PETALING JAYA: Press Metal
Aluminium Holdings Bhd is poised to gain from the aluminium-supply tightness tailwind that will support the commodity’s price amid risk of a structural deficit as demand outpaces supply.
Maybank Investment Bank Research (Maybank IB), in note to clients, said: “We believe these positives on Press Metal could be partially offset by the expected US dollar to ringgit weakness.”
While a softer US dollar to ringgit could support aluminium demand, the research house noted that Press Metal is exposed to the US dollar weakness on the revenue side.
“Based on our estimates, every 5% depreciation of the US dollar against the ringgit reduces Press Metal’s earnings by around 13%,” Maybank IB added.
It said the aluminium market would continue to tighten, with the London Metal Exchange inventories at near multi-decade lows as traditional supply sources remain constrained.
The Russian inflows have been disrupted by sanctions, while China, which accounts for 60% of global output, has reached its government-imposed 45 million tonne production ceiling versus 44.5 million as of August, Maybank IB noted.
Meanwhile, high energy costs have yet again forced several aluminium smelters to close, thus further reducing capacity.
“Although new projects are underway in India and Indonesia, commissioning progress could be slower than expected, leaving supply growth lagging demand,” added the research house.
While the long-term demand is constructive, Maybank IB said the near-term demand trends remain mixed, with the United States pressured by high tariffs and Europe still subdued.
In contrast, China is expected to record modest growth from stimulus measures.
Over the medium to long term, the structural demand from clean energy, artificial intelligence, and data centres underpins a constructive demand outlook for aluminium, it noted.
According to Maybank IB, the alumina price is expected to stay soft as alumina is expected to see a surplus of about one to two million tonnes in 2025 as capacity growth outpaces demand.
“For Press Metal, this means lower input costs downstream, but weaker earnings contribution from its upstream associate company, Nanshan Aluminium International Holdings Ltd (NAIHL),” said the research house.
The current aluminium-alumina spread narrowed to 12%, versus around 15% in the second quarter of 2025 (2Q25).
NAIHL’s capacity is set to reach four million tonnes by 2026, with its third one million-tonne line operational since July 2025 (adding about 300,000 tonnes in the second half of 2025 on a gradual ramp up) and the fourth due in 2Q26.
Separately, Press Metal’s 80%-owned Indonesia-based PT Kalimantan Alumina Nusantara’s new capacity of about one million to 1.2 million tonnes is slated for commissioning in 1Q27.
Given the favourable aluminium outlook, Maybank IB has maintained its forecasts on Press Metal and kept a “buy” call on the stock with a target price of RM6.34 per share.
It noted aluminium prices have rebounded since April, reaching a one-year high of US$2,737 per tonne in September.
