Shares of aluminum producers led gains in the Hong Kong market on Tuesday, with CHALCO (02600) climbing 4.34% to HK$8.89, while CHINAHONGQIAO (01378) advanced 4.15% to HK$23.58. CHUANGXIN IND (02788) rose 3.72% to HK$17.58, and NANSHAN AL INTL (02610) gained 3.30% to HK$25.68.
On the news front, escalating concerns over shipping disruptions in the Strait of Hormuz have intensified, and the overseas supply deficit outlook for this year remains unresolved. According to Huayuan Securities, continued inventory drawdowns across the aluminum supply chain are underpinning price strength. Looking further out, supply-side constraints—including domestic electrolytic aluminum capacity nearing its ceiling in China and slow progress on overseas project development—combined with steady or potentially better-than-expected demand growth, could push the market into a supply shortage this year, setting the stage for a sustained upward price cycle.
In a separate research note, Industrial Securities highlighted that both overseas and domestic electrolytic aluminum inventories continue to decline, while new capacity overseas is being commissioned at a slower pace. Expectations for resumed production in the Middle East also remain conservative. As a result, aluminum prices are likely to remain firm in the short term, tracking copper's strength. Meanwhile, listed aluminum companies' share prices could benefit from a rebound driven by a repair in the duration structure of their valuations.
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