Alumina prices have surged by 40% since the fourth quarter of 2024, reaching a high of 5,700 yuan per ton in December 2024.

According to the Zhitong Finance APP, the Bank of America Global Research team has published a Research Report stating that despite the gradual recovery of supply, the industry's Bauxite supply tightness will not be completely resolved in the near future, and the Alumina supply may remain tight until the first quarter of 2025. Although China will have 12.3 million tons of new Alumina production capacity coming into Operation in 2025, it is estimated that only 6 million tons of Bauxite resources are secured, which means that the remaining capacity may face obstacles when starting operations. Therefore, Bauxite may become a cost support for Alumina next year.

The supply of Guinea ore and the production of alumina are the main points of contention in 2025.

CITIC SEC Research Reports indicate that the easing supply and demand situation, coupled with catalyzing events, has significantly weakened alumina prices. Looking towards 2025, it is believed that the central price of alumina will likely decline; supply constraints combined with improved demand expectations suggest that aluminum price elasticity is still promising. Bullish on the expanding profit margins for aluminum and the investment value of the aluminum sector driven by dividends and valuation logic.

China Securities Co.,Ltd. released a research report stating that the early commissioning of new projects is the main driving force behind the return of alumina prices to fundamental levels. Although falling alumina prices have dragged down aluminum prices, the fact that over 60% of aluminum plants are operating at a loss has suppressed the downside potential of aluminum prices, indicating that profits from electrolytic aluminum have bottomed out and are on the rise. Given that the global aluminum supply growth in 2025 is only 1.6%, against a backdrop of loose MMF and proactive fiscal policies, Consumer demand is quite resilient, and aluminum prices are expected to regain upward momentum, seizing the current profit reversal opportunity to position in related symbols.

Hong Kong stocks related to the Aluminum Industry Chain:

CHINAHONGQIAO (01378): Institutions estimate that its alumina sector will contribute a profit increase of 700 RMB/ton in the fourth quarter of fiscal year 2024, with a quarter-on-quarter increase of 1.8 billion RMB. The aluminum Business is expected to contribute a profit increase of 200 RMB/ton, or a quarter-on-quarter increase of 0.4 billion RMB. It is estimated that this means the net income for the fourth quarter will exceed 8 billion RMB. Due to high alumina prices, the current industry profit margin is at a loss of 1000 RMB/ton, but since CHINAHONGQIAO has an alumina self-sufficiency rate greater than 100%, the impact on its earnings is limited. Institutions believe that CHINAHONGQIAO's aluminum profit margins are still considerable.

Aluminum Corporation Of China (02600): The subsidiary focusing on alumina Business, Chalco New Materials, achieved a net income of 0.695 billion RMB in Q3 2024, in which Aluminum Corporation Of China holds a 100% stake. Yunnan Aluminium reported a net income of 1.301 billion RMB in Q3 2024, with Aluminum Corporation Of China holding a 29.1% stake. These two subsidiaries contributed a total net income of approximately 1.07 billion RMB to Aluminum Corporation Of China, while the cost increase of other subsidiaries led to a decline in the company's sales profit margin. For the first three quarters of 2024, the company achieved an output of metallurgical alumina of 12.57 million tons, an increase of 0.88% year-on-year. In Q3 2024, the company's electrolytic aluminum output was 1.99 million tons, a quarter-on-quarter increase of 0.14 million tons (mainly due to the early resumption of production at subsidiary Yunnan Aluminium this year) and an increase of 0.12 million tons year-on-year. In Q3 2024, alumina output was 5.55 million tons (of which metallurgical-grade alumina was 4.37 million tons), a quarter-on-quarter increase of 0.52 million tons.