Tongling Says H1 Net Profit Down 48%

SHANGHAI, Aug. 31 -- Tongling Nonferrous Co, China's third-biggest copper smelter, said its net profit fell 48% in the first half on lower copper and sulfuric acid prices.

    Net profit was RMB 305 million (USD 44.6 million), while sales reached RMB 9.3 billion, down 47% year-on-year.

    "During the first six months this year, both copper and sulfuric acid prices were much lower than the corresponding period last year, undermining our profitability," the company said in its results statement.

    Output fell slightly, dropping 0.37% to 316,500 mt due to maintenance and copper scrap shortages.

    Tongling also said the shortage of raw materials and weak sulfuric acid prices would continue to weigh on its profitability.

    "Sulfuric acid prices are still weak and spot copper treatment and refining charges (TC/RCs) are falling as well," said Tongling Nonferrous.

    Spot TC/RCs were about USD 20mt/ Cents 2/lbs by the end of June, down 73% from the 2009 benchmark of USD 75/mt /Cents 7.5/lbs.

    "In the short term, it is impossible for us to raise the reliance on our own copper concentrates, which will be a potential problem," said Tongling.

    (Source: Metal Bulletin)