On the morning of May 28, the non-ferrous metal sector continued to show weakness. As of the time of publication, the Non-Ferrous Metal Mining ETF (159690) fell by 2.88%, with constituent stocks such as Zijin Mining dropping over 6%, and other significant declines seen in Xinyi Silver, Luoyang Molybdenum, and China Aluminum.

Overnight, commodities faced a collective sell-off, with gold, copper, and oil all declining—WTI crude oil fell by 4.77%, dropping below $90 per barrel; COMEX gold decreased by about 2% to around $4,400 per ounce, hitting a nearly two-month low; LME copper dropped by 0.7% to around $13,500 per ton.

Industry insiders believe that the sharp decline in commodities is due to a combination of two major bearish factors.

First, the U.S.-Iran negotiations have seen setbacks. Despite previous optimistic expectations in the market regarding a "framework agreement" between the U.S. and Iran, Iran subsequently publicly denied reaching any so-called "memorandum of understanding" with the U.S., and there was a brief exchange of fire in the Strait of Hormuz, leading to a sharp decline in geopolitical risk appetite.

Second, the hawkish signals from the Federal Reserve continue to resonate. Minneapolis Fed President Neel Kashkari clearly stated in Tokyo that "the Fed's current primary concern is inflation risk," and even if a U.S.-Iran agreement is reached, normalizing supply chains will still take months. The market pricing for interest rate hikes within 2026 remains around 17 basis points. The U.S. dollar index has stabilized above 99, putting continued pressure on the valuation of dollar-denominated commodities.

Guotai Junan Securities pointed out that the market currently "lacks pricing anchors"—the timeline for the U.S.-Iran agreement and the Federal Reserve's policy path both carry significant uncertainty. Core PCE data and the second estimate of Q1 GDP are the most important short-term catalysts; if the data exceeds expectations, it will further strengthen rate hike expectations.

Despite short-term macro pressures, the medium to long-term fundamentals of non-ferrous metals supply contraction remain unchanged. Founder Securities' mid-term strategy indicates that in the first half of 2026, major overseas copper companies have cumulatively revised down their production guidance by nearly 300,000 tons, and copper smelting spot TCs have dropped to a historical low of -$104 per dry ton, indicating a high certainty of tight supply at the mining level. In terms of aluminum, domestic social inventory has decreased from 1.49 million tons to 1.408 million tons, with Guinea's mining restriction policy set to take effect in June.

Bank of China Securities believes that the marginal impact of the Federal Reserve's hawkish stance on non-ferrous metals is limited, and there remains considerable uncertainty about whether rate hikes will actually materialize.

The Non-Ferrous Metal Mining ETF (159690) tracks the CSI Non-Ferrous Metal Mining Theme Index, focusing purely on upstream mineral resource companies, making it the most directly elastic to fluctuations in metal prices. For investors optimistic about the global resource supply contraction trend and who believe that short-term macro disturbances will not change the long-term upward shift in price centers, the current emotional pullback may provide a window for buying on dips