KUALA LUMPUR, 24 September 2025 — Press Metal Aluminium Holdings Bhd is positioned for a steady second half of 2025, underpinned by firmer aluminium prices, easing input costs, and resilient demand from growth sectors including renewable energy, data centres and AI infrastructure, industry watchers say.
In its first half of fiscal 2025 (1H25), Press Metal reported a core profit of RM949.7 million, a modest 2% year-on-year increase, with revenue rising about 7%. The second quarter in particular showed improvements: sales volume picked up and margins benefited from somewhat lower alumina costs and favourable supply-demand dynamics in the global aluminium space.
What’s Driving Confidence
Analysts point to several factors providing support for Press Metal’s positive outlook in the second half:
- Global supply constraints for aluminium remain a key tailwind. Disruptions in upstream operations (such as in alumina refining), reshuffling of trade flows, and geopolitical risks continue to tighten supply.
- Price strength is expected to hold. Even though spot prices have shown volatility, longer-term contract pricing and forward expectations are gradually adjusting upward as major aluminium smelters face cost pressures and new capacity is slower to come online.
- Lower input costs, especially for alumina and carbon anode materials, are helping restore margin breathing space. Press Metal has also hedged a portion of its aluminium output in forward contracts, which helps dampen downside risk.
- Demand from growth verticals—especially renewable energy deployment, data centres, electric vehicles, and AI infrastructure—continues to lean in favour of light, conductive, corrosion-resistant metals. Aluminium is central to these applications.
Risks on the Horizon
Despite these positives, the second half is not without potential headwinds. Key concerns include:
- Raw material price spikes: While input costs have moderated somewhat, any sharp rebound in alumina or energy/hydro power pricing could squeeze margins. Press Metal’s dependence on long-term power purchase agreements helps, but cost exposure remains.
- Global macroeconomic weakness: Slowing manufacturing demand in major markets, possible trade policy shifts, or currency fluctuations could dampen export sales or raise costs.
- Overcapacity risk: Although supply tightness is currently supportive of prices, some analysts warn that too many new aluminium or alumina/refining projects globally could lead to oversupply down the road, especially if demand growth softens.
Investor Angle
For investors, Press Metal appears to offer a risk-reward profile that is more stable in 2H25 than many cyclicals. Its hedging strategy, strong cost structure (including hydro-based power in Sarawak), and exposure to structural growth sectors lend some defensive qualities. Analysts maintain favourable ratings; Kenanga Research, for example, continues to assign an Outperform rating with a target price of around RM6.10 reflecting these strengths.
For shareholders, key performance indicators to monitor will be realised selling prices (contract vs spot), margin trends, the company’s ability to pass through cost inflation, and any changes in global aluminium supply or alumina availability. If these variables remain favourable, Press Metal could exceed consensus earnings in 2H25.
