Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Ratings agency Fitch has affirmed Aluminium Corporation of China’s (Chinalco) Long-Term Foreign-Currency Issuer Default Rating (IDR) and senior unsecured rating at ‘A-‘. The agency has also pegged the company’s outlook at stable.


Of the key rating drivers, Fitch has assessed Chinalco’s status, ownership and control as ‘Strong’, mainly since it has maintained the status as a backbone state-owned entity. The support record has been revised to ‘Moderate’ from ‘Strong’. This, mainly since the financial support received from the government has been insufficient.


Chinalco became the largest aluminium producer globally after acquiring Yunnan Metallurgical Group in 2018. The company’s annual alumina refining and smelting capacities are 22mn mt and 7.2mn mt, respectively. This accounts for 25pc and 20pc of China’s total alumina and aluminium capacity, respectively.


For the ratings, Fitch’s key assumptions include that the company’s revenue is likely to increase from CNY355bn in 2020 to CNY374bn in 2022 and EBITDA to increase by 10pc in 2022 from 8.8pc in 2020. Chinalco’s Capex in 2020-2022 is expected at CNY23.5bn a year. But there are no major merger and acquisitions and asset or capital injections. 


(1CNY = $0.141385)

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