Chinalco: Adhere To Traditional Alumina Benchmark Pricing-Shanghai Metals Market

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Chinalco: Adhere To Traditional Alumina Benchmark Pricing

Industry News 04:41:48PM Jun 01, 2010 Source:SMM

BEIJING, June 1 -- Aluminum Corp. of China, also known as Chinalco, supports the traditional form of pricing for alumina, a raw material used in the production of aluminum, the Chinese metal giant's vice president told Dow Jones Newswires Tuesday.

Echoing developments in the iron ore sector, industry majors including Anglo-Australian miner BHP Billiton Ltd. (BHP) have been lobbying to move alumina term prices toward a format based on spot prices, away from the traditional method of benchmarking it as a percentage of the London Metal Exchange aluminum price.

"We have no issue (with the current pricing format)," Lu Youqing, Chinalco's vice president, said. "We're still following the original method of pricing alumina."

Chinalco's position in the pricing argument is important because its listed unit is the world's second largest producer of alumina, which also differentiates the market from iron ore, where the country is a major importer.

BHP has argued that alumina ought to follow thermal coal and iron ore into market-oriented pricing because of similar industry trends such as a sharp rise in demand, the development of a spot market, and a divergence between spot and contracted prices.

 

 
 

Key Words:  alumina  Aluminum Al  CHALCO 

Chinalco: Adhere To Traditional Alumina Benchmark Pricing

Industry News 04:41:48PM Jun 01, 2010 Source:SMM

BEIJING, June 1 -- Aluminum Corp. of China, also known as Chinalco, supports the traditional form of pricing for alumina, a raw material used in the production of aluminum, the Chinese metal giant's vice president told Dow Jones Newswires Tuesday.

Echoing developments in the iron ore sector, industry majors including Anglo-Australian miner BHP Billiton Ltd. (BHP) have been lobbying to move alumina term prices toward a format based on spot prices, away from the traditional method of benchmarking it as a percentage of the London Metal Exchange aluminum price.

"We have no issue (with the current pricing format)," Lu Youqing, Chinalco's vice president, said. "We're still following the original method of pricing alumina."

Chinalco's position in the pricing argument is important because its listed unit is the world's second largest producer of alumina, which also differentiates the market from iron ore, where the country is a major importer.

BHP has argued that alumina ought to follow thermal coal and iron ore into market-oriented pricing because of similar industry trends such as a sharp rise in demand, the development of a spot market, and a divergence between spot and contracted prices.

 

 
 

Key Words:  alumina  Aluminum Al  CHALCO