According to "The Big Banks," CMB International expects aluminum prices to rise by 15% this year, with the aluminum market continuing to face supply shortages

CMB International expects that the global aluminum market will continue to experience a supply shortage this year, mainly due to China's capacity utilization rate being close to full and limited new capacity overseas; it is anticipated that aluminum prices will rise by 15% year-on-year this year. Although more capacity may come online outside of China by 2027, the ongoing shortage is expected to keep aluminum prices at high levels.

The bank forecasts that global aluminum capacity will grow by 1.3%, 2.6%, and 1.7% year-on-year from 2026 to 2028, reaching 74.7 million tons, 76.7 million tons, and 78 million tons, respectively, with the main contributions coming from regions outside of China, and overseas capacity is expected to grow by 1.6% this year.

At the same time, transportation and power electronics (including solar power generation) will continue to be the main drivers of aluminum demand growth in China, enough to offset the weak demand in construction and infrastructure due to sluggish real estate investment.

The bank initiates coverage on CHUANGXIN IND (02788.HK) with a "Buy" rating (core view: sales growth in the Saudi Arabian market and cost advantages brought by further cost reductions driven by renewable energy). Additionally, after incorporating higher aluminum price assumptions, the bank maintains a "Buy" rating on CHINAHONGQIAO (01378.HK) and updates its target price to 45 yuan. The bank believes that the recent stock price correction provides a good buying opportunity