Chalco Will Not Raise Alumina Prices in Q2
By Interfax-China 17 Apr 2007 at 08:06 AM GMT-04:00
SHANGHAI (Interfax-China) -- The Aluminium Corporation of China Ltd. (Chalco) has announced it will not further raise alumina prices in the second quarter of this year, Chalco Vice President Liu Xiangmin told Interfax yesterday.
Chalco's alumina price will remain at RMB 3,900 ($505.18) per tonne during the second quarter of this year, Liu said.
On March 21, Chalco raised alumina prices for the second time this year to RMB 3,900 ($505.18) per tonne, up 8.3% from the previous 50% rise on Feb. 1 to RMB 3,600 ($466.32). The current domestic alumina cash price is RMB 3,800 ($492.22) per tonne.
Alumina cash price in the domestic market will remain at approximately RMB 4,000 ($518.13) per tonne in the second quarter of 2007, according to Liu. An alumina market price higher than RMB 4,000 ($518.13) per tonne is not welcomed by domestic aluminium smelters, many aluminium smelters halted production last year due to high alumina prices. Chalco subsidiaries are less affected as they can self-supply at lower rates, Liu said.
Many aluminium smelters resumed or expanded production in the second half of last year as alumina prices fell, this resulted in increased fixed-asset investment in the aluminium smelting sector in the first two months of this year, up 124.2% compared with the same period last year. However, the recently imposed export restricting policies have resulted domestic market oversupply and low prices, weighing pressure on domestic aluminium smelters.
Chalco is currently set to list on the A-share market in two weeks, pending possible approval today from the China Security Regulatory Commission (CSRC), Liu added.
After completing the A-share listing, Chalco will acquire three aluminium smelters currently owned by its parent Chinalco, including Liancheng Aluminium Co. Ltd. in Guansu Province, Tongchuan Xinguang Aluminium Co. Ltd. in Sha'anxi Province and aluminium assets from Inner Mongolia Baotou Aluminium Co. Ltd., according to a statement released by Chalco last Friday.
Liu commented that Chalco’s overseas projects are developing well, including the Aurukun Bauxite Project in Australia, the Daknong Bauxite Mine Project in Vietnam, the Bauxite Project in Guinea and a joint venture with CVRD to construct a 1.8 million-tonne alumina refinery in Brazil.
Chalco will start construction of its Aurukun Bauxite Project after gaining consent from local aboriginal authorities, Liu said. Chalco signed the final agreement to develop the bauxite mine with the Queensland Government on March 23, 2007. The project has a construction cost of AUD 3 billion ($2.5 billion) and is designed to extract 7.5 million tonnes of bauxite and refine 2.1 million tonnes alumina per annum.
Chalco aims to complete prospecting work on its Guinea bauxite mine project within 3 years of the launch last May. Chalco obtained permission in November 2005 to carry out geological surveys of Guinean bauxite reserves in the prefectures of Mamou, Kindia, Dalaba and Pita, an area of about 13,000 square kilometers.
The alumina refinery joint venture in Brazil is still in the discussion stage, a final project plan has not yet been decided upon, according to Liu.
Aluminium futures settled marginally up on the Shanghai Futures Exchange on Tuesday at RMB 19,840 ($2,565), as the rising output of alumina and electrolytic aluminium offset the decline in imports, said analyst Shi.
China is also likely to reduce tax rebates for aluminium products, according to officials, but the timetable has not yet been set.
Analysts expect prices to move within a confined range, under pressure from current supply.
© Interfax-China 2007.
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