China Aluminium’s Inflection Point

China's aluminium sector entered 2026 at a structural inflection, with the binding 45mt capacity ceiling capping domestic supply growth at ~0.5% as electrification-driven demand expands at ~2%. Unlike prior cycles, this tightening is policy-anchored rather than macro-driven. With SHFE prices expected at RMB 23,000/t, cost tailwinds across inputs, and HK-listed names at 6-7x 2026E EV/EBITDA, aluminium remains attractive within China materials sub-sector for 2026