The Jackson Hole central bank symposium has concluded, and Warsh's hawkish signals have heightened market concerns over overseas liquidity. Huabao Fund's rapid interpretation suggests that short-term macroeconomic disruptions will not alter the industrial trend driven by the intelligentization wave, and the long-term allocation logic for the nonferrous metals sector remains solid.
Macro View: Short-Term Liquidity Disturbances No Match for Sustained Industrial Momentum
From a short-term perspective, overseas macro variables continue to unsettle the market. The U.S. Treasury has expanded its long-dated bond repurchase program, with federal debt surpassing the $40 trillion mark, keeping fiscal deficit pressures elevated. At this year's Jackson Hole symposium, Warsh reaffirmed the 2% inflation target, and while no explicit timeline for rate hikes or cuts was provided, his comments on rising long-end yields drew focus. Market pricing now places a 57.0% probability on a September rate hike, with the hawkish tone creating phase-based sentiment pressure.
Over a longer horizon, the industrial trend of the intelligentization era takes center stage. Token consumption is growing exponentially, continuously feeding upstream computing infrastructure demand. Large-scale construction of computing capacity will persistently drive underlying demand for nonferrous metals, a logic impervious to short-term interest rate fluctuations.
Precious Metals: Betting on Dollar Credibility While Awaiting Transmission of Tech Capital Expenditures
Gold is trading on macro expectations and shifts in dollar credibility. In the near term, NVIDIA's better-than-expected earnings boosted U.S. equities, somewhat restraining this week's precious metals performance. However, sustained central bank gold purchases are underpinning prices. The key driver for gold's upside lies in how U.S. technology capital spending feeds through to fiscal balances. Before a new wave of large-scale large-model training commences, the precious metals sector remains within a macro tailwind window.
The medium-to-long-term leading indicator is whether U.S. technology can maintain its edge, with the core tension centered on America's high debt and deficit issues. The continuous expansion of U.S. Treasury issuance is progressively eroding dollar credibility. Policymakers face a difficult balancing act among inflation, employment, and debt costs, which opens a favorable long-term upward path for gold.
Industrial Metals: Low Inventories and Tight Supply-Demand Dynamics Await Domestic Demand Realization
Industrial metals remain anchored to real-world supply-demand fundamentals. Current inventories across the board are at low levels, with some varieties continuing destocking. Domestic fiscal policy remains accommodative, waiting for tangible demand to materialize.
For copper, short-term social inventories continue to draw down. In a low-inventory environment, the possibility of soft squeezes in LME/SHFE cash markets cannot be ruled out, keeping copper prices rangebound with a firmer bias. Over the medium-to-long term, energy transition combined with AI computing construction provides rigid demand support, indicating a positive outlook for the copper sector.
For aluminum, short-term noise from Indonesian capacity ramp-ups and uncertainty surrounding Middle East restarts, alongside continued inventory destocking both domestically and overseas, provides price support. In the medium-to-long term, the tug-of-war between new Indonesian capacity and Middle East restart expectations may cap aluminum price upside. Yet given the strength in gold and copper, being overly bearish on aluminum is unwarranted. Even in a conservative scenario projected at RMB 22,000 per tonne, attractive dividend yields remain attainable.
For tin, the market displays strong expectations against a backdrop of weak reality. Inventories have ticked up modestly yet remain at low levels, with short-term range-bound trading likely. Over the medium-to-long term, tin benefits from technology-industry demand, leaving room for growth.
Overall, the industrial metals segment currently boasts healthy supply-demand fundamentals with inventories at low ebb across the board. Domestic fiscal efforts are in place, awaiting the realization of physical demand.
Minor Metals: Tracking Technology Beta with Amplified Flexibility Opportunities
Supply rigidity in minor metals remains pronounced, with demand deeply tied to AI-driven new materials sectors. Prices move in tandem with the technology sector's beta, offering greater price flexibility. Lithium, rare earths, tungsten, molybdenum, and germanium extended their upward momentum last week, making the industrial dividend worth attention.
