Silver Spot – China copper smelter Daye doubles profits in virus-dominated 2020
* Hubei-based Daye posts best profit in 17 years at 306.4 mln yuan
* Says 2020 was ‘extremely difficult and extraordinary’ amid virus
* Keeps 2021 copper cathode output target flat at 510,000 tonnes
March 31 (Reuters) – China Daye Non-ferrous Metals , a copper smelter in the coronavirus epicentre of Hubei province, said on Wednesday profits more than doubled in 2020 as a rally in prices helped make up for severe disruption early in the year.
Daye said in a filing it made net income of 306.4 million yuan ($46.8 million) last year, up from 146.7 million yuan in 2019. That is its best result since a 723 million yuan profit in 2003, Refinitiv Eikon data show.
The jump was due to rising prices for copper, gold and silver, as well as financial and tax benefits the company received to help it through the pandemic, said Daye, which cut operating rates in February and March 2020 and saw some staff test positive for COVID-19.
“The year 2020 was extremely difficult and extraordinary,” Daye said, noting it had to deal with mine shutdowns and floods as well as “the pandemic of the century … and other shocking external challenges.”
Nonetheless, the company met its revised target of producing around 510,000 tonnes of copper cathodes last year, down 4.3% on 2019, and aims to produce the same amount in 2021.
Revenues fell 10.4% to 29.4 billion yuan in 2020 due to the slight decrease in production, Daye said, even as copper prices rebounded from a four-year low in the wake of the virus outbreak to notch an annual gain of around 25%.
The company said it intends to accelerate construction of its new 400,000 tonnes per year copper smelting plant in Huangshi, without providing a launch date. It said in August the plant would be put into production in 2022.
The profit outlook for smelters now is “gloomy,” Daye warned, citing record low treatment charges for imported copper concentrate that are “far below the average minimum” amid fierce competition for feedstock and unstable supply.
$1 = 6.5478 Chinese yuan renminbi Reporting by Tom Daly. Editing by Mark Potter