"PMAH expects the recovery in LME aluminium prices to extend into 2021, due to healthy supply-demand conditions under a reflationary macroeconomic environment.
"This is underpinned by strong persistent demand by China, which recently became a net importer of primary aluminium, amid tightening supply," said RHB.
Meanwhile, ex-China capacity additions are expected to be limited next year, aside from Press Metal's own Samalaju Phase 3 expansion while the global decarbonanisation agenda will translate into supply discipline.
The research house increased FY21 to FY22 earnings by 9% after raising its forecast 2021-2022 realised LME prices to US$2,000-2,050 while imputing higher alumina and carbon anode raw material prices in tandem.
RHB reiterated that the stock was a top country and sector pick, raising its target price to RM8.50 from RM8 previously.
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