"Aluminum" reaches a new high

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On March 23, aluminum industry leader China Hongqiao (1378.HK) held its 2025 full-year results briefing in Hong Kong.

In 2025, the group’s revenue was approximately RMB 162.35B, up about 4% year over year. Net profit attributable to shareholders was approximately RMB 22.64B, up about 1.2% year over year. Basic earnings per share were approximately RMB 2.3842. The company’s board of directors recommended distributing an annual interim dividend of HKD 1.65 per share (165 HK cents) at year-end.

Management said it remains confident in the electrolytic aluminum market and aluminum price trends, and expects the domestic average price of electrolytic aluminum in 2026 to reach RMB 23,000 per ton, which would leave more than RMB 2,000 of upside compared with last year’s full-year figure.

Full Industry-Chain Layout

The company’s official website shows that Weiqiao Group was founded in 1951 and has been deeply involved in the textile and aluminum industries. As the core listed aluminum company under Weiqiao Group, China Hongqiao was listed on the Hong Kong Stock Exchange in 2011. Its products cover upstream raw materials such as alumina, midstream aluminum alloy products (electrolytic aluminum), and downstream aluminum alloy processing products (aluminum foil, aluminum sheets, etc.).

In terms of revenue structure, more than half of China Hongqiao’s revenue comes from midstream aluminum alloy products. In 2025, this business contributed revenue of RMB 106.1B, up about 3.6% from the same period last year. This is mainly due to the year-over-year increase in sales prices of aluminum alloy products.

During the reporting period, upstream alumina accounted for approximately 24% of the mix, generating revenue of RMB 38.83B, up about 4.0% year over year, mainly due to the year-over-year increase in the sales volume of alumina products. However, because last year’s alumina market price fell steadily, the average price for this business declined 15.2% year over year; the gross margin decreased from 35.4% to 22.2%.

In this regard, management said that because the group’s business operates with an “integrated upstream and downstream industrial chain,” a decline in alumina prices would actually reduce the self-use costs for the midstream and downstream. Therefore, the group’s business is affected only to a limited extent by the industry cycle fluctuations.

Meanwhile, in March this year, Guinea—the world’s largest bauxite producing country—disclosed that it is discussing with miners the quantity of ore to control and allocate to the market, in an effort to curb the downward momentum in raw-material prices. After the news broke, the alumina price rebounded to above RMB 2,700. It is understood that China Hongqiao currently maintains bauxite inventory of 7 to 8 months; together with cargo-in-transit and port reserves, its actually available supply is close to one year. “If the policy pushes up prices, the portion for export sales can also improve profits.”

In downstream aluminum alloy processing products, revenue from deep-processing products was approximately RMB 14.96B, up about 4.0% from the same period last year, mainly because its sales price increased compared with the same period last year.

This year’s average price of electrolytic aluminum may reach RMB 23,000 per ton

Over the past two years, electrolytic aluminum prices have continued to rise.

In January 2024, China’s electrolytic aluminum price was around RMB 19,000 per ton. By the first quarter of 2026, this price had already reached RMB 24,000 per ton.

Behind this is an imbalance in the growth rates between capacity and demand. In 2017, China set a production capacity red line for electrolytic aluminum of 45 million tons. Since then, for many years, this red line has never been broken. In 2025, China’s electrolytic aluminum output reached 44.23 million tons, and capacity utilization was already approaching 99%, leaving extremely limited room for growth.

However, aluminum products are widely used in power, new-energy vehicles, construction, and other fields to achieve lightweighting and cost savings. In some application areas, aluminum can gradually replace materials such as steel, wood, and copper. With demand being driven by new energy, power grids, photovoltaics, and related sectors. In 2025, global aluminum consumption is showing an accelerating growth trend.

According to Antaike data, in 2025, domestic electrolytic aluminum output grew 1.8% to 44.23 million tons, while consumption rose 2.6% year over year to 46.34 million tons, resulting in a supply-demand gap of 2.11 million tons. In the same period, global electrolytic aluminum consumption increased 2.3% year over year to 74.24 million tons, while the global production growth rate was only 1.7%.

Under these circumstances, aluminum prices have been surging all the way up. Both domestic and overseas electrolytic aluminum prices have hit new highs within the past three years, and they have remained at high levels.

Data show that in 2025, the LME cash aluminum monthly average price increased 8.8% year over year to USD 2,632 per ton, and the three-month aluminum average price increased 7.5% year over year to USD 2,641 per ton. On the Shanghai Futures Exchange, the cash aluminum monthly average price increased 4% year over year to RMB 20,750 per ton, and the three-month aluminum average price rose 3.5% year over year to RMB 20,698 per ton.

With the conflict in the Middle East also adding pressure, aluminum companies in the region have suspended production one after another. For example, the orderly shutdown of Qatar Aluminum’s smelter began at the start of this month, and a further restart of production is expected to require at least 6 to 12 months.

China Hongqiao’s management said it continues to have a favorable view of the electrolytic aluminum market and aluminum price trends. Management believes that over the next two years, China’s aluminum consumption will continue to show the characteristics of a “conversion of new and old growth drivers.” Energy storage, robots, low-altitude flying vehicles, and “replacing copper with aluminum” will become core growth engines. At the same time, new energy vehicles and other sectors will continue to contribute steady incremental demand. The combined demand from emerging tracks will help ensure the base for consumption, and total aluminum consumption is expected to maintain moderate growth.

For full-year demand, management expects that in 2026 the domestic average price of electrolytic aluminum may reach RMB 23,000 per ton, which would be more than RMB 2,000 of upside compared with China Hongqiao’s actual average price for 2025 full year (RMB 20,600 per ton). China Hongqiao said it will continue to advance the “aluminum-power grid integration” strategy and keep increasing the proportion of clean energy used.

As of the noon trading session on March 24, China Hongqiao’s share price was up 4.29%, quoted at HKD 33.06 per share, with a total market capitalization of HKD 329.9 billion.

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责任编辑：赵思远