Chalco cut expenditure of next year by 20%, indicating further output cut of aluminium industry

Insider of Aluminium Corporation of China (2600.HK)(601600.SH), the largest aluminim company in China claimed yesterday that it planned to cut capital expenditure of next year by 20%; and he added that output of electrolytic aluminium would continue to be shut down.

Chen Jihua, Chief Financial Officer of Chalco said in the call conference.

With the down of aluminium price to 13000 yuan/ton, which is lower than the production cost of 15000-16000 yuann/ton, smelters of Chalco are all in deficit. Chen predicted that China would shut another 1 million tons capacity.

And Chalco had no plan of cut output in Q4, he added.

Chalco declared on 23rd that it was halting parts of output in Shandong, Henan, Liaoning and Inner Mongolia, which would reduce electrolytic output by 720000 ton/year, accounting for 18% of the company¡¯s total output. And this operation could be adjusted according to the condition of the market and the company itself.

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