铝：中国停产担忧推高价格

Aluminium: China shutdown fears lift pricesQuick Note India Metals & Mining JashandeepSinghChadha-NFASL jashandeep.singhchadha@nomura.com+91 22 40374124 LME aluminium climbed to a four-year high after reports of smelter shutdown concerns in China reignited supply disruption fears (link).The market reaction was sharp despite arecent build in visible inventories (Fig. 1), highlighting that sentiment is being driven byforward supply concerns rather than immediate physical tightness.China's dominancemakes any supply disruption globally relevant China remains the largest aluminium producer globally,accounting for~60% of primary aluminiumoutput(Fig.2).Asaresult,even incrementalproductiondisruptionsorpolicyled curtailments can have an outsized impact onglobal balances,particularly inamarketwhere supply flexibility is already constrained.Broader global supply environment was already tightening The China headline comes against an already tightening global supply environment. Recent operational disruptions across global aluminium markets, including operationalconstraints at smelting assets in regions such as the Middle East, have incrementallytightenedsupplyexpectations.Asa result,webelievethecurrentrallyisnotpurelyaChina-specific reaction (Fig.5),but an amplification of broader concerns around supplyresilience. Price action reflectsforward risk, not current scarcityAluminium inventories have recently moved higher, which would ordinarily weigh on pricing. However, in our view, the market appears to be looking through near-termcommoditypositioningis beingdrivenby anticipatedtightnessratherthan current scarcity India-based upstream names in our coverage remainkey beneficiariesWebelievehigheraluminiumprices arepositiveforupstreamproducers in ourcoverage throughstrongerrealizations,improvedEBITDA/tonneand strongercashgeneration(Fig3). We maintain our Buy recommendations onTata Steel (TATA IN),JSW Steel (JSTL IN),Jindal Steel (JINDALST IN) and Lloyds Metals (LLOYDSME IN) Appendix A-1 See Disclaimers for Nomura Group entity details. Analyst Certification or all of the subject securities or issuers referred to in this Research report, (2) no part of my compensation was, is or will be directly or indirectlyrelated to the specific recommendations or views expressed in this Research report and (3) no part of my compensation is tied to any specificinvestment banking transactions performed by Nomura Securities International, Inc., Nomura International plc or any other Nomura Groupcompany. IssuerSpecificRegulatoryDisclosures The terms "Nomura" and "Nomura Group" used herein refer to Nomura Holdings, Inc. and its affliates and subsidiaries, including NomuraSecurities International, Inc. ('NSI) and Instinet, LLC (ILLC"), U. S. registered broker dealers and members of SIPC. Valuation Methodology We arrive at TP of Rs1,350 by applying slightly higher than mid-cycle one-year-forward EV/EBITDA of8.0x on.new steady-state EBITDA in June-28F.The benchmark for this stock is NIFTY50 the net exports from China increase, it would result in continued pressure on export HRC prices. In such a case, domestic HRCpriceswill remainunderpressureduetolowerimportparitypricesleadingtolowerspreads/margins.2.Delays inexpansion&cost overruns -This would result in lower than expected volume from FY26F onwards.Delay in commissioning might also resultin capex cost overrun resulting in lowerthan earlierexpected ROCE 3.Domestic demand disruptions -If the domestic demanddependanceonexports.Insuchacase,themarginswillbelowerthanexpected Valuation Methodology We arrive at TP of INR1,400 by applying slightly higher thanmid-cycle one-yearforward EV/EBITDAof 8.1xonnewsteady-state EBITDA inJun'28.Thebenchmarkforthis stock isNIFTY50 prices willremain under pressure due to lower import parity prices leading to lower spreads/margins.2.Delays in Dolvicommissioning-This would result in lowerthan expected volume fromFY28F onwards.Delayin commissioning might alsoresult in capex cost overrunresulting inlower than earlier expected ROcE3.Domestic demand disruptions-Ifthedomesticdemand grows lower than expected or lower than the capacityaddition, it would result in lower domestic HRC margins andhigher dependence on exports. In such a case, the margins will be lowerthan expected ValuationMethodology Wearriveat SOTP-basedTP of INR2,050byapplying a target EV/EBITDAof 8.4xon newsteady-state EBITDA in Jun'28'The benchmark for this stock is NIFTY50Risks thatmay impedetheachievement ofthetargetprice Risks:(1)a delayin steel capacity,(2)politicalunrestintheDemocratic Republic of the Congoaffecting the copperbusiness;,(3)BHQ beneficiation notyielding the sameresultsas seen inthe pilotproject;,and (4)resurfacing of Naxalactivities Valuation Methodology We arrive at TP of INR240 by applying slightly higher than mid-cycle one-year forward EV/EBITDAmultipleof7.7xonnewsteady-stateEBlTDAinJune'28.ThebenchmarkforthisstockisNIFTY50Risks that may impede the achievement of