Report Information - Report Title: Aluminum & Alumina Industry Weekly Report [1] - Analyst: Wang Rong [2] - Date: October 26, 2025 [2] Investment Rating - No investment rating information is provided in the report. Core Views - Aluminum prices are showing a breakthrough trend, with the overall center of gravity trending upward. In the medium to long term, there is a bullish outlook on aluminum's unilateral price, volatility, and smelting profit. The domestic aluminum ingot social inventory is expected to decline in the fourth quarter, and there is a certain certainty that the price will break through 21,000 this year and early next year [3]. - Alumina has temporarily formed a bottom around 2,800, but the reduction is not continuous. The short - term spot market remains weak, and the price decline has narrowed this week [4]. Summary by Directory 1. Trading: Spreads, Volume, and Open Interest - **Term Spreads**: This week, the A00 spot premium weakened, with the average SMM A00 aluminum premium changing from 0 yuan/ton to - 30 yuan/ton, and the average SMM A00 aluminum (Foshan) premium changing from - 105 yuan/ton to - 115 yuan/ton. The alumina spot premium also weakened, with the Shandong alumina premium to the current month changing from 39 yuan/ton to 0 yuan/ton, and the Henan alumina premium to the current month changing from 94 yuan/ton to 55 yuan/ton [9]. - **Monthly Spreads**: The near - month spread of SHFE aluminum has narrowed [10]. - **Volume and Open Interest**: The open interest of the SHFE aluminum main contract has increased significantly, and the trading volume has increased slightly. The open interest of the alumina main contract has increased slightly and is at a historical high, and the trading volume has increased slightly [13]. - **Open Interest to Inventory Ratio**: The open interest to inventory ratio of SHFE aluminum has declined, and the open interest to inventory ratio of alumina has continued to decline and is at a historical low [18]. 2. Inventory: Bauxite, Alumina, Electrolytic Aluminum, and Fabricated Products - **Bauxite**: As of October 24, the steel - linked weekly imported bauxite port inventory decreased by 971,300 tons compared with last week, and the port inventory days remained basically the same. As of September, the national 43 - sample enterprise bauxite inventory increased by 420,000 tons month - on - month, and the bauxite inventory days in alumina plants increased. As of October 24, the steel - linked weekly Guinea port bauxite shipment volume increased by 1.5849 million tons compared with last week, and the Australian port shipment volume decreased by 588,300 tons. The Guinea and Australian sea - floating inventories both increased slightly. As of October 17, the bauxite outbound volume from Australian and Guinea ports increased slightly, and the SMM - caliber bauxite arrival volume increased significantly [23][28][29][34]. - **Alumina**: This week, the total alumina inventory continued to increase, with a week - on - week increase of 51,000 tons. The in - plant inventory, electrolytic aluminum plant inventory, and yard/on - the - way inventory increased, while the port inventory decreased. As of October 23, the national alumina inventory was 4.061 million tons, a week - on - week increase of 44,000 tons [44][51]. - **Electrolytic Aluminum**: According to the seasonal pattern, the domestic electrolytic aluminum social inventory usually reaches its peak in the fifth or sixth week after the holiday and then enters a destocking cycle. As of October 16, the aluminum ingot social inventory decreased by 8,000 tons to 607,000 tons this week [52]. - **Fabricated Products**: This week, the downstream aluminum rod spot inventory and in - plant inventory decreased. As of September, the SMM aluminum profile and aluminum plate - strip - foil finished product inventory ratios decreased slightly, while the raw material inventory ratios increased slightly [58][61]. 