Chalco First-Half Loss Widens on Lower Aluminum PricesBloomberg News
Aluminum Corp. of China Ltd., the nation’s biggest producer, said its first-half loss widened amid lower prices.
The company, known as Chalco, posted a loss of 4.12 billion yuan ($671 million), or 0.3 yuan a share, in the first half. That compared with a loss of 623.8 million yuan, or 0.05 yuan a share, a year ago, it said in a statement, citing Chinese accounting standards. Sales declined 8.6 percent to 70.1 billion yuan.
Aluminum prices in London averaged about 8 percent lower in the first-half of 2014 than a year earlier. The lightweight metal’s prices have since rebounded, reaching an 18-month high of $2,100 a metric ton on Aug. 26, as producers including Chalco shuttered capacity.
The company said it still faces a “tough” operating environment in the second half.
The loss contrasts with United Co. Rusal, the world’s largest aluminum producer, which yesterday reported its first profit in five quarters as prices and premiums rose. Alcoa Inc. last month posted better-than-expected profit in the second quarter on the strength of its smelting business.
Chalco closed unchanged at HK$3.45 in Hong Kong before the earnings announcement. The benchmark Hang Seng Index lost 0.7 percent. The company’s Shanghai-traded shares declined 1.1 percent to 3.61 yuan today.
Aluminum has rallied as much as 26 percent since Feb. 3, when it touched the lowest since July 2009. It entered a bull market on the London Metal Exchange last month. Today, the metal for delivery in three months rose 0.1 percent to $2,088.
Chalco said April 16 it would cut 600,000 tons of production capacity.
The rebound in price may prompt the Chinese aluminum industry to restart closed smelters. Almost 1 million metric tons of aluminum capacity, including the suspended capacity in Chalco, is in the process of starting up, Credit Suisse Group AG analysts said in a note July 30.
— With assistance by Helen Yuan