PETALING JAYA: Press Metal
Aluminium Bhd benefitted from tighter global aluminium supply in the first quarter of financial year 2026 (1Q26), as disruptions in the Middle East lifted physical premiums and supported stronger smelting margins.
UOB Kay Hian (UOBKH) Research said the aluminium smelter’s results were in line with expectations, underpinned by firm aluminium prices and relatively low alumina costs.
According to BIMB Research, Press Metal made significantly higher profit margins because aluminium selling prices stayed strong while raw material costs stayed low.
It noted that while associate earnings fell sharply, the core smelting business was strong enough to offset that and drive overall profitability higher.
The research house highlighted profit margins rose to 21.3%, reflecting one of the strongest aluminium–alumina spreads environments in recent years, meanwhile, earnings before interest and taxes margin expanded further to 21.1%.
That said, UOBKH Research expects an even stronger performance in 2Q26, driven by further gains in aluminium prices and continued moderation in alumina input costs, stemming from disruptions linked to the Middle East conflict.
Management indicated realised aluminium prices exceeded US$3,000 per tonne during the quarter, supported by stronger London Metal Exchange prices, which rose 21.8% year-on-year, as well as a sharp rebound in physical premiums, particularly Main Japanese Port, which more than doubled from 4Q25 levels, according to BIMB Research.
It added that Press Metal highlighted approximately 40% of Gulf aluminium production has been affected by disruptions, tightening global physical supply.
“This is significant as gulf producers remain major suppliers to Japan, Europe and the United States.”
BIMB Research maintained a “hold” rating with a revised target price of RM9.23 (from RM7.55).
