NANSHAN AL INTL (02610) bucked the downward market trend, surging nearly 11%, bringing its cumulative stock price increase for the month to over 20%. As of the time of writing, the stock was up 10.75%, trading at HKD 60.25, with a turnover of HKD 161 million.
Globally, the primary aluminum market is in a state of tight balance, with Indonesia being a crucial provider of marginal supply increases. Despite Indonesia's ample planned production capacity for the long term, its power supply infrastructure is not adequately prepared, potentially leading to a significantly slower pace of capacity ramp-up than market expectations.
If aluminum prices remain consistently above $3,000 per ton, the likelihood of planned projects commencing production as scheduled would increase substantially. Conversely, should prices fall below $2,800 per ton, future supply increases from Indonesia could be more than 40% lower than anticipated.
NANSHAN AL INTL's planned 1 million-ton-per-year aluminum smelting project in Indonesia's Bintan Industrial Park is a core initiative to build an integrated "alumina-to-aluminum" industrial chain overseas. The first phase of this project aims to construct an annual capacity of 250,000 tons, with the primary investor being PT. Bintan Electrolytic Aluminium (BEA) and an estimated investment of approximately RMB 6.063 billion.
A solid foundation for this project lies in the company's existing alumina refinery within the same industrial park, which has a total designed annual capacity of 4 million tons. This provides a substantial raw material guarantee for the aluminum smelting project, resulting in significant synergistic cost advantages.
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