Chalco Increases Prices of Alumina for Second Month (Update1)

Sept. 1 (Bloomberg) -- Aluminum Corp. of China Ltd., the nation’s largest producer of the metal, raised alumina spot sales prices for the second month as demand recovered. Prices will rise 6.3 percent to 2,550 yuan ($373) a metric ton from 2,400 yuan, the Beijing-based company known as Chalco said in an e-mailed statement today. Chalco on Aug. 3 raised prices by 4.3 percent, the first gain since April 1. Aluminum futures in Shanghai have jumped 18 percent since April 1, prompting smelters to restart idled capacity and increasing demand for alumina, a raw material. China’s 4 trillion yuan stimulus spending is boosting usage of the metal in automobiles and real estate. Chalco rose as much as 4 percent to HK$8.55 in Hong Kong and traded at HK$8.48 at 12:44 p.m. The most actively traded aluminum contract gained 0.3 percent to 14,950 yuan a ton on the Shanghai Futures Exchange. China’s official Purchasing Managers’ Index rose to a seasonally adjusted 54 last month, the fastest pace in 16 months, from 53.3 in July, the Federation of Logistics and Purchasing said today. A reading above 50 indicates an expansion. Higher alumina and metal prices will help Chalco break even in the second half, rebounding from three straight quarterly losses, Chairman Xiong Weiping said Aug. 25. The company had a net loss of 1.6 billion yuan for the three months ended June 30, according to figures derived from the company’s earnings. Chalco plans to run 90 percent of its alumina capacity in one month from the current 70 percent, President Luo Jianchuan said Aug. 26. Producers are “confident” that consumption, especially from builders, will improve, he said. The sales prices of imported alumina at Chinese ports are between 2,400 yuan a ton and 2,500 yuan a ton now, Chalco said today.