Chalco, Yunnan Aluminum Foresee Q3 Decline

BEIJING, Oct 09, 2008 (SinoCast via COMTEX) --Chinese nonferrous metal producers Aluminum Corporation of China Ltd. (SHSE: 601600, and SEHK: 2600; Chalco) and Yunnan Aluminum Co., Ltd. (SZSE: 000807) both predicted a third-quarter decline on October 7 amid sharp price decrease. Chalco forecast that its net profits would plunge more than 50 percent year on year in the period from July to September 2008. Its net profits stood at CNY 2.043 billion and basic earnings per share CNY 0.16 in the third quarter of 2007. The company, known as the country's top aluminum producer, explained that flying prices of raw materials and fuel drove up its production cost while products prices slumped in the third quarter of this year. Yunnan Aluminum, which produces and sells aluminum products, carbon and carbon products, foresaw that its net profits would slump about 50-55 percent in the first nine months of 2008 from CNY 445.419 million a year earlier. It was plummeting prices of its products that eroded its operating revenues. Particularly, it had to pay much more for electricity in the period when it has stopped enjoying preferential electricity price since the beginning of hits year. From July 1, 2008, Yunnan Aluminum had to pay CNY 0.41 for 1-kilowatt-hour electricity, up from previously CNY 0.37. Earlier, it said that along with the electricity markup, the overall production cost of the company and its subsidiaries would hike by about CNY 100 million in 2008. In order to survive the steep price decline, quite a few producers of nonferrous metals turned to output reduction before October 1, 2008. Sichuan Aostaral Aluminum Co., Ltd. has ceased operation of 250,000-ton production capacity. Henan Yuguang Gold & Lead Co., Ltd. (SHSE: 600531) has shut down 33 percent of its lead smelting capacity. Sino- Platinum Metals Co., Ltd. (SHSE: 600459) has suspended production in Yuanjiang Nickel Co. Ltd.. In fact, many nonferrous metal producers has successively issued bonds since this April, such as Chalco, Shandong Nanshan Aluminum Co., Ltd. (SHSE: 600219), Hunan Nonferrous Metals Corp., Ltd. (SEHK: 2626), Yunnan Copper Co., Ltd. (SZSE: 000878), and Jiangxi Copper Co., Ltd. (SHSE: 600362: SEHK: 0358). Hunan Nonferrous Metals raised CNY 2 billion for the development of its multi-metal mine in Australia and a lead and zinc mine in Pakistan. Yunnan Copper issued CNY 2.8 billion one- year bonds in June 2008, and intended to earmark CNY 1.8 billion for loan payment. Jiangxi Copper obtained CNY 13.4 billion from its September bond issuance, including CNY 2.5 billion for acquisition and development of overseas resources, and CNY 4.72 billion for loan payment. From www.nanfangdaily.com.cn, Page 1, Wednesday, October 08, 2008 info@SinoCast.com For full details on Aluminum Corp. of China Ltd. ADS (ACH) click here. Aluminum Corp. of China Ltd. ADS (ACH) has Short Term PowerRatings of 8. Details on Aluminum Corp. of China Ltd. ADS (ACH) Short Term PowerRatings is available at This Link.