Policy dividends + tight supply and demand balance: a window may open for the non-ferrous metals sector

At the recent first CPPCC news conference, keywords such as high-quality development, new productive forces, and green low-carbon transformation provided guidance for the future development of China’s non-ferrous metals industry. Facing this historic opportunity, how will the industry break through? (Reference: China Nonferrous Metals Network, “First CPPCC News Conference Signals Policy, New Opportunities for Non-Ferrous Metals Industry Under High-Quality Development,” March 6, 2025)

Policy Guidance, Non-Ferrous Metals Industry Enters a New Development Stage

1. Green Low-Carbon Transformation, Building a New Competitive Track for the Industry

The conference specifically mentioned conducting special research on major issues such as green low-carbon transformation. It is foreseeable that, under the continued advancement of the “dual carbon” goals, green smelting technologies, recycled metal utilization, and low-carbon material innovation will become new competitive tracks for the industry. (Reference: China Nonferrous Metals Network, “First CPPCC News Conference Signals Policy, New Opportunities for Non-Ferrous Metals Industry Under High-Quality Development,” March 6, 2025)

In recent years, China’s non-ferrous metals industry has achieved significant results in green transformation, with main product energy consumption reaching world-leading levels. By 2025, the comprehensive energy consumption for copper smelting will be 191 kg standard coal per ton, down 2.9% from the previous year; the average electricity consumption for primary aluminum will be 13,202 kWh per ton, down 0.5%, about 800 kWh lower than the global average. (Reference: Economic Daily, “By 2025, the Non-Ferrous Metal Industry Will Achieve Steady Growth and Quality Improvement,” February 5, 2025)

2. Technological Innovation Empowerment, Promoting the Value Chain to Higher End

During the “14th Five-Year Plan” period, focusing on technological independence and the development of new productive forces, China’s non-ferrous metals industry needs to target downstream key industrial chain demands, precisely tackle high-end new materials, consolidate competitive advantages in material fields, and build an independent, controllable, safe, and reliable new materials industry system. This transformation will help China leap from a “big materials country” to a “strong materials country,” providing critical support for improving overall national technological innovation and leading high-quality industry development.

Specifically, focusing on the needs of new-generation information technology, new energy vehicles, aerospace, deep-sea economy, and other key industrial chains, new materials such as metal soft magnetic powders for AI chips and optical modules, key materials for solid-state batteries (lithium sulfide, metallic lithium), lightweight aluminum-magnesium alloys for humanoid robots, and high-end titanium alloys for equipment are expected to achieve significant breakthroughs and scale application during the “14th Five-Year Plan” period. (Reference: Galaxy Securities, “Non-Ferrous Metals Industry Review: Strengthening Strategic Resource Guarantee, Promoting Quality Upgrades of New Materials,” March 9, 2026)

3. Deepening Opening-Up, Expanding International Cooperation Space

In recent years, China’s non-ferrous metals industry has actively implemented a series of national policies, taking multiple measures to help enterprises expand into international markets and effectively respond to risks such as US-China trade frictions. By 2025, China’s total import and export trade in non-ferrous metals will reach a new level of $412.24 billion, an increase of 12.4% year-on-year. (Reference: Economic Daily, “By 2025, the Non-Ferrous Metal Industry Will Achieve Steady Growth and Quality Improvement,” February 5, 2025)

Against the backdrop of increasingly integrated global resource allocation and industrial chain cooperation, Chinese non-ferrous metal companies will have broader space in overseas resource development, international trade, and technological cooperation. Meanwhile, as the Belt and Road Initiative continues to advance, China’s position in the global metal resource supply chain will be further enhanced. (Reference: China Nonferrous Metals Network, “First CPPCC News Conference Signals Policy, New Opportunities for Non-Ferrous Metals Industry Under High-Quality Development,” March 6, 2025)

Balancing Supply and Demand to Seize Industry Opportunities

Looking ahead, some institutions suggest that on the demand side, the policy tone of the government work report remains steady and positive, with unchanged proactive fiscal policies and moderately loose monetary policies. The economy will still show structural highlights, with domestic demand, smart economy, future industries, emerging industries, and “dual carbon” policies being the main directions, boosting demand for related metal materials. (Reference: Wukuang Securities, “Non-Ferrous Metals: Policy Boosts Demand, Some Varieties Face Increased Supply Constraints,” March 10, 2026)

On the supply side, on one hand, long mine development cycles, declining resource grades, environmental and policy constraints have slowed global metal supply growth. On the other hand, geopolitical events will impact supply stability and energy costs. For example, the Middle East accounts for about 9% of global aluminum electrolytic capacity, and geopolitical risks could slow supply growth in 2026, widening supply-demand gaps; strategic small metals like rare earths, tungsten, and antimony may also face tighter supplies due to limited resources and increased strategic reserves. Overall, most market institutions believe that the supply-demand relationship in the non-ferrous metals industry will remain tightly balanced. (Reference: China National Radio, “Non-Ferrous Metal Industry Continues to Improve, Shanghai-listed Companies Show Rising Prices and Resources Advantages,” March 9, 2026; Huatai Securities, “Impact of Middle East Geopolitical Events on Non-Ferrous Metals Differentiates,” March 11, 2026)

Additionally, in recent years, influenced by global macroeconomic changes, rapid development of new energy industries, and resource supply constraints, the overall operation of the non-ferrous metals industry has significantly improved. Data shows that in 2025, profits of large-scale non-ferrous enterprises reached 528.45 billion yuan, a year-on-year increase of 25.6%, with industry prosperity clearly rising. Industry insiders point out that leading companies have formed comprehensive competitive advantages in resource reserves, global layout, and supply chain integration. (Data source: China Nonferrous Metals Industry Association, as of December 31, 2025; Reference: China National Radio, “Non-Ferrous Metal Industry Continues to Improve, Shanghai-listed Companies Show Rising Prices and Resources Advantages,” March 9, 2026)

Facing this industry upturn and tight supply-demand window, how can ordinary investors effectively seize the overall opportunities in the non-ferrous metals sector? Index-based investment may be a worthwhile option. The China Securities Index ETF for non-ferrous metals (159871) closely tracks the CSI Nonferrous Metals Index (930708.CSI), selecting high-quality A-share targets involved in non-ferrous metal mining, smelting, and processing. Interested investors may focus on the non-ferrous ETF (159871) and the ongoing linked funds (Class A: 026458; Class C: 026459), to easily follow industry leaders and share in industrial upgrading dividends.

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