By Tom Daly
By Tom Daly
BEIJING, March 26 (Reuters) – Chalco, China’s largest state-run aluminium producer, churned out 9% much less steel in 2019 because it shut two uncompetitive smelters and barely eked out a revenue within the fourth quarter, whereas it performed down the impression of the coronavirus on the trade.
Chalco, or Aluminum Corp of China Ltd 601600.SS, 2600.HK, produced 3.79 million tonnes, in keeping with its presentation to analysts reviewed by Reuters – simply managing to retain its spot because the world’s No.2 listed aluminium producer forward of rival Rusal’s 0486.HK 3.76 million tonnes.
High producer China Hongqiao 1378.HK final week reported an 11.3% drop in annual output to five.64 million tonnes.
The decrease manufacturing numbers come as Chinese language aluminium companies brace for a troublesome 2020 with costs SAFc1 crashing to greater than four-year lows of 11,340 yuan ($1,602) a tonne this week amid ample provide, coronavirus-hit demand and a broad selloff by commodities buyers. MET/L
Analysts say costs are under most smelters’ break-even and have prompted some to close items for upkeep.
Chalco, which stated in a submitting on Thursday that it shuttered two “non-competitive” smelting subsidiaries in 2019, made no point out of taking comparable measures as a result of virus disaster.
The coronavirus, which originated in China late final 12 months, has contaminated greater than 81,000 folks within the mainland and killed over 3,000. Globally, the variety of circumstances has crossed the half million mark, whereas greater than 24,000 have died.
The epidemic has floor each day life and companies to a halt with governments worldwide locking down borders and slapping strict journey curbs to include the unfold.
VIRUS IMPACT NOT SUBSTANTIAL
The general sample of the aluminium trade has, nonetheless, not modified considerably as a result of epidemic, though some orders from downstream processors and building of latest tasks have been affected, Chalco stated.
The aluminium producer additionally famous that main aluminium capability in industrial heartland Henan and “different areas with excessive prices might exit” the market, as locations like Yunnan and Sichuan turn out to be extra preferable places.
Chalco’s exterior aluminium gross sales fell 11.9% final 12 months, whereas output of uncooked materials alumina rose 2.1% to 13.eight million tonnes, in keeping with the presentation.
The brand new 2 million tonnes per 12 months alumina refinery in Guangxi is “advancing as scheduled” and is predicted to be accomplished in June, Chalco provides within the presentation.
The corporate didn’t instantly affirm the contents of the presentation.
Chalco was much less worthwhile than Rusal and Hongqiao in 2019.
The latter two noticed annual income of $960 million and about $863 million, respectively, whereas Chalco’s web revenue rose 2.4% to 851 million yuan ($121 million) on larger buying and selling volumes whereas it barely scraped a revenue within the remaining quarter.
Excluding a loss within the year-earlier interval, the fourth-quarter web revenue of 42.6 million yuan was Chalco’s lowest because the first quarter of 2016, Refinitiv Eikon knowledge exhibits.
($1 = 7.0633 Chinese language yuan)
Coronavirus spreads in China and beyondhttps://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?navid=919104201
(Reporting by Tom Daly; Enhancing by Elaine Hardcastle and Himani Sarkar)
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