Chinalco Mining (3668), the largest initial public offering in Hong Kong so far this year and closely followed by market participants, fared badly - trading 11% below the offer price in early trading hours and down 6.29% at HK$1.64 at 2 p.m. on Thursday.

The shares were priced January 24 at HK$1.75, slightly above the midpoint of the indicative price range of HK$1.52 to HK$1.91 per share. The overseas spin-off of state-owned Aluminum Corporation of China (Chalco) raised HK$3.37 billion (US$399 million) to be used for construction and development of its Peruvian Toromoccho copper mine.

The IPO on Thursday came amid a profit warning from the company's parent Chalco on Wednesday, in which the aluminium giant predicted losses for 2012 due to dropping aluminium prices worldwide and halting demand in China. Further, the US Commerce department said yesterday the US economy contracted by 0.1 %, surprising analysts who had expected a recovery in North America. Demand for base metals may be subject to correction as well in 2013. In its market outlook 2013, CLSA analyst Andrew Driscoll had warned investors to "avoid companies that have high-cost assets or high financial leverage, including Chalco, Hidili and Yangzhou Coal."

Several cornerstone investors had subscribed to the listing, including commodity traders Trafigura and Louis Dreyfus as well as mining company Rio Tinto. This was the second attempt of a listing, after the company had abandoned plans for a HK$1 billion offering in June of last year after falling copper prices and a weak market deterred management.

BNP Paribas and Morgan Stanley are the joint global coordinators of the offering while CCB International, China International Capital Corp (CICC), HSBC and Standard Chartered act as joint bookrunners for the deal.