China Hongqiao Group, the world’s biggest private-sector aluminium producer, said on Friday its output fell 4.1% in the first half from a year earlier as it moved smelting capacity to southwest China to make use of hydro-electric power.

Profits still rose by 14.3% following lower writedowns.

Hongqiao said production of aluminium alloy products – the term the company uses for primary aluminium production – was 2.741 million tonnes in January-June, down 4.1% year on year.

The decrease was “mainly because the group relocated some production equipment to the Yunnan green aluminium innovation industrial park,” the company said in a filing to the Hong Kong stock exchange.

Hongqiao is moving about 2 million tonnes of annual smelting capacity from its base in eastern China’s Shandong province to hydropower-rich Yunnan, with the first 1 million tonne phase due to start up this quarter.

Three-month aluminium prices on the Shanghai Futures Exchange in the first half averaged 5.8% less than a year earlier, Hongqiao said, pushing revenue down 3.6% to 39.94 billion yuan ($5.78 billion).

Prices, however, hit their highest since April 2018 in ShFE night-trading on Thursday, completing a V-shaped recovery as consumption in China rebounds from a coronavirus-driven collapse in demand.

Hongqiao, which only reports earnings on a half-yearly basis, said January-June net profit rose 14.3% year-on-year to 2.83 billion yuan following lower financial expenses and impairment losses.

The company, which in March sold off coal-fired power generation facilities as it prepared to use more hydropower, said it had reviewed its fixed assets in light of the campaign to cut coal consumption.

This resulted in a 152.2 million yuan writedown in the first half, which was much lower than a 1.17 billion yuan impairment on property, plants and equipment recorded a year earlier.

($1 = 6.9117 Chinese yuan renminbi)