What’s key to Chalco’s loss reversal in H1 2016? - An SMM insight

Chalco reversed losses and reported big profit in H1 2016 when many of its competitors were still struggling with meager profit. So, what’s the secret behind the great success?

Aluminium, alumina and refined copper costs fell by 400 yuan/tonne, 2,500 yuan/tonne and 5,200 yuan/tonne, respectively, from a year ago, Chalco general manager Yu Dehui said at the semiannual meeting, the main reason behind profit.

Chalco shut down outdated aluminium capacity last year, and efficient capacity from Huaxing Aluminium and Huajin Aluminium, etc., was released. This also helped improve Chalco’s competitiveness.

It’s worth noting that Chalco has made great progress in aluminium processing segment. The company signed cooperation agreement with famous automakers over R&D in new materials used in automobiles. Its JV that produces new aluminium construction materials has entered operations.

Ge Honglin, Chalco chairman, emphasized the importance of developing downstream industry, which is believed to be the biggest driver for its future profit growth.

Chalco posted 330 million yuan profit in H1 2016, the best performance in nearly five years, Tecent Finance learned from Chalco semiannual meeting on July 10.