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(Bloomberg) -- Glencore Plc-backed Nanshan Aluminum International Holdings Ltd. dipped on its Hong Kong trading debut on Tuesday, dragged lower as weak metal prices dampened sentiment around the top alumina producer in Southeast Asia.
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Shares were down 1% at HK$26.35 apiece as of 10:27 a.m. local time, after rising as much as 1.1% earlier. The unit of China’s Nanshan Group has said it will use the sale’s proceeds to expand production in Indonesia and for general working capital.
Prices of alumina, the feedstock for aluminum production, more than doubled during 2024 to a record high. They’ve since dived as new capacity is brought online — the industry’s response to a string of disruptions along the sprawling global supply chain, from Jamaica to Guinea, Australia and China.
The company’s earnings outlook “isn’t particularly promising” due to the fall in prices, even with an undemanding valuation, according to Michelle Leung, an analyst with Bloomberg Intelligence.
Glencore International AG, a wholly-owned subsidiary of Glencore Plc, is among its cornerstone investors and one of its top customers. The two companies entered an offtake agreement in January, according to the prospectus.
Indonesia’s alumina industry is set to expand at a rapid clip this year following a 2023 ban on the export of key raw material bauxite. Several Chinese companies have already built refineries in the Southeast Asian country, seeking to diversify their supplies away from key producer Guinea.
Alongside Nanshan’s second phase of expansion, Indonesia’s state aluminum unit started trial production from a new alumina refinery in January.
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