Core Viewpoint - The non-ferrous metals sector is experiencing a rare resonance between its financial and commodity attributes, driven by global central banks' shift towards marginal easing monetary policies and increased investments in energy transition and grid infrastructure. The China Securities Non-Ferrous Metals Mining Index saw a significant increase of 104.84% in 2025, making it a hot topic for investors in 2026 [1][7]. Group 1: Market Dynamics - The current macroeconomic environment, particularly the expectation of interest rate cuts, is providing favorable support for non-ferrous metals. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, benefiting interest-sensitive non-ferrous metals. Additionally, a declining US dollar index alleviates pressure on commodity prices denominated in dollars, creating a favorable exchange rate environment for the sector [3][9]. - On the supply side, non-ferrous metals face constraints such as declining ore grades, historically low capital expenditures, stricter approvals and environmental regulations, and geopolitical risks, leading to limited supply elasticity. Conversely, demand is surging due to the explosive growth of new energy sectors like electric vehicles and renewable energy storage, which increases the usage of lithium, cobalt, nickel, copper, aluminum, and rare earths in batteries and motors [3][9]. Group 2: Investment Opportunities - The ongoing issuance of the Invesco Great Wall China Securities Non-Ferrous Metals Mining Theme ETF (code: 560293) provides a convenient tool for investors to capture opportunities in the sector. This ETF tracks the China Securities Non-Ferrous Metals Mining Index, focusing on upstream resource leaders [1][5]. - The ETF comprises 39 constituent stocks, including high-growth industrial metals (copper, lithium, rare earths) and defensive precious metals (gold, silver), offering a balanced approach to investment. This diversified allocation allows for both offensive and defensive strategies, potentially reducing the index's drawdown during weaker market periods [5][11]. Group 3: Performance Metrics - Over the past five years, the China Securities Non-Ferrous Metals Mining Index has outperformed other non-ferrous metal indices, rising by 106.32%, compared to 95.08% for the segmented non-ferrous index, 93.60% for the China Securities Non-Ferrous Index, and 93.06% for the National Securities Non-Ferrous Index. The index's price-to-earnings ratio stands at 28.94, below the 10-year average of 37.32, indicating good investment value [6][12]. - The implementation of anti-involution policies since July of the previous year has led to a noticeable recovery in the price index for upstream mining and raw materials, aiding in profit recovery for companies in the sector. As of December 2025, the major raw material purchase price index was at 53.1%, remaining in a high expansion range [4][10].

Core Viewpoint - The non-ferrous metals industry has become a market focus since 2025, showing outstanding performance with a cumulative increase of 77.71% year-to-date, leading among 31 first-level industries in the Shenwan classification [1] Group 1: Industry Performance - The overall profitability of the non-ferrous metals sector has improved, with a year-on-year growth of 41.43% in net profit attributable to shareholders for the first three quarters of 2025, and a further increase to 50.81% in the third quarter [2][3] - The CSI Non-Ferrous Metals Mining Index has shown even greater elasticity, with net profit growth rates of 49.48% for the first three quarters and 55.62% for the third quarter [3] - The valuation of the CSI Non-Ferrous Metals Mining Index is currently at 24.16 times PE-TTM, positioned at the 39% historical percentile [3] Group 2: Sector Breakdown - All segments of the non-ferrous metals industry, except for energy metals and new metal materials, have achieved net profit growth in the first three quarters, with industrial metals, precious metals, and minor metals showing increases of 34.27%, 57.31%, and 45.49% respectively [3] - Institutional investors have increased their holdings in the non-ferrous metals sector, with public funds' holding ratio rising to 5.69% in Q3 2025, marking a 1.43% increase from the previous quarter and the highest level since 2021 [5] Group 3: Future Outlook - The industry is expected to benefit from a new cycle in global resources, with a positive outlook on copper, aluminum, and precious metals. Copper and aluminum prices have increased by 5.90% and 5.64% year-on-year in Q3 2025 [8] - Gold prices have surged by 39.88% year-on-year in Q3 2025, with central banks globally purchasing over 1,045 tons of gold in 2024, continuing a trend of high demand [8] - The lithium industry is seeing an improved supply-demand balance, while cobalt prices are expected to rise due to supply constraints from the Democratic Republic of Congo [10]