Alumina Registers Loss

Alumina Ltd has announced that the company registered a US$14.6 million half-year loss, no thanks to China’s dominance over aluminium prices.

According to Alumina, the company earnings have been hurt because of China’s policy to over-produce aluminium to bring down prices. Another Australian company, Rio Tinto, has been hurt by this move.

In the last year alone, aluminium price dropped 18 percent to US$1,835 per tonne despite the rise of other commodities.

According to John Bevan, China does not produce enough bauxite rock. This is essential in processing alumina, which in turn become aluminium after a series of processing.

Bevan added that China also imports about a third of its bauxite but costs have dropped more than 90 percent since June. Indonesia, one of the leading suppliers, has also been affected with the price drop and is now imposing extra taxes.

This development means that China would need to buy aluminium imports from other sources at a higher price. Bevan added that China has no choice because aluminium is one of the most widely used metals aside from iron. Demand for aluminium also remains high.

Bevan is the chief executive of Alumina.

In an interview, Bevan said that although the company lost money, he is confident that it would bounce back considering that demand for aluminium remains strong.