S&P upgrades Chalco

S&P said it raised its rating on Aluminum Corp. of China Ltd. (Chalco) to BBB from BBB-.

Chalco’s rating is linked to its parent, Aluminum Corp. of China (Chinalco) and it provides more than an estimated 50% of Chinalco’s revenue , the agency said.

“Robust aluminum prices and continued cost control will underpin Chalco's healthy earnings. Positive market momentum should continue into 2022-2023 due to robust recovery in demand, smelter curtailments in China and Europe, and supply disruptions amid soaring energy prices and energy shortages. We forecast Chalco's annual EBITDA at Chinese renminbi (RMB) 33 billion this year and RMB 26 billion next year, following a historical high of RMB 27.7 billion in 2021,” S&P said in a press release.

The outlook is stable.

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