Chalco Lost Over RMB 8.23 Bln in 2012, Gloomy Outlook for Aluminum Industry Lies ahead

SHANGHAI, Mar. 29 (SMM) – According to Aluminum Corporation of China (Chalco)’s annual report, the company lost RMB 8.23 billion last year, equivalent to a loss of RMB 22.56 million each day, its biggest loss since it went public back in 2007.

Chalco reported losses for the first time in 2009, totaling RMB 4.65 billion.

The company lost RMB 3.75 billion in alumina business last year, RMB 3.09 billion in primary aluminum business, RMB 1.39 billion in aluminum processing, and RMB 1.45 billion in headquarters and other segments.

Chalco went public on April 30, 2007. From 2007 to 2011, its net profit growth was -9.74%, -99.91%, -50447.51%, -16.75% and -69.41%, respectively.

Its asset debt ratio rose 6.29 percentage points to 69.28% last year, highlighting its tight financial situation.

Chalco has been putting great efforts in coal-power-aluminum integration against high electricity costs, which has proved futile, though. It terminated plans to acquire SouthGobi Energy Resources and Winsway Coking Coal Holdings last year. 

Losses at Chalco are a reflection of the slump in the entire aluminum industry. Depressing global aluminum market, high energy costs in China and plunging aluminum prices have greatly eroded profits of aluminum smelters. Data from the China Nonferrous Metals Industry Association show that 93% of Chinese aluminum smelters suffered losses in 2012. 

Steadily growing aluminum inventories, sluggish downstream consumption, tumbling aluminum prices, and slow recovery in global economy since the start of this year indicate an uneven road to recovery in aluminum industry.