February 3, 2026 08:30 AM GMT China Equity Strategy | Asia Pacific Focus List Changes – China/HK and China A-share Thematic We add Chalco (601600.SS) and remove China Yangtze Power (600900.SS) in our China/HK Focus List and A-share Thematic List. We add Chalco (601600.SS) and remove China Yangtze Power (600900.SS) in our China/HK Focus List and A-share Thematic Focus List: Morgan Stanley Materials analyst Rachel Zhang believes the positive outlook for Chalco stems from the following: For more details on Cha ...

Investment Rating - The report initiates coverage of Chuangxin Industries with a BUY rating and a target price (TP) of HK$32, representing a 28% upside from the current price of HK$25 [3][8]. Core Insights - Chuangxin Industries presents a unique growth opportunity in the aluminium sector, driven by capacity expansion in Saudi Arabia and a significant cost advantage due to low green energy costs in China [1]. - The ongoing development of wind and solar power sources is expected to further reduce electricity costs by 2026-2027, enhancing profitability [1]. - The tight supply in the aluminium market is anticipated to support higher aluminium prices, with a 1% increase in aluminium prices projected to boost Chuangxin's earnings by 2.5% in 2026 [1]. Financial Summary - Revenue is projected to grow from RMB 13,815 million in FY23A to RMB 20,091 million in FY27E, with a notable increase of 29.1% in FY26E [2]. - Adjusted net profit is expected to rise significantly from RMB 1,003.6 million in FY23A to RMB 4,819.4 million in FY27E, reflecting strong growth potential [2]. - The earnings per share (EPS) is forecasted to increase from RMB 0.67 in FY23A to RMB 2.32 in FY27E, indicating robust profitability growth [2]. Capacity Expansion - Chuangxin currently operates 788 kt of electrolytic aluminium capacity in China and is expanding with a 500 kt project in Saudi Arabia, expected to be completed by Q2 2027 [7][14][16]. - The company has a high self-sufficiency rate for electricity, with plans to achieve over 50% of its power supply from green energy by 2027, significantly reducing costs [25][34][37]. Cost Structure - The current electricity cost for Chuangxin is RMB 0.33/kWh, lower than the industry average of RMB 0.40/kWh, with expectations to reduce this further to below RMB 0.20/kWh through green energy initiatives [25][37]. - The company’s captive coal-fired power plants provide 100% electricity self-sufficiency for aluminium smelting, enhancing its cost leadership in the sector [24][25]. Market Position - Chuangxin is positioned as a significant player in the aluminium market, being the 12th largest electrolytic aluminium producer in China as of 2024 [7]. - The company has established a strong customer base, with a significant portion of its revenue derived from major clients in the non-ferrous metal processing sector [39][41].

Summary of Aluminum Industry Research Report Industry Overview - The report focuses on the aluminum industry in China, specifically tracking high-frequency demand trends and inventory levels during the week of January 22 to January 28, 2026 [1] Key Points Production Data - Total aluminum production in China was 859,000 tons (kt), remaining flat week-over-week (WoW) but increasing by 3% year-over-year (YoY) and 3% YoY on the lunar calendar [2] - Aluminum billet production was 314,000 kt, showing a decrease of 5% WoW, an increase of 15% YoY, and a decrease of 8% YoY on the lunar calendar [2] - Year-to-date (YTD) aluminum production reached 4.3 million tons (mnt), up 2.9% YoY, while aluminum billet production was 1.7 mnt, up 7.6% YoY [2] Inventory Levels - Total aluminum ingot and billet inventory stood at 1,274 kt on January 29, 2026, reflecting a 6% increase WoW, a 2% increase YoY, and a 64% increase YoY on the lunar calendar [3] - Social and producers' inventory comprised 1,053 kt and 222 kt respectively, with social inventory up 6% WoW and 44% YoY, while producers' inventory increased by 9% WoW but decreased by 58% YoY [3] - For aluminum ingot, total inventory was 881 kt (+4% WoW, +28% YoY, +66% YoY on lunar calendar), and for aluminum billet, total inventory was 393 kt (+11% WoW, -31% YoY, +60% YoY on lunar calendar) [3] Apparent Consumption - Overall aluminum apparent consumption in China was 798 kt during the week, down 5% WoW but up 53% YoY, and down 5% YoY on the lunar calendar [4] - Apparent consumption for aluminum ingot was 850 kt (-2% WoW, +18% YoY) and for aluminum billet was 262 kt (-13% WoW, +243% YoY) [4] - YTD overall aluminum apparent consumption was 4.0 mnt, up 6.4% YoY, with aluminum ingot and billet apparent consumption increasing by 0.2% and 31.4% YoY respectively [4] Market Sentiment and Analysis - The report indicates that the aluminum ingot and billet inventory data is more representative for calculating overall aluminum demand due to the inclusion of various types of aluminum inventory [5] - Total aluminum inventory increased WoW, and the inventory level was higher than the same period in 2022-2025 on the lunar calendar [5] - Apparent consumption levels were higher than the same period in 2023 but lower than in 2024-2025 on the lunar calendar [7] Additional Insights - The report emphasizes the cautious market expectation regarding demand recovery in the aluminum sector [1] - The aluminum sector is currently ranked highest in the sector pecking order, followed by copper, battery materials, gold, coal, cement, and steel [1] This summary encapsulates the key findings and insights from the research report on the aluminum industry in China, highlighting production, inventory, and consumption trends along with market sentiment.

