China Hongqiao’s profits surged in H1 2021 with only a 2.1pc increase in production volumes owing to 13-year highs at the Shanghai Futures Exchange (SHFE).
According to media reports, the company produced 2.8mn mt of aluminum alloy products in the first half of this year, up from 2.74mn mt in the same period of 2020. Hongqiao also stated that alumina sales rose 24pc annually during this period.
In H1 2021, Hongqiao reported a net profit of CNY8.14bn ($1.25bn), an increase of 187pc from the prior year period. SHFE prices were at CNY20,575/mt this week, which translates to $3,165/mt. This new high in more than a decade is because of capacity curtailments in multiple regions of China due to a regulatory crackdown on energy consumption in the past few months. In comparison, this week’s highest aluminum cash price on the London Metal Exchange was $2,644/mt, lower by a staggering $521/mt.
China Hongqiao remains the world’s largest non-governmental producer of aluminum with a capacity to produce 5.8mn mt of primary and alloyed aluminum in a year, which it intends to expand to 6.5mn mt soon.