Aurubis plans 2016 high level production despite its Bulgaria smelter shutdown

The company is aiming for a high level of production this year despite a scheduled shutdown at its Pirdop smelter in Bulgaria in April/May, joint interim CEO Erwin Faust told shareholders, without giving a specific forecast.

The incoming chief executive of Aurubis AG, Europe’s biggest copper smelter, indicated on Wednesday he may step up the international expansion of the company.

Aurubis has a history spanning almost 150 years at its main base in Hamburg but the group should “strive to move further out into the world,” Juergen Schachler, due to take office in July, told shareholders at their annual meeting.

This could bring “some changes in the character” of the company, he added, without elaborating.

Schachler’s recent predecessors have signalled an interest in acquisitions, especially in Asia and South America, but no takeovers were made in these regions and the group has recently concentrated on growing its existing businesses.

Aurubis’ last takeover was in 2011, when it bought the rolled copper operations of the Luvata group.

The company is aiming for a high level of production this year despite a scheduled shutdown at its Pirdop smelter in Bulgaria in April/May, joint interim CEO Erwin Faust told shareholders, without giving a specific forecast.

“We are profiting from a good and stable situation on the concentrate (copper ore) market and the strong U.S. dollar is also supporting our business,” Faust said.

Aurubis posted a drop in first-quarter earnings partly due to weak copper scrap markets.

“We faced headwinds here (in scrap markets) in the first quarter but we are currently sensing a light improvement in the situation,” Faust said, adding he expected that to continue.

Copper prices fell to a 6.5 year low in January.

Faust said China was not expected to make large exports of copper to Europe despite large exports of other commodities.

“This is essentially because China is a net importer of copper cathodes (new metal) because the production of the local smelters is not enough to cover its national needs,” he said.

Copper ore treatment and refining charges (TC/RCs), fees paid by miners to smelters to refine concentrate into metal and are a key part of the global copper industry’s earnings, had fallen but were “historically at a very good level,” he said.

Benchmark TC/RCs for 2016 have fallen 9 percent to $97.35 a tonne and 9.735 a pound. Aurubis processes complex grades of concentrate and its TC/RCs are generally over the benchmark level, an Aurubis spokeswoman said.

Copper product markets were showing mixed trends, Faust said.

“For cast rod, with its markets mainly in central Europe, we expect good demand,” Faust said. “For cast shapes we expect demand to be stable. In the international market for flat rolled products, we only expect light growth in Europe.”

source; Reuters