SHANGHAI, Sept.5 (CBI China) -- At its interim results announcement conference held on September 1st, CHALCO CEO Xiao Yaqing said alumina prices will continue to fall by another RMB 200-300/mt in 2H08 due to capacity expansion in China, and despite rising raw material and energy prices.
CBI also believes alumina prices will continue to face downward pressures during 2008, with room to move down by an additional RMB 200/mt due to the following reasons. First, current refined aluminum prices are below RMB 17,000/mt, and a large number of domestic refined aluminum producers are suffering financial losses, the worst case with losses of RMB 1,000/mt. In this context, refined aluminum producers are expected to negotiate hard for lower prices, and this will affect market prices. Second, new refined aluminum projects scheduled to come online during September have been delayed due to the present unprofitability in the sector, and decisions for other new projects scheduled for completion in 4Q will be based on aluminum prices. CBI believes alumina prices will
find little support at RMB 3,000/mt as there is no expected increase in demand. Third, Nalco announced its new alumina price of USD362/mt for September shipment, and softening prices of imported goods will further dampen domestic prices.