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.
Hindustan Copper sees 10% fall in output
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.
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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.
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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."
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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.
