Chinese nonferrous metal producers Aluminum Corporation of China Ltd, and SEHK: 2600; Chalco) and Yunnan Aluminum Co., Ltd. both predicted a third-quarter decline on October 7 amid sharp price decrease.

Chalco forecast that its net profits would plunge more than 50 percent year on year in the period from July to September 2008. Its net profits stood at CNY 2.043 billion and basic earnings per share CNY 0.16 in the third quarter of 2007.

Yunnan Aluminum, which produces and sells aluminum products, carbon and carbon products, foresaw that its net profits would slump about 50-55 percent in the first nine months of 2008 from CNY 445.419 million a year earlier.

From July 1, 2008, Yunnan Aluminum had to pay CNY 0.41 for 1-kilowatt-hour electricity, up from previously CNY 0.37. Earlier, it said that along with the electricity markup, the overall production cost of the company and its subsidiaries would hike by about CNY 100 million in 2008.

In order to survive the steep price decline, quite a few producers of nonferrous metals turned to output reduction before October 1, 2008. Sichuan Aostaral Aluminum Co., Ltd. has ceased operation of 250,000-ton production capacity.

Henan Yuguang Gold & Lead Co., Ltd. (SHSE: 600531) has shut down 33 percent of its lead smelting capacity. Sino- Platinum Metals Co., Ltd. (SHSE: 600459) has suspended production in Yuanjiang Nickel Co. Ltd..

In fact, many nonferrous metal producers has successively issued bonds since this April, such as Chalco, Shandong Nanshan Aluminum Co., Ltd. (SHSE: 600219), Hunan Nonferrous Metals Corp., Ltd. (SEHK: 2626), Yunnan Copper Co., Ltd. (SZSE: 000878), and Jiangxi Copper Co., Ltd. (SHSE: 600362: SEHK: 0358).

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