Aluminum Corp of China Ltd (Chalco), the country's top producer of primary aluminum, may shut down some high-cost aluminum capacity due to low prices, its investor relations manager said on Friday.

Zhang Qing said Chalco will try to make up the volume by running its low-cost aluminum operations at full capacity. Chalco may cancel or shorten time for repairs at those low-cost smelters to increase production, she said. "We are going to fine-tune operations to cut losses," Zhang said.

Chalco, the world's third-largest producer of alumina - the main material for aluminum production - maintains its output target of 3.5 million tons of primary aluminum this year, Zhang said.

She said that nearly all aluminum smelters in China should be recording losses as current prices are below production costs.

Spot aluminum was offered at about 13,260 yuan per ton in Shanghai, down 20 percent in the past month and below many smelters' production costs of 16,000-18,000 yuan per ton. "We may close down one of our two systems," an official at Chalco's Pingguo plant in Guangxi said.

The system that may be shut down can churn out 25,000 tons of primary aluminum a year, he said. Pingguo would run full rates at its other system, which has a 130,000-ton capacity.

Other high-cost aluminum smelters in China are expected to cut back capacity in the coming months if aluminum prices stay below production costs.

Reuters

(HK Edition 10/11/2008 page2)