Chalco Slashes Spot Alumina Prices by 23.08%

China's leading aluminum producer Aluminum Corporation of China Ltd. (NYSE: ACH; Chalco) cut spot alumina prices by 23.08% to CNY 2,000 per ton from January 1, 2009, due to sluggish demand.
In 2008, the company gradually cut alumina prices from CNY 4,200 per ton at the year-beginning to CNY 2,600 per ton at the year-end. And 4.11 million tons of alumina production capacity, or 38% of its total, was idle by November 5, 2008.

Chinese electrolytic aluminum producers had slashed their outputs by around 4.3 million tons by the end of 2008, after two massive production reductions in October and December. As a result, demand for alumina shrank. For instance, electrolytic aluminum producers stopped running around 1.7 million tons of production capacity in December, and that was estimated to cut demand for alumina by over 3 million tons.

Currently, the market prices of alumina products in China have dropped to around CNY 1,800 per ton, said industry analysts, adding that Chinese alumina producers have slashed alumina output by over 7 million tons.

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