China Hongqiao Group Co. boosted net profit 21 percent in the first half as the world’s biggest aluminum maker increased output to a record and prices climbed.
Net income rose to 3.3 billion yuan ($496 million) for the six months through June, from 2.72 billion yuan a year earlier, the Shandong province-based company said in a statement. Revenue gained 13 percent to 25.4 billion yuan, according to Hongqiao, which doesn’t report quarterly figures.
China’s aluminum industry, which accounts for 55 percent of world supply, benefited from a 15 percent rise in domestic prices in the first half. While output and exports remain below last year’s levels, they are on track to be China’s second-highest, and Hongqiao’s production rose 28 percent from a year earlier. Demand for aluminum outstripped supply in the first half, Chairman Zhang Shiping said in the statement.
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“The group believes that the demand for aluminum products in China will remain strong in the second half,” Zhang said in the statement on Friday. Sectors including passenger cars, electric vehicles, electronic devices, as well as food and pharmaceutical packaging are using more aluminum, he said.
Aluminum has advanced along with most other industrial commodities as China’s economy has stabilized, lifting demand. The country is still adding low-cost capacity while smelters shutter elsewhere in the world, and prices are set to fall more than 11 percent in the next four years as China expands supply, according to U.S.-based researcher Harbor Intelligence.
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Hongqiao surpassed Russia’s United Co. Rusal last year as the world’s biggest maker of the metal. Most of its income comes from selling molten aluminum that’s cooled and then rolled by customers. Its first-half output was nearly 18 percent of China’s total production of 15.4 million tons.
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