Aurubis’ annual earnings surge on higher copper scrap RCs

Aurubis, Europe’s biggest copper producer, posted improved earnings in its latest annual results, largely thanks to higher scrap refining charges (RC) since its acquisition of recycling firm Metallo in May 2020.

For its financial year to September 30. 2020, Aurubis’ operating earnings before taxes (EBT) grew by 15% to €221 million ($268 million) year on year, the company said on December 9.

It attributed the growth to significantly higher refining charges(RC) for copper scrap and the improved availability of other recycling materials, after integrating Belgian-Spanish Metallo into its annual accounting for the first time.

Supplies of recycling materials in Europe has recovered since June 2020, accompanied by easing of Covid-19-related measures and higher copper price, which supported the surge of RC in copper scrap towards September this year, Aurubis said.

With a recent move to set up a joint venture with cable recycling firm TSR, Aurubis said it would continue to expand the proportion of recycled materials it used as production input.

European copper scrap availability has still not returned to pre-Covid-19 levels, while the spot availability of copper concentrates - another major source of copper raw materials for smelting - is also tight.

“The spot price was below this benchmark($62 per tonne/6.2 cents per lb) for long periods of the year. [But] due to the recovery in concentrates supplies and Chinese smelter buying restraint, spot prices at the [end of September] indicated a slight recovery,” the company said. “Overall, we expect the concentrates market to be at least balanced in 2021.”

Aurubis’ copper cathode output dropped slightly over the year to September to 1.03 million tonnes, down from 1.07 million tonnes over the previous financial year due to an outage at its Olen copper refining facility in Belgium.

The European producer is keeping its copper premium for 2021 supplies to European customers unchanged year on year at $96 per tonne.

In addition to the rising scrap RCs, precious metals sales also became a driver for Aurubis revenues, the company added, with its precious metal sales rising by 21% year on year to €3.5 billion in the year to September 30, due to a rally in gold and silver prices.

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