Top China aluminum maker Chalco's H1 net dives; costs up

HONG KONG (Reuters) - Aluminum Corp of China Ltd (Chalco) (2600.HK: Quote, Profile, Research, Stock Buzz)(601600.SS: Quote, Profile, Research, Stock Buzz), the world's No.3 alumina producer, said late on Friday its first half net profit dived about two-third, dented by higher production costs and an oversupply of the metal.

Production disruptions caused by nationwide power shortages and snowstorms also hit profits.

January-June net profit fell to 2.41 billion yuan ($351.9 million) from a restated 6.97 billion yuan a year earlier, worse-than the company's earlier warning issued in June that its interim net profit would slide by at least 50 percent.

China's smelting capacity is expected to rise to about 19 million tonnes this year from about 16 million tonnes last year, as smelters build new plants despite rising construction costs, increasing electricity fees and a fall in domestic aluminum prices that has all but eliminated profit margins.

Aluminum on the London Metals Exchange rose almost 30 percent in January-June, mainly boosted by energy costs, but has dropped 17 percent from a record high early last month as investors worry about future demand.

Shares in China's top aluminum maker slumped 44 percent in January-June, underperforming a 26 percent drop on the index for Chinese firms listed in Hong Kong .HSCE.

($1=6.848 Yuan)

(Reporting by Alison Leung; Editing by Tomasz Janowski)