's first ETF managers. With over 19 years of deep experience in index investing, the firm has created index tools like the CSI 300 ETF Huatai-PineBridge (510300) and the A500 ETF Huatai-PineBridge (563360), which are characterized by transparent investment targets, convenient trading, and low fees. As of June 30, 2026, the company's ETFs have generated cumulative profits of over 180.6 billion yuan for holders over the past two years, making it one of only three public fund companies in the A-share market to have achieved cumulative profits exceeding 160 billion yuan during that period. A MACD golden cross signal has formed, indicating these stocks are showing strong upward momentum!