Source: Zhitong Finance
Aluminum prices recorded their biggest increase since at least 1987.
LME aluminum, nickel, and copper prices soared after the US and UK imposed sanctions on Russian metals.
According to the CITIC Construction Investment Research Report, in the early morning of April 13, Beijing time, the United States announced new trading restrictions on Russian aluminum, copper, and nickel. The new regulations restrict the use of Russian metals in global exchanges and OTC derivatives transactions. They apply to Russian aluminum, copper, and nickel produced on or after April 13. Metals produced before that date are not restricted.
The new sanctions will spur LME pressure positions and benefit the price of many metals, while affecting the logistics direction and country of related metals$NAIGAI (8013.JP)$Metal price comparison.
Russian metal deliveries are restricted, and copper and nickel can be added through other delivery brands, but since China has a 15% tariff on aluminum ingot exports, China+Russian raw aluminum accounts for more than 60% of the world's share, and the number of additional delivery brands from other overseas brands is probably limited.
Aluminum-related companies:
$CHINAHONGQIAO (01378.HK)$: Komo is expected to experience three favorable factors: 1) tightening supply/demand will support the rise in aluminum prices; 2) falling coal prices/higher hydropower adoption rates will support the decline in electricity costs; 3) increased dividend payments will drive the stock price. As a result, Komo pointed out that the company's net market ratio of 0.8 times is not high, lower than its global aluminum peers, which provides an attractive risk-reward ratio. Xiaomo pointed out that this is due to the company's low valuation, and that its subsidiaries may be listed on A-shares.
$CHALCO (02600.HK)$: Citi believes that due to the high demand for aluminum from solar installations and new energy vehicles, and demand continues to be tight, the price of aluminum in the mainland will remain high for some time, driving the profit margin of the aluminum industry. Citi released a research report stating that it maintained the “buy” rating of China's aluminum industry and adjusted the 2024/25 profit estimates of +53% and -5% to 9 billion yuan and 11.3 billion yuan, reflecting the increase in aluminum production and the increase in alumina price forecasts, while lowering the 2025 aluminum price forecast. The expected profit for 2026 is RMB 13.8 billion, and the target price was raised to HK$7.88.
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