Shares of Nanshan Aluminum International Holdings Ltd., backed by Glencore Plc, dropped on their Hong Kong trading debut Tuesday, reflecting weaker investor sentiment due to declining alumina prices.
The stock slipped by 1% to HK$26.35 per share as of 10:27 a.m. local time, despite briefly rising by 1.1% earlier in the session. The Southeast Asian alumina producer, a subsidiary of China’s Nanshan Group, plans to use the proceeds from the sale to fund production expansion in Indonesia and for general working capital.
The alumina market had surged in 2024, with prices more than doubling to a record high. However, they have since fallen sharply as new production capacity has been introduced to the market, following supply chain disruptions in regions like Jamaica, Guinea, Australia, and China.
Bloomberg Intelligence analyst Michelle Leung noted that the company’s earnings outlook remains weak due to the price downturn, despite an undemanding valuation.
Glencore International AG, a subsidiary of Glencore Plc, is a major investor and customer of Nanshan, with the two companies entering an offtake agreement in January, according to the prospectus.
Indonesia’s alumina sector is poised for rapid growth in 2025, following a 2023 ban on bauxite exports, which has prompted Chinese companies to build refineries in the country. Nanshan is also expanding its operations, while Indonesia’s state-owned aluminum unit began trial production at a new alumina refinery earlier this year.
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