Aluminum Corp. of ChinaAluminum Corp. of China (ACH), or Chalco, is another foreign resource stock that's getting heavily shorted by investors right now. The $5 billion aluminum producer is the biggest in the People's Republic, positioning that puts Chalco in good shape to service the domestic aluminum market. Chalco is also one of the lowest cost producers in a high production cost region for aluminum, which gives Chalco advantages over its peers at home but puts it at a disadvantage over foreign rivals that boast more bargain-priced production for the same market priced commodity.
In many ways, Chalco's reliance on the domestic market for aluminum in China is a good thing -- it also spares the firm from excessive exposure to Western markets, where aluminum demand is struggling. The Chinese government has been keen to prop up domestic markets for materials in the past, and Chalco's home team status could help the firm be first in line for support.
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