HAMBURG (Reuters) - Aurubis AG, Europe's largest copper producer, on Thursday confirmed an upgraded core profit forecast for the current financial year as it expects strong business environment and demand momentum to continue.
Aurubis confirmed operating earnings before taxes (EBT) of between 450 million euros and 550 million euros ($495.36 million and $605.44 million) for the 2022/23 financial year, up from an earlier forecast of 400 million to 500 million euros.
Operating EBT in the second quarter ended March totalled 166 million euros, only slightly down from the high level of 168 million euros seen in the previous year, Aurubis said.
The company said the change in forecast comes amid expectations of continued high fees it can charge to process copper concentrate (ore), firm price premiums for the copper it produces and continued strong demand for copper wire rod with high prices.
"Aurubis continued its positive development with a second quarter on par with the exceptionally good previous year," Aurubis CEO Roland Harings said.
High demand for Aurubis' metal products showed Aurubis metals are increasingly needed for the mobility and energy transition and for digitalization, he said.
In the past six months, Aurubis has managed energy costs through forward-hedging.
"Well-known research institutes and Aurubis continue to anticipate growth on both the demand and the supply sides in the copper concentrate market in calendar year 2023," the company said.
"Due to capacity growth in existing mines worldwide along with the ramping-up of new projects, expansion of global mine output is anticipated to outpace growth in smelter capacities."
Refining fees, called copper concentrate treatment and refining charges (TC/RCs), are paid by miners to smelters to refine concentrate into metal. When mining output is high, mines and other concentrate owners must compete for smelter capacity which firms TC/RCs.