Jiangxi Copper posts lowest profit since 2017 as virus sinks prices

Jiangxi Copper Co, China’s top copper producer, on Tuesday posted its smallest net income in more than two years as first-quarter profits fell 78.4% on lower copper prices in the wake of the novel coronavirus outbreak.

The Nanchang-based company said in a filing to the Shanghai Stock Exchange its net income was 160.26 million yuan ($22.65 million) in January-March 2020, down from 742.35 million yuan a year earlier.

That marked Jiangxi Copper’s lowest quarterly profit since the fourth quarter of 2017, according to Refinitiv Eikon data, and came as benchmark copper prices slumped to four-year lows last month, with investors betting the pandemic would destroy demand for industrial metals.

Revenues were up 15% year-on-year at 56.21 billion yuan on higher production. Jiangxi Copper, an integrated producer that operates both mines and smelters, last year acquired a 30% controlling stake in Shandong Humon Smelting Co and started including Humon’s output in its own numbers from July.

It said last month it aimed to raise refined copper production by 6% in 2020..

However, margins were eroded by lower copper prices, which fell almost 20% on the London Metal Exchange in January-March, their steepest quarterly drop since 2011.

London copper slumped to $4,361 a tonne in late March, the lowest since January 2016, but has since recovered to around $5,200 a tonne.

Jiangxi Copper, which is also the biggest shareholder in Canada-listed miner First Quantum Minerals, said earlier this month it planned to raise its stake in Humon to 43.2% via a private share issue.

($1 = 7.0743 Chinese yuan renminbi)

(By Tom Daly; Editing by Kirsten Donovan)