China Hongqiao Group targets alumina self-sufficiency by 2017 end

The world's largest aluminium producer China Hongqiao Group posted 21 per cent increase in profits in the first half of the current financial year.

Referring to the Construction sector as the biggest growth driver for domestic aluminium demand, CEO Zhang Bo said, aluminium capacity at the company will be expanded to 6.5 million tonnes per annum this year from the current 5.9 million tonnes capacity.

In a bid to streamline raw material procurement, the Group intends to improve its upstream vertical operations. Accordingly, it has worked out plans to enhance the group's alumina self-sufficiency rate. Earlier this year, China Hongqiao acquired Binzhou Beihai Xinhe New Materials Co., a move intended to add to its alumina self-sufficiency.

Zhang expects the Group will become 100 per cent self-reliant for alumina by the end of 2017.

Alumina prices in China have lately embraced their long-awaited rebound after continuous declines. The rise was fuelled by an unexpected red mud dam landslide at Luoyang Xiangjiang Wanji Alumina Plant. Producers in many regions were encouraged to raise their offers. However, analysts at the Shanghai Metals Market (SMM) believe, the price rise is going to be short-lived unless demand from aluminium smelters picks up.