Timing and magnitude of increase surprise market but rebound unlikely to be sustained in face of ample supply
Aluminum Corp of China (Chalco), the world's second-largest alumina producer, yesterday raised its spot alumina prices 50 per cent, the sharpest increase since the company went public.
The Beijing-based company said spot prices of alumina, the semi-processed material used to make aluminium, would be increased to 3,600 yuan a tonne from 2,400 yuan.
Shares in Chalco jumped as much as 12.5 per cent yesterday before closing up 10 per cent at HK$7.66.
The rebound in alumina prices was unsustainable given the amount of new capacity coming on stream in China, analysts said, adding the timing and magnitude of the increase surprised the market.
Chalco investor relations manager Zhang Qing said the price rise was in response to higher international prices, with imported alumina at mainland ports hitting about 3,900 yuan a tonne.
'We've set the price a little lower than the import prices as we think the rebound in international alumina prices will not last long amid ample supply,' Ms Zhang said.