CITIC updates aluminium wheel supply agreement, raises purchase cap through 2028

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CITIC Dicastal has revised its aluminium alloy wheel supply agreement with affiliated companies, raising annual purchase caps through 2028 following changes to its supplier network and expectations of stronger market demand.

According to a filing with the Hong Kong Stock Exchange, the new framework agreement replaces an earlier arrangement after several wheel manufacturers became, or are expected to become, connected parties following acquisitions by parent company CITIC Group.

Under the revised agreement, the annual cap for purchases of aluminium alloy wheels will increase from 680 million yuan to 11 billion yuan in 2026, 12 billion yuan in 2027, and 13 billion yuan in 2028.

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The higher purchase limits were due to higher aluminium prices, greater demand for aluminium alloy wheels, especially from the electric vehicle (EV) sector, and greater expected shipment volumes at CITIC Dicastal, the company said.

The revised agreement will however only cover the purchase of finished aluminium alloy wheels and will no longer include the purchase of raw materials, unlike the previous framework.

The new spending limits are governance thresholds for transactions between CITIC Dicastal and its related parties. The higher caps are meant to give more operational flexibility as production grows. The company said related-party transactions will still be subject to pricing benchmarks and regulatory oversight.

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