China Aluminium Closures to Depress Alumina Prices

HONG KONG - The closure of two aluminium plants controlled by Aluminum Corp of China Ltd may drive down prices of alumina, the raw material for production of the metal, industry sources said.

Aluminum Corp, also known as Chalco (2600.HK: Quote, Profile, Research) (601600.SS: Quote, Profile, Research), said alumina production at its Guizhou plant remained normal, even though the plant's aluminium production had halted due to power shortages in Guizhou province.

"Alumina production has not stopped," Liu Qiang, Chalco's board secretary told Reuters.

Chalco is the world's third-biggest alumina producer and the top aluminium supplier in China.

The power shortage forced Chalco to shut its Guizhou plant's aluminium production and Zunyi Aluminum from Jan. 23.

Investor relations manager Zhang Qing said the Guizhou plant had raised capacity to 1.2 million tonnes of alumina and 400,000 tonnes of primary aluminium after adding new capacity last year.

The plant produced about 800,000 tonnes of alumina, about 8 percent of Chalco's 10 million tonnes of output last year.

Zunyi had a capacity of 110,000 tonnes of aluminium, making the shutdowns 510,000 tonnes of annual capacity or 42,500 tonnes per month.

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