China copper firm Daye ups output target after loss, delays smelter launch

BEIJING (Reuters) - China Daye Non-ferrous Metals Mining Ltd, the Hubei-based copper producer hit hard by the coronavirus outbreak earlier this year, on Monday defiantly raised its annual production target after posting a first-half net loss.

Daye, located near the virus epicentre of Wuhan, said it would ensure production of 510,000 tonnes of copper cathode this year, up from the 505,000 tonnes annual target set in March.

“We will increase daily as well as monthly production to recover the losses resulted from the epidemic,” Daye said in a filing to the Hong Kong stock exchange.

Its new 400,000 tonnes per year copper smelting project in Huangshi will now not start producing until 2022, however, the filing said. The company had previously guided for a launch in the first half of 2021.

Daye reported a 50.5 million yuan ($7.38 million) loss for January-June, versus a 3.9 million yuan profit a year earlier. It had previously announced a 118 million yuan loss for January-April 2020,implying it had returned to profitability in the last two months of the half.

Revenue fell 30.6% to 12.06 billion yuan, which the company said was “mainly attributable to the epidemic effect causing poor production and sales of the main products.”

It noted a V-shaped rebound in copper prices from the second quarter, however, partly driven by recovering Chinese demand and noted predictions that investment in new infrastructure in China could boost copper further. Prices of byproduct sulphuric acid have also risen, it added.

Daye’s copper cathode production came in at 240,930 tonnes in the first half, down 10.5% on the year.

However, the company managed to maintain an 83.8% capacity utilisation rate “during the most critical period of the epidemic from February to March” it said, providing an insight into the smelter’s operations under the Hubei lockdown.

Some Daye workers tested positive for COVID-19 and almost 1,000 had to self-isolate at home.

($1 = 6.8457 Chinese yuan renminbi)

Reporting by Tom Daly, editing by Louise Heavens