Chalco cuts spot price 10pc as shares soar

Aluminum Corp of China (2600), the nation's biggest producer of the metal, cut its alumina spot price by 10 percent yesterday.

The Beijing-based company, known as Chalco, cut the price of the raw material to 2,600 yuan (HK$2,950) per tonne from 2,900 yuan per tonne, it said.

Chalco's H shares rose as much as 21 percent in intraday trading yesterday, as China's 4 trillion yuan stimulus plan led to the anticipation of increasing demand for the base metal.

The stock surged 19 percent to close at HK$3.45 on the Hong Kong bourse.

The company had idled smelters to keep alumina production capacity at 4.11 million tonnes per annum, or about 38 percent of its total annual alumina production capacity as of November 15, because of the declining price of the base metal, it said in a filing to the Hong Kong stock exchange.

Aluminum futures have dropped more than 20 percent this year on the Shanghai Futures Exchange.

The company said last week that it issued 5 billion yuan in five-year bonds to replace bank borrowings and for working capital.

Meanwhile, Chalco shareholders have approved a plan to allow board directors to buy back no more than 10 percent of the company's outstanding shares, the company said in a stock exchange filing on Sunday.

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