Chalco's Big Loss Puts Damper On Ambitions

China's biggest aluminum producer misses earnings forecasts in a big way and says it will rein in spending.

After suffering a fourth-quarter loss that was a whopping 10 times worse than expected, Chinese aluminum giant Chalco's appetite for acquisitions and capital spending seems to be waning.

In a further sign of the commodities bust, Chalco (nyse: ACH - news - people ), the listed unit of parent Aluminum Corp. of China and China's biggest aluminum producer, posted its first loss in a decade and warned of further losses in the first quarter of this year. Chalco's near-term outlook is uncertain, as supportive government actions counter a harsh cost and demand environment. The news sent shares plunging over 11%.

Chalco missed earnings expectations in a big way when it posted a net loss Sunday of 2.6 billion yuan ($376.2 million) from October through December. Analysts had forecast a 260 million yuan ($38.1 million) loss, according to a Reuters poll. Chalco earned 1.5 billion yuan ($219.6 million) in the fourth quarter of 2007.

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