The "Resource Anchor" of Industrial Recovery: How Tianhe Non-Ferrous Metal ETF Captures the New Manufacturing Boom Cycle

Against the macro backdrop of a global manufacturing recovery and the shift from destocking to active restocking cycles, demand for industrial non-ferrous metals is entering an upward trajectory. The Tianhong Non-Ferrous Metals ETF (159157) closely tracks the CSI Industrial Non-Ferrous Metals Index (H11059), focusing on core industrial metals such as copper and aluminum. It accurately reflects the demand transmission pathways driven by downstream sectors like power investment, new energy vehicles, and AI data centers, providing a standardized tool to capture the benefits of manufacturing recovery.

1. Cycle Positioning: Global Manufacturing PMI Rebound and the Initiation of Active Restocking

Currently, the global economy is at a critical juncture of manufacturing recovery and inventory cycle transition. Data shows that in February 2026, the US ISM Manufacturing PMI rose to 52.4, the S&P Global Manufacturing PMI reached 51.6, both indicating continued expansion; Japan’s PMI also rebounded above the growth threshold. According to Fed Securities, the global manufacturing PMI climbed to a 44-month high of 51.9, reflecting a significant rebound in manufacturing momentum.

Meanwhile, major economies like China, the US, and Europe are gradually shifting from active destocking to active restocking. Citic Securities reports that, as demand for restocking releases, the price elasticity of upstream resource commodities is expected to increase. In this cycle, industrial non-ferrous metals, as the “foundation” of manufacturing, will see their rigid demand fully reflected once the restocking cycle begins.

2. Demand-Side Drivers: Three Major Downstream Sectors Reshaping Industrial Metal Demand

In traditional cycles, demand for industrial non-ferrous metals heavily depends on real estate and infrastructure investment. However, the core driver of this manufacturing recovery has undergone a structural shift—three emerging sectors are now the main sources of incremental demand:

• Power Investment: Accelerating construction of new power systems. Driven by the “dual carbon” goals and “computing and electricity” policies, grid investment and power equipment upgrades are speeding up. Copper, as the “main artery” of power transmission, is indispensable in cables, transformers, and other equipment; aluminum offers lightweight advantages in power device frames and heat sinks. Huatai Securities expects demand from energy storage, data centers, and power equipment to grow rapidly, significantly contributing to overall aluminum consumption.

• New Energy Vehicles: Dual forces of lightweighting and electrification. The expanding NEV industry increases copper per vehicle by 3-4 times compared to traditional fuel vehicles. Aluminum alloy bodies and battery shells greatly boost aluminum demand. The key role of rare earth permanent magnets in drive motors links rare earth demand closely with NEV penetration.

• AI Data Centers: Hidden resource consumption in computing power expansion. Rapid growth in AI infrastructure drives new metal demand. High-density computing deployments in data centers increase the need for cooling and power distribution systems, raising the use of copper and aluminum materials.

3. Tool Mapping: H11059 Index Precisely Anchors Core Transmission of Prosperity

The CSI Industrial Non-Ferrous Metals Index (H11059) is highly aligned with the above demand structure. It excludes precious metals like gold and silver, focusing on 30 listed companies in copper, aluminum, lead-zinc, rare earths, tungsten, molybdenum, and other industrial metals. As of March 2026, the top ten holdings account for nearly 55% of the index, concentrated in leading companies such as Jiangxi Copper, China Aluminum, Luoyang Molybdenum, and North Rare Earth, covering domestic and global industry leaders.

This composition enables H11059 to accurately reflect the transmission of manufacturing recovery prosperity:

• Copper and Aluminum as Core Pillars: Assigning key weights to copper and aluminum captures the demand from power and computing sectors. Leading firms like Zijin Mining, China Aluminum, and Yunnan Aluminum directly benefit from increased grid investments and data center construction. Zijin Mining’s 2025 copper production ranks first in China and fourth globally, with profit elasticity significantly above industry average during resource price cycles.

• Rare Earths and Strategic Metals as Key Drivers: North Rare Earth holds the world’s largest rare earth mine at Bayan Obo, with proven reserves accounting for 83.7% of China’s total. Driven by demand from NEVs, industrial motors, and robotics, the strategic value of rare earths continues to strengthen.

• Diversified Holdings to Mitigate Single-Stock Risks and Preserve Leading Premiums: Mining companies face uncertainties related to mineral rights, geopolitics, and safety. A single company experiencing production disruptions or cost overruns could see asymmetric stock impacts. Holding a complete basket of 30 constituent stocks via ETF effectively diversifies individual risks while maintaining exposure to the systemic risks of the industrial non-ferrous metals sector.

The Tianhong Non-Ferrous Metals ETF (159157) aims to simplify complex factors—such as ore pricing, macro liquidity shocks, and industry logic—into a transparent, tradable on-market code. In the context of rising global manufacturing PMI, inventory cycle shifts, and increasing demand from emerging sectors, it offers a rational asset allocation framework.