Press Metal Sees Advantage Amid Supply Constraints

Press Metal Holdings Bhd. is expected to benefit from tight aluminum supply, low-carbon advantage, and easing input costs. Maybank Investment Bank and RHB Research maintain their "buy" ratings, with Maybank raising its target price to RM6.34 and RHB keeping its unchanged target price at RM6.26. Both research houses expect a stronger second half of 2025 and a soft alumina/aluminum ratio, supporting LME prices.

Press Metal Holdings Bhd. is poised to benefit from a combination of factors, including tight aluminum supply, a low-carbon advantage, and easing input costs. Analysts from Maybank Investment Bank and RHB Research have maintained their "buy" ratings, with Maybank raising its target price to RM6.34 and RHB keeping its unchanged target price at RM6.26. Both research houses anticipate a stronger second half of 2025 and a soft alumina/aluminum ratio, which is expected to support London Metal Exchange (LME) prices.

The tight aluminum supply is driven by increased demand and production constraints, particularly in the alumina and ammonia sectors. According to a study by Market Forces, just 10 industrial sites in Australia account for more than half of the country's manufacturing gas use, with alumina and ammonia leading the way [1]. This concentration of demand underscores the critical role of these sectors in the global aluminum supply chain.

Press Metal Holdings Bhd. is well-positioned to capitalize on these trends. Its focus on low-carbon operations aligns with the broader industry shift towards sustainability. Companies like Rio Tinto and South32 have made significant strides in reducing their emissions and transitioning to renewable energy sources [1]. This shift not only helps these companies meet their environmental goals but also positions them to benefit from potential regulatory incentives and cost savings.

The easing of input costs is another positive factor for Press Metal Holdings Bhd. As companies like Orica and Dyno Nobel invest in decarbonisation technologies, they are also driving down the cost of production [1]. This reduction in input costs can translate into improved profitability for Press Metal Holdings Bhd., assuming it can effectively pass on these savings to its customers.

In conclusion, Press Metal Holdings Bhd. is expected to benefit from a combination of tight aluminum supply, a low-carbon advantage, and easing input costs. The strong analyst ratings and positive market outlook suggest that investors should keep a close eye on this stock for potential growth opportunities.

References:
[1] https://www.alcircle.com/news/how-australias-alumina-ammonia-companies-like-rio-tinto-south32-orica-are-plotting-net-zero-pathways-115155