Core Viewpoint - Century Aluminum Company has announced the sale of its Hawesville, Kentucky site to TeraWulf Inc., which will transform the site into a digital infrastructure campus for high-performance computing and artificial intelligence workloads, while Century retains a minority equity stake in the project [1][3]. Group 1: Transaction Details - The Hawesville site will be redeveloped by TeraWulf Inc. into a digital infrastructure campus [1]. - Century Aluminum will maintain a non-controlling minority equity stake in the site, indicating ongoing interest in its productive reuse [1]. - The transaction is expected to create substantial new jobs, including both construction and permanent skilled positions, contributing to long-term economic activity in the region [2]. Group 2: Company Background and Future Plans - Century Aluminum is the largest producer of primary aluminum in the U.S. and has announced significant investments to more than double domestic aluminum production [3]. - Recent investments include the expansion of the Mt. Holly smelter in South Carolina and a new 750,000MT smelter to be built in Inola, Oklahoma, in partnership with Emirates Global Aluminium [3]. - The company emphasizes its commitment to investing domestically to meet national security needs for critical minerals [4]. Group 3: Advisory and Legal Counsel - BofA Securities served as the exclusive financial advisor to Century Aluminum for this transaction [4]. - FBT Gibbons and Vedder provided legal counsel to Century Aluminum [4]. Group 4: Company Overview - Century Aluminum operates primary aluminum smelting facilities in the U.S. and Iceland and is the majority owner of the Jamalco alumina refinery in Jamaica [5].

Emirates Global Aluminium has started initial meetings with investors in the United Arab Emirates ahead of a potential share sale, according to people familiar with the matter https://t.co/qHL2iUTMur ...

Core Viewpoint - The aluminum market is experiencing a significant supply shortage, driven primarily by increasing demand from the renewable energy sector, while global production capacity is constrained due to various regulatory and economic factors [4][6][12]. Group 1: Demand Drivers - The demand for aluminum is being significantly influenced by the renewable energy sector, as aluminum is essential for electric vehicles, solar panels, and wind energy infrastructure [7][8]. - By 2025, the average aluminum usage per electric vehicle in China is expected to reach 245 kg, contributing to a projected market size of over 200 billion yuan for aluminum in the electric vehicle sector by 2030 [7][9]. - The rapid growth in renewable energy installations, with solar and wind power capacities increasing by 41.9% and 22.4% respectively, is further driving aluminum demand [9][10]. Group 2: Supply Constraints - Global aluminum production is facing severe constraints, with China's production capacity nearing its limit due to regulatory measures aimed at reducing carbon emissions [13][14]. - The energy-intensive nature of aluminum production, requiring approximately 14,000 kWh of electricity per ton, is exacerbating supply issues as energy costs rise [13][16]. - Recent shutdowns of aluminum smelters, such as the Mozal aluminum plant in Mozambique, highlight the challenges faced by producers due to high electricity prices [14]. Group 3: Market Conditions - Current aluminum inventories are critically low, with the London Metal Exchange (LME) reporting stock levels sufficient for only 12-15 days of global consumption, far below the 25-30 days needed for market stability [18][20]. - The price of aluminum has surged, with U.S. buyers paying a premium of approximately 68% over LME prices, indicating a tightening market [19][20]. - The overall market dynamics suggest that the recent price increases in aluminum are not solely driven by industry-specific factors but are also influenced by broader commodity market trends and geopolitical factors [22].

