DJ MARKET TALK: Chalco Power Tariff Talks May Hit Metal Price -CS
1210 [Dow Jones] STOCK CALL: Credit Suisse says Chalco's (2600.HK) management confirms starting negotiations with power firms to cut power tariffs; tips cost savings could boost Chalco's EPS by CNY0.19-CNY0.29/share. House also cites industry magazine Metal Bulletin as saying Beijing may allow up to 15 smelting firms to do the same, expects cost savings for whole sector could reach US$0.10-US$0.15/lb, vs sector's current loss at US$0.15-US$0.20/lb.
Says, "implication for global aluminum prices nevertheless would be negative, as the lower cost for Chinese smelters supports a lower floor price for global aluminum prices." House doesn't give ratings for Chalco, as it is advising Chalco's parent Chinalco on Rio Tinto deal. Chalco +2.1% at HK$3.98.