Core Viewpoint - The alumina market is experiencing a supply surplus and rising inventory levels, leading to downward pressure on prices, although there are signs of stabilization in late October [1][9]. Supply and Production - In October, China's bauxite production was 4.7723 million tons, a slight decrease of 2.2% month-on-month and a 6.9% year-on-year decline; cumulative production from January to October reached 50.5155 million tons, up 5.2% year-on-year [2]. - Domestic bauxite inventory at alumina plants was 52.45 million tons, showing a slight decrease but remaining at a high level, indicating weak replenishment intentions [2]. - In October, China's metallurgical-grade alumina production was 7.7853 million tons, a month-on-month increase of 2.4% and a year-on-year increase of 6.8%; cumulative production from January to October reached 74.458 million tons, up 8.1% year-on-year [4]. Inventory Levels - As of last week, the total alumina inventory in China reached 4.732 million tons, continuing to rise, with electrolytic aluminum plants holding 3.269 million tons of alumina, indicating sufficient raw material reserves [5]. - The Shanghai Futures Exchange's total alumina inventory reached 248,000 tons, with warehouse receipts at 237,000 tons, both at relatively high levels [5]. Downstream Impact - In October, China's electrolytic aluminum production was 3.7421 million tons, a month-on-month increase of 3.5% and a year-on-year increase of 1.1%; however, production is expected to decline to 3.62 million tons in November due to environmental factors affecting some enterprises [8]. - The operating capacity for electrolytic aluminum remained stable at 4.406 million tons, with a utilization rate of 96.1%, indicating limited room for production increases [8]. Price Dynamics - Alumina prices are under significant pressure, nearing the industry's average cost line, which may lead to increased expectations for production cuts among alumina producers due to compressed industry profits [4][9]. - The overall supply-demand balance for alumina remains loose, with high inventory levels, suggesting limited further downside for prices due to strong cost support [9].

Investment Rating - The report maintains an "Outperform" rating for the company [6] Core Insights - The company reported stable overall performance with orderly resource expansion, achieving a revenue of 44.07 billion yuan in the first three quarters of 2025, a year-on-year increase of 12.5%, and a net profit attributable to shareholders of 4.40 billion yuan, up 15.1% year-on-year [6] - The increase in performance is attributed to rising aluminum prices and decreasing costs, with the average market price of electrolytic aluminum in Q3 2025 being 20,711 yuan per ton, a 2.5% increase quarter-on-quarter and a 5.9% increase year-on-year [6] - The company plans to implement a mid-term dividend of 3.20 yuan per 10 shares, amounting to approximately 1.11 billion yuan, with a dividend payout ratio of 40.10%, an increase of 7.87 percentage points compared to 2024 [6] Business Data and Profit Forecast - Total revenue forecast for 2025 is 59.33 billion yuan, with a year-on-year growth rate of 9.0% [5] - The net profit attributable to shareholders is projected to be 6.34 billion yuan for 2025, reflecting a significant year-on-year growth of 43.7% [5] - The gross profit margin is expected to improve to 16.8% in 2025, with a return on equity (ROE) of 18.6% [5] Financial Summary - As of September 30, 2025, the company reported a net cash flow from operating activities of 6.98 billion yuan, a year-on-year increase of 25.2% [6] - The company has a strong cash reserve with 10.68 billion yuan in cash and cash equivalents [6] - The company’s total assets and liabilities ratio stands at 23.21%, indicating a solid financial position [6]

Investment Rating - The report maintains an "Outperform" rating for the company [6]. Core Insights - The company reported stable performance in its Q3 2025 results, with total revenue of 44.072 billion yuan, a year-on-year increase of 12.5%, and a net profit attributable to shareholders of 4.398 billion yuan, up 15.1% year-on-year [6]. - The increase in revenue is attributed to rising aluminum prices and decreasing costs, with the average market price for electrolytic aluminum in Q3 2025 at 20,711 yuan per ton, reflecting a 2.5% increase quarter-on-quarter and a 5.9% increase year-on-year [6]. - The company has successfully expanded its resource base, with the Yangliu Aluminum Ore West District mining plan approved, aiming for an annual capacity of 600,000 tons [6]. - The company has also invested 500 million yuan for a 16.70% stake in Yunnan Aluminum Foil, enhancing its integrated aluminum industry chain [6]. Financial Data and Profit Forecast - Projected total revenue for 2025 is 59.33 billion yuan, with a year-on-year growth rate of 9.0% [5]. - The forecasted net profit attributable to shareholders for 2025 is 6.34 billion yuan, representing a significant increase of 43.7% compared to the previous year [5]. - The company's gross margin is expected to improve from 15.4% in 2025 to 21.7% by 2027 [5]. - The return on equity (ROE) is projected to be 18.6% in 2025, increasing to 19.5% in 2026 [5].

