Singapore 24/08/2016 - Copper cathode production at Jiangxi Copper Co rose 3.1 percent to 599,800 tonnes in the first half of this year, the Hong Kong-listed firm said in its first half report on Wednesday.
The company said in March that it will target copper cathode output of 1.175 million tonnes this year, down 83,500 tonnes or 6.6 percent from its production last year.
Jiangxi Copper was among ten Chinese smelters who agreed at the start of December to cut its copper cathode output by a combined 350,000 tonnes in 2016 to prop up prices.
Some market participants had casted doubts on whether the smelters would abide by the agreement especially after domestic copper prices rebounded since late November last year.
Jiangxi Copper’s profit attributable to owners of the company fell 37.9 percent year-on-year to 643 million yuan ($97 million) in January-June.
Global economic recovery was below expectations and while the Chinese economy was generally stable, it lacked growth momentum with the bulk commodity market remaining sluggish in the first half, the company said.
Despite a smaller drop in product prices as compared to the same period last year, prices fluctuated at low levels, causing great pressure on the company’s operations, it added.
But the copper price is expected to obtain support or bottom out soon given its current low level in the recent decade and loosening monetary policies in various countries, though there remains uncertainty from macroeconomic factors like Brexit and possible US interest rate hike, Jiangxi Copper said.
Copper prices on the Shanghai Futures Exchange had increased by close to 20 percent between November last year and mid-July this year. But since mid-July it has stayed range-bound with a slight bias to the downside.
The most active SHFE October copper contract finished morning session trading at 36,770 yuan per tonne on Tuesday, down 350 yuan from the previous day's close.