CITIC SEC has released a research report indicating that global primary aluminum production growth is expected to slow in 2025, with concurrent trends of planned capacity additions and reduction risks. Aluminum companies in India, China, and the Middle East are projected to lead in profitability growth, maintaining their advantageous industry positions. The analysis focuses on four key industry themes: valuation, dividends, growth, and resources. As a sector where China holds a competitive edge, the investment value of Chinese enterprises remains worthy of significant attention. Simultaneously, companies in India and the Middle East also possess distinct advantages. The report maintains a positive outlook on investment opportunities within the aluminum sector and recommends monitoring the industrial strengths emerging in new regions.
The primary views from CITIC SEC are outlined as follows: Global primary aluminum output growth is decelerating, with expansion plans and contraction risks progressing side-by-side. According to company announcements, major listed aluminum producers in China and overseas are forecast to produce 22.92 million tons and 21.25 million tons of primary aluminum in 2025, representing year-on-year increases of 3.9% and 1.3%, respectively. Based on the firm's and Bloomberg's projections, production growth from 2025 to 2028 will slow to 2.9% for China and 1.8% for overseas markets. Against the backdrop of record-high aluminum prices, overseas producers have announced multiple expansion projects for 2025, with total planned capacity exceeding 6 million tons per year. However, most of these projects are anticipated to commence operations between 2028 and 2030. Concurrently, the finalization of the Mozal shutdown and Hawesville sale highlights increasing risks related to power supply and the crowding-out effect of AI data centers on electricity availability. The interplay of these two major trends will shape the industry's long-term structure.
Chinese, Indian, and Middle Eastern aluminum firms continue to exhibit advantages in both profitability and valuation. On profitability, the calculated average single-process cost for primary aluminum among major global producers in 2025 is estimated to rise by 2.1% year-on-year, while selling prices are expected to increase by 8.1%. This leads to projected year-on-year growth of 4.8 percentage points for the EBITDA margin of the primary aluminum business and 0.2 percentage points for the overall corporate EBITDA margin. Companies from China, India, and the Middle East are leading in profitability growth, solidifying their dominant positions. Regarding valuation, as of June 4, the 2026 forecasted EV/EBITDA multiples for Indonesian and Chinese aluminum companies, based on Wind and Bloomberg data, stand at 4.6x/4.9x, which is below the global average of 5.6x. In terms of dividends, Bloomberg data indicates that Indian, Chinese, and Middle Eastern aluminum firms are expected to achieve leading dividend yields of 4.6%, 3.5%, and 3.0% in 2025, respectively. On the growth front, consensus forecasts from the firm and Bloomberg suggest that from 2025 to 2028, the average production growth rates for Chinese, Indonesian, European & North American, and Indian aluminum companies will be 8.4% (from a negligible base), 6.7%, and 5.6%, respectively, highlighting their substantial expansion potential.
Key Focus on Leading Chinese Aluminum Enterprises
Chinese aluminum companies maintain significant leads across multiple fronts, including valuation, dividends, and growth. Calculations show that, as of June 4, 2026, the average valuation of major listed companies in China's aluminum sector has retreated to a historical low range of 6-8x PE, with some individual stocks achieving a standout dividend yield of 8%. As a sector where China holds a competitive advantage, the long-term investment value of Chinese aluminum enterprises warrants focused attention.
Strengths of Indian and Middle Eastern Firms
Aluminum companies in India and the Middle East possess advantages in valuation, growth potential, and resource access.
Potential Risk Factors
Key risk factors include: weaker-than-expected growth in primary aluminum demand; faster-than-anticipated construction and commissioning of primary aluminum projects; accelerated construction and commissioning of alumina projects; rising global energy costs; greater-than-expected supply disruptions in the mining sector; increases in prices of raw and auxiliary materials; and intensification of global trade disputes.
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