Report Industry Investment Rating - Aluminum: Cautiously bullish [9] - Alumina: Neutral [9] - Aluminum alloy: Cautiously bullish [9] - Arbitrage strategy: Long spread for SHFE aluminum [9] Core Viewpoints - The overall supply - demand fundamentals of domestic electrolytic aluminum have not changed significantly. Overseas, production cuts in Iceland and high power costs put pressure on overseas production. Consumption is expected to peak in November - December. With positive macro - factors, aluminum price declines are limited, and upward space may open if inventory reduction goes smoothly [6] - Alumina has a surplus supply - demand pattern. Although the spot price is low and market activity has increased due to winter storage demand, the price is hard to rise, and continuous restocking by electrolytic aluminum plants is unsustainable. There are few positive factors in the current fundamentals [7][8] Summary by Category Aluminum Spot and Futures - **Spot prices**: On November 3, 2025, the price of East China A00 aluminum was 21,440 yuan/ton, the Central Plains A00 aluminum was 21,300 yuan/ton, and Foshan A00 aluminum was 21,290 yuan/ton [1] - **Futures prices**: The opening price of the SHFE aluminum main contract on November 3, 2025, was 21,360 yuan/ton, and the closing price was 21,600 yuan/ton, up 315 yuan/ton from the previous trading day [2] - **Inventory**: As of November 3, 2025, the domestic social inventory of electrolytic aluminum ingots was 627,000 tons, the warrant inventory was 64,269 tons, and the LME aluminum inventory was 554,575 tons [2] Alumina Spot and Futures - **Spot prices**: On November 3, 2025, the alumina prices in Shanxi, Shandong, Henan, Guangxi, and Guizhou were 2,845 yuan/ton, 2,790 yuan/ton, 2,865 yuan/ton, 3,010 yuan/ton, and 3,015 yuan/ton respectively. The FOB price of Australian alumina was 319 US dollars/ton [2] - **Futures prices**: The opening price of the alumina main contract on November 3, 2025, was 2,798 yuan/ton, and the closing price was 2,789 yuan/ton, down 21 yuan/ton (-0.75%) from the previous trading day [2] Aluminum Alloy - **Prices**: On November 3, 2025, the procurement prices of Baotai civil - use raw aluminum and mechanical raw aluminum were 17,000 yuan/ton and 17,200 yuan/ton respectively, up 100 yuan/ton from the previous day. The Baotai quotation for ADC12 was 20,900 yuan/ton, up 100 yuan/ton from the previous day [3] - **Inventory**: The social inventory of aluminum alloy was 73,500 tons, and the in - factory inventory was 58,700 tons [4] - **Cost and profit**: The theoretical total cost was 20,905 yuan/ton, and the theoretical profit was - 5 yuan/ton [5] Market Analysis - **Electrolytic aluminum**: Overseas production cuts, high power costs, and positive macro - factors support the aluminum price. Consumption is expected to improve in the peak season, and the aluminum price may rise if inventory reduction is smooth [6] - **Alumina**: The spot price is low, and market activity has increased due to winter storage. However, the supply - demand surplus remains, and the price is hard to rise. Cost reduction from imported ore has not improved smelting losses [7][8]

