Alumina price pressure slashes Chalco’s 1H earnings
China Aluminum Corp, or Chalco, the world’s second largest alumina maker, said its first-half profit declined 5.15% year-on-year to US$846.56 million (RMB6.4 billion) despite rising overall revenues after it was forced to cut alumina prices as a result of improved capacity among its smaller domestic competitors, China Economic Net reported. Chalco’s revenue jumped 31.4% year-on-year to US$4.83 billion (RMB36.5 billion) in the first six months, but alumina sector profits plummeted 43.5% to US$648.15 million (RMB4.9 billion) in the first six months as its alumina selling price dipped 25.4%, slashing its revenue by US$476.19 million (RMB3.6 billion). “The result was better than our RMB5.6 billion expectation, and we are optimistic over second-half profits should the alumina price stand at what it is, or even just a bit lower,” said Xiao Yaqing, Chalco’s chairman and CEO. “I think alumina prices will stand at a reasonable price in next six months due to expansion of aluminum capacity and limited bauxite resource. We will focus on developing bauxite mines at home and abroad,” he added. Chalco has been acquiring smaller players amid a domestic industry consolidation to boost global competitiveness. It has bought out Shandong Aluminum Industry Co this year and recently got the approval to purchase Lanzhou Aluminum Co, which is expected to be completed by the end of year.