3. Production: Output, Capacity, and Operating Rate - **Bauxite**: In September, the domestic bauxite supply was not loose and remained stable. The SMM - caliber domestic bauxite output decreased slightly. Imported bauxite supply is an important factor driving the growth of the total domestic bauxite supply. In terms of provinces, the steel - linked Shanxi bauxite output increased slightly in September, while the SMM - caliber output decreased slightly. The steel - linked Henan bauxite output increased slightly, while the SMM - caliber output decreased. The steel - linked and SMM - caliber Guangxi bauxite outputs both decreased [64][67]. - **Alumina**: The alumina capacity utilization rate remained basically stable. As of October 24, the national total operating alumina capacity was 97.4 million tons, a week - on - week increase of 600,000 tons. This week, the domestic metallurgical - grade alumina output was 1.862 million tons, a week - on - week increase of 1,000 tons, remaining at a high level in recent years. The short - term alumina supply remains loose [71]. - **Electrolytic Aluminum**: As of September, the electrolytic aluminum operating capacity remained at a high level, and the capacity utilization rate remained high due to profit repair. As of October 16, the steel - linked weekly electrolytic aluminum output was 852,900 tons, a week - on - week increase of 20 tons, remaining at a high level in the past six years. With the arrival of the consumption peak season, the molten aluminum ratio increased seasonally, and the aluminum ingot casting volume is expected to decline month - on - month, reducing the supply pressure [74]. - **Downstream Processing**: This week, the recycled aluminum rod output decreased by 520 tons week - on - week. The aluminum rod plant load decreased slightly, and the aluminum rod weekly output decreased by 900 tons week - on - week. The aluminum plate - strip - foil output increased slightly, with a week - on - week increase of 900 tons. The domestic aluminum downstream leading enterprise operating rate decreased slightly by 0.1% week - on - week. The aluminum plate - strip operating rate increased, but there are expectations of demand decline. The aluminum foil operating rate decreased, and there is a risk of weakening terminal demand. The aluminum profile operating rate increased slightly, but the photovoltaic profile was affected by the reduction of downstream component factory production. The aluminum cable operating rate increased slightly, the recycled aluminum alloy operating rate remained flat, and the primary aluminum alloy operating rate increased [77][78][81][83]. 4. Profit: Alumina, Electrolytic Aluminum, and Fabricated Products - **Alumina**: This week, the alumina profit decreased slightly. The steel - linked metallurgical - grade alumina profit was 135.4 yuan/ton, and the smelting profit remained at a good level. Shandong, Shanxi, and Henan alumina profits remained stable, and Guangxi alumina had better profit performance due to relatively firm cost [85]. - **Electrolytic Aluminum**: The electrolytic aluminum profit remains at a high level. However, the complex global macro - economic situation, overseas geopolitical conflicts, and changing trade policies have increased uncertainties and interfered with market expectations [97]. - **Downstream Processing**: The aluminum rod processing fee decreased by 20 yuan/ton week - on - week, and the downstream processing profit remains at a low level [98]. 5. Consumption: Import Profit and Loss, Export Profit and Loss, and Apparent Demand - **Import Profit and Loss**: The alumina and SHFE aluminum import profit and loss have narrowed [107]. - **Export**: In September 2025, the export of unwrought aluminum and aluminum products decreased slightly by 14,000 tons month - on - month. The aluminum fabricated product export profit and loss showed differentiation, and the aluminum processing product export demand was hindered by trade policy adjustments [109][112]. - **Apparent Demand**: The commercial housing transaction area decreased, and the automobile production increased month - on - month [116].