Summary
The intelligentization trend is unambiguous, and the long-cycle value of nonferrous metals allocation remains unchanged. While precious metals led gains earlier, market sentiment is gradually spilling over into industrial metals. The hawkish stance from Jackson Hole may cause phase-based market fluctuations, but the sector holds three core supports: tight supply-demand conditions, low aggregate valuations, and demand clearly driven by the intelligentization trend. The sector demonstrates clear right-side allocation value, suggesting investors consider building positions during dips.
Strong Fundamentals Plus Valuation Trough: Right-Side Allocation Value Stands Out!
Different nonferrous metals exhibit varying prosperity levels, timelines, and growth drivers, making divergence inevitable. For those bullish on the sector, an easier approach is full-spectrum coverage to better capture the entire sector's beta. The Huabao Nonferrous Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) track an index comprehensively covering copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. With full coverage across precious, industrial, energy, and strategic minor metals, it effectively captures the sector's beta. Key constituent stocks include industry leaders such as Zijin Mining Group (601899), CMOC Group (603993), China Northern Rare Earth (Group) High-Tech (600111), Aluminum Corporation Of China Limited (601600), and Zhongjin Gold (600489). The ETF also serves as a margin trading and short-selling vehicle, establishing itself as an efficient one-stop tool for nonferrous metals allocation. Source: Shanghai and Shenzhen exchanges, as of August 31, 2026.
*Note: "Valuation trough" refers to the nonferrous metals sector's strong safety margin across valuation dimensions: ① horizontally, its PE (TTM) sits in the lower-middle range among Shenwan first-tier industries, indicating significantly less valuation pressure than most sectors; ② vertically, the CSI Nonferrous Metals Index PE hovers near its three-year median, without clearly overextending future growth expectations; ③ from an internal-external comparison perspective, taking A-share Zijin Mining Group (601899) versus U.S.-listed Southern Copper as an example, Zijin's valuation is notably below its global peer, underscoring the pricing discount prevalent among A-share nonferrous leaders in global markets.
Note: The individual stocks mentioned here are all constituent stocks of the Huabao Nonferrous Metals ETF (159876) benchmark index. As of end-July, weightings were: Zijin Mining Group (601899), 11.93%; CMOC Group (603993), 7.97%; China Northern Rare Earth (Group) High-Tech (600111), 4.70%; Aluminum Corporation Of China Limited (601600), 3.55%; Zhongjin Gold (600489), 3.13%. Index constituent displays herein are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they reflect the holdings or trading activities of any fund under the manager's purview.
ETF fee disclosure: When subscribing or redeeming fund shares, agencies may charge commissions at rates not exceeding 0.5%. On-exchange trading fees are subject to actual charges by securities firms. The ETF charges no sales service fee. Feeder fund fee disclosure: For the Huabao CSI Nonferrous Metals ETF Feeder Fund (Class A), subscription fees are RMB 1,000 per transaction for amounts of RMB 2 million or above, 0.6% for amounts between RMB 1 million and 2 million, and 1% for amounts below RMB 1 million. Redemption fees are 1.5% for holdings under 7 days and 0% for holdings of 7 days or more, with no sales service fee. The Class C shares charge no subscription fee, with redemption fees of 1.5% for holdings under 7 days and 0% for 7 days or more, plus a 0.3% sales service fee.
Risk disclosure: The Huabao Nonferrous Metals ETF passively tracks the CSI Nonferrous Metals Index, which has a base date of December 31, 2013, and was published on July 13, 2015. Index constituent composition adjusts according to index compilation rules, and backtested historical performance does not indicate future index performance. The fund manager assesses this fund's risk level as R3-medium risk, suitable for balanced (C3) and above investors. Please refer to sales institutions for suitability matching opinions. Any information appearing herein (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, or any form of expression) serves as reference only. Investors must bear sole responsibility for their own discretionary investment decisions. Additionally, any views, analyses, or forecasts herein do not constitute investment advice to readers in any form, nor are they liable for any direct or indirect losses arising from the use of this content. Fund investing carries risks; past performance does not represent future performance. Performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Invest in funds with caution.