Minsheng Securities: The value of bauxite resources deserves attention, and the tight supply and demand situation of alumina is difficult to change.

Minsheng Securities released a research report stating that due to the decline in grade and depletion of domestic bauxite resources, the production growth is difficult. Overseas bauxite is heavily dependent on resources in Guinea, but the uncertain political environment in Guinea and factors such as shipping have led to the instability of overseas bauxite supply. Overall, the value of bauxite resources is worth attention. Additionally, constrained by disruptions in domestic and foreign ore supply, the increase in alumina production is limited. Looking at the fourth quarter, the amount of bauxite from Guinea will significantly decrease from September to October due to the rainy season, which will impact the operating rates of alumina enterprises. Coupled with environmental restrictions in some regions during the environmental protection season, the tight supply and demand situation for alumina is unlikely to change. Key points from Minsheng Securities: - Domestic bauxite is concentrated in distribution, with declining grades. - Since 2019, domestic bauxite production has been continuously declining. - Emphasis on the attributes of bauxite resources. - Short-term tight supply and demand for alumina, with no long-term worries. Minsheng Securities predicts a bauxite deficit of 4.85 million tons in 2024. On one hand, domestic bauxite production has not been able to recover as scheduled, leading to tight spot supply. On the other hand, the transport of bauxite from Guinea has been disrupted by multiple factors, and the increase in imports has not met expectations. In the long term, domestic bauxite production is unlikely to increase due to declining grades and depletion of resources, with a heavy dependence on Guinea. Overall, the attributes of bauxite resources are worth attention, with relatively high costs for domestic bauxite. The price center of bauxite is expected to gradually rise in the future. Aluminum stocks recommended by Minsheng Securities: Aluminum Corporation Of China (601600.SH), CHINAHONGQIAO (01378), Tianshan Aluminum Group (002532.SZ), Yunnan Aluminium (000807.SZ), Shandong Nanshan Aluminium (600219.SH). Risk warning: Downstream aluminum demand lower than expected, overseas bauxite production release exceeding expectations, Yunnan production restrictions exceeding expectations.