Chalco swings to profit as sales surge amid re­bound in prices

China Daily (USA) - - BUSINESS - By BLOOMBERG

Alu­minum Corp of China Ltd, the coun­try’s sec­ond­largest pro­ducer, said it swung to a profit in the third quar­ter as sales surged to the high­est level in more than two years amid a price re­bound. Its shares rose in Shang­hai.

The com­pany known as Chal­co­had­net in­come of 50.1 mil­lion yuan ($7.4 mil­lion) in July-Septem­ber, com­pared with a re­stated net loss of 972 mil­lion yuan a year ear­lier, ac­cord­ing to a state­ment. Sales rose to 42 bil­lion yuan, the high­est since 2014.

Alu­minum has climbed 16 per­cent in Shang­hai this year, along with a broader com­mod­ity rally, as a credit-fu­eled binge boosted prop­erty and in­fras­truc­ture spend­ing. The com­pany has also been cut­ting costs af­ter do­mes­tic metal prices slumped to a record late last year.

Chalco may need to re­duce out­put costs fur­ther as China’s ex­pand­ing alu­minum ca­pac­ity will curb prices for the rest of the year, Zhu Yi, an an­a­lyst with Bloomberg In­tel­li­gence, said in a re­port ear­lier this month. Idled fa­cil­i­ties are restart­ing and new­plants are com­ing on­line as smelters ben­e­fit from higher mar­gins, send­ing out­put in the world’s top pro­ducer to a 15-month high in Septem­ber.

The com­pany’s shares have risen 12 per­cent in­HongKong this year, out­per­form­ing a 6.7 per­cent gain in the bench­mark Hang Seng In­dex. The stock was sus­pended on Fri­day morn­ing af­ter the mar­ket was closed as TyphoonHaima ap­proached. It ended at HK$2.89 (37 US cents) on Thurs­day, down 1 per­cent, be­fore the earn­ings re­lease. In Shang­hai, the stock gained 1.3 per­cent.

Alu­minum Corp of China Ltd’s net in­come in July-Septem­ber

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