Jiangxi Copper plans to lift 2020 output by 6% y/y, but warns of virus impact

Excavators dig rare earth on a field of Jiangxi Copper’s Sichuan branch in Chengdu. (Image by 62|Shutterstock)

China’s biggest copper producer Jiangxi Copper Co said on Monday it aimed to churn out 6% more refined metal in 2020 than last year, despite warning that the spreading coronavirus could hurt demand.

The Nanchang-based company, which posted a 0.8% rise in annual net profit to 2.47 billion yuan ($347.96 million) in 2019, is targeting 1.65 million tonnes of copper cathode output this year, according to a filing to the Shanghai Stock Exchange.

That compares to 1.56 million tonnes produced last year.

An integrated producer controlling both mines and smelters, Jiangxi Copper also said it plans to produce 207,500 tonnes of copper concentrate, or partially processed copper ore, on a metal content basis, down slightly from 209,200 tonnes in 2019.

It aims to raise gold output by more than 50% to 77 tonnes this year, having produced 50.2 tonnes of the precious metal in 2019.

That represented a near doubling of 2018 volumes, after the company last year acquired a controlling stake in Shandong Humon Smelting.

Last year’s net profit was Jiangxi Copper’s best since 2014, according to Refinitiv Eikon data, but the company warned that demand for copper was under threat on a number of fronts.

In China, the world’s top copper consumer, home appliance demand is suppressed, and automobile consumption is sluggish, the company said in its earnings release. “The growth rate of copper consumption is expected to decline,” it added.

With low processing fees for copper concentrate and prices for byproduct sulphuric acid falling, some Chinese smelters have had to cut production, the company said.

That has tightened supply, lending some support to copper prices, which are currently languishing near four-year lows.

“However, if the overseas epidemic situation cannot be controlled quickly and effectively, then a financial crisis and global economic recession will be triggered and copper consumption will also be greatly affected,” it added.

($1 = 7.0986 Chinese yuan renminbi)

(By Tom Daly; Editing by Jan Harvey)

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