Investment Rating - The report does not explicitly state an investment rating for the aluminum industry but provides insights into demand trends and expectations for growth in specific sectors [1][3]. Core Insights - Aluminum demand in the solar power industry is expected to increase by 5-8% year-over-year (YoY) in 2025, despite a recent decline in demand since mid-May [1][4]. - Overall aluminum demand in China is projected to grow by 3-4% YoY in 2025, with a weaker growth forecast for the second half of the year compared to the first half [3]. - The demand for aluminum building profiles is anticipated to decrease by 8-10% YoY in 2025, showing a slight improvement from a 10% YoY decrease in 2024 [5]. Summary by Sections Aluminum Production - The weekly semi-aluminum products output was approximately 610kt in early July 2025, reflecting a 7.5% YoY increase, while the aluminum profile output was around 190kt, down 6% YoY [2]. - The weekly aluminum foil sheet output was about 370kt, showing a slight decline of 1% YoY [2]. Demand Trends - The aluminum demand from the solar power industry is primarily for industrial profiles and foil sheets, with a noted decrease in demand since mid-May, which has slowed into July [1][4]. - The apparent consumption of aluminum is expected to remain weak in July but may rebound in September and October, with potential growth in the automotive and electricity sectors [3]. Inventory Levels - Current inventory levels for aluminum profile mills are around 520kt, which is a 20% decrease YoY, with raw materials and finished goods inventories down 18% and 21% YoY, respectively [6].

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Group 1: Industry Overview - Guinea holds the world's largest bauxite reserves, accounting for 25.52% of the total [1] - Aluminum is the third most abundant metal in the Earth's crust, following oxygen and silicon [1] - Global bauxite resources are concentrated in a few countries, including Guinea, Australia, Vietnam, Brazil, Indonesia, China, India, and Russia [1] - China is the largest consumer and importer of bauxite, with a significant role in the global bauxite industry [1] - As of the end of 2024, the proven bauxite reserves globally are approximately 2.9 billion tons, with a static reserve-to-production ratio of about 64.44 years [1] Group 2: Market Demand and Trends - There is an increasing demand for lightweight aluminum profiles globally, particularly in the automotive and aerospace sectors [4] - The rapid development of industries such as new energy vehicles and photovoltaics is creating new opportunities for the aluminum profile industry [4] - The application of aluminum profiles in various sectors is deepening, leading to a significant increase in demand [4] Group 3: Company Rankings and Performance - In April 2024, the top companies in China's industrial aluminum profile sector were announced, with Conglin Aluminum Technology, Dingmei New Materials, and Fen'an Aluminum ranking in the top three [7][8] - The top companies in aluminum melting and casting services included Hunan Baling Kiln Energy Saving, Guangdong Jucheng Equipment Technology, and Zhejiang Lanwei Environmental Protection Equipment [9] - Major listed companies in the aluminum industry include China Aluminum, Nanshan Aluminum, Yun Aluminum, and Shenhuo Co., with revenues exceeding 30 billion yuan [10][11] - China Aluminum leads in revenue with 136.36 billion yuan from the primary aluminum segment, while Yun Aluminum and Shenhuo Co. also show strong performance [11][13]

Investment Rating - The report maintains a positive outlook on aluminum and lithium sectors while being less bullish on steel names, indicating a preference for aluminum and lithium investments [1][2]. Core Insights - The report emphasizes the need for steel supply reform, anticipates a near-term bottom for lithium prices, and expects potential corporate actions from aluminum companies in China [1]. - It highlights that aluminum and lithium stocks have performed well, while steel stocks have lagged behind, prompting a reassessment of investment strategies [1]. - The report ranks the sectors in the following order: aluminum > lithium > copper > steel > gold > battery > thermal coal > cement [1]. Summary by Sections Aluminum - The aluminum sector is viewed as undervalued relative to mid-term fundamentals, with expectations for a re-rating driven by a cap on smelting capacity and improved margins [2]. - Shareholder return policies from companies like Hongqiao and Chalco are generating investor interest, with Chalco initiating share buybacks [2]. Steel - The anticipated steel supply reform has been delayed, with internal communications between local governments and steel mills ongoing [6]. - Recent data from the National Bureau of Statistics (NBS) shows a decline in pig iron output of approximately 3% year-over-year in May 2025, contrasting with a 4% increase reported by MySteel [6]. Lithium - The report suggests that lithium prices are nearing a short-term trough at Rmb60,000 per ton, with expectations of production cuts to stabilize the market [8]. - Investors are concerned about the potential restart of suspended supply if prices rebound to Rmb70,000 per ton, alongside ongoing capacity additions in the pipeline [8].

