Since Q4 2025, the domestic aluminum average price has been 21,407 yuan per ton, up 3.4% compared to Q3, driving the year-to-date aluminum price to 20,646 yuan per ton, a 1.0% increase compared to the average price in the first three quarters of 2025. On January 5th, the domestic electrolytic aluminum price reached 23,300 yuan per ton, marking the highest level since March 2022. Institutions believe that since Q4, due to tightening global supply caused by power issues and persistent expectations of a surge in energy storage demand, the global aluminum supply and demand are expected to remain in a tight balance over the next two years.
The Shandong Provincial Department of Industry and Information Technology, along with other departments, jointly issued the "Shandong Province Nonferrous Metals Industry Steady Growth Work Plan." The primary objectives are that by 2026, the added value of the province's scale-above nonferrous metals industry will increase by approximately 5% year-on-year, aluminum industry operating revenue will exceed 660 billion yuan, and the proportion of electrolytic aluminum capacity meeting or exceeding energy efficiency benchmark levels will surpass 35%.
Huatai Securities pointed out that the profit center for electrolytic aluminum is expected to shift further upward in the first half of 2026. While the recent sharp rise in aluminum prices has led to cautious purchasing sentiment in the downstream electrolytic aluminum industry chain, and fundamental data appears weak—with significant inventory accumulation in the electrolytic aluminum segment, weakening spot basis, and mainstream aluminum billet processing fees turning negative—this has raised concerns among many investors about the sustainability of the price rally. Huatai Securities believes that weak downstream purchasing willingness amid the off-season and high prices is a normal phenomenon. Notably, this situation has led to persistently low raw material inventories downstream. As long as the logic of a tight long-term supply-demand balance for electrolytic aluminum remains unchanged, substantial downstream purchasing demand released after price adjustments could provide solid support for aluminum prices. The price floor center is likely to be significantly higher than before the current rally.
Furthermore, considering the potential price boost from anticipated strong demand during the upcoming "Golden March, Silver April" peak season, Huatai Securities suggests that weaker current downstream purchasing willingness might actually be more conducive to subsequent rises in aluminum prices and the profit center. They are optimistic that the electrolytic aluminum sector will continue its profit expansion trend in the first half of 2026.
Hong Kong-listed stocks related to electrolytic aluminum include: CHINAHONGQIAO (01378): As a leading global integrated aluminum producer, CHINAHONGQIAO's comprehensive industrial chain and scale advantages create a strong profit moat. High self-sufficiency rates in bauxite, power, and alumina secure its cost advantage per ton of aluminum. Institutions forecast the company's net profit attributable to shareholders for 2025-2027 to be 24.803 billion yuan, 25.81 billion yuan, and 27.96 billion yuan, representing year-on-year increases of +10.9%, +4.1%, and +8.3%, respectively.
CHUANGXIN IND (02788): In March 2025, CHUANGXIN IND planned to jointly invest in the Saudi Red Sea integrated aluminum industry chain project with Chuangxin Group, Chuangxin New Materials, etc., holding a 33.6% stake in the project. Guolian Minsheng Securities stated that CHUANGXIN IND's integrated layout spanning energy-alumina-electrolytic aluminum, with its electrolytic aluminum capacity located in the Inner Mongolia region which has an energy cost advantage, positions it well. Future grid connection of green power is expected to further reduce electrolytic aluminum costs. The company's overseas expansion of electrolytic aluminum capacity in Saudi Arabia makes it a rare player in the industry with potential for incremental electrolytic aluminum production.
NANSHAN AL INTL (02610): The planned 1-million-ton-per-year electrolytic aluminum project in Indonesia's Bintan Industrial Park by Nanshan Aluminum is a core initiative for building an integrated overseas "alumina-electrolytic aluminum" industrial chain. The first phase of the project plans to construct a capacity of 250,000 tons per year, with the investment entity being PT. Bintan Electrolytic Aluminium (BEA) and an investment of approximately 6.063 billion yuan. This project has a solid foundation, as Nanshan Aluminum has already built an alumina plant within the same industrial park with a total designed capacity of 4 million tons per year, providing ample raw material supply and significant synergistic cost advantages for the electrolytic aluminum project.
CHALCO (02600): As of the end of 2024, the company's bauxite resources amounted to approximately 2.7 billion tons. Within the "Chinese Special Valuation" system, its value is poised for reassessment. Amid an unstable geopolitical environment, focusing on "security" is a key economic theme. As electrolytic aluminum is a vital resource for the national economy, CHALCO, being a leader in bauxite, alumina, and electrolytic aluminum, is well-positioned. State-owned enterprise reforms are also expected to enhance efficiency, potentially leading to a valuation reshuffle for the company. As an integrated domestic aluminum industry chain enterprise with significant resource security capabilities, CHALCO exhibits substantial earnings elasticity in response to rising aluminum prices.