UPDATE 1-Aurubis says smelter output restored, fees to rise soon

Wed Feb 26, 2014 6:06am EST

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HAMBURG Feb 26 (Reuters) - Germany's Aurubis, Europe's largest copper producer, said smelter fees are likely to rise soon and help it turn around this year, while it also has restored high output at its main Hamburg plant after a long maintenance period.

"We are still in heavy seas, but we are on course and hopefully will come through soon," Chief Executive Peter Willbrandt told shareholders at their annual meeting on Wednesday. "There are signs of this."

Earlier this month, Aurubis posted a pre-tax loss of 73 million euros ($100 million) for the first quarter of its 2013/14 fiscal year starting Oct. 1, against a 13 million euro profit a year earlier due to delays in modernising the Hamburg plant and tight scrap market.

Work is now largely finished, Willbrandt said.

"The concentrate (copper ore) processing in Hamburg has in past weeks been running at a very high level," he said.

"For the rest of the year, much will depend how the copper price develops and the investment trend in the economy."

Copper prices should have a "good fundamental basis", he said. He noted premiums for copper cathodes or newly produced metal were "at a high level".

"The sales markets for copper products are showing rising purchase interest as shown in the 2014 negotiating season for annual contracts, which has just been completed," he said.

Availability of copper concentrate is good, which is likely to have a positive impact on copper treatment and refining charges (TC/RCs), he said.

TC/RCs are paid by miners to smelters to refine concentrate into metal and are a significant part of the global industry's earnings but have been weak early in the new year.

"There have been positive signals in the copper concentrate market," he said. "The TC/RCs will rise, although this will take place at the earliest in the current quarter."

The market for sulphuric acid, a byproduct of copper, remains tough because of low demand from the fertilizer industry and forecasts are difficult, he said.

The scrap metal market remained tight, while the euro zone economy is also showing signs of stabilisation including in south Europe, he said.

"Overall there will probably be a balanced market situation for copper, which does not display a large surplus," he said.

Aurubis shares were up 0.12 percent at 41.36 euros at 1039 GMT, while Germany's MDAX index for medium-sized companies down 0.07 percent. ($1 = 0.7282 euros) (Reporting by Michael Hogan; editing by Jane Baird)

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