Metal rally fails to boost Chalco, Jiangxi Copper results
Aluminum Corp of China (Chalco) and Jiangxi Copper yesterday reported poor interim results despite metal prices rebounding in the second quarter after massive stimulus injections by governments worldwide.
Chalco, the mainland's biggest alumina and aluminium producer, reported a worse than expected 3.52 billion yuan (HK$3.99 billion) loss in the first six months, compared with a profit of 2.39 billion yuan last year.
Analysts had expected Chalco's second-quarter loss to narrow significantly from the first quarter's after the rebound in aluminium prices.
But based on Chalco's results announcement, its second-quarter loss still amounted to 1.63 billion yuan after deducting its first-quarter loss of 1.89 billion yuan.
Chalco said its average price for external sales of aluminium fell 33.1 per cent to 10,874 yuan per tonne in the first six months from a year ago, while the average selling price of alumina dropped 38.34 per cent to 1,745 yuan per tonne.
The utilisation rate of the Beijing-based company's capacity was kept at a low level of 66.9 per cent at its alumina facilities and 83.4 per cent at its aluminium facilities because of weak demand.
During the period, alumina output decreased 31.6 per cent to 3.2 million tonnes, but aluminium output still posted a 5.9 per cent rise to 1.61 million tonnes, Chalco said.
Meanwhile, Jiangxi Copper said first-half profit plunged 60.99 per cent to 1.2 billion yuan from 3.08 billion yuan a year earlier.
Sales decreased 23.57 per cent to 21.35 billion yuan.
The mainland's largest integrated copper producer had warned earlier that its interim net profit would slump more than 50 per cent after reporting an 89.27 per cent drop in first-quarter profit to 151.8 million yuan.
Based on the latest figures, its second-quarter profit amounted to 1.05 billion yuan, reflecting a big improvement from the first three months, thanks to the substantial rebound in copper prices.
Three-month copper futures prices on the London Metal Exchange rose about 68 per cent in the first six months and closed at US$5,101 per tonne at the end of June. But in terms of average prices, copper was still 49.2 per cent lower than the same period last year.
Jiangxi Copper said copper prices were unlikely to fall drastically, because demand for the metal was increasing as the global economy began to pull out of recession.