Concept tracking of Hong Kong stocks | It is difficult to change the fact of supply shortage even if the Strait is open for navigation, aluminum companies' profits follow the rise in prices (with concept stocks)

Iran announced that the Strait of Hormuz is open to commercial shipping. The LME aluminum fell on hearing this news, but more concerns about production resumption should not be priced in advance. Since March, the shutdown of capacity includes 265,000 tons in Qatar due to power shortages, 300,000 tons in Bahrain Aluminum due to alumina shortage, 1.6 million tons in Al Taweelah, a subsidiary of Emirates Global Aluminum (EGA) due to "uncontrolled shutdown" of equipment, and 520,000 tons in Mozambique due to the expiration of a power contract. The Middle East accounts for about 9% of global primary aluminum production, and aluminum smelting itself is an industry that consumes a lot of electricity. Therefore, the risk of blocking the Strait of Hormuz, shipping delays, smelters being attacked, and force majeure declarations will immediately amplify concerns in the market about the "rupture of spot supply". China Securities Co., Ltd. believes that the open navigation can bring material to the aluminum smelters in Bahrain and Qatar, with a production capacity of 600,000 tons potentially returning in 3 months. However, the resumption of production at EGA's stalled equipment will take at least 12 months. The loss caused by the war is real and should be priced in, so there is no need to worry too much about the depth of the price correction, especially under the backdrop of warming sentiment. According to JPMorgan, the aluminum market is transitioning from an old narrative of long-term oversupply to a new narrative dominated by capacity destruction, limited substitution, and regional supply imbalances. A target price of $4,000 per ton is no longer a radical scenario within this framework, but a natural result of the continued expansion of the supply black hole. JPMorgan expects that the London Metal Exchange (LME) aluminum price will surpass $4,000 per ton in the coming months, with an expected price of $3,800 per ton in the second quarter and an average price of $3,500 per ton for the whole year. Hong Kong-listed companies related to the aluminum industry chain include CHINAHONGQIAO (01378), Aluminum Corporation Of China (02600), CHUANGXIN IND (02788), and NANSHAN AL INTL (02610).