Report Industry Investment Rating No relevant content provided. Core Views of the Report - The alumina market is in a state of weak reality versus production cut expectations. The price has stabilized, but a rebound remains weak without large - scale production cuts. The support level for the next month is expected to be around 2750 - 2800 yuan/ton [3][67]. - The electrolytic aluminum market has relatively low supply pressure, with overseas supply disruptions and an increasing domestic aluminum - water ratio. Consumption shows resilience, and with the copper - aluminum ratio repair logic, the aluminum price is expected to be positive. After a short - term adjustment, the aluminum price is likely to remain bullish [3][68][70]. Summary According to the Directory 1. Market Review - In October, the main alumina futures contract was still weak, with the price fluctuating narrowly between 2800 - 2880 yuan/ton, and the trading volume increased [9]. - In October, the Shanghai aluminum futures contract oscillated upwards, reaching a new high of 21425 yuan/ton. The LME aluminum was relatively stronger, reaching 2917 dollars/ton at one point. The Shanghai - LME aluminum ratio decreased from 7.63 to 7.32, and the import loss expanded to about 2500 yuan/ton [9]. 2. Macroeconomic Analysis Overseas - The Sino - US tariff negotiation in October had positive results. The Fed cut interest rates by 25BP in October and ended quantitative tightening in December. The market's expectation of a December interest rate cut decreased from over 90% to less than 70% [14]. - In the US, the September CPI rose seasonally, and the October Markit composite PMI rebounded. In the eurozone, the October composite PMI also rebounded, mainly due to the strong performance of the German service industry [15][16]. Domestic - In the first three quarters, China's GDP grew by 5.2% year - on - year, and the industrial added value increased by 6.2%. In September, the CPI and PPI improved, and the new social financing in September was 3.53 trillion yuan [17][19]. - From January to September, China's exports increased by 6.1% year - on - year, and imports decreased by 1.1%. The trade surplus was 8750.8 billion dollars. In September, exports and imports both increased significantly [18]. 3. Alumina Market Analysis Bauxite - In October, the supply of domestic bauxite was tight, and the price was stagnant. From January to September, China imported 157.637 million tons of bauxite. In September, the import volume was about 15.88 million tons [22]. - The price of domestic bauxite may continue to decline slightly due to the weak profit of downstream alumina and the seasonal decrease in the arrival of imported bauxite [23]. Alumina Supply - In September, China's alumina production was 7.623 million tons, and it is estimated to be about 7.85 million tons in October. In the long run, some high - cost enterprises may face production cuts [24]. - In September, the alumina import volume was 59,980 tons, and the export volume was 246,420 tons. Since mid - September, the import window has been open, which is expected to break the net export pattern [26]. Alumina Inventory and Spot - By the end of October, the alumina futures exchange inventory was 223,000 tons, an increase of 53,000 tons from the end of last month. The spot premium remained high and volatile [27]. Alumina Cost and Profit - In September, the average fully - cost of the Chinese alumina industry was 2932.46 yuan/ton, an increase of 2.08 yuan/ton from August, mainly due to the increase in raw material prices [28]. Alumina Outlook - The alumina market is still in a state of weak reality versus production cut expectations. The price has stabilized, but the rebound is weak without large - scale production cuts. The support level for the next month is expected to be around 2750 - 2800 yuan/ton [29][67]. 4. Electrolytic Aluminum Market Analysis Electrolytic Aluminum Supply - In September, China's primary aluminum production was 3.6488 million tons, and it is estimated to be about 3.772 million tons in October. The aluminum - water ratio is expected to rise to 77.3% in October [36]. - In September, the global (ex - China) electrolytic aluminum production was 2.436 million tons. In October, the production of Century Aluminum's Icelandic smelter decreased, and the overseas production is expected to continue to decline [36][39]. - From January to September, China's cumulative primary aluminum imports were about 1.9624 million tons, and the cumulative exports were about 182,300 tons. The cumulative net imports were 1.78 million tons [39]. Electrolytic Aluminum Inventory - By the end of October, the aluminum ingot inventory was 618,000 tons, an increase of 34,000 tons from the end of last month. The aluminum rod inventory was 146,000 tons, and the social inventory of aluminum ingots + aluminum rods was 772,000 tons, an increase of 65,000 tons [40]. - The SHFE electrolytic aluminum inventory warrant was 66,000 tons, an increase of 7000 tons from last month, and the LME inventory was 469,000 tons, a decrease of 44,000 tons [40]. Electrolytic Aluminum Spot - In October, the spot discount was close to par to a slight premium during the mid - month delivery, and was around a discount of 50 yuan/ton at the beginning and end of the month. The LME 0 - 3 month contract remained in a slight premium state [41]. Electrolytic Aluminum Cost and Profit - In October, the theoretical average fully - cost of the Chinese electrolytic aluminum industry was 15,793.93 yuan/ton, a decrease of 334.24 yuan/ton from last month. The monthly theoretical profit was 5188.93 yuan/ton, an increase of 546.18 yuan/ton from last month [42]. 5. Consumption Analysis Aluminum Processing - In October, the performance of aluminum processing was lackluster during the peak season. In November, the demand in the construction and some industrial fields will continue to weaken, but the demand in the new energy vehicle and power sectors will remain relatively stable [59]. Domestic Terminal Consumption - In the real estate sector, from January to September, the cumulative new construction area decreased by 18.9% year - on - year, the cumulative completion area decreased by 15.3%, and the cumulative construction area decreased by 9.4% [60]. - In the new energy vehicle sector, in September, the production and sales of new energy vehicles were 1.617 million and 1.604 million respectively, with year - on - year growth of 23.7% and 24.6% [61]. - In the power sector, from January to September, the State Grid completed fixed - asset investment of over 420 billion yuan, a year - on - year increase of 8.1%. It is expected that the annual investment will exceed 650 billion yuan for the first time [61]. - In the photovoltaic sector, in September, the newly - added photovoltaic installed capacity was 9.7GW, a month - on - month increase of 31.79% and a year - on - year decrease of 63.94%. From January to September, the newly - added installed capacity was 240.31GW, a year - on - year increase of 49.37% [62]. Aluminum Exports - In September, China's exports of unwrought aluminum and aluminum products were 521,000 tons, a month - on - month decrease of 1.8%. From January to August, the cumulative exports were 4.516 million tons, a year - on - year decrease of 8.1% [64]. 6. Market Outlook - Macroscopically, the Fed's policy and the Sino - US trade negotiation will affect the market. The domestic demand - side policy is worth looking forward to [67]. - In the alumina market, the supply pressure is still large, but the production cut expectation is increasing. The price has stabilized, but the rebound is weak without large - scale production cuts [67]. - In the electrolytic aluminum market, the supply pressure is small, and the consumption has resilience. With the copper - aluminum ratio repair logic, the aluminum price is expected to be positive. After a short - term adjustment, the aluminum price is likely to remain bullish [68][70].

