Chalco's increase in its spot alumina price, to bring it in line with increases at other domestic, international competitors, not sustainable as alumina supply growth continues to accelerate, spot alumina prices well above average cost in China, all forms of aluminum in oversupply and Chinese government raising taxes to reverse it, says Merrill Lynch's Alexander Latzer. Chalco today announces increase in spot alumina price by 50% to CNY3,600/ton; Latzer estimates domestic Chinese alumina contract pricing at CNY3,500/ton. Notes rising surplus of aluminum in China likely to lead to lower aluminum prices in 2H. LME 3-month aluminum last at $2,716/ton, down $13 on yesterday's London PM kerb.
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