Commodities

Jiangxi Copper Q2 profit grows on higher output, prices

Credit: REUTERS/CHINA STRINGER NETWORK

China's Jiangxi Copper Co posted a 5% rise in second-quarter net profit as higher production and a strong rally in copper and gold prices cushioned a coronavirus-hit first half.

By Tom Daly

BEIJING, Aug 28 (Reuters) - China's Jiangxi Copper Co 600362.SS, 0358.HK posted a 5% rise in second-quarter net profit as higher production and a strong rally in copper and gold prices cushioned a coronavirus-hit first half.

For the first half, net income fell 42.7% to 745.3 million yuan ($108.6 million), a filing to the Shanghai Stock Exchange showed.

That implies a profit of 585 million yuan for the second quarter, up from 558 million a year earlier, after Jiangxi Copper recorded its lowest earnings since 2017 in the first quarter of 2020.

The Nanchang-based firm is one of the biggest copper smelters in China, the world's top metals consumer.

London copper prices CMCU3 rose more than 20% in the second quarter, completing a Chinese demand-driven recovery after tanking in the first quarter as the coronavirus shattered consumption.

Jiangxi Copper's production volumes also climbed, with copper cathode output up 6.9% at 800,600 tonnes, putting the company more or less on track to hits its annual target of 1.65 million tonnes.

Copper concentrate production grew by 2.6% to 100,460 tonnes.

That helped propel a 39.9% jump in first-half revenue to 146.99 billion yuan.

The company also cashed in on a rally in precious metals in the first half, with gold production almost tripling to 38.5 tonnes and silver output up 222.4% to 544.85 tonnes following the inclusion of 43.15%-owned subsidiary Shandong Humon Smelting Co's 002237.SZ output numbers on its books from July 2019.

Spot gold prices XAU= are up almost 29% this year and have repeatedly hit record highs on a weakening dollar.

Jiangxi Copper last week said it would close a loss-making copper mining subsidiary in China.

Overseas, it will introduce strategic investors into its 49%-owned Baku Tower tungsten project in Kazakhstan this year, it said in Friday's filing.

($1 = 6.8639 Chinese yuan renminbi)

(Reporting by Tom Daly; editing by Jason Neely)

((tom.daly@thomsonreuters.com; +86 10 5669 2119;))

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