S&P Global Ratings upgraded China Hongqiao Group's (HKG:1378) long-term issuer credit to BB+ from BB, among other ratings, according to a recent release.

The aluminum producer will see stronger earnings over the next two years due to steady production and higher aluminum prices, S&P said.

Industry conditions continue to favor China's aluminum producers as solid demand, a cap on production capacity, and narrow supply given the Middle East conflict anchor prices, S&P said.

Retained sales volume until 2027 and competitive cost positioning should also boost the company's position, the rating agency said.

The company has lessened the share of short-term debt in its capital structure, but the effort's durability is yet to be tested, the rating agency said.

The stable outlook stems from S&P's view that the company's healthy earnings and cash flow will support a debt-to-EBITDA ratio at under 1.5x over the next one to two years.

Notable shifts in the company's liquidity, operating cash flow, capital expenditure, short-term debt, or debt-to-EBITDA ratio could result in future rating actions.