Report Overview - Report Title: "Shanghai Aluminum Weekly Report (2.9 - 2.13)" [1] - Author: Zhu Senlin from Dayue Futures Investment Consulting Department [1] Industry Investment Rating - Not provided Core Viewpoints - After the Spring Festival, the market will enter a stage driven by both fundamentals (domestic seasonal demand) and policy (US tariff trends). Due to the long - term support of the 45 million - ton ceiling capacity constraint in China, aluminum prices are still likely to rise rather than fall. After the holiday, the price may open higher, mainly running between 23,000 - 24,000 yuan/ton. In the medium term, it is still optimistically oscillating upward. As the consumption peak season is approaching, short - term long positions are recommended [3] Summary by Directory 1. Market Review - During the Spring Festival holiday, LME copper prices were oscillating. After the holiday, the market will be driven by fundamentals and policy [3] 2. Fundamentals (Inventory Structure) 2.1 Supply - Demand Balance Sheet | Time | Production (10,000 tons) | Net Imports (10,000 tons) | Apparent Consumption (10,000 tons) | Actual Consumption (10,000 tons) | Supply - Demand Balance (10,000 tons) | | ---- | ---- | ---- | ---- | ---- | ---- | | 2018 | 3609 | 7.03 | 3615.03 | 3662.63 | - 47.6 | | 2019 | 3542.48 | - 0.64 | 3541.84 | 3610.44 | - 68.61 | | 2020 | 3712.44 | 105.78 | 3818.22 | 3816.92 | 1.3 | | 2021 | 3849.2 | 150.33 | 3994.63 | 4008.83 | - 14.2 | | 2022 | 4007.33 | 46.55 | 4053.88 | 4083.86 | - 29.98 | | 2023 | 4151.3 | 139.24 | 4290.51 | 4294.81 | - 4.3 | | 2024 | 4312.27 | 196.16 | 4502.5 | 4487.5 | 15 | [10] 2.2 Other Items - Also includes aluminum, bauxite, alumina, and aluminum rods, but no specific content is provided [6] 3. Market Structure 3.1 Spot - Futures Spread - No specific content is provided, only the data source is Wind [26][28] 3.2 Import Profit - No specific content is provided [29]

Core Viewpoint - The aluminum industry is experiencing a significant divergence in the pricing and profitability of electrolytic aluminum and alumina, with electrolytic aluminum profits rising sharply while alumina prices remain under pressure, leading to a clear shift in profit distribution within the industry [1][5]. Group 1: Electrolytic Aluminum Market - Since late December last year, the price of electrolytic aluminum has significantly increased, with the Shanghai aluminum futures price reaching a historical high of 26,185 yuan/ton in January [1]. - The profitability of the electrolytic aluminum sector has been supported by rising futures prices, despite weak demand from downstream processing enterprises [2]. - The production capacity of electrolytic aluminum continues to increase slightly, with daily output around 12.3 million tons, while downstream demand has weakened due to seasonal factors and high prices [2][4]. Group 2: Alumina Market - The alumina sector is facing severe structural oversupply, with nominal production capacity nearing 110 million tons and operational capacity around 93 million tons, significantly exceeding the demand from electrolytic aluminum [4]. - The average price of alumina has dropped from 2,750 yuan/ton to 2,650 yuan/ton since mid-December, falling below the industry average cost [3]. - Despite some production cuts and maintenance in alumina plants, the average daily output remains above 260,000 tons, indicating persistent high levels of supply [3][4]. Group 3: Industry Dynamics - The divergence in pricing and profitability between electrolytic aluminum and alumina is attributed to differences in capacity constraints, demand structure, and the nature of the products [5][6]. - The lack of a profit-sharing mechanism within the aluminum industry means that even with high profits in electrolytic aluminum, aluminum smelters are reluctant to accept high-priced alumina [4][5]. - The current market structure and supply constraints suggest that the disparity in profitability between electrolytic aluminum and alumina will continue until there are substantial changes in production capacity and profit distribution mechanisms [6].

Core Viewpoint - The Australian dollar (AUD) is experiencing strength against the US dollar (USD), driven by the Reserve Bank of Australia's hawkish stance and expectations of potential intervention in the yen by Japan and the US [1][2]. Group 1: Economic Indicators - The unemployment rate in Australia unexpectedly dropped from 4.3% to 4.1%, outperforming the market expectation of 4.4% [2]. - Employment increased significantly by 65,200 jobs, primarily driven by full-time positions [2]. - The national capacity utilization rate rose to 83.3%, the highest in 18 months, indicating that businesses are operating close to full capacity [2]. Group 2: Monetary Policy Outlook - There is a growing consensus that the Reserve Bank of Australia may need to raise interest rates in February due to signs of capacity constraints in the economy [2][3]. - The Australian Federal Bank's strategy team suggests that if the Consumer Price Index (CPI) exceeds a year-on-year increase of 4%, the likelihood of a 25 basis point rate hike in February will significantly increase [3]. - Despite differing opinions on the timing of rate hikes, there is a general agreement that the Reserve Bank of Australia can no longer maintain a loose monetary policy stance [3].

