Shenwan's aluminum sector index recorded another significant rise. Following market close on April 9, Sichuan Huiyuan Optical Communications Co., Ltd. (000586), which had seen five consecutive trading limit gains, issued an announcement regarding abnormal stock price fluctuations.
The company clarified that its main operations include power optical cables, online monitoring systems for power grids, and plastic optical fibers. It does not possess production capacity for quartz fiber preforms or quartz fibers, relying entirely on external procurement for quartz fibers used in power optical cables. Power optical cables serve as supporting infrastructure in the electricity market. Plastic optical fiber products are primarily applied in decorative lighting, industrial controls, power equipment, and consumer electronics. Industrial control optical components compatible with plastic fiber communication (with speeds under 100 Mbps) are mainly used in sensor units on automated production lines and control signal transmission for high-voltage frequency converters, and are not high-speed optical modules required for data centers or AI computing.
The company noted recent high market attention on supply-demand improvements for fiber optic products and related cables and modules for computing data centers. It confirmed it currently has no business, orders, or technical reserves in these areas.
For 2025, the company forecasts a net profit attributable to shareholders ranging from a loss of 1.5 million to 3 million yuan, representing a year-on-year reduction in losses of 67.89% to 83.94%. The improved performance is mainly attributed to increased sales revenue from optical fiber cables and online monitoring services compared to the same period last year. Additionally, the company received a 2 million yuan subsidy for specialized and innovative SMEs, recorded as non-recurring profit or loss.
The stock has experienced consecutive trading limit gains recently, with a cumulative increase of over 60% since the beginning of April, bringing its latest total market capitalization to 4.859 billion yuan.
Geopolitical tensions continue to disrupt the aluminum supply chain. On April 9, the Shenwan aluminum index rose against the market trend by 2.3%, marking its third consecutive day of gains with a cumulative increase exceeding 10%. Among index components, Hesheng Co., Ltd. hit the upward trading limit. Mingtai Aluminium, Dingsheng New Materials, and Aluminum Corporation of China Limited (Chalco) rose by 8.74%, 5%, and 4.42% respectively. Xinbo Shares, Zhongfu Industrial, and Jiaozuo Wanfang also saw gains exceeding 2%.
Recent reports indicate that major US aluminum suppliers, including Rio Tinto Group and Century Aluminum Company, have raised premiums for key semi-finished aluminum products by approximately 12%. The price increase is primarily attributed to import disruptions from the Middle East due to the conflict involving Iran.
China Galaxy Securities pointed out that Middle Eastern capacity accounts for nearly 9% of global primary aluminum production. The recurring geopolitical conflicts in the region have impacted production and logistics for local aluminum plants. Following partial shutdowns at Qatar Aluminum and Aluminium Bahrain, Emirates Global Aluminium's Taweelah smelter suffered significant damage from missile and drone attacks by Iran. If the Taweelah smelter and Aluminium Bahrain's primary aluminum capacities were fully halted, the affected capacity in the Middle East would expand to 3.48 million tons, representing about 5% of global capacity, intensifying supply disruptions.
The institution also noted that Guinea, the world's largest exporter of bauxite, plans to restrict ore exports to stabilize prices. Combined with rising shipping and energy costs, this could push aluminum prices higher from the cost side. Furthermore, if a ceasefire agreement is not reached, there is a risk of further production cuts in the Middle East's primary aluminum capacity. Subsequent implementation of these cuts, against a backdrop of low global aluminum inventories, could drive prices even higher.
As of April 9, four aluminum companies have released performance forecasts for the first quarter of 2026. Based on the median forecasts, Shenhuo Shares and Tianshan Aluminum are expected to report net profits more than doubling year-on-year. Aluminum Corporation of China Limited (Chalco) and Mingtai Aluminium are forecast to see net profit growth exceeding 50%. The significant profit increases are largely linked to lower raw material costs and higher prices for finished products.
Shenhuo Shares anticipates a net profit attributable to shareholders of 2.25 billion yuan for Q1 2026, a 217.68% year-on-year increase. The company attributed this to a significant enhancement in profitability from its primary aluminum segment, driven by higher sales prices for primary aluminum products and lower costs for key raw material alumina.
Tianshan Aluminum expects a net profit attributable to shareholders of 2.2 billion yuan for Q1 2026, up 107.92% year-on-year. During the reporting period, partial capacity from the company's 1.4 million ton green, low-carbon energy efficiency improvement project for primary aluminum commenced operation, leading to an approximate 10% year-on-year increase in primary aluminum production and sales. Concurrently, sales prices for primary aluminum products rose about 17% year-on-year, while production costs were effectively controlled and decreased compared to the previous year, resulting in a strong start to the year through combined volume and price effects.
Aluminum Corporation of China Limited (Chalco) forecasts a net profit attributable to shareholders between 5.302 billion and 5.585 billion yuan for Q1 2026, representing year-on-year growth of 50% to 58%. The company achieved a significant improvement in operating performance, reaching its best level for the same period historically, by further increasing the ratio of self-mined resources and maintaining full, stable, and optimized production across all finished product capacities.
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