Investment Rating - The investment rating for Aluminum Corporation of China (Chalco) is "Buy" with a target price of Rmb9.62 per share based on a 2.22x 2025E P/B [18] - The investment rating for Baoshan Iron & Steel is "Buy" with a target price of Rmb8.2 per share based on a 0.85x 2025E P/B [22] - The investment rating for Tianqi Lithium is "Hold" with a target price of HK$23.0 for H-shares and Rmb26.26 for A-shares [24][27] Core Insights - The report indicates cautious market expectations regarding demand recovery in the aluminum sector in China, with a near-term pecking order of steel > aluminum > lithium > copper > gold > battery > thermal coal > cement [1] - Total aluminum production in China for the week of June 12-18, 2025, was 845kt, flat week-over-week (WoW), and up 3% year-over-year (YoY) [2] - Total aluminum inventory in China stood at 722kt on June 19, 2025, reflecting a 1% increase WoW but a significant 38% decrease YoY [3] - Apparent aluminum consumption in China was 849kt during the same week, down 6% WoW but up 5.8% YoY for the year-to-date [4] Production Summary - China's total aluminum production year-to-date reached 20.9 million tonnes (mnt), representing a 3.2% increase YoY, while aluminum billet production was 8.4mnt, up 6.2% YoY [2] - Aluminum billet production for the week was 365kt, flat WoW, and up 9% YoY [2] Inventory Summary - The total inventory of aluminum ingots was 493kt, down 3% WoW and 40% YoY, while aluminum billet inventory was 229kt, up 9% WoW but down 30% YoY [3] - The inventory levels are lower than the same period in 2021-2024 on a lunar calendar basis [7] Consumption Summary - Apparent consumption of aluminum ingots was 885kt, down 3% WoW but up 1% YoY, while aluminum billet apparent consumption was 329kt, down 7% WoW but up 3% YoY [4] - Year-to-date apparent consumption of aluminum in China reached 21.6mnt, reflecting a 5.8% increase YoY [4]

Global Commodities Research 13 June 2025 J P M O R G A N Global Commodities The Week in Commodities At Any Rate: Aluminum's premium paralysis Global Commodities Research Natasha Kaneva (1-212) 834-3175 natasha.kaneva@jpmorgan.com JPMorgan Chase Bank NA Tracey Allen (44-20) 7134-6732 tracey.l.allen@jpmorgan.com J.P. Morgan Securities plc This is a summary note that consolidates the latest views of our global commodity strategists published over the week; to read detailed reports, refer to the hyperlinks. It ...

Alcoa (AA) FY Conference Summary Industry Overview - The aluminum industry is positioned for long-term growth due to its essential role in various sectors including renewable energy, electric vehicles, and industrial processes [3][4] - Alcoa emphasizes aluminum's importance in the transition to a low-carbon economy, highlighting its applications in solar panels and wind turbines [3] Key Financial Insights - Alcoa managed to limit the potential tariff cost increase from $30 million to $10 million by redirecting Canadian-produced metal to non-U.S. customers, preserving margins despite reduced revenue [6] - The second quarter guidance was adjusted due to changes in the aluminum segment's benefits from lower alumina prices, with expected benefits reduced from $165 million to $140 million [7] - The tax provision for the second quarter is expected to approximate zero, negating previously anticipated tax benefits [7] Tariff Impact - The recent increase in tariffs from 25% to 50% has led to a rise in the Midwest premium, which peaked at $0.68 per pound but has since declined [13] - Alcoa's Canadian production is negatively impacted by tariffs, as the costs exceed earnings from U.S. sales [15] - Ongoing discussions with the U.S. administration aim to address the negative impacts of tariffs on Alcoa and the broader aluminum industry [20][22] Operational Updates - The smelter in Spain is currently shut down due to a power outage, with plans to restart contingent on government feedback regarding the outage's cause [30][31] - Alcoa is progressing with a new mine approval in Australia, expected to enhance aluminum production and reduce costs significantly by 2029 [62][64] Market Dynamics - Chinese aluminum demand has slowed, but growth is observed in India and Southeast Asia, with a projected 7% CAGR in primary aluminum demand in India through 2029 [37] - Alcoa is exploring opportunities to sell idled assets to hyperscalers, with several sites being marketed for potential data center use [39][40] Balance Sheet and Financial Health - Alcoa's adjusted net debt target is set between $1 billion and $1.5 billion, with a current debt level of $2.1 billion, indicating ongoing deleveraging efforts [45][46] - The company has successfully managed its pension liabilities, which are now fully funded in the U.S. [46][53] Future Growth Opportunities - Alcoa is focusing on growth through its current portfolio and exploring new opportunities in the industry, including enhancing capabilities for recycled content to meet European demand [48][49] - The company is open to strategic opportunities but has no immediate announcements [49] Conclusion - Alcoa is navigating a complex landscape influenced by tariffs, operational challenges, and market dynamics while positioning itself for future growth through strategic investments and operational efficiencies [59][60]

