Shares of China Hongqiao (01378) climbed more than 4% in Hong Kong trading, last up 4.25% at HK$24.52 with turnover reaching HK$610 million. The rally comes amid escalating US-Iran military conflicts that have disrupted passage through the Strait of Hormuz, fueling expectations of tighter supply conditions in the global aluminum market.
As of September 8, three-month aluminum futures on the London Metal Exchange (LME) advanced to $3,341 per metric ton, reflecting growing concerns over supply disruptions. According to Zhongtai Securities, beyond the heightened uncertainty surrounding shipping routes through the strait, the renewed US-Iran tensions also cast doubt over aluminum electrolysis supply from the Middle East, a region that accounts for approximately 9% of global output. For the worldwide electrolytic aluminum industry, the period of widened overseas supply deficits could be extended further, with the sector's supply-demand dynamics likely to remain tight over the medium term.
Recently, China Hongqiao released its interim results for the first half of 2026. Guotou International Securities noted that the company's strong earnings growth was primarily driven by a significant year-over-year increase in aluminum prices, coupled with its excellent management capabilities and integrated operations. During the period, the company achieved gross profit of RMB 27.53 billion, up 32.3% year-on-year. Alumina sales volume reached 6.917 million tons, rising 8.6% from the prior year, while aluminum alloy deep-processing product sales totaled 444,000 tons, a 23.2% increase year-on-year.
The brokerage highlighted that during the first half, maritime blockages caused by the US-Iran conflict, along with elevated energy costs that reduced production capacity in major global electrolytic aluminum regions, were compounded by surging demand from energy storage and power grid sectors. This combination drove up electrolytic aluminum prices and further widened the price differential between domestic and international markets.