Core Viewpoint - Aluminum is undergoing a value reassessment, transitioning from being viewed as a "common metal" to being recognized as a strategic asset in the global energy transition, akin to copper [2][6]. Supply and Demand Dynamics - Global aluminum prices have surged over 6% since October, reaching nearly three-year highs, driven by structural changes in supply and demand [1][3]. - Domestic aluminum production capacity is nearing its ceiling, with a utilization rate of 99.41%, indicating limited room for future growth [4][5]. - The demand for aluminum is being bolstered by emerging industries such as electric vehicles and solar energy, which are offsetting declines in traditional sectors [4][5]. Price Influences - The recent price increase is linked to macroeconomic uncertainties, including the U.S. government shutdown and rising gold prices, which have positively impacted non-ferrous metal prices [3][8]. - The correlation between copper and aluminum prices is strong, with rising copper prices enhancing aluminum's market demand as a substitute [5][6]. Future Outlook - Analysts predict that aluminum prices will likely remain high and may gradually increase, supported by stable supply and demand dynamics [7][8]. - The potential for aluminum to replace copper in various applications is growing, particularly in electrical wiring, due to its cost advantages [6][7]. - The global aluminum market is expected to face challenges from macroeconomic factors and geopolitical risks, which could influence price stability [8].

Group 1: Report General Information - The research object is Huafeng Aluminum Co., Ltd., and the industry is non - ferrous metals. The research date is September 1, 2025 [1][2][17] - The participating research institutions include a large number of investors [2] Group 2: Company Overview - Huafeng Aluminum focuses on the R & D, production, and sales of aluminum strips and foils. Its main products cover various series of aluminum alloy strips and foils in the heat transfer field, widely used in automotive heat exchange systems and new - energy vehicle power battery components. It has production bases in Shanghai and Chongqing and exports products to over 40 countries and regions. It has won honors such as the Ministry of Industry and Information Technology's Manufacturing Single - Champion Demonstration Enterprise and National Green Factory [24] Group 3: Company's 2025 H1 Performance - In the first half of 2025, the company's overall operation maintained a steady development trend. The core business advanced steadily, and the market layout was continuously optimized. The Chongqing Phase II project advanced as planned [25] - The company achieved an operating revenue of 5.964 billion yuan in H1 2025, a year - on - year increase of 20.87%; a total profit of 648 million yuan, a year - on - year increase of 2.02%; a net profit attributable to shareholders of the listed company of 570 million yuan, a year - on - year increase of 2.15%; and earnings per share of 0.57 yuan, a year - on - year increase of 1.79% [25] Group 4: Interaction and Q&A New Project Investment Progress - The "Intelligent Construction Project of High - end Aluminum Strips and Foils for New - Energy Vehicles with an Annual Output of 450,000 Tons" is under construction. It will introduce 1 + 1+4 hot continuous rolling mills, high - speed cold continuous rolling mills, and supporting shears. It will be built on the original land of Chongqing Huafeng and about 500 additional acres of land, with a total investment of 2.6 billion yuan. In May 2025, Chongqing Huafeng acquired the state - owned construction land use right of relevant plots in Baitao Street, Fuling District [26] Cost Reduction of the New Project - Due to the tight capacity of the previous hot - rolling process, the company has increased the purchase of semi - finished raw materials and outsourced processing in recent years, increasing costs. After the Phase II project is put into operation, the number of outsourced processing and semi - finished product purchases is expected to decrease, which will help reduce the comprehensive product cost. After the hot - continuous rolling equipment is put into operation, the company will carry out cost - reduction planning based on actual operations [27] Progress in Emerging Application Fields - The company is a material supplier for radiator customers and indirectly applies materials in emerging fields through downstream customers. Currently, the application in emerging fields is in its infancy, with most products in the verification, promotion, and small - batch production stages, and mass production will be promoted as downstream market demand grows [28] Group 5: Company's Future Plans - The company will continue to focus on the core business direction, steadily advance various tasks, and protect the rights and interests of all shareholders. It also hopes to maintain smooth communication with investors [29]

Group 1 - The core concept of "aluminum replacing copper" as a conductive material is being actively explored by technology companies, with recent developments indicating a potential breakthrough in this area [1][2] - TE Connectivity and Bowei Alloy recently held a closed-door seminar to discuss advancements and future plans regarding the "aluminum replacing copper" technology, inviting over 50 leading companies in the automotive and battery sectors [1][3] - Copper is currently the most widely used conductive material, essential for the electrification of vehicles, with an average of 60 kilograms of copper used in each electric vehicle, significantly more than traditional fuel vehicles [1][4] Group 2 - Aluminum has about two-thirds the conductivity of annealed copper, but its lower melting point and softness can lead to issues such as increased electrical resistance and potential electrical accidents [2][3] - TE Connectivity announced a new generation of low-voltage aluminum core conductors that reportedly solve the issue of electrochemical corrosion between aluminum and copper, enhancing aluminum's creep resistance to near that of pure copper [2][3] - The collaboration between Bowei Alloy and TE Connectivity faced challenges, particularly with the mechanical strength and thermal stability of different aluminum alloys, leading to a focus on developing aluminum alloys that can withstand high temperatures [3][4] Group 3 - The automotive industry is facing a "copper shortage" crisis, with 80% of copper concentrate in China being imported, and the demand for copper continuing to rise due to advancements in artificial intelligence and electrification [4] - The transition to aluminum replacing copper is seen as beneficial for alleviating resource pressures and reducing carbon emissions, as the carbon emissions from primary copper smelting are three times higher than those from aluminum [4]

