Top Biz News

Chalco cuts spot alumina prices again

(SD-Agencies)
Updated: 2006-11-07 13:57

Aluminum Corp of China Ltd (Chalco), the world's second-largest producer of alumina, has reduced spot prices of its main products by 18.6 percent from November 1, in its fourth cut since August as a price war escalates.

The top Chinese alumina and aluminum maker was forced to deepen its cut of spot alumina prices to 2,400 yuan (US$305) a ton this round as domestic rivals pre-empted the metal giant by offering lower prices, a Chalco official said yesterday.

Chalco had verbally told smelter clients last week that it wanted to cut the price by 15.3 percent to 2,500 yuan per ton, down from 2,950 yuan previously.

But other alumina refineries then began offering spot alumina at 2,450 yuan, the official said.

"How we can sell if we don't offer lower prices," he said, referring to alumina.

Chalco's spot offer price for alumina, the main material for aluminum production, is now 58 percent lower than its offer in early August of 5,650 yuan a ton, according to its websitewww.chalco.com.cn.

"The price cut is aimed at fending off domestic competition and also in response to lower European prices," said Geoffrey Cheng, analyst of equity research for Daiwa Securities.

"Many operators around the globe are still profitable at this point and they might be ready to make more cuts."

Global shortages had pushed up prices of alumina in the past year and helped Chalco nearly double first-half net profit, given it is the largest producer in China.