Chalco, Chinese Aluminum Stocks Rise on Outlook for Demand

BEIJING, July 17 -- Aluminum Corp. of China Ltd. led gains among aluminum producers in China-markets trade on optimism demand for the metal will pick up further amid a recovery in the property and auto industries.

    Aluminum Corp. or Chalco, the nation's biggest maker of the lightweight metal, rose 8.3 percent to 14.83 yuan as of 1:43 p.m. in Shanghai, set for a one-year high. Shandong Nanshan Aluminum Co., the No. 2, advanced 10 percent to 12.82 yuan in Shanghai while Yunnan Aluminium Co., the fifth-largest, climbed 9.5 percent to 11.88 yuan in Shenzhen. The benchmark Shanghai Composite Index added 0.1 percent.

    "The better-than-expected figures for the property and auto industries have laid a solid foundation for a full pick-up in demand for aluminum," Luo Wei, an analyst at China International Capital Corp., said in a report today. "Major listed aluminum companies we cover are all forecast to report profit in the second quarter." He has an "overweight" rating on the aluminum industry.

    Gross domestic product grew 7.9 percent in the second quarter, faster than the 6.1 percent pace in the previous three- month period, the statistics bureau said yesterday.

    China's housing sales surged 45.3 percent in the first five months and real-estate investment growth accelerated to 6.8 percent, the statistics bureau said last month. Car sales rose 48 percent in June, the most since February 2006, according to industry figures.

    Aluminum has gained 2 percent this month, set for its fourth month of advances in five on the London Metal Exchange, and jumped 10 percent so far this year, tracking a rally in industrial metals led by copper.

    (Source: Bloomberg)