Core Viewpoint - The company Bowei Alloy (601137.SH) reported a revenue of 10.221 billion yuan for the first half of 2025, marking a year-on-year increase of 15.21%, and a net profit of 676 million yuan, up 6.05% year-on-year. The growth is attributed to increased sales volume, particularly in the new materials sector, which saw a sales volume of 125,600 tons, an 11% increase compared to the same period in 2024 [1][2]. Group 1: Financial Performance - In the first half of 2025, Bowei Alloy achieved total revenue of 10.221 billion yuan, representing a 15.21% increase year-on-year [1]. - The net profit attributable to shareholders reached 676 million yuan, reflecting a 6.05% year-on-year growth [1]. - The sales volume of new materials reached 125,600 tons, contributing significantly to the company's revenue growth [1]. Group 2: Product Development and Market Potential - Bowei Alloy, in collaboration with Tyco Electronics, has made significant advancements in developing "aluminum substitute copper" composite materials for automotive low-voltage wiring harnesses, potentially opening a market space of approximately 36 to 48 billion yuan [2][4]. - The new composite material is expected to be ready for vehicle integration by the end of 2026, with mechanical properties comparable to copper wire under high temperatures [2][4]. - The automotive industry faces a "copper shortage" due to increasing demand, particularly as electric vehicles and AI technologies expand, making the development of aluminum alternatives critical [3][4]. Group 3: Technical Challenges and Innovations - The main technical challenges for "aluminum substitute copper" include addressing aluminum's creep and electrochemical corrosion issues, which have hindered its large-scale application in the automotive sector for over 20 years [4][5]. - Tyco Electronics has announced a new generation of low-voltage aluminum core conductors that reportedly overcome the electrochemical corrosion problem, which is crucial for the material's viability [4][5]. - Bowei Alloy's expertise in copper alloys is seen as a valuable asset in innovating aluminum alloys, with confidence in transferring knowledge from copper to aluminum development [5].

Core Insights - The air conditioning market in China is experiencing significant growth due to high temperatures and government subsidies, with production expected to reach 120.32 million units in the first half of 2025, a year-on-year increase of 6.9% [2] - Domestic sales are projected to grow by 9.0% to 66.54 million units, while exports are expected to decline by 7.5% to 56.56 million units [2] Market Dynamics - The air conditioning market has shown strong performance in the first half of the year, driven by government subsidies and an early onset of high temperatures in June [3] - From January to May, domestic shipments reached over 54 million units, marking a historical high with a year-on-year growth of 7.8% [4] - The Northeast region has seen an unprecedented surge in air conditioning sales, with some areas experiencing growth rates of up to 1000% due to extreme heat [4][5] Government Subsidies - The government subsidy program has expanded, allowing households to receive subsidies for up to three air conditioning units, significantly boosting demand [9] - Some consumers have reported difficulties accessing these subsidies, but the program is expected to continue in the long term despite temporary disruptions [10] Technological Trends - The main technological trends in air conditioning focus on energy efficiency and temperature control, with AI technology increasingly integrated into new products [12][14] - AI features allow for real-time temperature monitoring and adjustment based on user location, enhancing user experience [15] Consumer Guidance - Consumers are advised to select air conditioning units based on room size, brand reputation, and compatibility with existing home appliances [31][32] - The average price of air conditioning units has decreased, influenced by the introduction of entry-level products [36] Industry Challenges - The rising cost of copper has led to discussions about alternative materials, such as aluminum, although technical challenges remain before widespread adoption can occur [40][41] - The air conditioning industry is currently in a replacement cycle, with significant potential for market growth driven by technological advancements and changing consumer needs [29][30]

Group 1: Company Overview and Global Presence - Zhejiang Hailiang Co., Ltd. has established 23 production bases globally, with domestic bases located in provinces such as Zhejiang, Shanghai, and Guangdong, and overseas bases in countries including the USA, Germany, and Vietnam [1][2] - The company has built long-term stable business relationships with nearly 10,000 customers across over 130 countries or regions [1] Group 2: Product Development and Market Position - Copper foil is a key product for the company, with significant resources invested in its development; the business faced temporary profit pressure but is showing signs of recovery in 2024 [2] - The company is focusing on lithium battery copper foil and standard copper foil, supporting the growth of the new energy and electronic circuit sectors [2] - Hailiang's Gansu subsidiary is developing solid-state battery copper foil, with plans for mass production in 2025 [2] Group 3: Response to Market Changes - The company has a limited direct impact from recent tariff policy changes due to its established global production network, which mitigates risks from single market fluctuations [3] - Hailiang is proactively addressing the trend of aluminum replacing copper by enhancing its aluminum production capabilities, particularly in the air conditioning and new energy vehicle sectors [3]

