CITIC Securities: Middle East conflict threatens aluminum supply, valuation repair of aluminum sector in progress.

CITIC Securities' research report indicates that the ongoing conflict in the Middle East poses a threat to the stability of aluminum supply in the Middle East and Europe. In history, in May 2006, October 2021, March 2022, and January 2026, aluminum prices all failed to break through the 25000 price barrier. The valuation of the electrolytic aluminum sector at this level was suppressed to 7-8 times. By 2026, China's electrolytic aluminum output has almost reached its peak, while overseas new capacity release is slow. The aluminum price is likely to challenge the 25000 barrier successfully in a tight balance. The current geopolitical tensions in the Middle East are accelerating the deterioration of the supply and demand situation. This will not only help to push the aluminum price above 25000 but also stabilize it at that level. When the 25000 barrier is no longer a historical high but a normal price, the electrolytic aluminum sector will usher in a valuation repair rally with a target of 10 times PE based on 25000 as the anchor point.