Aluminum maker Alcoa Inc (AA.N) and China Power Investment Corp moved a step closer to linking up to manufacture aluminum products in China, the companies said on Wednesday.

The two companies signed a letter of intent that sets out a framework for a joint venture that will produce high-end fabricated aluminum products in China in a bid to win business from the country's automotive, aerospace, packaging and electronics markets.

The companies had signed a memorandum of understanding in January to cooperate in China.

Alcoa shares rose 1 percent to $11.75 in premarket trading. At Tuesday's close, the stock had fallen 24 percent so far this year.

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