CITIC Securities: Aluminum Sector Overpriced Pessimism, Potential for Rational Recovery
CITIC Securities has released a research report indicating that current concerns regarding excessive production of electrolytic aluminum in China and the ramp-up of Indonesian electrolytic aluminum capacity may have been overly priced into the market. The firm suggests that considering supply-side disruptions and emerging signs of demand improvement, aluminum prices could see positive performance in the first half of both 2026 and 2027. Looking beyond the second half of 2027, CITIC Securities anticipates that aluminum prices will remain supported by a cost curve and incentive pricing around $3,000 per ton. The report highlights that Chinese aluminum companies, representing a sector where China holds a competitive advantage, continue to present investment value worthy of ongoing attention.
The market's current pricing of aluminum futures may be reflecting an exaggerated response to potential supply increases from China and Indonesia. By factoring in anticipated demand improvements and supply-side uncertainties, CITIC Securities suggests a potential divergence between market sentiment and future price realities. This perspective invites consideration of whether current investment strategies are adequately accounting for the long-term cost structures and incentive pricing mechanisms that could underpin aluminum prices, particularly in the context of China's strategic industrial positioning and the evolving global commodity landscape over the next decade.
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