Core Viewpoint - Gree Electric Appliances is exploring the potential for spin-off listings of various business segments, including industrial products, high-end equipment, precision molds, electronic components, and renewable resources, based on market conditions and strategic needs [3] Group 1: Management and Strategy - The recent online performance briefing was the first led by Zhang Wei after his appointment as president, showcasing a younger management team [3] - Gree's sub-brand, Jinghong, is targeting both the engineering and consumer markets with a focus on high cost-performance products [3][4] - The company aims to achieve complementary pricing strategies between the Gree and Jinghong brands to cater to price-sensitive consumers [4] Group 2: Product Development and Innovation - Gree Electric has no immediate plans to replace copper with aluminum in air conditioning units due to significant performance and reliability concerns, despite aluminum's lower cost [3] - The company has been involved in the chip business since 2015, with an initial planned capacity of 240,000 pieces per year, funded by its own resources [4] - Gree's self-developed chips are now widely used in home air conditioners, with approximately 30% of applications being self-researched, and are also utilized in commercial air conditioning, smart equipment, and industrial robots [4] Group 3: International Expansion - Gree is expanding its multi-brand strategy overseas, with plans to establish regional sales companies and smart manufacturing bases [4] - The company has achieved over 20% market share in the Middle East and several Eastern European countries, as well as in Brazil, Indonesia, and Canada [4] - Gree's international diversification has extended beyond air conditioning to include refrigerators, washing machines, and other home appliances [4]

Core Viewpoint - Gree Electric Appliances' Vice President Hu Yusheng stated that the company currently has no plans to replace copper with aluminum in air conditioning units due to significant performance and reliability concerns despite the lower cost of aluminum [1] Group 1: Company Insights - Copper is a core raw material for air conditioners, accounting for approximately 20% of the production cost [1] - Aluminum costs about 1/10 of copper in terms of material price, but it has inferior properties in terms of melting point, thermal conductivity, resistivity, corrosion resistance, and long-term reliability [1] - The company emphasizes that without guaranteed performance, quality, and reliability, there will be no shift to aluminum as a substitute for copper [1] Group 2: Industry Context - Market analysis suggests that rising copper prices could lead to increased production costs for air conditioners, making the "aluminum substitution" a significant cost-reduction strategy [1] - Several companies in the home appliance industry are already promoting the application of "aluminum substitution" in air conditioning units [1]

Group 1: Business Development Strategy - The company will focus on both overseas expansion and solidifying domestic business, leveraging early advantages in local capacity construction in regions like the U.S. and Southeast Asia [1] - The company aims to enhance overseas business contributions while maintaining a strong domestic presence [1] Group 2: Revenue and Profitability Insights - Revenue and gross margin growth in copper busbars is driven by high-quality demands from emerging sectors like data centers, with the company utilizing its raw material scheduling advantages [2] - The company has elevated its heat dissipation copper material business to a strategic level, integrating two research institutes to enhance technological implementation [2] Group 3: Market Adaptation and Technology - The company has prepared for the trend of aluminum replacing copper in air conditioning applications, having developed mature aluminum tube production capabilities over nearly a decade [2] - The company is well-equipped to handle cost changes due to industry iterations, with established technical reserves [2] Group 4: Impact of Tariff Policies - Recent tariff policies have had minimal impact on the company's overseas operations, thanks to its global layout and early advantages [2] Group 5: Copper Foil Business Outlook - The copper foil industry faces overall development pressure in 2024, with profit margins squeezed by copper price fluctuations; however, production utilization rates at Gansu Hailiang are improving [3] - The company is committed to continuous innovation in advanced copper foil technologies to provide differentiated, high-quality products [3] Group 6: U.S. Operations Performance - The U.S. factory is operating normally, with production capacity utilization steadily increasing and contributing positively to the business [3]