Chalco reports first-half net loss

Aluminum Corporation of China (Chalco; ACH.NYSE, 601600.SHA, 2600.HKG) reported a loss for the first half of 2012 as aluminum prices fell, the Chinese economy slowed and costs rose, The Wall Street Journal reported. Chalco, China’s largest aluminum producer, said it had a loss of US$512 million from January to June, in sharp contrast of its net profit of US$65 million a year earlier. Its first-half revenue increased 9% to US$11.3 billion. Three-month aluminum futures on the London Metal Exchange have fallen 22.6% from their peak in March while domestic prices have dropped 10.4% since January. “At current aluminum prices, the profit for the second half is unlikely to be materially better than the first half,” according to a note from Barclays Research. Chalco is attempting to diversify, with its efforts including a bid for coal miner SouthGobi Resources (1878.HKG; SGQ.TSE) that faces political opposition in Mongolia where the miner is based.