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HONG KONG (Reuters) - Aluminum Corp of China Ltd (Chalco), the country's top aluminiummaker, raised its spot price for alumina by 3.6 percent but thenews failed to offset concerns that a production cut will hit itsearnings, sending its shares lower on Friday. Chalco raised the price of alumina, the key material for aluminiumproduction, by 100 yuan to 2,900 yuan per tonne from Thursday, aprice list showed on its website. The news came after Chalco said it would cut alumina outputcapacity by 1.7 million tonnes, or 12 percent of its currentcapacity, after a change in Indonesia's bauxite policy affectedsupplies. Chalco's shares fell 3.6 percent on Friday, making it the worstblue-chip performer and lagging a 0.1 percent gain in the broadermarket. J.P. Morgan revised its earnings forecasts for Chalco to a lossfrom profit and downgraded the company's shares to "underweight"from "hold" as Chalco's supply of imported bauxite had beenaffected by the policy change in Indonesia. The brokerage now expects Chalco to post a loss of 2 billion yuan($314 million) in 2012 against an earlier forecast of a 122 millionyuan profit, it said in a research report on Friday. "With China's metal output remaining high despite industry losses,we believe domestic aluminium prices will struggle for traction,"it added. The price hike for alumina might not help the company much. Chalcowas a relatively small seller in the spot market with the bulk ofits alumina production for term deliveries that have been linkedwith domestic aluminium prices, sources at aluminium smelters said. Aluminium prices fell to a five-month low last week with LondonMetal Exchange (LME) three-month hitting $1,969 on May 24, due to asupply glut and a slowing global economy. "The costs of production to alumina producers are rising," amanager at a large aluminium smelter said, of the price hikes. He added that aluminium smelters were keen to import more spotalumina this year because international prices had fallen anddomestic prices had stayed steady. ($1 = 6.3690 Chinese yuan) (Reporting by Joy Leung and AlisonLeung; Editing by Chris Gallagher) Thomson Reuters 2012 All rights reserved SUBSCRIBE to Mineweb.com's free daily newsletter now. I am an expert from smart-rfid-tag.com, while we provides the quality product, such as RFID Wristbands , China RFID Key Fob, RFID Metal Tag,and more.
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