Shares in Chinalco Mining Corp International, which is developing a copper mine in Peru, closed 6.3 per cent lower than their offered price on their trading debut yesterday. The sharp price fall might have been caused by retail investors, who tended to have a short investment horizon and were not familiar with the company's operations and outlook, analysts said. Chinalco Mining is the overseas non-aluminium and non-ferrous metals arm of state-owned Aluminum Corp of China (Chinalco). "Chinalco Mining's operation in Peru is a long way from Hong Kong and production will only begin late this year, so it's not easy for local investors to picture its prospects," said Christfund Securities research director Simon Lam Ka-hang. Its shares traded as much as 11.4 per cent below the initial public offering price of HK$1.75 and a high of HK$1.67 before closing at HK$1.64. Retail investor sentiment for metals stocks was probably also dampened by comments from the China Iron & Steel Association yesterday that profit at the nation's large steel mills slumped by 98 per cent last year. But perhaps overlooked by disappointed shareholders was the fact that copper mining in South America was much more profitable than steel smelting in China, which had been suffering from chronic industry overcapacity in the past few years, Lam said. About 62 per cent of Chinalco Mining's HK$3.1 billion share offering was bought by Chinalco's Australian business partner Rio Tinto and four mainland commodities traders that have also committed to buy 60 per cent of the future output of its Toromocho mine. These investors are not allowed to sell their shares for six months. Institutional investors with good understanding of Chinalco Mining's business tend to be long term and not trade on market sentiment. UOB Kay Hian Securities analyst Helen Lau said many investors evidently did not understand Chinalco Mining's business and some might have dumped its shares on a down day in the stock market. Lau said the company's current valuation represented good value. She said the shares were fairly valued at HK$2.56 each. Chinese smelters are Toromocho's main customers.