Yunnan Copper Says No Clear Signs of Recovery; Posts Net Loss

Aug. 17 (Bloomberg) -- Yunnan Copper Industry Co., a unit of Aluminum Corp. of China, said there were “no clear signs” of a recovery after suffering a first-half loss of 126.3 million yuan ($18 million) on lower output and metal prices. Copper production dropped 35 percent from last year because of a shortage of raw materials and falling prices, the Kunming, Yunnan province-based smelter said in a statement today. The loss matched the company’s prediction on July 9 and compares with a profit of 545.6 million yuan a year ago. Copper prices almost halved in the period from a year ago as the global recession curbed demand in China, the world’s biggest producer and consumer. Railway transport “stress” and rising costs may depress second-half profit, Yunnan Copper said. “Macro-economic growth has stabilized, but there haven’t been clear signs of a recovery, therefore demand and price fluctuations may be more difficult to predict,” the country’s third-largest copper smelter said. It didn’t elaborate on the transport comment. Yunnan Copper fell 9.9 percent to 29.86 yuan at 2:34 p.m. local time, leading a 4.8 percent drop in the benchmark Shanghai Composite Index. Copper prices dropped today as a decline in U.S. stocks renewed investors’ concern that the metal’s rally isn’t justified by economic prospects. The company produced 122,800 metric tons of copper in the first half, it said. Gold output dropped 56 percent to 2.84 tons, and sulfuric acid was down 8.6 percent to 303,000 tons, it said. Sulfuric acid is a byproduct from copper smelting. State-owned Aluminum Corp. of China is country’s largest aluminum producer. --Xiao Yu. Editors: Tan Hwee Ann, Jacob Lloyd-Smith. To contact the Bloomberg News staff on this story: Xiao Yu in Beijing on yxiao@bloomberg.net