Industrial Non-Ferrous ETF Penghua rises over 1%, copper and aluminum cycle remains unchanged, emphasizing metal rebound opportunities

In terms of news flow, expectations for the U.S.-Iran conflict ease in stages. U.S. Treasury yields fall, the U.S. dollar stays steady, and industrial base metals continue to rebound. Among them, LME March copper +1.8%, aluminum +5.6%, and SHFE copper +0.3%, aluminum +3%.

Institutions pointed out that, on the commodities side, in the short term it will closely follow developments in the U.S.-Iran conflict, and opportunities to play catch-up in aluminum should be emphasized. In the long run, the economy’s bottoming out and deglobalization promote optimization of the supply-demand structure, and the trend has not changed: 1) In the short term, although the U.S.-Iran conflict triggers concerns about inflation and constrains the Fed’s rate cuts, industrial metals commodities have not yet returned to an upward channel. However, given that, on the one hand, since the rate-cut trade from August 2025, the supply and demand sides for high-quality resource products represented by copper and aluminum have both shown clear industrial changes; and on the other hand, the United States currently has stronger control over oil and the economy’s reliance on oil has declined, inflation pressure is manageable and the probability of Fed rate hikes is low. Therefore, commodity prices are likely to be supported at present. Meanwhile, due to conflict-related damage to facilities and supply-chain disruptions, Middle Eastern aluminum producers are gradually increasing idled capacity, with especially a higher probability that conflict will escalate during holidays. Pay attention to the aluminum price’s subsequent “catch-up” rally. 2) In the long run, economic bottoming and intensified deglobalization-driven competition for resources by countries will not change the cycle rhythm of copper and aluminum, and the price midline will move higher.

On the equities side, allocate to aluminum first, and copper offers value: from a cycle perspective, although the U.S.-Iran conflict is difficult to predict, on the one hand, if we work backward from reasonable valuations, the market values of copper and aluminum leading companies imply a relatively large safety buffer for their commodity positioning, and value still stands out. On the other hand, regardless of whether it is stagflation or recovery, electrolytic aluminum benefits and should be taken seriously, and the scale of Middle Eastern supply outages is sufficient to offset the possible weakness in demand.

From a value perspective, the equity value of copper and aluminum will ultimately be repriced: 1) Commodity long-term midline remains stable with an upward bias—under a deglobalization backdrop, price midlines for growth-oriented resource products such as copper and aluminum are lifted. First, from the monetary dimension, the credibility of the current dollar is steadily eroding, and when facing global uncertainty, monetary easing is likely the default option. Second, from the supply-demand dimension, driven by factors such as national security, nationalism, and resource depletion, supply for resource products like copper and aluminum is constrained and cost increases are the prevailing direction. Third, with the rapid development of AI, it strongly boosts global electricity demand, and copper and aluminum affected by supply-demand conditions also benefit. 2) Use growth or dividends to compensate for risk—domestic copper and aluminum valuations are generally lower than overseas, and both domestic copper’s growth attributes and aluminum’s dividend attributes help re-rate valuations upward.

As of 10:43 on April 7, 2026, the CSI Industrial Nonferrous Metals Thematic Index (H11059) rose strongly by 1.17%. Among constituent stocks, Tianshan Aluminum rose 5.03%, Shenhuo Co. rose 3.90%, China Tungsten & High-Tech rose 3.87%, and followed with gains such as Power Investment Energy and Yunnan Aluminum. The Industrial Nonferrous ETF Penghua (159162) rose 1.09%, with the latest price at 0.84 yuan.

The Industrial Nonferrous ETF Penghua closely tracks the CSI Industrial Nonferrous Metals Thematic Index. The CSI Industrial Nonferrous Metals Thematic Index selects securities of 30 listed companies with relatively large market values whose businesses involve industries such as copper, aluminum, lead-zinc, and rare earth metals as index samples, to reflect the overall performance of securities of thematic listed companies in the industrial nonferrous metals sector.

According to data, as of March 31, 2026, the top ten weighted stocks of the CSI Industrial Nonferrous Metals Thematic Index (H11059) were Luoyang Molybdenum, Northern Rare Earth, China Aluminum, Yunnan Aluminum, Xiamen Tungsten, Xingye Silver & Tin, Tianshan Aluminum, Shenhuo Co., Tongling Nonferrous, and Dongyangguang. The combined weight of the top ten stocks was 54.07%.