Chalco: Aluminum smelters face 'big production cuts'
23 September 2008
The head of China's largest aluminum producer, Aluminum Corp of China (Chalco), said smelters may face "big production cuts," because of high costs and low prices, Bloomberg reported. Chalco's presdient, Luo Jianchuan, made the comments to reporters yesterday at a conference in Chongqing. China's largest smelters have already agreed to cut output by more than 10% this year, and many are operating below cost at current prices, according to a recent JPMorgan Chase report. Aluminum prices in Shanghai have dropped 10% to US$2,358 per ton, while average production costs range from about US$2,600-US$2,700 per ton. Steelmakers have seen orders from China's real estate industry fall this year as developers face tighter access to credit and sluggish property sales. The real estate industry accounts for a third of China's demand for metals.