Strong Q3 Earnings! The Aluminum Index Rallies Against the Market Trend

I. Today’s A-Share Market Performance Today (October 27), the market fluctuated downward. By closing, over 4,601 A-share stocks across the Shanghai, Shenzhen, and Beijing exchanges declined; the Shanghai Composite Index fell by 1.33%, the Shenzhen Component Index dropped by 2.50%, and the ChiNext Index plunged by 3.41%. Total trading volume across the three exchanges amounted to ¥146.094 billion, down ¥147.8 billion from the previous trading day. According to Guojin Industry Classification, aluminum smelting & processing, telecommunications network engineering, and copper ore mining & selection ranked among the top-performing sectors. Recently, aluminum producers have been releasing their Q3 earnings reports. According to Caixin Media, several leading aluminum enterprises reported year-on-year growth in both revenue and net profit for Q3. Rising aluminum prices have boosted corporate revenues and gross profits. Regarding inventory, aluminum stockpiles at domestic and international exchanges have declined. Data released recently by the Shanghai Futures Exchange (SHFE) and the London Metal Exchange (LME) show that SHFE aluminum inventories fell by 24,114 tonnes that week, while LME aluminum inventories decreased by 1,750 tonnes on October 26. Inventory drawdowns indicate that warehouse outflows exceeded inflows, thereby reducing available stock. Against the backdrop of surging aluminum demand from AI and new-energy applications—and constrained expansion of domestic electrolytic aluminum capacity—this inventory decline further strengthens supply-demand support for aluminum prices. Possibly influenced by these developments, today the Guojin Aluminum Index rose by 2.15%. 1. Introduction to the Guojin Aluminum Index The Guojin Aluminum Index covers constituent stocks in the aluminum smelting and processing sector, weighted using a scoring methodology based on size and quality factors. III. Development of the Aluminum Industry Aluminum products are widely used across industrial and everyday applications. With a relative density of 2.70 g/cm³—approximately one-third that of steel or copper—aluminum is among the lightest metals. Aluminum alloys are composite materials formed by adding alloying elements such as copper, magnesium, zinc, silicon, and manganese to aluminum. These alloys exhibit excellent electrical and thermal conductivity, as well as oxidation resistance, making aluminum a critical foundational metal spanning numerous industries and facets of daily life. Recycled aluminum represents a vital direction for green industry development. Currently, aluminum production primarily follows two pathways: primary (electrolytic) aluminum and recycled aluminum. According to data from China’s Ministry of Commerce, electrolytic aluminum operating rates remained between 95% and 98% in 2024, with capacity tightly capped. In contrast, recycled aluminum enables resource circularity and helps alleviate pressure on primary aluminum resources. Typically, recycled aluminum involves first refining scrap aluminum into aluminum ingots, then processing those ingots into aluminum alloy materials. Per Ministry of Commerce data, approximately 60% of scrap aluminum flows into the recycled aluminum sector. In 2024, China’s total aluminum alloy output reached 14.27 million tonnes, of which recycled aluminum alloys accounted for 49% of total aluminum alloy production.

Nonferrous Metals—Why Are They Transitioning from Cyclical Commodities to Growth-Oriented Assets? Midstream Players Even Work at a Loss—Yet Still Must Operate!

Good evening. Starting today, we begin an in-depth analysis of upstream resource industries—from absolute beginner level to comprehensive understanding of individual upstream enterprises. We will also continuously track supply-demand dynamics and price-volume relationships essential for futures trading (preparing for Q4 2024 through 2027). This article first provides an overview of the nonferrous metals industry—including its classification, competitive landscape, and the ‘smile curve’—before launching into an initial deep dive on the copper industry and its leading enterprises. (I) Industry Overview and Classification Ferrous metals—i.e., iron and steel—are anchored in real estate and infrastructure demand: building houses, roads, and bridges all rely heavily on steel. These are classic cyclical sectors whose demand rises sharply during economic upturns. Nonferrous metals, however, differ fundamentally. Their demand anchor lies in power transmission, new energy, electronics, and defense industries. This explains why the recent tech rally has lifted nonferrous metals: electricity transmission cannot function without copper—and AI is an enormous electricity consumer. Nonferrous metals refer to all metals except iron, manganese, and chromium, and are broadly categorized into four groups: 1. Light nonferrous metals: primarily aluminum, magnesium, and lithium. Aluminum enjoys the broadest application; lithium serves as the core raw material for new-energy batteries, with demand surging alongside the new-energy industry’s explosive growth. 2. Heavy nonferrous metals: primarily copper, lead, zinc, nickel, and tin. Copper is indispensable for power transmission and distribution; lead and zinc are widely used in battery manufacturing; nickel is a critical raw material for both new-energy batteries and stainless steel. 3. Precious metals: primarily gold, silver, platinum, and palladium. Characterized by scarcity and store-of-value attributes, their prices are highly sensitive to macroeconomic conditions amid risk-aversion demand. 4. Rare and rare-earth metals: primarily tungsten, antimony, rare earths, indium, and germanium. Dubbed the ‘industrial vitamins’ for high-end manufacturing, national defense, and new-energy sectors, they possess exceptionally high strategic value. (II) Industrial Chain Breakdown and Value Distribution (the ‘Smile Curve’) The nonferrous metals industrial chain forms a closed loop: ‘upstream mining & beneficiation → midstream smelting & primary processing → downstream advanced processing → end-use applications’. Profitability varies markedly across segments: 1. Upstream (mining & beneficiation): A profit stronghold, with typical gross margins ranging from 30% to 60%. Due to resource scarcity, long lead times for capacity expansion (5–8 years), and weak supply elasticity, upstream players hold the strongest pricing power. Profits expand substantially when metal prices rise (e.g., copper ore, lithium ore, rare-earth ore). 2. Midstream (smelting & primary processing): Thin-margin segment, with typical gross margins between 2% and 15%. Smelting operations (e.g., copper smelting) suffer intense competition due to relative overcapacity and depressed processing fees (e.g., copper concentrate treatment charges trading at a discount); However, certain commodities subject to strict capacity caps (e.g., electrolytic aluminum) retain relatively robust profitability thanks to rigid supply constraints. 3. Downstream (advanced processing & end-use applications): Higher-margin segment, with typical gross margins ranging from 15% to 35%. Advanced downstream processing (e.g., copper tubes for AI computing heat dissipation, aluminum foil for EV batteries, aerospace-grade aluminum alloys) commands premium pricing owing to high technical barriers and high product value-added; End-use sectors (e.g., new-energy vehicles, photovoltaics) enjoy strong demand—but remain highly vulnerable to upstream price volatility. (III) Current Industry Dynamics 1. Divergent Supply-Demand Patterns: Overall, the industry exhibits a structurally bullish pattern of ‘rigid supply, upgraded demand’. Upstream resource supply remains tight due to insufficient capital expenditure, declining ore grades, and environmental regulations plus quota constraints; Downstream demand is underpinned by traditional sectors (power grids, construction), while emerging sectors—new-energy vehicles, energy storage, AI computing power, and wind power—serve as the core growth engines, driving surging demand for lithium, cobalt, nickel, rare earths, and other metals.

Boliden's quarterly profit jumps 77% aided by high metal prices

17 hours ago

Swedish miner Boliden reported a 77% surge in Q3 adjusted operating profit to SEK 4.9 billion, driven by strong metal prices and improved production at its Garpenberg mine and Odda smelter.

reuters

2026-10-29

Boliden's quarterly profit jumps 77% aided by high metal prices

Boliden's quarterly profit jumps 77% aided by high metal prices

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