Summary of Conference Call Notes Industry Overview - The conference call discusses the aluminum and copper industries, highlighting the current market dynamics and future outlooks for both metals. Key Points on Aluminum - **High Copper-Aluminum Ratio**: The copper-aluminum ratio is currently at a historical high of approximately 4, indicating a significant potential for aluminum price increases as it is seen as a substitute for copper in various applications, particularly in the electrical and home appliance sectors [2][6] - **Aluminum Price Dynamics**: LME aluminum prices have reached new highs, while domestic aluminum prices remain relatively weak. This price discrepancy creates conditions for aluminum to experience a price correction or "catch-up" [1][2] - **Supply Constraints**: China's electrolytic aluminum capacity utilization is nearing its limit at 98%, with a total capacity of 45 million tons. This limits further production increases. Additionally, overseas production is constrained due to power supply issues in regions like Canada and Australia [8] - **Export Tax Changes**: The cancellation of export tax rebates has led to a significant decrease in China's aluminum and aluminum product exports in 2025 compared to 2024. However, there has been an increase in scrap aluminum imports, indicating strong domestic consumption capabilities [9] - **Inventory Levels**: Both domestic and global electrolytic aluminum inventories are at low levels, which supports price stability and potential increases in 2026 [10] Key Points on Copper - **Supply Growth Slowdown**: Global copper mine supply growth has slowed to 1-2% due to issues such as mining difficulties in Indonesia. This limited supply makes copper prices more resilient to declines [3][4] - **Market Optimism**: The market outlook for copper prices is optimistic, supported by favorable macroeconomic conditions and easing trade tensions between China and the U.S. [3][5] - **Profitability in the Lead Industry**: The profitability in the electrolytic lead industry is concentrated in the electrolytic segment, with production profits nearing 4,000 RMB per ton. This indicates a healthy market for related stocks [11] Other Important Insights - **Downstream Demand Variability**: The demand in the casting industry is mixed, with stable orders for automotive profiles but pressure on construction-related profiles. Overall, downstream consumption is maintaining a year-on-year growth trend [12] - **Future Outlook for Copper and Magnesium**: Both copper and magnesium are expected to remain attractive investment options due to ongoing supply issues. Magnesium, in particular, is anticipated to see a price increase due to its favorable fundamentals compared to copper [13]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - This week, the main contract of Shanghai Aluminum 2512 closed at 21,625 yuan/ton on Friday afternoon, a week-on-week increase of 1.41%. Shanghai Aluminum showed a strong and volatile trend. The direction of the Fed's December interest rate cut is unclear, the US government shutdown set a record, and the PMI performance of the manufacturing and service industries in the US and Europe diverged, resulting in macro uncertainties. During the off-season, the start - up rate of aluminum products decreased, but the inventory pressure was limited. There were disturbances in overseas supply, and the copper - aluminum ratio was at a high level, so Shanghai Aluminum was strongly volatile [3]. - Macroscopically, the direction of the Fed's December interest rate cut is unclear, the US government shutdown set a record, and the PMI performance of the manufacturing and service industries in the US and Europe diverged. In terms of supply, domestic ore is in short supply, while imported ore is sufficient, and the shipment of some Guinea ore has resumed. The weekly output of domestic alumina decreased, but the operating capacity is still at a high level year - on - year and is accumulating inventory again. The room for the increase of domestic electrolytic aluminum operating capacity is limited. In terms of demand, the overall start - up rate of aluminum products decreased this week, and it is expected to continue to decline next week. In terms of inventory, the spot inventory of electrolytic aluminum increased slightly week - on - week, the spot inventory of aluminum rods decreased slightly, and the LME aluminum inventory decreased week - on - week [3]. - The macro situation is mixed with long and short factors, and uncertainties are increasing. During the off - season, the start - up rate of aluminum products decreased, but the inventory pressure was limited. There were disturbances overseas, and the copper - aluminum ratio was at a high level. Shanghai Aluminum is expected to be strongly volatile, and it is recommended to go long at low levels. Alumina continues to accumulate inventory, and its fundamentals are still weak, so it is recommended to go short on rallies [3]. 3. Summary by Directory Price Data - This week, Shanghai Aluminum was strongly volatile. The spread between December and January contracts of Shanghai Aluminum continued to be under pressure week - on - week, and the LME aluminum 0 - 3M spread continued to weaken week - on - week. The high price of the Shanghai Aluminum futures market put pressure on the spot premium of aluminum ingots [7][11][15]. Fundamental Data - Supply of domestic ore is tight, while imported ore is sufficient, and the shipment of some Guinea ore has resumed [19][21]. - The monthly spread of alumina changed little. The weekly output of domestic alumina decreased by 13,000 tons to 1.84 million tons, but the operating capacity is still at a high level year - on - year. The alumina import window narrowed, and the overall inventory increased by 56,000 tons to 4.788 million tons [22][26][29]. - The room for the increase of domestic electrolytic aluminum operating capacity is limited. The weekly output of domestic electrolytic aluminum increased by 70 tons to 854,000 tons. Aluminum imports are at a premium. The spot inventory of electrolytic aluminum increased slightly week - on - week, the spot inventory of aluminum rods decreased slightly, and the LME aluminum inventory decreased week - on - week [37][39][44]. - The overall start - up rate of aluminum products decreased this week, and it is expected to continue to decline next week due to the high price of the futures market and the off - season effect [51][56]. - From October 27th to November 2nd, the transaction areas of new and second - hand houses in 10 key cities decreased year - on - year. The production plan of household air conditioners in November was 12.76 million units, a decrease of 23.7% compared with the actual performance of the same period last year. The production plan of refrigerators in November was 7.78 million units, a decrease of 9.4% compared with the actual performance of the same period last year. The production plan of washing machines in November was 7.93 million units, a decrease of 0.2% compared with the actual performance of the same period last year. From October 1st to 31st, the retail sales of new energy vehicles in the national passenger car market increased by 17% year - on - year. The production plans of domestic component enterprises in November varied, with the overall production plan expected to decline month - on - month [57][64][74].