Investment Rating - The report maintains a "Recommended" rating for the aluminum industry [1] Core Views - The macroeconomic environment is favorable, with the Federal Reserve continuing to lower interest rates and tariff pressures easing [6][10] - The demand season is gradually coming to an end, leading to potential downward pressure on aluminum water conversion rates and inventory performance [10] - Long-term supply growth in the aluminum industry is limited, while demand continues to have growth points, suggesting sustained high industry prosperity [10] Summary by Sections 1. Prices - As of October 31, the LME three-month aluminum closing price was $2888.0 per ton, up $31.5 from the previous week, a 1.1% increase week-on-week and a 10.4% increase year-on-year [22] - The Shanghai aluminum active contract closing price was 21300.0 yuan per ton, up 75.0 yuan from the previous week, a 0.4% increase week-on-week and a 2.1% increase year-on-year [22] - The average price of A00 aluminum in Changjiang was 21300.0 yuan per ton, up 170.0 yuan from the previous week, a 0.8% increase week-on-week and a 2.0% increase year-on-year [22] 2. Production - In September 2025, the electrolytic aluminum production was 361.5 million tons, a decrease of 11.8 million tons month-on-month and a decrease of 7.4 million tons year-on-year [54] - The alumina production in September 2025 was 760.4 million tons, a decrease of 13.5 million tons month-on-month and an increase of 38.3 million tons year-on-year [54] 3. Key Companies and Earnings Forecast - China Hongqiao (1378.HK): Price 26.93, EPS forecast for 2024/2025/2026: 2.35/2.65/2.89, PE: 11.5/10.2/9.3, Investment Rating: Buy [5] - Tianshan Aluminum (002532.SZ): Price 13.37, EPS forecast: 0.96/1.00/1.27, PE: 14.0/13.3/10.5, Investment Rating: Buy [5] - Shenhuo Co. (000933.SZ): Price 24.73, EPS forecast: 1.91/2.13/2.56, PE: 12.9/11.6/9.7, Investment Rating: Buy [5] - China Aluminum (601600.SH): Price 9.99, EPS forecast: 0.72/0.84/0.92, PE: 13.8/11.8/10.9, Investment Rating: Buy [5] - Yun Aluminum (000807.SZ): Price 22.99, EPS forecast: 1.27/1.88/2.07, PE: 18.1/12.2/11.1, Investment Rating: Buy [5]

