HK Stock Market Move | Aluminum industry stocks have performed well, with strong support for aluminum prices still coming from demand for the "New Three" industries. Keep an eye on changes in industry chain costs this year.

The aluminum industry's stock gains are leading, as of the deadline for this report, CHINAHONGQIAO (01378) rose by 4.38% to HK$11.92, and Aluminum Corporation of China (02600) rose by 4.33% to HK$4.82. EB Securities released a research report stating that in the aluminum downstream demand structure in 2024, transportation and construction real estate accounted for the highest percentages at 24.7% and 23.8% respectively. From February to May 2024, the completed area of real estate has declined by more than 20% year-on-year, but the monthly average aluminum price has increased from 18,806 yuan/ton in February 2024 to 20,784 yuan/ton in May 2024, indicating that the demand for "new three items" such as new energy vehicles, photovoltaics, and battery foils continue to provide strong support for aluminum prices. According to calculations, the domestic aluminum electrolysis supply-demand pattern is showing a tight balance trend from 2024 to 2026, with surpluses of 490,000 tons, 240,000 tons, and shortages of 350,000 tons respectively, and the aluminum price center is expected to move up. Soochow pointed out that in reviewing this year, the upward trend in the cost of alumina price will dominate the investment logic for the whole year of 2024, and the industry chain profit is expected to return to the electrolytic aluminum side in 2025. Due to factors such as the suspension of domestic mining and the unsmooth transportation of overseas minerals, the price of alumina has risen by over 90% in 2024, and the profit of the electrolytic aluminum industry has shifted from the smelting side to the upstream alumina side. The investment logic for the whole year of 2024 revolves around aluminum companies with bauxite supply and alumina production capacity; looking ahead to 2025, the turning point in the cost side's decrease is clear, and industry chain profits are expected to return to the electrolytic aluminum side.