In a move that places it ahead of now-former second-place firm U.C. Rusal, the People’s Republic of China’s Aluminum Corp of China Ltd (Chalco) said on Friday that it bumped up total production by 18 percent over the course of last year, making it the second-most-prolific aluminium producer on Earth.
Reporting from Reuters described a presentation late last week that revealed last year’s total aluminium production came to 4.17 million metric tons in 2018, besting Rusal’s output last year by 417 thousand metric tons.
Chalco joins China Hongqiao Group as being the only two firms smelting more aluminium per year than the Russian Federation company. Hongqiao passed Rusal’s production numbers in 2015.
With Chalco’s parent company Chinalco’s purchase of Yunnan Aluminium in 2018, the group’s total aluminium smelting output per year now tops 5 million metric tons.
Managing director of aluminum consultancy AZ China Paul Adkins told Reuters that the lead Chalco has on Rusal may only be temporary.
“Chalco is still saddled with higher costs of production compared to the private behemoths like Hongqiao and Xinfa… which means it is more exposed to soft metal prices.
“If metal prices don’t improve soon, they may not stay at that level of output for long.”
Despite a rise in production, Chalco did not see a corresponding improvement on its bottom line. The firm said in the same report that they showed the first quarterly loss in three years for the fourth quarter, thanks largely to weak domestic demand and fallen aluminium prices.
However, the firm sought to capitalize in the alumina market’s uncertainty last year, bumping refining of the aluminium precursor by 5.5 percent last year to a total of 13.51 million metric tons.
Though Rusal spent much of 2018 under the thumb of United States sanctions, the firm said that the situation impacted sales but not production. Last year’s sales fell by 7.2 percent on account of the sanctions.