Core Insights - The CEO of Century Aluminum Company, Jesse Gary, sold 150,000 shares for approximately $7.2 million, coinciding with a significant stock surge and upcoming major plans for the company [1][2] Company Overview - Century Aluminum Company is a leading producer of various metals, including primary aluminum products, operating in the U.S. and Iceland, with additional facilities in the Netherlands and Jamaica [5] - The company reported a revenue of $2.53 billion and a net income of $80.80 million for the trailing twelve months (TTM) [4] - The company has experienced a 149.34% increase in stock price over the past year [4] Recent Developments - On January 26, Century Aluminum announced a partnership with Emirates Global Aluminum to establish the first aluminum smoldering plant in the U.S. in 47 years, expected to create 1,000 jobs [8] - The U.S. administration is pushing to increase domestic aluminum production, with Century Aluminum holding a 40% stake in the new plant, which is significant given the high demand for aluminum [9] Transaction Analysis - The recent sale of 150,000 shares by Jesse Gary is larger than his previous median sell transactions, representing 20.84% of his total holdings at the time, compared to a prior median of 15.38% [7] - The shares were sold at a weighted average price of $48.19, close to the market close price of $48.71 on the transaction date, indicating the sale occurred at historically elevated price levels [7]

Financial Performance - Alcoa reported revenues of approximately $3.4 billion, showing a robust sequential increase driven by elevated aluminum and alumina prices along with enhanced shipment volumes [2] - Adjusted earnings were about $1.25 per share, surpassing market predictions, indicating a return to solid profitability after a volatile previous cycle [2] - Operating cash flow improved significantly, strengthening Alcoa's balance sheet and liquidity as it approaches 2026 [2] Operational Highlights - The quarter saw increased aluminum production as smelters operated at higher utilization levels, and alumina production benefited from fewer interruptions and improved cost management [5] - Management highlighted record output at various facilities, demonstrating the business's leverage when pricing and operations align [5] - Improvements helped mitigate persistent energy costs and inflationary pressures that have been significant concerns for investors [5] Stock Performance - Alcoa shares have shown strong gains over the past year, outperforming broader materials indices as investors anticipated higher earnings potential and increasing free cash flow [6] - The immediate market response to the recent earnings report was subdued, indicating that much of the favorable news had already been factored into the stock price [6] - Some profit-taking occurred as investors shifted focus from the recent quarter to expectations around margins and volumes in the upcoming quarters [6] Future Outlook - Alcoa reaffirmed expectations for stable aluminum and alumina production in 2026, with volumes generally in line with current run rates [7] - The company anticipates high capital expenditures to sustain operations, pursue decarbonization initiatives, and undertake selective growth projects [7] - Management acknowledged that specific assets, including major smelter restarts, will impact near-term earnings before becoming accretive later in the cycle [7] Investment Thesis - The investment thesis for Alcoa now hinges on execution and the commodity landscape rather than solely on recovery [8] - If aluminum prices remain stable and cost pressures diminish, the company's operating leverage could lead to another phase of earnings growth [8] - Alcoa's stock is currently valued at $64, approximately 8% above the current market price, reflecting a genuine turnaround [8]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - Aluminum is expected to trade at high levels with high volatility, alumina is predicted to operate weakly, and cast aluminum alloy will follow the trend of electrolytic aluminum [1] Summary by Related Catalogs Futures Market - The closing price of the main Shanghai aluminum contract was 25,590, down 50 from the previous trading day, up 1,535 from a week ago, up 3,405 from a month ago, and up 4,730 from three months ago. The night - session closing price was 24,935. The LME aluminum 3M closing price was 3,234, down 30 from the previous trading day, up 96 from a week ago, up 278 from a month ago, and up 497 from three months ago [1] - The trading volume of the main Shanghai aluminum contract was 1,013,509, an increase of 76,398 from the previous trading day, an increase of 657,707 from a week ago, an increase of 787,888 from a month ago, and an increase of 887,083 from three months ago. The open interest was 342,527, a decrease of 20,306 from the previous trading day, an increase of 4,567 from a week ago, an increase of 27,434 from a month ago, and an increase of 183,348 from three months ago [1] - The closing price of the main Shanghai alumina contract was 2,816, and the night - session closing price was 2,783. The trading volume was 833,895, a decrease of 39,746 from the previous trading day, an increase of 269,738 from a week ago, an increase of 635,849 from a month ago, and an increase of 600,606 from three months ago. The open interest was 468,246, an increase of 1,530 from the previous trading day, a decrease of 20,892 from a week ago, an increase of 305,892 from