HK Stock Market Move | The collective rise of the aluminum industry stocks raises concerns about the stability of the electrolytic aluminum supply chain due to the escalation of the situation in the Middle East.

The aluminum industry stocks collectively rose, as of the time of this report, NANSHAN AL INTL (02610) rose by 5.69% to 66.9 Hong Kong dollars; Aluminum Corporation Of China (02600) rose by 4.15% to 14.57 Hong Kong dollars; CHUANGXIN IND (02788) rose by 3.26% to 24.7 Hong Kong dollars; and CHINAHONGQIAO (01378) rose by 3.11% to 37.84 Hong Kong dollars. On the news front, since February 28th, tensions in the Middle East have continued to escalate, leading to concerns in the market about the stability of the supply chain for aluminum production in the Middle East. China Securities Co., Ltd. pointed out that the tense military situation in the Middle East is threatening the global aluminum supply chain. The report stated that the six Middle Eastern countries have a combined capacity of approximately 7 million tons of aluminum production, with Iran alone having a capacity of nearly 800,000 tons, facing threats in both raw material inputs and finished product exports. Against the backdrop of weak global aluminum inventory resilience, aluminum prices are trending upwards. Citigroup noted that aluminum smelters typically maintain about one to two weeks of alumina inventory - in regions with more fragile logistics conditions, the inventory cycle may be longer - which to some extent limits the direct risks to production in the short term. The bank stated that the most likely near-term impacts at this stage are the rise in war risk premiums, sustained high freight rates, and additional shipping delays from the Gulf region. Goldman Sachs believes that the energy price hikes caused by the Middle East situation will also have a transmission effect on the global aluminum smelting profitability through the cost curve.