S&P affirms Chalco

Standard & Poor's said it affirmed Aluminum Corp. of China Ltd. (Chalco)'s BBB+ foreign currency long-term corporate credit rating and removed it from CreditWatch, where it was placed with negative implications on Aug. 3.

S&P also lowered the company's stand-alone credit profile to BB+ from BBB-.

The outlook is negative.

The affirmation reflects Chalco's timely and sufficient support, in the event of financial distress, from the government of the People's Republic of China, S&P said.

The downgrade reflects the view that the company's credit metrics will continue to be weak due to industry overcapacity and slower-than-expected recovery in prices of aluminum and alumina, S&P said.

The ratings consider Chalco's stand-alone credit profile, leading domestic market position, track record of ongoing improvement in operating efficiency and good access to the rapidly growing Chinese economy, as well as the high cyclicality in the alumina and aluminum markets, overcapacity in domestic aluminum production and weak financial performances, the agency said.

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