China Hongqiao (01378) rose more than 6%, reaching a high of HK$35.56 to set a new listing record. As of writing, the stock was up 6.86% at HK$35.5, with a turnover of HK$811 million. On the news front, LME aluminum broke through the $3,000 per tonne mark at the start of the new year, hitting its highest level since 2022. The main aluminum contract on the Shanghai Futures Exchange also surpassed the RMB 24,000 per tonne level.

CSC Financial noted that renewed market concerns over the stability of aluminum supply have emerged following news that Mozambique's Mozal aluminum smelter will transition to an indefinite shutdown starting March 15, 2026. The brokerage believes that as PMI rebounds in major overseas economies, boosting aluminum demand, global primary aluminum demand is expected to increase by 1.5 to 1.87 million metric tons in 2026, representing growth of 2% to 2.5%.

With the market in a tight supply-demand balance, further complicated by power supply threats to production, aluminum prices are more prone to increases than decreases, and profits are expected to continue expanding at elevated levels. Huachuang Securities research points out that since the fourth quarter, global supply has tightened due to power issues, coupled with persistent expectations for a surge in energy storage demand.

The brokerage forecasts that global aluminum supply and demand will remain tightly balanced over the next two years. Current combined LME and domestic aluminum inventories total approximately 1.2-1.3 million metric tons, with safety stock levels expected to stay low, providing upward support for aluminum prices. Additionally, considering the current high premium for U.S. aluminum nearing 70%, if power shortage concerns escalate leading to production cuts in the United States, aluminum could demonstrate even greater price elasticity.

With aluminum production costs declining, primary aluminum profits are likely to remain high, making the sector attractive for both its dividend potential and price elasticity. As a global leader in primary aluminum production capacity, China Hongqiao continues to advance its high dividend and share repurchase programs, gradually highlighting its attributes as a dividend asset and positioning itself to be a core beneficiary of these market dynamics.