Aurubis Copper Outlook Rises as Sulphuric Acid Offsets Weak TC/RCs

Aurubis

Aurubis copper outlook has improved as stronger sulphuric acid revenues, higher recycling charges and resilient European copper product demand offset weak concentrate treatment and refining charges. Europe’s largest copper producer and recycler raised its full-year operating earnings before tax guidance to €425mn-525mn.

Aurubis copper outlook had previously stood at €375mn-475mn. The upgrade reflects a stronger market environment, especially for sulphuric acid, which is now expected to make a notably higher earnings contribution than last year.

Aurubis copper outlook is important because it shows how copper smelter economics are no longer driven only by concentrate treatment charges. By-product acid revenue, recycling margins and downstream copper product demand are becoming increasingly important earnings buffers.

The company’s operating EBT rose by 22% year on year to €121mn in January-March, while operating Ebitda increased by 19% to €187mn.

Acid Revenue Helps Cushion Concentrate Market Pressure

Sulphuric acid has become a key earnings support for Aurubis. Restricted sea traffic in the Middle East has tightened global sulphur supply since March, reducing acid availability and lifting spot prices.

Aurubis is not fully exposed to spot acid price movements because of its term contract structure. However, higher sulphuric acid revenues are still expected to contribute more strongly to earnings this fiscal year.

The company produced 585,000t of sulphuric acid in the second quarter, up 6% from a year earlier. First-half output rose by 5% to 1.17mn t, supported by higher concentrate throughput at its primary smelters.

This is strategically important for copper smelters. Weak TC/RCs normally pressure margins, but acid revenue can partly offset that weakness when acid markets tighten.

Aurubis processed 620,000t of copper concentrate in the second quarter, up 4% on the year. First-half concentrate throughput rose by 4% to 1.25mn t.

The company said announced utilisation adjustments, especially in China, are unlikely to fully offset this year’s expected concentrate deficit. This confirms that the copper concentrate market remains structurally tight.

Aurubis remains confident in concentrate supply because of long-term contracts and supplier diversification. The group said it is already supplied with concentrates well into the fourth quarter of its 2025-26 fiscal year.

Copper cathode output from the custom smelting and products segment was broadly stable at 150,000t in the second quarter. First-half cathode output was unchanged at 301,000t.

Recycling and Wire Rod Demand Strengthen Earnings Base

Aurubis’ downstream copper demand showed a clear split across European end markets. Wire rod demand remained strong, while shapes demand weakened because of slower automotive activity.

Wire rod output rose by 8% year on year to 241,000t in the second quarter. First-half wire rod production increased by 4% to 442,000t, supported by demand from energy infrastructure.

The company expects wire rod demand to grow this fiscal year, especially from infrastructure, renewable energy and data-centre expansion. This highlights copper’s role in electrification, grid build-out and digital infrastructure.

However, Aurubis expects overall sales to be slightly below last year’s level. High copper prices, rising energy costs and geopolitical uncertainty continue to weigh on customer behaviour.

Shapes output fell by 13% year on year to 39,000t in the second quarter and by 14% to 73,000t in the first half. This reflects weaker automotive demand, showing that not all copper-consuming sectors are recovering at the same pace.

Recycling conditions improved. The recycling segment’s Ebitda rose by 56% year on year to €63mn in the second quarter, while EBT increased to €38mn from €23mn.

Higher copper prices encouraged dealers to release scrap inventories, improving European scrap and blister copper availability. This lifted refining charges above both the previous quarter and the same period last year.

Aurubis processed 246,000t of copper scrap and blister copper in the first half, broadly in line with 249,000t a year earlier. Recycling segment cathode output rose by 5% year on year to 133,000t in the second quarter and by 4% to 266,000t in the first half.

The company expects recycling to make a stronger earnings contribution this fiscal year. But scrap availability will remain volatile because collection activity and dealer behaviour are closely tied to copper prices.

Aurubis now expects full-year operating Ebitda of €700mn-800mn. It expects operating EBT of €370mn-430mn from custom smelting and products and €115mn-175mn from multi-metal recycling.

A maintenance shutdown at Lunen in May-June is expected to reduce operating EBT by €10mn. Even with that impact, the upgraded guidance shows that Aurubis is benefiting from a more diversified earnings base across acid, recycling and copper products.

The Metalnomist Commentary

Aurubis’ upgraded guidance shows that copper smelters with acid, recycling and downstream product exposure are better positioned than pure concentrate processors. The strategic lesson is clear: in a world of weak TC/RCs, the strongest copper players will be those that control more value across by-products, scrap and end-use demand.