Chalco 2600

Re: Chalco 2600

Postby winston » Fri Aug 01, 2008 10:36 am

Still trying to time my put :(

Chalco cuts spot alumina prices by 8.6 percent

HONG KONG, Aug 1 (Reuters) - Aluminum Corp of China Ltd (2600.HK: Quote, Profile, Research, Stock Buzz)(601600.SS: Quote, Profile, Research, Stock Buzz), the world's third-largest producer of alumina, has reduced spot alumina prices by 8.6 percent from Friday, the second reduction since June, smelters said.

The firm offers spot alumina at 3,200 yuan ($468.4) a tonne versus 3,500 yuan on Thursday, a company official confirmed with Reuters.

It reduced spot alumina prices by 16.7 percent to 3,500 yuan in June this year. ($1=6.831 Yuan)
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Re: Chalco 2600

Postby winston » Thu Aug 07, 2008 12:48 pm

Chalco Rises in Hong Kong After Chinese Smelter Production Cut
By Xiao Yu

Aug. 7 (Bloomberg) -- Aluminum Corp. of China Ltd., the nation's biggest producer of the metal, rose the most in almost a month in Hong Kong trading after the country's largest smelters cut output by more than expected, boosting prices.

Beijing-based Chalco, as the company is better known, rose as much as 5.4 percent to HK$7.20 and traded at HK$7.16 at 10:10 a.m. local time. That's the biggest gain since July 11. In Shanghai, the stock gained 0.3 percent to trade at 12.46 yuan.

Aluminum prices gained in London after China's smelters cut output by more than an earlier target of 10 percent because of power shortages and weak export demand. The cut will also last three months longer to the end of the year.

``Chalco will be the biggest winner if the industry's production cut and a consolidation helped to ease a domestic supply glut this year and next year,'' Sabrina Xie, a Shenzhen- based analyst with Guotai Junan Securities Co., said by phone.
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Re: Chalco 2600

Postby winston » Tue Aug 19, 2008 8:13 pm

China smelters brace for next power price move
By Polly Yam

HONG KONG, Aug 19 (Reuters) - Power-hungry Chinese aluminium smelters are bracing themselves for higher electricity prices next month after Beijing's second on-grid rate rise in two months, a move that will may force older smelters to cut output or sell out.

China, the world's second-largest electricity producer and consumer and top aluminium producer and consumer, said on Tuesday it will hike on-grid power tariff paid to thermal generators by 0.02 yuan per kilowatt-hour, a rise of about 5 percent, effective from Aug. 20. [ID:nPEK222278] [ID:nSP210262]

Although this will not affect electricity consumers directly since the state-owned grids will absorb the higher cost, smelters say they reckon a subsequent rise will hit them as Beijing battles its worst power deficit in four years, which has already forced some smelters to cut production.

"Smelters are talking about another power fee hike. We are quite certain the fees would be higher in September," an official for a listed aluminium smelter said, adding that the smelter had not received a notice.

Smelters that did not own power plants and which imported alumina would face problems, likely cutting output or selling assets, said Lan Ke, Beijing-based analyst at Southwest Securities.

The smelters could cut output or sell assets.

Beijing raised average electricity tariffs by about 4.7 percent from July 1, the first rise in two years, but pressure for another hike had mounted since then.

Though the authorities did not say if or when they would allow the state-operated grid to pass on the higher rates, analysts expected a subsequent rise in retail prices to follow.

Aluminium smelters' production costs would rise 145 yuan ($21.12) per tonne for each 0.01 yuan rise in power fees, Zhu said.

A hike of 5 percent may raise smelters' production costs by more than 300 yuan per tonne to about 17,800-18,300 yuan per tonne, smelter officials estimated.

At the same time, domestic aluminium prices have fallen nearly 5 percent this month, to 17,930 yuan per tonne on Tuesday, on increased supply after China said it will impose a 15 percent tax on exports of aluminium alloy from Aug. 20, amid soft demand.

But improved power supplies could give some smelters the confidence needed to launch tens of thousands of tonnes of new capacity, a trade manager at a large smelter in Henan province said.

Alumina, the main material for aluminium production, and electricity normally make up about 70 percent of production costs for smelters in China.

