Huatai Securities says market fears of 2027–28 overseas electrolytic aluminum
capacity additions—focused on Indonesia, India, Angola and Saudi Arabia—are
overstated. Accounting for China's domestic capacity ceiling, uncertainty over
overseas power infrastructure and supply-demand modeling, Huatai judges current
forward pricing too pessimistic and expects overseas forward supply-demand to
remain at a tight balance. If global power constraints worsen and AI-related new
demand scales up, the market could move into a material shortfall. On costs,
Huatai expects the full-cost midpoint at high-cost smelters to continue rising
and estimates a 2027–28 overseas spot aluminum floor (including spot premiums)
above $3,000/t, roughly ¥22,000/t domestically. Current equity market pricing
for the aluminum sector is materially below those support levels, implying
valuations may be depressed.