Group 1 - The board of China Aluminum announced the resignation of Mr. Li Xiehua from his positions as a non-executive director and committee member due to work requirements, effective October 31, 2025 [1] - After his resignation, Mr. Li will no longer hold any positions within the company or its subsidiaries [1] - For the year 2024, China Aluminum's revenue composition is as follows: 96.33% from the aluminum industry and 3.67% from the energy sector [1] Group 2 - As of the report date, China Aluminum's market capitalization is 171.4 billion yuan [2]

Group 1 - The company, Jiaozuo Wanfang, announced the convening of its 10th Board of Directors' sixth meeting on October 30, 2025, which was held both in-person and via communication methods [1] - The meeting reviewed the company's Q3 2025 report and other documents [1] - For the first half of 2025, the company's revenue composition was entirely from the aluminum industry, accounting for 100.0% [1]

Group 1 - The company, Jiaozuo Wanfang, announced plans to invest in a project to produce 400,000 tons of recycled aluminum annually [1] - The project will enable the production of various aluminum products, including 100,000 tons of round bars, 75,000 tons of alloy ingots (liquid), 25,000 tons of die-cast parts, 180,000 tons of aluminum plates and strips, and 20,000 tons of copper-aluminum composite strips [1] - The total investment for the project is approximately 3.8 billion yuan, with around 3 billion yuan allocated for construction [1]

Report Investment Ratings - Aluminum: Cautiously bullish [9] - Alumina: Neutral [9] - Aluminum alloy: Cautiously bullish [9] - Arbitrage strategy: Long spread for SHFE aluminum [9] Core Views - The overall domestic supply - demand fundamentals of electrolytic aluminum remain unchanged. Overseas production cuts and macro - positive factors limit the depth of price corrections. The upward space for aluminum prices may open if inventory reduction is smooth [6]. - Electrolytic aluminum plants are actively purchasing alumina, but alumina prices lack upward momentum due to cost and supply factors. The current price valuation is low, and uncertainties around the Guinea election need attention [7][8]. Summary by Category Aluminum Spot and Futures - **Spot prices**: On October 28, 2025, the price of East China A00 aluminum was 21,160 yuan/ton, Central Plains A00 aluminum was 21,030 yuan/ton, and Foshan A00 aluminum was 21,070 yuan/ton [1]. - **Futures prices**: The opening price of the SHFE aluminum main contract on October 28, 2025, was 21,315 yuan/ton, and the closing price was 21,140 yuan/ton, down 120 yuan/ton. The trading volume was 187,481 lots, and the open interest was 285,793 lots [2]. Aluminum Inventory - As of October 28, 2025, the domestic social inventory of electrolytic aluminum ingots was 626,000 tons, an increase of 8,000 tons from the previous period. The warrant inventory was 66,243 tons, a decrease of 50 tons from the previous trading day. The LME aluminum inventory was 465,650 tons, a decrease of 3,625 tons from the previous trading day [2]. Alumina Spot and Futures - **Spot prices**: On October 28, 2025, the alumina prices in Shanxi, Shandong, Henan, Guangxi, and Guizhou were 2,845 yuan/ton, 2,790 yuan/ton, 2,865 yuan/ton, 3,025 yuan/ton, and 3,035 yuan/ton respectively. The FOB price of Australian alumina was 319 US dollars/ton [2]. - **Futures prices**: The opening price of the alumina main contract on October 28, 2025, was 2,829 yuan/ton, and the closing price was 2,817 yuan/ton, down 8 yuan/ton (-0.28%). The trading volume was 314,332 lots, and the open interest was 389,764 lots [2]. Aluminum Alloy - **Prices**: On October 28, 2025, the procurement prices of Baotai civil - grade scrap aluminum and mechanical scrap aluminum were 16,700 yuan/ton and 16,900 yuan/ton respectively, down 100 yuan/ton from the previous day. The Baotai quotation of ADC12 was 20,800 yuan/ton, down 100 yuan/ton from the previous day [3]. - **Inventory**: The social inventory of aluminum alloy was 75,300 tons, and the in - plant inventory was 60,700 tons [4]. - **Cost and profit**: The theoretical total cost was 20,703 yuan/ton, and the theoretical profit was 97 yuan/ton [5]. Market Analysis - **Electrolytic aluminum**: Overseas production cuts, stable consumption, and macro - positive factors limit the depth of price corrections. Attention should be paid to the inventory reduction rhythm [6]. - **Alumina**: Electrolytic aluminum plants are actively purchasing, but prices are under pressure due to cost and supply factors. The price valuation is low, and uncertainties around the Guinea election need attention [7][8].