Low prices to dent Hind Copper margins

MUMBAI: Hindustan Copper, India third-largest copper producer, said profits will take a hit this year owing to the crash in copper prices and lower production at one its plants.

Copper prices fell to a three-year low of $3,464 a tonne on Thursday on the London Metals Exchange.

M Samajpati, director (finance), said margins will be under pressure as the firm booked shipments of copper ore at $6,000 per tonne and prices of the refined metal have now fallen below $4,000 per tonne. The firm had a profit margin of 15.4% for the year ended March 31.

Samajpati said the PSU’s production will be down by about 20% as the copper smelter was shutdown for maintenance purposes. “We closed our smelter in eastern India from April to October,” he said. The company produced 44,000 tonne of copper last year.
An analyst from a research firm said all copper producers are taking a hit as prices have fallen sharply. “The marginal cost of production of copper is $4000 per tonne and prices are already below it. How long smelters will sustain production has to be seen.”

Samajpati said Hindustan Copper is looking to restart its three mines as it wants to become self sufficient in its raw material requirements. The firm imports nearly a third of its ore needs.

shubhashish@dnaindia.net