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Aurubis optimistic despite impact of pandemic, chip crisis, energy prices -Breaking

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© Reuters. FILE PHOTO – A Kilembe employee shows off a small piece of copper ore. It is located at 497km (309 mi) from Kampala, Uganda, on the foothills the Rwenzori Mountains. REUTERS/James Akena

By Michael Hogan

HAMBURG, (Reuters) – Aurubis AG is Europe’s biggest producer. It remains positive that it will meet its operating profit forecast despite the effects of the pandemic and the crisis in semiconductors. “Aurubis is in a good state and our performance is robust,” CEO Roland Harings said. “We are experiencing very good demand for our copper products, metal prices are at high levels which illustrates strength in the economy and we are achieving high production.” Aurubis in August forecast full-year group 2020/21 operating earnings before tax of 270-330 million euros ($314-$384 million), against 221 million euros in the previous year. “We are retaining this forecast and we remain hopeful we will be able to achieve the higher end of the range,” Harings said. “I am confident we will report a good performance for the current financial year.” The demand for copper products is strong despite the production cut in automobile manufacturing. “We are seeing strong product demand despite the chip crisis and supply chain problems in several industries,” Harings said. “We are seeing that the themes sustainability, electro-mobility, the expansion of renewable energy infrastructure are generating more demand.” “Although overall automobile production has been cut we have good order books from this sector. Electric vehicles have a considerably higher copper content and production of electric cars is increasing massively.” Aurubis is maintaining full output in the face of the surge in energy prices in past weeks. “We will continue full production, naturally rising energy costs are a factor we must face,” the CEO said. “We have extensive risk-management with long-term energy supply contracts.” “My opinion is that high energy costs are temporary because of several factors in the market.” Aurubis announced a 2022 copper premium for its customers of $123 per tonne above London Metal Exchange prices, up from $96 a tonne in 2021. “This reflects the firm demand we expect next year and also higher costs including for ocean shipping,” Harings said. “The 2021 level was perhaps rather low, announced during the uncertainty during the pandemic.” Annual treatment and refining charges (TC/RCs) for 2022 will be set by the global copper industry by the end of the year, with expectations of a rise. To process copper concentrate, miners must pay TC/RCs. When concentrate supplies are large, charges tend to rise and miners have to be competitive for smelting capacities. “From my point of view, a rise in TC/RCs for 2022 would be justified by world market conditions,” Harings said. “High metal prices means mines have been increasing production and their output is expected to remain high in the new year.”

($1 = 0.8595 euros)

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