a month ago, and an increase of 111,873 from three months ago [1] - The closing price of the main aluminum alloy contract was 23,850, and the night - session closing price was 23,165. The trading volume was 24,936, an increase of 1,546 from the previous trading day. The open interest was 7,725, a decrease of 1,120 from the previous trading day and a decrease of 10,189 from a week ago [1] Spot Market - The domestic average price of alumina was 2,648, unchanged from the previous trading day, down 9 from a week ago, down 110 from a month ago, and down 333 from three months ago. The CIF price at Lianyungang was 330 US dollars per ton (2,720 yuan per ton), unchanged from the previous trading day, up 1 US dollar per ton from a week ago, down 5 US dollars per ton from a month ago, and down 16 US dollars per ton from three months ago. The FOB price of Australian alumina was 308 US dollars per ton, unchanged from the previous trading day, down 5 US dollars per ton from a month ago, and down 15 US dollars per ton from three months ago [1] - The price of Australian imported bauxite (Al:48 - 50%, Si:8 - 10%) was 60 US dollars per ton, unchanged from the previous trading day, down 8 US dollars per ton from a month ago, and down 9 US dollars per ton from three months ago. The price of Indonesian imported bauxite (Al:45 - 47%, Si:4 - 6%) was unchanged. The price of Guinean imported bauxite (Al:43 - 45%, Si:2 - 3%) was 62 US dollars per ton, unchanged from the previous trading day, down 1 US dollar per ton from a week ago, down 8 US dollars per ton from a month ago, and down 12 US dollars per ton from three months ago. The price of Yangquan bauxite was 500 yuan per ton, down 10 yuan per ton from the previous trading day, down 30 yuan per ton from a week ago, down 20 yuan per ton from a month ago, and down 50 yuan per ton from three months ago [1] - The pre - baked anode market price was 6,087, unchanged from the previous trading day, unchanged from a week ago, down 100 from a month ago, and up 422 from three months ago. The processing fee of Foshan aluminum rods was - 20, down 140 from the previous trading day, down 90 from a week ago, down 420 from a month ago, and down 280 from three months ago. The processing fee of Shandong 1A60 aluminum rods was 200, unchanged from the previous trading day, unchanged from a week ago, unchanged from a month ago, and down 50 from three months ago [1] - The refined - scrap spread of aluminum ingots was 1,371, an increase of 174 from the previous trading day, a decrease of 15 from a week ago, an increase of 816 from a month ago, and an increase of 1,126 from three months ago [1] Inventory - The domestic social inventory of aluminum ingots was 800,000 tons, an increase of 4,000 tons from the previous trading day, an increase of 32,000 tons from a week ago, an increase of 239,000 tons from a month ago, and an increase of 158,000 tons from three months ago. The warehouse receipts of aluminum ingots on the Shanghai Futures Exchange were 142,700 tons, a decrease of 100 tons from the previous trading day, an increase of 3,800 tons from a week ago, an increase of 66,500 tons from a month ago, and an increase of 79,500 tons from three months ago. The LME aluminum ingot inventory was 0 tons, a decrease of 500,000 tons from the previous trading day, a decrease of 509,300 tons from a week ago, a decrease of 519,600 tons from a month ago, and a decrease of 504,000 tons from three months ago [1] Profit and Loss - The profit and loss of electrolytic aluminum enterprises was 8,745.89, an increase of 600 from the previous trading day, an increase of 1,137.08 from a week ago, an increase of 3,185.58 from a month ago, and an increase of 4,031.64 from three months ago. The import profit and loss of aluminum spot was - 2,207.28, a decrease of 509.12 from the previous trading day, unchanged from a week ago, a decrease of 340.49 from a month ago, and a decrease of 112.72 from three months ago. The import profit and loss of aluminum 3M was - 1,380.63, an increase of 17.61 from the previous trading day, an increase of 198.79 from a week ago, an increase of 460.01 from a month ago, and an increase of 457.41 from three months ago. The export profit and loss of aluminum sheets and coils was 3,822.36, a decrease of 19.83 from the previous trading day, an increase of 478.52 from a week ago, an increase of 46.89 from a month ago, and an increase of 695.42 from three months ago [1] - The profit and loss of Shanxi alumina enterprises was - 167, unchanged from the previous trading day, an increase of 44 from a week ago, a decrease of 35 from a month ago, and a decrease of 130 from three months ago [1] - The theoretical profit of ADC12 was 426, and the price of Baotai ADC12 aluminum alloy was 24,000, an increase of 300 from the previous trading day, an increase of 700 from a week ago, an increase of 2,800 from a month ago, and an increase of 3,500 from three months ago. The price difference between Baotai ADC12 and A00 was - 860, a decrease of 300 from the previous trading day, a decrease of 420 from a week ago, a decrease of 240 from a month ago, and a decrease of 460 from three months ago [1] Other Information - The trend strength of aluminum is 1, alumina is 0, and aluminum alloy is 1. The trend strength ranges from - 2 to 2, with - 2 being the most bearish and 2 being the most bullish [3]

Group 1 - Chinalco and Rio Tinto will acquire a 69% stake in Companhia Brasileira de Aluminio for approximately $903.5 million [1]