Summary of J.P. Morgan Aluminium Dashboard Industry Overview - **Global Aluminium Demand**: Increased by 2% year-to-date (YTD), with China showing a growth of 3% while the rest of the world (RoW) remains flat [1][1] - **China's Production**: Continues to hover just below the 45 million tonnes per annum (Mtpa) cap, with net imports of primary aluminium running at 2.5-3 million tonnes per annum [1][1] - **Global Inventories**: Visible inventories are approximately 1,170 kilotonnes (kt), remaining near decade lows, contrasting with rising copper inventories [1][1] - **Alumina Prices**: Down 53% YTD to $314 per tonne, positively impacting smelter margins, with the alumina/aluminium linkage at 11%, near historical lows [1][1] - **Aluminium Prices**: Up 11% YTD, but underperforming copper, which is up 25% [1][1] - **Midwest Premium**: Increased to a near-record ~$1,860 per tonne, close to 70% of the London Metal Exchange (LME) price, incentivizing imports after domestic stockpiles were largely depleted [1][1] - **Market Outlook**: The forward curve is in slight contango, with expectations of a surplus market over the next two years [1][1] Key Companies with Aluminium Exposure - **Overweight Recommendations**: - South32 (S32 AU) - Rio Tinto (RIO AU/RIO LN) - Norsk Hydro (NHY NO) - Press Metal (PMAH MK) [1][1] Future Price Projections - **2026/27 Base Metals Outlook**: Anticipates aluminium prices could reach $3,000 per metric tonne in the first half of 2026 due to higher copper prices and a balanced market, although significant supply growth from Indonesia is expected to undercut prices later in 2026 and beyond [2][2] - **Projected Surplus**: Forecasted surplus of 307 kt and 215 kt in 2026 and 2027 respectively [2][2] Financial Metrics of Key Companies - **Rio Tinto Ltd. (RIO AU)**: - Market Cap: $121.7 billion - EV: $140.1 billion - Price Target: $138.0 (3% upside) - EV/EBITDA: 5.9x for 2025, 5.6x for 2026 - PE: 13.8x for 2025, 12.8x for 2026 - Dividend Yield: 4.3% for 2025, 4.7% for 2026 [5][5] - **Norsk Hydro (NHY NO)**: - Market Cap: $13.9 billion - Price Target: $74.0 (3% upside) - EV/EBITDA: 5.5x for 2025, 5.3x for 2026 - PE: 12.7x for 2025, 10.8x for 2026 - Dividend Yield: 4.2% for 2025, 5.3% for 2026 [5][5] - **Press Metal (PMAH MK)**: - Market Cap: $13.1 billion - Price Target: $7.3 (10% upside) - EV/EBITDA: 17.4x for 2025, 15.6x for 2026 - PE: 25.5x for 2025, 22.9x for 2026 - Dividend Yield: 1.4% for 2025, 1.6% for 2026 [5][5] Global Production and Demand Summary - **China Aluminium Production**: Expected to increase from 35.8 Mt in October 2024 to 36.5 Mt in October 2025, a 2% increase [17][17] - **Global Aluminium Demand**: Projected to rise from 60.3 Mt in 2024 to 61.4 Mt in 2025, a 2% increase [17][17] Additional Insights - **Alumina Production in China**: Expected to rise from 79.8 Mt in 2023 to 83.7 Mt in 2024, with significant month-on-month increases anticipated [19][19] - **Global Market Dynamics**: The aluminium market is experiencing shifts due to varying production rates across regions, with China leading in both production and demand growth [19][19] This summary encapsulates the key insights and projections regarding the aluminium industry and specific companies, providing a comprehensive overview for potential investment considerations.