Aluminum electrolysis stocks hit the daily limit! Major impact from Middle East conflict! The sector's performance is likely to continue reaching new highs

The standout sector in today’s market is definitely the electrolytic aluminum segment!

On March 30, the Wind Aluminum Industry Index surged more than 5% throughout the day. Among the stocks, Minfa Aluminum, Changlu Co., Tianshan Aluminum, Nanshan Aluminum, and others hit their daily trading limit. Yunlü Aluminum rose more than 9%.

“Electrolytic aluminum’s行情 has received dual support from both performance and the narrative.” An analyst covering non-ferrous metals at an East China brokerage told Securities Times·China Securities Journal that the Shanghai aluminum futures price maintained a high level as an average in the first quarter. Meanwhile, the war among the United States, Israel, and Iran has led to expectations that global production capacity—nearly 10%—will face cuts. All of these provide support for the rise in electrolytic aluminum. The analyst said that if the war continues, electrolytic aluminum performance is expected to keep improving.

A major shock to global capacity

The sharp rally in the electrolytic aluminum sector is backed by multiple positive factors.

On March 29, the Al Taweelah aluminum plant confirmed that its facilities were attacked by Iran and is currently assessing damage. The Al Taweelah aluminum plant and the Alba aluminum plant have capacities of 1.5 million tons and 1.6 million tons, respectively, totaling 4% of global capacity.

In 2025, the electrolytic aluminum capacity in the Middle East region is about 6.92 million tons per year, accounting for 9% of global capacity. Previously, due to interruptions in energy supply and disruptions in alumina supply, on March 12, Qatalum announced the shutdown of 40% of its capacity (260,000 tons per year); on March 15, Alba announced it would start reducing output across three production lines due to raw material supply impacts, involving 19% of capacity (300,000 tons per year). The above projects together impact 560,000 tons per year of capacity, accounting for 0.7% of global capacity.

CITIC Securities believes that the direct attack on the aluminum plants in this instance means the risk of production disruptions in the Middle East region has been further significantly raised. At the same time, damage to aluminum plant equipment will lead to longer-cycle capacity shutdowns and restarts, creating more far-reaching impacts on supply and demand.

“Currently, the core of market sentiment is dominated by the escalation of geopolitical conflicts in the Middle East, which creates a double shock to the electrolytic aluminum industry chain and further increases pressure on regional supply patterns.” In its latest research report, West China Securities said that on the one hand, attacks on Iran’s core oil and gas facilities directly push up energy prices. Electrolytic aluminum is a high energy-consuming industry, so soaring energy costs combined with supply disruptions further exacerbate the risk of output cuts by electrolytic aluminum plants in the Gulf region; on the other hand, security concerns over navigation in the Strait of Hormuz have become prominent. This not only threatens import channels for raw materials such as bauxite, but also constrains the efficiency of shipping finished electrolytic aluminum products abroad, subjecting the stability of the regional supply chain to severe tests.

The aforementioned analyst also told Securities Times·China Securities Journal that after electrolytic aluminum production lines are shut down, restarting production generally takes half to one year. If the war lasts longer and infrastructure is damaged, the difficulty of restarting the shut-in capacity would increase further.

West China Securities also believes that Middle East electrolytic aluminum capacity accounts for nearly 9% of global capacity. The escalation of geopolitical conflict directly intensifies the risk of regional output cuts, and disruptions to shipping through the Strait of Hormuz further disturb supply. Coupled with serious cost inversion in Europe, the United States, and other high electricity-price production regions—Mozambique’s 580,000-ton capacity has already been fully shut down—global potential output reduction reaches 15 million to 20 million tons per year. The expected global supply reduction for the full year is 3% to 5%, and the trend toward tighter supply is irreversible.

Sector performance may keep setting new highs

Electrolytic aluminum’s performance has been relatively strong in recent years. In its annual report, Aluminum Corporation of China previously stated that in 2025, the company achieved total profit of RMB 25.84 billion, net profit of RMB 21.525 billion, and operating net cash flow of RMB 34.092 billion, the best in its history.

No exception, Yunlü Aluminum’s 2025 revenue reached RMB 60.043 billion, up 10.27% year over year. Net profit attributable to shareholders of listed companies was RMB 6.055 billion, up 37.24% year over year. Net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was RMB 6.0 billion, up 40.91% year over year.

“China is the world’s largest producer of electrolytic aluminum. Currently, the national cap on electrolytic aluminum is controlled at 45 million tons, and the industry is almost entirely operating at full capacity. In the future, with the development of industries such as new energy, the demand for aluminum still has further room to rise, which may further push up aluminum prices.” The aforementioned non-ferrous metals analyst said.

In the first quarter, as electrolytic aluminum prices continued to rise, the earnings leverage of electrolytic aluminum enterprises has begun to show.

On the evening of March 29, 2026, Tianshan Aluminum released a performance forecast, saying that in the first quarter, net profit is expected to be RMB 2.20 billion, up about 107.92% year over year. Regarding the reasons for the growth in performance, the company explained that part of the capacity from its 1.4 million-ton green low-carbon energy efficiency improvement project for electrolytic aluminum is coming online, and the year-over-year growth in electrolytic aluminum production and sales volumes is about 10%; at the same time, the year-over-year sales price of electrolytic aluminum products rose by about 17%, production costs were effectively controlled with a year-over-year decline, and synergy between volume and price efforts helped deliver a solid start to the full year.

The market generally believes that because aluminum prices remain at a high level in the first quarter, the high year-on-year growth in electrolytic aluminum enterprises’ performance is essentially confirmed, and Tianshan Aluminum once again proves this logic.

“Middle East, as the world’s core low-cost electrolytic aluminum production region, has electrolytic aluminum output of about 7 million tons, accounting for around 10% of the global total. Once the marginal cost support brought by its energy advantage is weakened, it will directly raise the global electrolytic aluminum cost curve and drive the aluminum price center of gravity upward. With global electrolytic aluminum already in a situation of mild shortage and low inventory, geopolitical disruptions reinforce expectations of tighter supply, pushing aluminum prices up further.” In a recent research report, Galaxy Securities said.

（Source: China Securities Journal）