By Tom Daly
By Tom Daly
BEIJING, March 20 (Reuters) – China Hongqiao Group 1378.HK, the world’s largest aluminium producer, stated on Friday decrease prices boosted web revenue by 12.7% in 2019 regardless of a pointy drop in output, because it introduced its intention to spice up manufacturing from scrap steel.
Internet revenue got here in at 6.095 billion yuan ($862 million) final yr, versus 5.407 billion yuan in 2018, the corporate stated in a Hong Kong inventory trade submitting, warning the coronavirus could have a “profound influence” on world provide chains.
The rise in revenue got here at the same time as Hongqiao noticed an 11.3% fall in manufacturing of aluminium alloy merchandise to five.644 million tonnes, and a 6.7% drop in income to 84.18 billion yuan final yr as Shanghai aluminium costs SAFc1 averaged 2.4% decrease.
The corporate attributed the upper revenue to decrease buy costs for uncooked supplies akin to coal, larger effectivity and larger gross sales of fabricated aluminium merchandise.
It stated decrease major aluminium manufacturing was attributable to China’s winter restrictions on industrial output in 2019, in addition to its change to extra superior amenities and an outage brought on by flooding close to its Shandong headquarters in August.
Hongqiao had stated on the time its annual manufacturing would fall by 200,000-300,000 tonnes on account of that incident.
The corporate is transferring round 2 million tonnes of annual aluminium manufacturing from Shandong to Southwest China’s Yunnan province to make the most of cleaner hydropower, however doing so is not going to improve its licensed capability of 6.5 million tonnes per yr of major aluminium.
Nonetheless, Hongqiao stated it could “dedicate itself to growing the first aluminium manufacturing capability by secondary aluminium,” or scrap aluminium, and “plans so as to add new manufacturing strains for secondary aluminium,” with out elaborating.
The corporate at present makes its aluminium utilizing alumina, a substance refined from bauxite ore, however recycling scrap aluminium – akin to used cans – might assist it save prices, particularly with Shanghai aluminium costs falling to their lowest since 2016 this week.
“It’s anticipated that the aluminium business will face larger challenges and alternatives” in 2020 as a result of epidemic, Hongqiao added.
Alumina gross sales rose 29% in 2019 to five.28 million tonnes after the corporate “seized market alternatives” to promote extra materials domestically when its personal utilization decreased, Hongqiao stated, including that the 1 million tonnes per yr second part of its alumina venture in Indonesia is anticipated to begin up the top of 2020.
($1 = 7.0731 Chinese language yuan renminbi)
(Reporting by Tom Daly;Modifying by Elaine Hardcastle)
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