UPDATE 1-Chalco posts Q4 net loss, warns of loss in Q1

Aluminum Corp of China Ltd (Chalco) (2600.HK) (601600.SS), the world's largest aluminium firm by market value, posted a bigger-than-expected net loss in the fourth quarter, its first deficit in a decade, and warned of a first quarter loss.

Chalco and its global competitors, including aluminium giant Alcoa (AA.N), which reported a second consecutive quarterly loss in March, are suffering as the global economic downturn has eroded demand for the versatile metal used extensively in transport and packaging.

"Since 2009, the company is still facing an exceptional business landscape. It is expected that the company will record a loss in its net profit for the first quarter of 2009," Executive Director Luo Jianchuan said in a statement.

Chalco, whose parent Chinalco is offering $19.5 billion to buy Rio Tinto (RIO.AX)(RIO.L) assets and convertible notes that would double its Rio stake to 18 percent, said it will reduce investment scale and improve investment structure to weather the challenging market in 2009.

Chinalco said last Friday that it arranged a $21 billion loan to finance the planned Rio tie-up. [ID:nLR976550] [ID:nSYD423833]

London Metal Exchange benchmark aluminium MAL3 prices have dropped 7.8 percent this year to about $1,420 a tonne after falling 36 percent in the fourth quarter last year.

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