Reuters reported that Aluminum Corporation of China Limited returned to profit in the Q4 of 2010 but cautioned that the sector faced headwinds in China from high costs and excess capacity.
To cope with this, Chalco said that it would be looking beyond China's borders for growth on expectations that demand for the lightweight metal in the transport, packaging and building sectors were expected to rise on sustained economic recovery in the United States and Europe.
Mr Xiong Weiping chairman of Chalco said that "In China, the challenge for the aluminum sector remains overproduction and rising costs but in the global picture demand remains strong and there are a lot of growth opportunities."
China is the world's largest producer of aluminum and represents about 40% of global demand. But with the country's output of the metal expected by Chalco to reach 19 million tonnes this year outstripping consumption by 1 million tonnes competition in the home market will be fierce. Still, Chalco expects aluminum prices to drift up this year in part because of broad based inflation and currency factors.
Mr Xiong said that the company expects 3 month aluminum futures prices at the London Metal Exchange at USD 2,300 per tonne to USD 2,900 per tonne this year compared with what it said was an average of USD 2,272 in 2010.
He said that aluminum futures prices at the Shanghai Futures Exchange would probably range from CNY 16,000 per tonne to CNY 18,500 per tonne compared with an average of CNY 16,186 last year.
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