Financial Performance & Outlook - Alcoa's Q1 2025 adjusted EBITDA excluding special items increased to $855 million, up from $677 million in Q4 2024[50] - Q1 2025 net income attributable to Alcoa Corporation was $548 million, or $2.07 per common share[50] - The company maintains a strong cash balance of $1.2 billion as of Q1 2025 and adjusted net debt of $2.1 billion[57] - FY25 outlook includes alumina shipments of 13.1 to 13.3 million metric tons and aluminum shipments of 2.6 to 2.8 million metric tons[59] Market Dynamics - Spot alumina price was $363/mt as of June 3rd, with over 80% of Chinese refineries being unprofitable at current prices[22] - LME aluminum price was $2,449/mt, with the Midwest premium at $971/mt[26] - U S primary aluminum apparent consumption is 4.1 Mmt and imports are 4.2 Mmt in 2024[32] Strategic Initiatives - Alcoa completed a $1 billion debt offering in Australia, primarily used to repay existing debt[16] - The company formed the San Ciprián joint venture and is resuming production at the smelter, expecting an EBITDA loss of approximately $70 million to $90 million in 2025[17, 75] - Alcoa is targeting an optimal capital structure with $10 to $15 billion adjusted net debt[58]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify their high valuations [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Kaiser Aluminum (KALU) Analysis - Kaiser Aluminum (KALU) has shown a four-week price change of 5%, indicating growing investor interest [4] - KALU has gained 15% over the past 12 weeks, with a beta of 1.43, suggesting it moves 43% more than the market [5] - KALU holds a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - KALU has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors and drive the stock price up [7] - The stock is trading at a Price-to-Sales ratio of 0.40, suggesting it is undervalued, as investors pay only 40 cents for each dollar of sales [7] Group 4: Additional Opportunities - Besides KALU, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8]

Group 1: Company Overview - Constellium SE (NYSE: CSTM) is a global leader in developing innovative, value-added aluminum products for various markets, including aerospace, packaging, and automotive [5] - The company generated $7.3 billion in revenue in 2024 [5] Group 2: Innovations and Products - At the 55th Paris Air Show, Constellium will showcase its high-performance aluminum products, including Airware, an aluminum-lithium solution designed for aircraft and spacecraft applications [2] - Airware provides superior strength-to-weight ratios, reduced material density, and excellent fatigue and corrosion resistance, making it suitable for more efficient, lower-emission aircraft [2] Group 3: Sustainability Initiatives - Constellium will unveil the first aluminum ingot fully manufactured at lab scale from end-of-life aircraft, utilizing a recycling and remelting process that meets new aircraft production standards [3] - This initiative is a collaboration between Constellium and TARMAC Aerosave, supported by Airbus, representing a significant advancement toward a circular economy in aerospace [3] Group 4: Future Projects - The exhibit will also highlight the company's progress on the Wing of the Future project, aimed at developing next-generation wing technologies for lighter, more fuel-efficient aircraft [4] - The role of aluminum in sustainable aviation will be explored, with additional resources available for further insights [4]