BEIJING (Reuters) - China’s Chalco said on Friday it boosted annual aluminum output by 16 percent in 2018, putting it ahead of Russia’s Rusal as the world’s second-biggest publicly traded producer of the metal.
The increase underscores China’s growing dominance of the global aluminum market, as the world’s biggest producer and consumer of the metal, although weak aluminum prices have already led to some production being shuttered this year.
State-controlled Chalco, formally known as Aluminum Corp of China Ltd, said in a presentation to analysts reviewed by Reuters that its aluminum production came in at 4.17 million tonnes last year, beating the 3.753 million tonnes churned out by Rusal.
The Russian company, formerly the world’s top producer, had already been overtaken in terms of output by China Hongqiao Group in 2015.
Chalco did not immediately reply to a request for comment.
Chalco’s unlisted parent, Chinalco, now has a group capacity in excess of 5 million tonnes after taking over Yunnan Aluminium last year.
U.S. sanctions on Rusal, announced last April but withdrawn in January, did not have any major impact on the Russian company’s production, but its aluminum sales did fall 7.2 percent in 2018.
Rusal will keep its aluminum production stable at 3.8 million tonnes in 2019, its stakeholder En+ said.
Beijing-based Chalco last produced more metal than Rusal in 2012, when both firms produced more than 4 million tonnes of aluminum, according to a review of company filings.
Chalco, which in late 2017 started a 500,000 tonne per year aluminum smelter in Inner Mongolia, managed to raise annual output considerably despite being forced to close some production toward the end of the year as Shanghai aluminum prices tanked.
It has already shuttered 200,000 tonnes of capacity in 2019, while Rusal plans to launch the second line of its Boguchansk aluminum smelter in Siberia by the end of this month.
“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,” said Paul Adkins, managing director of aluminum consultancy AZ China.
“If metal prices don’t improve soon, they may not stay at that level of output for long,” Adkins said.
Chalco posted its first quarterly loss in more than three years on Thursday and said annual net profits fell last year due to low aluminum prices and slack domestic demand.
Chalco also said its alumina production rose by 5.5 percent in 2018 to 13.51 million tonnes, as it sought to capitalize on global shortages of the aluminum raw material.
Reporting by Tom Daly; additional reporting by Polina Devitt in MOSCOW; editing by Richard Pullin