Report Information - Report Title: Aluminum Daily Report [1] - Report Date: May 30, 2025 [2] - Research Team: Non-ferrous Metals Research Team [3] - Researchers: Yu Feifei, Zhang Ping, Peng Jinglin [3] 1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints - Aluminum prices rose on the 29th due to the US court's action on Trump's tariffs, which alleviated international trade concerns. The Shanghai Aluminum futures closed at 20,200, up 0.25%, with the total open interest of the index increasing by 12,079 to 526,165 lots. [8] - In the spot market, inventory in East China has been decreasing, leading to strong price support from suppliers. Pre-holiday restocking by downstream buyers and low expected arrivals have tightened supply, keeping spot premiums high. [8] - Alumina prices have fallen below 3,000 yuan/ton due to reduced disruptions at Guinea's mines and improved profitability for alumina plants. However, political instability in Guinea remains a risk. [8] - On the supply side of electrolytic aluminum, there are no significant changes, and capacity constraints limit pressure. On the demand side, inventory decreased by 46,000 tons to 511,000 tons on Thursday compared to the previous week, providing some support for aluminum prices. However, the approaching off-season, high smelting profits, and the inhibitory effect of high prices on end-users may limit the upside. It is advisable to avoid risks before the holiday. [8] 3. Summary by Relevant Catalogs 3.1 Market Review and Operation Suggestions - **Market Performance**: Aluminum prices turned up again, with the Shanghai Aluminum futures closing at 20,200, up 0.25%, and the total open interest of the index increasing by 12,079 to 526,165 lots. [8] - **Spot Market**: In East China, inventory has been decreasing, leading to strong price support from suppliers. Pre-holiday restocking by downstream buyers and low expected arrivals have tightened supply, keeping spot premiums high. The spot premium in East China was 110 yuan/ton, 40 yuan/ton in Central China, and -40 yuan/ton in South China. The import loss was around -1,100 yuan/ton. [8] - **Alumina Market**: Disruptions at Guinea's mines have eased, and improved profitability for alumina plants has increased the expectation of rising production capacity. Prices have fallen below 3,000 yuan/ton, but political instability in Guinea remains a risk. [8] - **Electrolytic Aluminum Market**: On the supply side, there are no significant changes, and capacity constraints limit pressure. On the demand side, inventory decreased by 46,000 tons to 511,000 tons on Thursday compared to the previous week, providing some support for aluminum prices. However, the approaching off-season, high smelting profits, and the inhibitory effect of high prices on end-users may limit the upside. It is advisable to avoid risks before the holiday. [8] 3.2 Industry News - **Emirates Global Aluminium (EGA)**: EGA plans to invest $4 billion in an aluminum plant in Oklahoma, USA. The plant is expected to have an annual capacity of 600,000 tons of primary aluminum, with construction starting in late 2026 and completion in 2030. EGA will also cooperate with RTX and Tawazun Council on a gallium project. The location depends on securing a competitive long-term power supply agreement and favorable investment incentives and tax credits. [9][10] - **Norsk Hydro**: Due to the challenging market environment, Norsk Hydro will close its Birtley extrusion plant in the UK at the end of May. The plant has an annual capacity of about 12,000 tons and employs about 100 people. Customers and production activities have been transferred to other plants. [10] - **Hong Kong Exchange**: The London Metal Exchange (LME) has approved the addition of three more warehousing facilities in Hong Kong, bringing the total to seven. The first four facilities will start operating in July. [10] - **Guinea**: The Guinean transitional authorities have classified several mining rights as strategic reserve areas, including concessions, industrial and semi-industrial mining licenses, and exploration licenses for bauxite, iron, gold, diamonds, and graphite. [10]

Investment Rating - The industry investment rating is "Positive" for the electrolytic aluminum sector, indicating an upward trend in aluminum prices for 2025 [2][34]. Core Insights - The report highlights that the destocking of electrolytic aluminum is occurring earlier than in previous years, leading to a tightening supply-demand balance, which is expected to support aluminum prices [3][4]. - The average profit for the electrolytic aluminum industry has significantly improved, transitioning from losses at the end of the previous year to substantial profits in early 2025, driven by falling costs of alumina and electricity [3][18]. - The demand structure for aluminum is undergoing transformation, with significant growth expected in the new energy and power sectors, which will offset declines in the real estate sector [15][34]. Summary by Sections Supply and Demand Dynamics - As of February 2025, the domestic electrolytic aluminum production capacity reached 45.17 million tons, nearing its ceiling, with an operating capacity of 43.98 million tons and a utilization rate of 97.4% [15][34]. - The total inventory of electrolytic aluminum (ingots and rods) decreased by 25,100 tons compared to the previous week, indicating a shift towards destocking earlier than in past years [3][4]. Cost Analysis - The price of alumina has dropped significantly, with a reported price of 3,381 RMB/ton as of March 6, 2025, down 41.4% from its peak in December 2024, leading to a reduction in electrolytic aluminum production costs by approximately 4,597 RMB/ton [18][29]. - The price of coal has also decreased, with Q5500 coal prices falling to 700 RMB/ton, resulting in a corresponding drop in electricity costs for aluminum production [29][30]. Investment Recommendations - The report suggests focusing on companies with significant cost improvements and stable performance, such as Yun Aluminum, Tianshan Aluminum, and China Aluminum, as potential investment opportunities [34][35].