Sunstone eying HK listing on aluminium boom

Reuters reported that Sunstone Development Corporation Limited plans to triple capacity and gain a Hong Kong stock market listing in 2010. Sunstone makes and trades in prebaked carbon anode, used in the electrolysis process to produce aluminium. Chinese producers require about half a tonne of carbon anode for every tonne of aluminium and China is the leading producer of the metal. Mr Lang Guanghui chairman of Sunstone wants to list in Hong Kong by buying either a listed shell company or a non listed firm into which the parent firm would then inject assets. He said that "We are going to take the decision in December. We hope our assets will be listed in Hong Kong in the Q3 or Q4 of 2010." He added that Sunstone Development, Rio Tinto Alcan and Dubai Aluminium will boost annual capacity to 330,000 tonnes before the year end from 150,000 tonnes. It plans to further expand to 1 million tonnes with new capacity in China or in the Middle East. Mr Lang said that in 2009, the firm is expected to produce 150,000 tonnes of prebaked carbon anode and buy about 30,000 tonnes from other producers for reselling. It would export a total of 150,000 tonnes to 160,000 tonnes in 2009. Carbon anode is produced from petroleum coke and coal tarpitch. The 2 raw materials take up about 65% of the production costs at Sunstone Development's plant. He said that the firm, the top exporter of the anode in China in 2007 to 2008 would expand its domestic sales in coming years to around 20% of its total production to take advantage of rising demand from Chinese aluminium smelters. Mr Lang said that the firm's exports and prices of prebaked carbon anodes had fallen this year due to the global financial crisis. Export prices were USD 450 per tonne to USD 500 per tonne for delivery in the Q4 versus USD 800 in the H1 of 2008. Chinese prices of anode were now CNY 3,200 per tonne to CNY 3,300 per tonne versus above CNY 5,000 in the Q1 of 2008. Chinese state backed metals research group Antaike sees new capacity boosting China's production of primary aluminium by 24.7% on the year to 17 million tonnes in 2010, a big rise after a 0.2% increase expected in 2009. Antaike forecasts China's demand for prebaked carbon anodes at 7.87 million tonnes in 2010 up 13.6% from 6.93 million tonnes expected this year. (Sourced from Reuters)