Aluminum Corp of China Ltd (Chalco), the largest producer of the metal in China, has moved into the black in the first two months of this year after posting a loss in 2009, buoyed by price hikes for the metal and effective cost-cutting measures.
"We've seen a distinct improvement in our sales revenue and operating results due to recovering market demand and reduced production costs," Chairman Xiong Weiping said on Monday, without disclosing detailed figures.
Chalco, one of the world's largest aluminum and alumina producers, posted a worse-than-expected net loss of 4.64 billion yuan ($680 million) in 2009, compared with a net profit of 19.5 million yuan a year earlier.
"We'll still face challenges this year, but expectations of quick growth in the property and transportation sectors, which consume more than 50 percent of all aluminum products, will propel demand and boost prices for our products," Xiong said.
Chalco projects global aluminum prices will fluctuate between $2,000 and $2,400 per ton for 2010, and between 15,500 yuan and 18,000 yuan per ton in the Chinese market.
Chalco is a world leader in the production of both alumina and aluminum. Aluminum oxide, commonly referred to as alumina, is used in the production of aluminum metal and also used as an abrasive due to its hardness.
Global alumina consumption is expected to hit 78.4 million tons this year, while domestic markets are forecast to gobble up 35 million tons in 2010.
China will import 4.2 million tons of alumina this year, Xiong estimated.
Chalco produced 7.78 million tons of alumina and 3.44 million tons of aluminum in 2009. This year the company hopes to raise production of alumina by 30 percent and aluminum by 10 percent.
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