Aluminum Corp of China (Chalco) warned its first-half profit would fall more than 50 per cent because of higher costs and disruption to production from snowstorms, while a government-ordered power tariff increase would lead to higher energy costs in the second half. 'The power tariff rise will no doubt lead to upward cost inflation for metal smelters, led by aluminium producers that command the highest power consumption based on per tonne of metal produced,' said Helen Wang, an analyst at DBS Vickers. On Thursday, Beijing said it would raise electricity prices by an average 4.7 per cent or 2.5 fen (2.8 HK cents) per kilowatt-hour from July 1. Aluminium production uses about 14,500 kWh per tonne while for copper the figure is about 7,000 kWh to 8,000 kWh per tonne and zinc is about 3,000 kWh to 4,000 kWh per tonne, according to Ms Wang. Sabrina Xie Lulu, an analyst at Guotai Junan Securities, said the tariff rise would increase Chalco's aluminium unit production cost by 2 per cent and lead to a cut in the company's earnings per share by 4 per cent this year and 8 per cent next year. Power accounts for about 31 per cent of the operating costs for Chalco's aluminium smelting business. Deutsche Bank said within metals companies, Chalco would be the most affected by the tariff rise as it would cut 5.6 per cent of forecast earnings this year and 11.2 per cent next year. The impact on steel and other metals companies would be limited, the bank said. Chalco's shares fell 2.64 per cent to close at HK$10.32 yesterday because of the cost pressure. However, analysts are expecting a bigger sell-off on Monday because of the profit warning. The mainland's largest alumina and aluminium producer last night said first-half profit would slide by more than 50 per cent based on mainland accounting standards. Chalco reported a profit of 6.4 billion yuan in the same period last year. The company closed a number of aluminium smelters in February because of the country's worst snowstorms in 50 years. The rise in prices of raw materials and fuels also increased production costs 'noticeably', the company said. Shares in Chalco have fallen 36 per cent this year as brokerages, including CLSA, DBS, Merrill Lynch and Macquarie, reduced their earnings estimates or target price after the company cut the price of its spot alumina by 17 per cent on June 3.