As of March 10, 2025, the profit for a single ton of electrolytic Aluminum is approximately 3,300 yuan per ton, with profits for Aluminum significantly on the rise.
According to the Zheshang Research Reports, the central price of Aluminum is showing an upward trend, and this upward momentum continues. In terms of inventory, Global inventory is at a low level, and social circulation inventory is reaching a turning point. Coupled with limited supply increase + good demand quality, as of March 10, 2025, the profit per ton of electrolytic aluminum is approximately 3300 yuan/ton, significantly increasing the profit per ton of Aluminum. It is recommended to pay attention to Yunnan Aluminium (000807.SZ) and other companies.
The main points from Zheshang are as follows:
Price: The central price of Aluminum is rising, and the upward trend continues.
Shanghai Aluminum price: As of March 10, 2025, the SMM closing price for Aluminum is 20760 yuan/ton, an increase of 1580 yuan/ton year-on-year, a growth of 8%.
London Aluminum price: As of March 10, 2025, the LME spot settlement price is 2716 USD/ton, an increase of 507 USD/ton year-on-year, a growth of 19%.
Aluminum inventory: Global inventory is at a low level, and social circulation inventory is reaching a turning point.
Aluminum inventory is at a historically low level. In 2024, Europe initiated sanctions against RUSAL, leading to a rapid increase in LME aluminum inventory of about 0.6 million tons, which has since been reduced, and the current inventory level in Futures has reached a new low in the last twelve months. The social circulation inventory has entered a reduction inflection point. By the end of February, the social inventory of electrolytic aluminum rods saw a reduction for the first time, with a weekly reduction rate of about 2%; the social circulation inventory of electrolytic aluminum ingots was about 0.87 million tons, and the reduction process successfully started on March 10, 2025.
Supply and demand: Limited increase in supply due to strict constraints + strong demand characteristics.
Supply side: Domestic supply is close to the production capacity ceiling, with idle indicators showing only 0.13 million tons of new capacity, and Yunnan's production increased by about 0.35 million tons year-on-year in terms of resumption; overseas capacity has a strong uncertainty due to the late startup, with a maximum of 0.55 million tons of capacity (about 0.28 million tons of electrolytic aluminum production) anticipated in the second half of 2025 if commissioning goes as planned.
Demand side: The downstream of electrolytic aluminum has undergone structural changes, and demand remains robust. After the Spring Festival, the operating rate showed a significant recovery, with good demand characteristics; in March, China's monthly production of photovoltaic cells was about 57 GW, with a rush for resources noted for 430/531; Lithium Battery total production in March was 134 GW, a year-on-year increase of 46% and a month-on-month increase of 14%; the State Grid's aluminum cable orders are expected to increase by 0.14 million tons in the 2024 bidding, and the first batch in March 2025 also saw a year-on-year increase of 0.03 million tons, a growth of 29%.
Profit: Redistribution of profits along the industry chain, significant improvement in profits per ton of aluminum.
As of March 10, 2025, the profit per ton of electrolytic aluminum is approximately 3300 yuan/ton, with profits per ton of aluminum significantly rising. Recommended to pay attention to: Yunnan Aluminium, Henan Shenhuo Coal & Power, CHINAHONGQIAO (Shandong Hontron Aluminum Industry Holding), Tianshan Aluminum Group, Henan Zhongfu Industrial, Aluminum Corporation Of China.
Risk Warning: Risks of changes in international political situations, risks of supply exceeding expectations, and risks of lower than expected downstream demand release.
