Shares of CHALCO (02600) are currently down more than 4%. At the time of writing, the stock has fallen 4.66% to HK$9.01, with a turnover of HK$756 million.
This movement follows reports of significant aluminum inventory accumulation in the Middle East, a situation caused by the blockade of the Strait of Hormuz. With tensions between the US and Iran easing and logistics returning to normal, the concentrated release of this stockpile is expected to put substantial downward pressure on aluminum prices. The potential volume for release is estimated to be between 500,000 and 1 million metric tons.
Adding to supply pressures, Indonesia's aluminum capacity is ramping up rapidly. The country's aluminum production this year is projected to exceed 2.2 million tons, introducing new supply into the market.
A recent report highlights a discrepancy in production data. The International Aluminum Institute estimates China's annualized aluminum production for April was around 44.7 million tons, while data from Shanghai Metals Market suggests 46 million tons. Official government figures are even higher, at 47.6 million tons, creating a gap of nearly 3 million tons between the different estimates.
The report's supply and demand model uses the 46 million ton figure as its baseline assumption. Based on this, a small global aluminum deficit of approximately 153,000 tons is projected for 2026. However, if the higher official production data proves accurate, the global aluminum market would instead shift into a state of surplus.
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