The Zhitong Finance App learned that Morgan Stanley released a research report stating that the target prices for China's Hongqiao (01378) and China Aluminum (02600) were raised to HK$15.1 and HK$7.5, and each maintained an “incremental” investment rating.

The bank said that due to environmental, mining safety control and grade degradation issues, the supply of local bauxite in China was blocked, and cumulative production fell 20% this year, and production is expected to drop 8% to 60 million tons for the whole year. The shortage of bauxite affected alumina production. Mainland alumina production increased 3% year-on-year in the first four months. As a result, China imported more bauxite and alumina. China's bauxite imports rose 6% in the first four months, with imports from Australia and Guinea rising 20% and 8% respectively. Currently, 70% of the bauxite needed by China comes from imports, of which Guinea and Australia each account for 74% and 22%. China is also importing more alumina this year, with imports increasing by 75% so far this year.

The report also indicates that the global supply of 5.9 million tons of alumina has been blocked, which is equivalent to about 10% of the global supply after China is deducted. Due to China's need for more imports, the global alumina market is further constrained. The supply of alumina in China and the world is tighter, and alumina prices have been high for a longer period of time.