1. Industry Investment Rating - No information provided 2. Core View - The supply side of coal mines has little change for the time being, with the coal mine operating rate continuing to rise slightly last week; on the demand side, the steel mill's hot metal production has slightly decreased, but there are still expectations for winter storage replenishment; the market's expectation for the fifth round of price cuts has cooled down, and there are expectations for coal production cuts. In the short term, coking coal and coke are expected to fluctuate widely [7]. 3. Summary by Directory 3.1 Weekly View and Strategy - **Supply**: On January 16, 2026, the operating rate of coking coal mines in 523 sample mines was 88.47%, a week-on-week increase; the daily average output of raw coal in 523 sample mines was 1.9779 million tons. The capacity utilization rate of all-sample independent coking plants was 72.69%, a week-on-week decrease; the daily average output of all-sample independent coking enterprises was 634,500 tons. In terms of steel mills' coke production, the capacity utilization rate this week was 85.38%, and the daily output was 467,200 tons, a week-on-week decrease [7]. - **Demand**: As of January 16, 2026, the blast furnace operating rate of 247 steel mills surveyed by MYSTEEL was 78.84%; the daily average hot metal output was 2.2801 million tons, with a slight week-on-week decrease. The profitability rate of 247 steel mills was 39.83%. The average profit per ton of coke was -65 yuan/ton, a decrease of 20 yuan/ton compared with the previous week [7]. - **Inventory**: As of January 16, 2026, the inventory of 230 independent coking plants was 9.5483 million tons, a slight week-on-week increase; the coking coal inventory at ports was 2.989 million tons, a slight week-on-week decrease. The coking coal inventory of 247 steel mills was 8.022 million tons, a slight week-on-week increase; the coking coal inventory of all-sample independent coking enterprises was 11.3285 million tons, a slight week-on-week increase. The coke inventory at ports was 1.887 million tons, a slight week-on-week increase; the coke inventory of 247 steel mills was 6.5033 million tons, a slight week-on-week increase [7]. - **View**: In the short term, coking coal and coke are expected to fluctuate widely [7]. - **Strategy**: Participate in the short-term long side of the coking coal and coke 2605 contracts. The support level for coking coal 2605 is around 1,050 - 1,060 yuan/ton, and the support level for coke 2605 is around 1,620 - 1,630 yuan/ton. Pay attention to policy regulation, capacity constraints, and the customs clearance volume of imported coal in the later stage [7]. 3.2 Industrial Chain - No specific content provided for analysis 3.3 Spot and Futures Market - No specific content provided for analysis 3.4 Inventory - **Coking Coal Inventory (Mines, Ports)**: As of January 16, 2026, the inventory of 230 independent coking plants was 9.5483 million tons, a slight week-on-week increase; the coking coal inventory at ports was 2.989 million tons, a slight week-on-week decrease [28]. - **Coking Coal Inventory (Coking and Steel Enterprises)**: As of January 16, 2026, the coking coal inventory of 247 steel mills was 8.022 million tons, a slight week-on-week increase; the coking coal inventory of all-sample independent coking enterprises was 11.3285 million tons, a slight week-on-week increase [33]. - **Coke Inventory**: As of January 16, 2026, the coke inventory at ports was 1.887 million tons, a slight week-on-week increase; the coke inventory of 247 steel mills was 6.5033 million tons, a slight week-on-week increase [38]. 3.5 Supply - **Coking Coal Import and Export**: From January to November, the cumulative import of coking coal was 10.48559 million tons, and the export was 112,960 tons [44]. - **Coal Mine Output**: On January 16, 2026, the operating rate of coking coal mines in 523 sample mines was 88.47%, a week-on-week increase; the daily average output of raw coal in 523 sample mines was 1.9779 million tons [48]. - **Coking Output**: As of January 16, the capacity utilization rate of all-sample independent coking plants was 72.69%, a week-on-week decrease; the daily average output of all-sample independent coking enterprises was 634,500 tons [53]. - **Steel Mill Coke Output**: As of January 16, 2026, in terms of steel mills' coke production, the capacity utilization rate this week was 85.38%, and the daily output was 467,200 tons, a week-on-week decrease [58]. 3.6 Demand - **Hot Metal and Operating Rate**: As of January 16, 2026, the blast furnace operating rate of 247 steel mills surveyed by MYSTEEL was 78.84%; the daily average hot metal output was 2.2801 million tons, with a slight week-on-week decrease [66]. - **Steel Mill and Coke Profit per Ton**: As of January 16, 2026, the profitability rate of 247 steel mills surveyed by MYSTEEL was 39.83%. The average profit per ton of coke was -65 yuan/ton, a decrease of 20 yuan/ton compared with the previous week [72].

Group 1 - China Hongqiao (01378) saw its stock price increase over 3%, reaching a new high of 22.62 HKD, with a current trading price of 22.32 HKD and a trading volume of 339 million HKD [1] - The company expects a net profit attributable to shareholders of approximately 12.359 billion RMB for the first half of the year, representing a year-on-year increase of around 35% [1] - The significant growth in the company's performance is primarily attributed to the year-on-year increase in aluminum prices, coupled with a decrease in the cost of thermal coal [1] Group 2 - According to Guolian Minsheng Securities, domestic electrolytic aluminum production capacity is nearing its ceiling, with limited potential for new capacity additions in the future [1] - The demand side is supported by sectors such as the power grid and new energy vehicles, which are expected to show resilience, leading to a gradual emergence of a supply-demand gap in electrolytic aluminum [1] - The China Nonferrous Metals Industry Association announced on July 29 that it will strictly control the new production capacity of alumina, indicating a potential slowdown in the pace of new capacity coming online, which may improve the current overcapacity situation [1]