Umicore Sees No Increase in Zinc Prices Until 2003 (Update1)
2001-10-12 11:50 (New York)
(Closes shares in final paragraph.)
Brussels, Oct. 12 (Bloomberg) -- Umicore SA, the second-
largest zinc refiner, doesn't expect zinc prices to rise in the
next 18 months as the slowing economy, weakened by the terrorist
attacks in the U.S., pushes metal prices lower.
``Our base case is that low prices will remain for quite a
while,'' Umicore Chief Executive Thomas Leysen said in an
interview. ``They might still drop a bit -- it's not going to be
pleasant for any metal producer.''
Brussels-based Umicore warned Sept. 6 that it wouldn't meet
its target of a 10 percent increase in profit this year as the
slumping economy caused industrial metals prices to drop. Umicore
sees the global economy slipping into recession next year and with
it, no improvement in the average price of zinc above today's
level for at least 18 months.
``We don't see any upturn in the global economy until 2003,''
Leysen said. ``The fact is that metal prices have an impact on our
results.''
The price of zinc and copper on the London Metal Exchange
fell 20 percent between Jan. 1 and Sept. 6. That's when Umicore
said operating profit would be little changed from last year's
149.96 million euros ($135.6 million) ``barring any further
deterioration'' in metal prices and the global economy.
The world has changed since then. The Sept. 11 terrorist
attacks fueled concern the world's economy will slow further. The
average price of zinc, which is used to galvanize steel used by
manufacturers such as automakers, has dropped 6.7 percent to $786
a ton since the attacks. The average price of copper, which is
found in products from mobile phones to pipes, is down 4 percent.
Umicore plans to release a trading statement in mid-November.
Leysen declined to say whether the company's 2001 profit
expectations will change.
The company, formerly Union Miniere SA, reported operating
profit from zinc refining fell 14 percent to 42.3 million euros in
the first half. Copper operating profit rose 7 percent to 16.2
million euros.
Umicore shares fell 67 cents, or 1.6 percent, to 41.50 euros.
--Andrew Clapham in the Brussels newsroom (32 2) 285 4304, or at
aclapham@bloomberg.net jmf |
