Huatai Securities: Overseas High Costs Support, No Need to Be Pessimistic About Forward Aluminum Prices

```htmlAccording to Golden Ten Data on June 24, a research report from Huatai Securities states that in recent times, concerns regarding overseas electrolytic aluminum production expansion for 2027–2028 have been rising, with the focus on new capacities under construction in Indonesia, India, Angola, Saudi Arabia, and other regions. However, considering the domestic capacity ceiling restrictions, uncertainties in power supply for overseas projects, and supply-demand balance calculations, Huatai Securities believes the current market pricing for the long-term supply and demand structure of aluminum is overly pessimistic. The overseas long-term supply and demand can still remain tightly balanced. If global power shortages intensify and new demand linked to AI breaks out, the aluminum supply-demand structure could shift towards a significant shortage. On the cost side, the overall cost center for high-cost smelters is likely to continue rising in the future. Huatai Securities estimates the bottom support for overseas spot aluminum prices (including spot premiums) in 2027–2028 remains above $3,000/ton, which corresponds to over 22,000 CNY/ton domestically. According to their calculations, the current equity market valuation for the aluminum sector is already significantly lower than the above price support, suggesting a potential undervaluation.```