Aluminum Corp. of China Ltd., the nation's biggest producer of the metal, said it's idled 38 percent of its alumina capacity because of falling prices and demand.
Chalco, as the Beijing-based company is known, has shut 4.11 million metric tons of annual production capacity as of Nov. 5, it said in a filing to the Hong Kong stock exchange. The company didn't say what the operating capacity was before the latest cut.
Chalco, Alcoa Inc. and Rio Tinto Group are shutting smelters after the metal plunged by about a third in three months. The global credit crunch and economic slowdown is curbing demand from manufacturers, carmakers and builders.
The latest reduction is because of ''the impact of aluminum production cuts and the low price of alumina,'' Chalco said in the statement. Two tons of alumina are needed to make one ton of aluminum.
Chalco fell 12 percent today in Hong Kong trading to HK$2.86, taking its loss this year 82 percent. Its yuan- denominated shares dropped 3 percent to 6.09 yuan in Shanghai. The announcement came after the market closed.
The company also said today it sold 5 billion yuan ($733 million) of 5-year bonds to replace bank borrowings and for working capital.
Slashes Output
Chalco on Oct. 22 said it will slash annual output capacity of aluminum by 18 percent, or 720,000 tons, and may consider further cuts. It had closed 10 percent of its alumina capacity, an executive said Oct. 15.
The company said today it had shut capacity in Zhongzhou, Shanxi, Shandong and Henan.
Third-quarter profit slumped 93 percent, Chalco said Oct. 26. JPMorgan & Chase Co. expects Chalco to post a loss in the fourth quarter.
Aluminum futures dropped 1.2 percent to 13,585 yuan a ton today on the Shanghai Futures Exchange. Chinese smelters have an average production cost of 18,000 yuan to 18,500 yuan a ton, according to JPMorgan.
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