Expanding losses may boost acquisitions by large smelters, such as Aluminum Corp of China Ltd (Chalco) (2600.HK: Quote, Profile, Research, Stock Buzz) (601600.SS: Quote, Profile, Research, Stock Buzz), the country's biggest, similar to its 2005-2006 spree when it bought millions of tonnes of capacity.

"Chalco will continue to buy regardless of low profit margins on the international standard. A consolidation in China's aluminium industry is unavoidable," Geoffrey Cheng, an analyst at Daiwa Securities, said.

If China maintained a long-term plan to let the market determine coal and power prices, power fees would continue to rise, possibly making aluminium a low-margin business, he said.

"The question is: Is China's aluminium industry competitive?"
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Re: Chalco 2600

Postby winston » Fri Aug 29, 2008 11:15 pm

Chalco profit plunges 66pc

Aluminum Corp of China (2600), the nation's biggest producer, said first-half profit plunged 66 percent because of production cuts and rising costs.

Net income slipped to 2.4 billion yuan (HK$2.7 billion), or 0.178 yuan a share, from a revised 7 billion yuan, or 0.562 yuan, a year earlier, the Beijing-based company said in a statement to Shanghai's stock exchange, citing domestic standards. Sales fell to 39.6 billion yuan from 42.7 billion yuan.

The company, better known as Chalco, on June 20 said first- half profit will fall by more than half.

BLOOMBERG
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Re: Chalco 2600

Postby LenaHuat » Mon Sep 01, 2008 9:26 am

Severe demand destruction taking place in China. Last Friday, China's VP Wang Qishan presided over a forum discussion with a top-level Taiwanese biz group. The Taiwanese bizmen looked pretty glum on Taiwanese TV. The re-structuring of the Chinese economy is facing severe difficulties over tax regime, global demand weakness, labor issues, environmental issue and more severely competition from Vietnam/India and other lower cost centres.
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Re: Chalco 2600

Postby millionairemind » Mon Sep 01, 2008 9:53 pm

Chinalco eyes bigger stake in Rio Tinto
SHANGHAI, Sept 1 – Chinese aluminium maker Chinalco may increase its minority stake in Anglo-Australian miner Rio Tinto if market conditions are right, but has no timetable for such a move, its president said on Monday.

”Under the right market conditions, this is an option, it is possible. But we have not decided when. It will depend on the timing of opportunities in the market and our requirements,” Xiao Yaqing told reporters in Shanghai.

Chinalco and US aluminium firm Alcoa Inc jointly bought 12 per cent of Rio’s London-listed shares, or 9 per cent of Rio Group’s total equity, in January.

The companies have Australian government approval to raise their combined stake to 14.99 per cent of the shares in Rio, equating to about 11 per cent of the Rio Group. Rio is listed in both London and Australia.

Rio Tinto is defending itself against a $150bn takeover bid from bigger rival BHP Billiton, which is awaiting clearance from Australian and European regulators, due later this year, before formally launching an offer.

Xiao, who also chairs Aluminum Corp of China Ltd (Chalco), which is controlled by Chinalco and is China’s largest alumina and aluminium producer, added that alumina prices would be volatile in the second half of this year and primary aluminium prices could fluctuate around 18,000 yuan ($2,628) per tonne.

He also said aluminium production may be restricted if power prices keep rising.


China has raised electricity prices and more increases are expected as rising coal costs have pinched power generators and prompted many to curtail coal purchases and power output, contributing to a power shortage over the summer.

Chalco on Friday posted a near two-thirds drop in first-half net profit, hit by high production costs, output disruptions and aluminium oversupply.

The company’s shares in Hong Kong were down 1.6 per cent at HK$6.91 by 0324 GMT on Monday, while its Shanghai-listed shares were off 3.7 per cent at 9.81 yuan.

The company, which faces fierce competition and increasingly scarce raw materials, plans to raise capital over the next two years and diversify overseas.

Xiao said Chalco would welcome cooperation in its Aurukun bauxite project in Queensland, Australia, from foreign players including Alcoa and Rio Tinto, and would not insist on maintaining full control.

Chalco signed a deal in May last year to invest $2.4bn in the Aurukun project, which will also include an alumina plant with annual capacity of 2.1 million tonnes.

