On August 4, all three major A-share indices rose, with the non-ferrous metals sector joining the uptrend. The HuaBao Non-Ferrous Metals ETF (159876), the largest and most liquid ETF tracking the same index, saw its intraday price climb as much as 1.74% before closing 1.41% higher. Since hitting its year-to-date low of 0.831 on July 20, the daily candlestick chart appears to have formed an upward consolidation channel.
With positive earnings pre-announcements and prices at low levels, capital is actively positioning for a rebound from oversold conditions. The HuaBao Non-Ferrous Metals ETF (159876) saw net capital inflows of 7.2 million shares during the session. This follows a single-day capital injection of 659 million yuan yesterday. Over the past ten trading days, the ETF has accumulated a total of 110 million yuan in net inflows.
Among constituent stocks, Yunnan Lincang Xinyuan Germanium Industry Co., Ltd. hit the daily 10% gain limit. Youyan Yixuan New Materials Co., Ltd. rose over 9%, while Shaanxi Sirui Advanced Materials Co., Ltd. and Huaxi Non-Ferrous Metals Co., Ltd. each gained more than 8%. Other stocks like Xiamen Tungsten Co., Ltd. and Xingye Silver & Tin Mining Co., Ltd. also followed the upward trend. Among heavyweight stocks, Huayou Cobalt Co., Ltd. rose over 3%, Jiangxi Ganfeng Lithium Co., Ltd. gained over 2%, and China Northern Rare Earth (Group) High-Tech Co., Ltd. and Aluminum Corporation of China Limited (Chalco) each advanced over 1%.
With the market recovering and capital returning, the repair trend in the non-ferrous metals sector is becoming increasingly clear.
Oil Price Constraints Weakening, Opening Space for Metals
The Index Research & Investment Department at HuaBao Fund recently stated its bullish outlook on the medium-to-long-term cycle for the non-ferrous metals sector. They noted that the previously predicted oil price range of $70–$120 per barrel has been validated, and that this range is locked in by the short-term mutual interests of the US and Iran. If oil prices remain in this range for an extended period, the suppression effect on the non-ferrous sector is likely to diminish.
On the supply side, Iran's core objective is to secure control over the Strait of Hormuz. If oil prices break above $120, Iran's role would shift from a victim in the US-Iran conflict to a "pressure-applying party" on third-party countries. This would significantly increase the difficulty of gaining control of the Strait, and high oil prices would force Iran to seek de-escalation through negotiations or cooperate with the US via TACO. On the demand side, China, as a major consumer with institutional advantages, has no incentive to increase imports to actively raise its own energy costs, naturally capping any upward movement in oil prices. Overall, an $80–$100 range is a comfortable zone for the US, Iran, and third-party countries, making a breakout above previous highs for crude oil difficult.
Token Explosion Driving Computing Infrastructure Buildout, Lifting Metal Prices
The exponential expansion of computing infrastructure, driven by the explosion in token usage, will significantly boost demand for non-ferrous metals. Structural constraints, such as the long development cycle of mines, make the supply side inflexible, leading to a prolonged tight supply-demand balance. Over time, the mismatch between supply and demand growth rates will widen the gap, increasing the certainty of a rising price floor. Recently, the prices of "computing metals" like copper, aluminum, and tin have already seen notable increases, with corporate profitability improving in tandem, providing solid fundamental support.
Strong Fundamentals and Low Valuations Create a Window of Opportunity
On the fundamentals front, the non-ferrous metals sector has been reporting a wave of positive earnings. As of August 3, among the 60 constituent stocks of the underlying index for the HuaBao Non-Ferrous Metals ETF (159876), 39 listed companies have released their 2026 interim earnings forecasts. All of these 39 companies are expected to report profits and year-on-year growth. Zijin Mining Group Co., Ltd. currently leads with a forecasted maximum net profit attributable to the parent company of 39.1 billion yuan. China Molybdenum Co., Ltd. and Aluminum Corporation of China Limited (Chalco) are expected to report maximum net profits of 16.5 billion yuan and 12.2 billion yuan, respectively.
Given the strong fundamentals and low valuations, the Index Research & Investment Department at HuaBao Fund recommends paying attention to the right-side allocation value of the sector. They believe the factors that have caused the sector to pull back since March have essentially been eliminated. Currently, stable commodity prices are supporting corporate earnings, and leading companies still have production growth contributions, making sector profitability highly certain. With low valuations and high growth certainty, the current period represents a quality allocation window for the non-ferrous metals sector.
Because different non-ferrous metals have varying degrees of prosperity, rhythms, and driving factors, divergence is inevitable. For investors bullish on the sector, a more straightforward approach is to gain full coverage to better capture the overall beta of the sector. The underlying index of the HuaBao Non-Ferrous Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) fully covers industries including copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. This full-category coverage helps to better capture the overall sector beta. The ETF is also a margin trading and short-selling instrument, providing an efficient tool for a one-click investment in the non-ferrous metals sector.