Tensions in the Middle East have led to a critical shortage in aluminum supply, resulting in substantial first-quarter profit growth for several A-share companies within the aluminum industry chain. On the evening of April 8, Aluminum Corporation Of China Limited (601600.SH) released a preliminary earnings forecast, projecting a first-quarter net profit between 5.302 billion yuan and 5.585 billion yuan, representing a year-on-year increase of 50% to 58%. On the same evening, Henan Mingtai Al.Industrial Co.,Ltd. (601677.SH) also issued a positive profit alert, anticipating a net profit of 650 million yuan to 700 million yuan for the quarter, a surge of 48.00% to 59.00% compared to the same period last year.
Since late February, military actions by the US and Israel against Iran have effectively closed the Strait of Hormuz. Media reports indicate that Middle Eastern aluminum producers are facing export blockades, with projects like the Qatar Aluminum joint venture beginning orderly shutdowns or declaring force majeure. The three-month aluminum futures contract on the London Metal Exchange (LME) surged by approximately 8-10%, reaching near four-year highs. In late March, Emirates Global Aluminium, with an annual capacity of about 1.5 million tons, and Aluminium Bahrain, with a capacity of around 1.6 million tons, were attacked, forcing the partial suspension of production lines for assessment. Following these incidents, LME aluminum prices jumped 3.85% to 6% in a single day, peaking at $3,492 per ton, the highest level in four years. Aluminum prices recorded an overall gain of over 12% for the month of March.
The aluminum industry's upstream sector involves raw materials, including bauxite mining and alumina refining. The midstream sector is the core smelting process, which is primary aluminum production. The downstream sector encompasses processing and application, where products like aluminum profiles and alloys are widely used in construction, automotive, photovoltaics, and other fields. While China leads globally in alumina production capacity, it heavily relies on imported bauxite resources, and its capacity is constrained by a clear ceiling under the "dual carbon" policy.
Media analysis suggests the Middle East accounts for approximately 9% of global aluminum supply. The attacks on the major facilities of Emirates Global Aluminium and Aluminium Bahrain by Iran, with a combined capacity exceeding 3 million tons, alongside logistical disruptions in the Strait of Hormuz blocking exports of aluminum ingots and imports of alumina and bauxite, are expected to require over 12 months for affected capacity to recover. Analysts project this will widen the global aluminum market deficit in 2026 to between 900,000 and 1.5 million tons. Concurrently, low inventory levels are amplifying supply risks.
Tianshan Aluminum Group Co.,Ltd. (002532.SZ) noted in early April investor relations activities that domestic primary aluminum capacity has already hit the industry's ceiling. Coupled with power constraints overseas, supply in the primary aluminum sector is becoming increasingly tight. Meanwhile, development in new energy sectors (photovoltaics, new energy vehicles, energy storage) and new power infrastructure is driving significant demand for aluminum, leading to continuously positive industry fundamentals. The "dual carbon" policy is steering the industry towards green development, with energy structure optimization and energy saving/carbon reduction forming long-term themes.
Against the backdrop of tightening aluminum supply, some international aluminum product suppliers have raised prices. In early April, Rio Tinto Group and Century Aluminum Co. increased the price of aluminum billets, a key semi-finished product, by approximately $110 per ton. Rio Tinto is a globally leading diversified mining giant with a fully integrated vertical chain in the aluminum business. Century Aluminum is the largest primary aluminum producer in the United States, with an annual capacity of around 1 million tons.
The aluminum shortage and subsequent price increases have directly boosted the share prices of related companies. Institutions and analysts believe the price premium hikes will significantly improve the gross margins of both companies, particularly benefiting Century Aluminum as the largest US primary aluminum producer, due to domestic supply tightness and tariff protections. As of the close on April 8, Century Aluminum (CENX.US) shares traded at $65.57, having approached a 52-week high intraday near $67.63. The stock has gained approximately 53% year-to-date in 2026 and over 200% in the past year.
In the A-share market, some aluminum industry companies began their upward trend as early as mid-2025. For instance, Tianshan Aluminum Group Co.,Ltd. rose from around 7 yuan in May 2025 to a high of 21.78 yuan in January 2026, while Aluminum Corporation Of China Limited increased from approximately 6.2 yuan in May 2025 to a peak of 15.85 yuan in January 2026. In the first quarter, many aluminum companies reported further improved performance. Henan Mingtai Al.Industrial Co.,Ltd.'s Q1 forecast attributed growth to sharply rising international aluminum prices, synchronized increases in domestic prices, strong overall orders, a competitive advantage in overseas export business, a significant proportion of recycled aluminum in raw materials enhancing product competitiveness and profit margins, and the ability to raise product prices in line with aluminum costs, effectively boosting profitability.
Currently, multiple institutions have revised their central price forecasts for aluminum upwards, anticipating that the tight supply situation will be difficult to reverse throughout 2026, suggesting prices may maintain high levels with potential for further increases. Brokerages are largely including the aluminum sector in their 2026 strategic allocations for non-ferrous metals/cyclicals, emphasizing the themes of "supply constraints + demand resilience + geopolitical premium."
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