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H1 reports from China's metal companies have revealed difficult operating conditions as rising energy prices, investment in environmental protection and an increase in resource tax have squeezed margins. Shares in the metal index fell 58.6% in the first half of the year, underperforming the SSE Composite Index which saw a 48% decrease. Copper companies fared better than most as the copper price remained at historically high levels and prices of sulphuric acid - a byproduct of the copper treatment process - soared. Jiangxi Copper, China's biggest producer, reported strong results with a 55% surge in revenues year-on-year. Net profit grew at the slower rate of 32.8%, reducing the company's profit margin to 10.4%, from 12.1% in the first half of 2007. The company has a slightly bearish outlook for the rest of this year, as the continued slowdown in the global economy takes its toll on copper demand and the appreciation of the dollar puts downward pressure on copper prices. However, it suspects copper supply will remain tight, which should support prices on the downside. Yunnan Copper Company struggled in the first half as revenue fell 18.9% and net profit plunged 29.5% y-o-y. The companies profit margin was cut to 3.8%, from 4.4% in the first half of 2007. A 45-day machine overhaul was blamed for the poor sales figures as output remained flat, whilst high energy prices pushed up production costs. Tongling Nonferrous Metals saw similar problems to Yunnan as rising raw material prices and fluctuations in the copper price cut the gross margin in the firm's copper unit to just 0.59%. Company-wide results were improved greatly by the strong performance of sulphuric acid, where gross margin increased to 71.6%, bringing Tongling's profit margin to 2.9%, up from 2.0% in H1 2007.

Cable maker Nexans announced its H1 2008 financial statements on 24th July. The company reported H1 sales dropped by 6.28% year-on-year to €3,554M (US$5,572M) as a result of deliberate reduction of the external sales in the electrical wires business. Operating margin was €220M (US$345M), which is an increase of 18% from same period last year. H1 net income was €119M (US$187M), which was comparatively more stable than the other sectors due to less exposure to tax rate change. Nexans believes that the increased uncertainty in the economic environment had not affected its profitability as operating margin increased to its target amount. It also announced that it has abandoned the plan to sale its automotive cable harnesses business.

The Shanghai Futures Exchange announced that it will begin delivery of copper and aluminium futures contracts at warehouses at Yangshan port. Settlement will be in RMB without tax and that will reflect international prices. The Shanghai Yangshan port bonded zone has been approved by the State Council and was officially put in operation on 10th December. The area is also home to a number of trading houses and logistics companies.

German wiring harness maker Leoni reported EUR2.96 billion revenues in 2010, up from EUR2.16 billion a year ago and well above its forecast for EUR2.80 billion. Revenues were fuelled by sales growth in BRIC markets as well as in the US. Strong demand for automotive components and the increase in copper prices provided additional support to revenues, especially in Q4 2010. The company realised earnings before interest and tax (EBIT) of EUR131 million in 2010, reversing a EUR116 million loss in 2009. EBIT in 2010 beat Leoni's projections, which stood at EUR120 million. Leoni reiterated its full year revenue target of EUR3.10 billion for 2011, and said the unrest in Tunisia and Egypt, where it has several production sites, will not have a substantial impact on its performance.

Chinese Henan Longhui Copper Co. Ltd. has confirmed that its copper and copper alloy tube and copper pipe project is underway and is expected to be completed by June 2011. The operation is expected to produce 90,000t/y of copper and copper alloy tube, including large-calibre copper tube and corrosion-resisting copper alloy tube, and 100,000t/y of copper pipe. The project will be completed at a cost of RMB1B and is expected to generate RMB10B in sales revenue and RMB500M in pre-tax profit. The company, which is located in the Mengzhuang Industrial zone of Hui county in Henan province, produced 380,000t of copper tube in 2010 and generated RMB23.5B in sales revenue.

Nexans reported that it saw strong improvement in performance in H1 2011. The cable maker said that sales at current metal prices amounted to €2.3B in H1 2011, up by 8.9% y-o-y. Despite this, the company announced a pre-tax loss of €133M compared with a €5M profit in H1 2010. This was mainly attributed to the inclusion of a €200M reserve relating to an ongoing E.U. proceeding for alleged anticompetitive behaviour in the submarine and underground power cable sector. The company realised an organic growth over the period of 8.2% y-o-y and said that all business units exhibited growth, especially the Industry and Building unit. Nexans is targeting sales growth of between 5 and 7% for full year 2011.

Aurubis AG, a leading producer of unwrought copper and copper semis, announced its third quarter results. It reported pre-tax profits to have risen by 41% y-o-y to €111M and total net revenues of €3.294B, up by 32% y-o-y. The company produced 198,000t of copper wirerod, down by 6% y-o-y, whereas production of copper shapes was up by 10% y-o-y, amounting to 55,000t. Within this area, Aurubis' product mix is characterised by an increasing proportion of speciality products. The company noted cooling demand for its copper products during April to June 2011, attributed to seasonal factors.

Jiangxi Mingxin Copper Industry started a copper fabricating project in Yingtai Industry Park. The investment is made by Fujian merchants and amounts to 360.0 million yuan (US$52.7 million). The new project is anticipated to be completed in February 2011. It was reported that expected revenue will be 1 billion yuan (US$146.5 million) and pre-tax profits 41 million yuan (US$6.0 million).