China Hongqiao Group, the world’s biggest aluminum maker, boosted net profit 21 percent in the first half after expanding output and grabbing market share as some higher-cost rivals stayed shut. Its shares surged to the highest in more than a year. Net income rose to 3.3 billion yuan ($496 million) in the six months to June, from 2.72 billion yuan a year earlier, the Shandong province-based company said in a statement. Revenue gained 13 percent to 25.4 billion yuan as output rose 28 percent to 2.71 million metric tons, according to China Hongqiao. While China’s aluminum industry benefited from a rise in domestic prices in the first half, they’re still lower on average than a year earlier, keeping pressure on higher-cost producers. China Hongqiao has been expanding supply even as China’s nationwide output and exports trail last year’s levels. The company is among the world’s lowest-cost producers after building a supply chain that includes an alumina refinery in Indonesia, bauxite mines in Guinea, and power plants in China, according to JPMorgan Chase & Co. Capacity Expansion The company has been on an “aggressive, strategic drive” to grow capacity and market share, Daniel Kang, an analyst at JPMorgan Chase, said by phone from Hong Kong. “That’s the big driver, which has offset lower prices and is driving the bottom line. Debt is still rising and that is a bit of a concern as free cash flow continues to be negative.” China Hongqiao’s shares closed 3.8 percent higher at HK$6.52, their highest since July 2015. The company—which reported its earnings on Friday after the close of trade—had better-than-expected results on lower costs, Goldman Sachs Group Inc. analyst Yan Yan said in a report. Aluminum in China will stabilize at around 12,500 yuan a ton in the second half, higher than current prices, supported by growing demand, Chief Executive Officer Zhang Bo said at a press briefing in Hong Kong. Demand from the property sector will continue to grow for years to come, Zhang said. Aluminum futures in Shanghai fell 0.5 percent to 12,295 yuan on Monday. Use Increasing Demand outstripped supply in the first half, and the group believes consumption for aluminum products will be strong in the second, Chairman Zhang Shiping said in the earlier statement. Sectors including cars, electric vehicles, electronic devices and packaging are using more aluminum, he said. Aluminum has advanced this year along with most other industrial commodities as China’s economy has stabilized, lifting demand. The country is still adding low-cost capacity while smelters shutter elsewhere, and prices are set to fall more than 11 percent in the next four years as China expands supply, according to U.S.-based researcher Harbor Intelligence. China accounts for about 55 percent of world supply. China Hongqiao surpassed United Co. Rusal last year as the world’s biggest maker of the metal. Its first-half output accounted for about 17 percent of China’s supply in the period, according to Bloomberg calculations. Most of China Hongqiao’s income comes from selling molten aluminum that’s cooled and then rolled by customers.