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Aluminum Corp of China (Chalco), the mainland's biggest alumina and aluminium producer, has raised its spot alumina price 10 per cent, its first price rise in seven months, which analysts said reflected some signs of  stability  for aluminium prices.
The  company is offering spot alumina at 2,200 yuan (HK$2,500) a tonne, effective from  January 10,  from 2,000 yuan, according to  its website.
The  increase came  two weeks after  a 23 per cent  cut.  Chalco reduced   prices  52 per cent  over five cuts after June last year when it offered spot alumina at 4,200 yuan  per tonne.
Shares of Chalco climbed as much as 9.54 per cent  after the news before closing up 5.72 per cent at HK$3.88 yesterday.
'[The price rise] reflects  recent signs of price stability or even a slight pick-up  in metals prices, particularly aluminium, following the industry's aggressive production cutbacks and inventory destocking,' said DBS Vickers analyst Helen Wang.
Over the past two weeks, the mainland spot price for aluminium  has edged up 3 to 4 per cent to  12,260 yuan  per tonne. Spot alumina recovered from 1,700 yuan a tonne  to  1,800 to 1,900 yuan  per tonne.
However, since spot alumina represents less than 20 per cent of Chalco's total alumina sales, Ms Wang said she  would not change her earnings forecast on Chalco until she saw 'more signs of fundamental improvement'.
She forecast  earnings for last year of 2.37 billion yuan,  down 77 per cent from 2007. This year, Chalco's earnings may drop further  to 636 million yuan, she said.
Chalco's state-owned parent, Chinalco, an integrated nonferrous metal producer, also saw its profit  decline  following weakening demand and lower prices for aluminium and other nonferrous metals.
Chinalco reported a profit of 2 billion yuan for last year, compared with more than 20 billion yuan in  2006 and 2007, falling short of targets set by the State-owned Assets Supervision and Administration Commission, vice-president Lu Youqing said  last week.
Revenue dropped 4.3 per cent to 126 billion yuan although the company's  assets increased 46 per cent to 259.5 billion yuan last year.
Mr Lu said Chinalco  would cut executive pay by as much as 50 per cent and workers' wages by 15 per cent,  which could save  up to  4 billion yuan per year.   The company  said  there  would be no layoffs.



Chalco makes first alumina spot price increase in seven months