Aurubis Upbeat on Copper Demand after Good Q1

FRANKFURT, Feb. 22 -- Aurubis, Europe's biggest copper smelter, forecast its operating profit would improve significantly this year after higher metal prices buoyed first-quarter profit to consensus-beating levels.

Aurubis said its forecast was based on assumptions of a continuing positive trend for copper products and sulphuric acid as well as still "good" margins in the recycling business.

Analysts said the company had a good start into the fiscal year, all the more commendable in that the first quarter to December was normally the weakest quarter of the business year.

"The company's wording with regard to the future prospects (have) become more optimistic, which is positive," said analyst Dirk Schlamp of DZ Bank.

Aurubis said the forecast of worldwide economic improvement this year would spur demand for copper.

"In view of the economic recovery, we expect the positive trend in demand to continue for our entire copper product range," it said, forecasting sales of copper products would exceed the level of last year.

"In the medium term, we expect demand for copper to increase and the treatment and refining charges for copper concentrates to improve," it added.

Aurubis shares rose 7.9 percent to 32.47 euros by 0814 GMT, outperforming the German mid-cap index's gain of 0.7 percent.

Aurubis swung to a pretax profit of 126 million euros ($173.8 million) in the quarter to December from a loss of 124 million a year earlier. Analysts in a Reuters poll had on average expected pretax profit of 74 million euros.

Poland's state-controlled KGHM, the second-largest copper smelter in Europe, has said it expected resurgent copper prices to bolster its 2010 profits.