Xiao said the company’s domestic bauxite projects now under construction would have annual capacity of about 10 million tonnes, with about 70 per cent of that expected to be in production by the end of 2009.
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Re: Chalco 2600

Postby winston » Thu Sep 04, 2008 7:09 pm

Templeton Asset Reduces Holdings in Chalco's Hong Kong Stock
By Xiao Yu

Sept. 4 (Bloomberg) -- Templeton Asset Management Ltd., a subsidiary of California-based Franklin Resources Inc., cut its stake in Aluminum Corp of China Ltd.'s Hong Kong shares for the fifth time since May, according to an exchange filing.

The fund manager sold 7.85 million shares in Aluminum Corp., China's largest maker of the metal, at an average price of HK$7.158, on Aug. 27, according to the Sept. 4 filing to the Hong Kong stock exchange. This reduces its holdings to 13.94 percent from 14.79 percent.

Chalco, as the company is known, is the second-worst performer in the benchmark Hang Seng Index this year as investors sell the stock on concern about rising costs and falling prices. The Beijing-based company last week posted a 65 percent drop in first-half profit on rising costs.

Chalco fell 2.5 percent to trade at HK$6.30 at 10:46 a.m. local time. The stock is down 61 percent this year, compared with the 26 percent drop in the benchmark index in Hong Kong. Its Shanghai-listed shares dropped 0.3 percent to 9.58 yuan.

Including the latest reduction, Templeton Asset has cut its stake in Chalco five times since May 30 from 18 percent, according to the filing.
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Re: Chalco 2600

Postby winston » Tue Sep 09, 2008 11:30 am

Chalco shares hit 21-month low on poor outlook

HONG KONG, Sept 9 (Reuters) - Shares in Aluminum Corp of China Ltd (Chalco) <2600.HK>, the world's No.3 alumina producer, fell more than 7 percent to a 21-month low on Tuesday after Deutsche Bank cut its target price on the stock by more than 37 percent.

The stock hit a low of HK$5.98, down 7.6 percent in late morning trade.

"With the costs of key production inputs continuing to rise and further downside risk to alumina/aluminum ASPs (average selling prices), we expect further margin squeeze for Chalco in 2H08 and FY09," wrote analyst Julian Zhu in a note to investors.

The bank cut its target price for the stock to HK$5 from HK$8 on Tuesday.

It also slashed its earnings estimates on Chalco <601600.SS> by 24 percent for 2008 and 17 percent in 2009 on higher production costs.
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Re: Chalco 2600

Postby winston » Mon Sep 22, 2008 11:18 am

Chalco won't cut aluminium output despite low price

HONG KONG, Sept 22 (Reuters) - Aluminum Corp of China Ltd (Chalco) is planning to maintain its output of primary aluminium despite low prices that may force higher-cost smelters in China to cut production, Chalco President Luo Jianchuan said on Monday.

"We are not considering cutting production," Luo told reporters on the sidelines of an aluminium conference in Chongqing. He said Chalco was confident of 2009 Chinese primary aluminium consumption because the government was working on measures to boost domestic demand.
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Re: Chalco 2600

Postby winston » Tue Sep 23, 2008 8:47 am

Chalco makes output pledge as prices fall
Kathy Wang and agencies

Aluminum Corp of China (2600), or Chalco, the mainland's biggest producer of the metal, said the company will maintain its primary output, while low metal prices may force higher-cost smelters to reduce production.

"We are not considering cutting production," president Luo Jianchuan said in Chongqing.

"As some domestic [private] smelters are in the red, it's reasonable for them to adjust their output."

Many Chinese smelters are having cashflow problems because of the lower light metal price, but it is hard to predict how much the domestic smelters will scale back, Luo said.

Global aluminum demand, inclusive of China, will grow less than expected, he said.

The real estate industry accounts for one-third of demand for the light metal in the mainland.

Beijing-based Chalco will cut investment in China by 20 percent amid rising costs, while the company seeks overseas development opportunities, chairman Xiao Yaqing said earlier this month at the firm's interim results announcement.

Xiao said the company wants to buy coal assets and build more power plants in order to reduce production costs.

Chalco slashed output by more than 10 percent from August because of a shortage of electricity, which accounts for 40 percent of its costs.

Chalco shares closed yesterday at HK$6, gaining 5.26 percent.

The stock has dropped 8 percent in the past month.
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