Chalco shuts down 38 pct of annual alumina capacity

Aluminum Corp of China Ltd, the world's No. 3 alumina maker, said it had shut down 38 percent of its total annual alumina capacity, the second major capacity shut announced in two weeks due to sliding prices and weak demand.

The company, also known as Chalco, said on Oct 22 it had temporarily shut down 720,000 tonnes of annual aluminium capacity, or 18 percent of its total capacity. Alumina is the main material for the production of primary aluminium.

Most Chinese aluminium firms are making losses now due to weak demand amid a global financial crisis and a record stocking of the metal, which is widely used in industries including construction and automaking.

Chalco reduced the output of alumina at high-cost operations starting late October and shut down annual alumina production capacity of 4.1 million tonnes as of Nov. 5, it said in a statement on Thursday.

That would see the firm losing about 685,000 tonnes of alumina output this year, or 6.2 percent of the estimated annual production of about 11 million tonnes in 2008. That amount of alumina can produce 342,500 tonnes of primary aluminium.

Chalco also said it had completed the issue of 5 billion yuan five-year bonds, the second tranche of a 10 billion yuan medium-term issue, with annual interest of 4.58 percent. The first batch of 5 billion yuan had been issued in June.

The company said last week it planned to cut capital spending by at least 20 percent next year due to lower aluminium output. It targeted spending 20 billion yuan in capital investment in 2008.

Analysts said the profit outlook for Chalco is bleak and the company would likely make a loss in the fourth quarter after it posted a 92 percent plunge in net profit in the third quarter.

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.