Asia-Pacific's aluminum smelters should maintain robust margins amid higher metal prices due to a narrower supply of global primary aluminum, Fitch Ratings said in a recent release.
The rating agency expects low-cost firms in China, India, and Indonesia to gain the most due to controlled cost inflation amid their integrated raw material framework and relatively steady power costs.
Aluminum prices have increased about 20% since the start of the Middle East conflict, leading to tighter global primary aluminum supply.
Fitch believes Asia-Pacific smelters that can retain output and control costs will see a boost in earnings and cash flow under rising aluminum prices.
The region's producers are less exposed to imported gas and spot raw material volatility, giving them clearer advantages compared to global peers, Fitch said.