Seemingly ordinary salt and aluminum actually hide the shadows of millennia-old business logic. In ancient times, salt production was inefficient due to primitive technology and energy shortages, coupled with government monopoly control, causing prices to soar—during the time of Guan Zhong's salt law, salt valley prices were up to six times higher. This monopolistic pattern persisted until the Han Dynasty. Iron, due to dispersed resources and difficult regulation, exited the monopoly, while salt became a stable source of revenue for the state treasury.

Why does this history matter now? Because the metal market is also experiencing similar rotation patterns. Under the backdrop of rate cuts, there are clear cyclical rotations within metals: gold and silver → copper → aluminum → minor metals → processing, in that order. With the global manufacturing recovery imminent, the electrolytic aluminum cycle is currently unfolding through three key stages: slowing rate cut pace, end of rate cuts, and early stage of rate hikes. Aluminum is still in the first stage, and two major inflection points—fundamentals and valuation—are approaching.

Data speaks the loudest. Currently, the copper-to-aluminum price ratio has surged to 4.4, hitting a new high again. Over the next three years, both copper and aluminum supply will be tight. Assuming copper prices stabilize at around 88,000 yuan/ton, and considering the accelerating substitution between copper and aluminum, with a valuation inflection point at 3.5, aluminum prices could potentially spike to 25,000 yuan/ton. This is not wishful thinking but a reasonable expectation based on supply and demand gaps.

Valuation-wise, it’s even more interesting. The dividend yield of electrolytic aluminum stocks is as high as 5%, which already makes them attractive dividend assets within the commodities sector. Domestic capacity has long hit a ceiling, and overseas electricity supply is generally tight, providing a dual support for aluminum’s resource attributes. Plus, after a soft landing, global industrial activity is expected to recover from the bottom, and with these three logical factors converging, a valuation expansion from the current levels to 12X-15X is entirely plausible.