SCMP reported that Jiangxi Copper, China's largest copper smelter, warns copper faces more downside price pressure as it posted 52% YoY fall in interim profit due to lower prices of the metal.

Company said that with a new round of release of copper mining capacity globally and China's economic restructuring and slowdown, the copper market faces a change in demand and supply relationship."

Amid expectation that the United States will cut or end its bond buying program and continued economic weakness in Europe and Japan, copper price would be further pressured.

Net profit for the year's first 6 months was CNY 1.28 billion under international accounting standards compared with CNY 2.67 billion in the year earlier period. The profit amounts to a third of the CNY 3.84 billion full year net profit forecast based on the average estimate of 19 analysts polled by Bloomberg. Gross profit margin fell to 4% from 6.3%.

Apart from a squeeze on profit margin, lower copper prices also saw the company book CNY 572.8 million inventory valuation loss in the H1 up from CNY 86.4 million in the year earlier period. It also booked a loss of CNY 109.4 million fair value changes on derivatives contracts, which are related to its metal price hedging activities. This compares with a gain of CNY 175.7 million in last year's H1.

Investment gains in the first 6 months of this year also shrank to CNY 47.6 million from CNY 290.2 million largely caused by CNY 142.9 million loss on gold futures contracts. Revenue rose 31% YoY to CNY 88 billion as higher sales volume more than offset a fall in average selling price. It did not provide details on its sales by volume and price.