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2022
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Annual profit 5.1 billion! Luoyang molybdenum industry record the best performance in history!
On March 18, Luoyang Molybdenum Industry (SH.603993) announced its 2021 results. The company's operating performance increased significantly, with annual revenue of 173.86 billion yuan (RMB, the same below), a year-on-year increase of 54%, and net profit attributable to its parent of 5.11 billion yuan, a year-on-year increase of 119, all of which achieved the best performance in history.
On March 18, Luoyang Molybdenum (SH.603993) announced its 2021 results, with significant growth in the company's operating results,Annual revenue is 173.86 billion yuan (RMB, the same below),Year-on-year growth of 54%, home-to-home net profit of 5.11 billion yuan, up 119 percent year-on-year, the best performance in history.
Higher metal market boosts profit growth
Luoyang Molybdenum said that copper and cobalt prices are the main reasons for the company's growth.
Luoyang Molybdenum expects that under the background of "double carbon", the demand for copper related to renewable energy and new energy vehicles will increase significantly in 2022. However, given the uncertainty of the outbreak, global supply chain bottlenecks are optimistically expected to ease in the second half of 2022, and global copper inventories as a whole will remain low, supporting copper prices.
According to the analysis of the report, under the background that the global economy is gradually recovering from the epidemic, many countries have introduced economic stimulus policies to benefit copper consumption, and the liquidity of the US dollar is abundant, the impact of the bottleneck in the global supply chain is still there, the inventory of copper metal has dropped to a historical low, and the price of copper has risen rapidly in the first half of 2021, and even reached a record high of US $10724.50/ton in May 2021. The LME (London Metal Exchange) copper in stock settlement price averaged $9317/tonne in 2021, up 50.61 per cent year-on-year.
▲ LME Copper in stock Settlement Price (Image Source: Luoyang Molybdenum Annual Report)
The price of cobalt metal also moved out of seasonal volatility, rising to a three-year high. According to the analysis of Luoyang Molybdenum Industry, cobalt prices have seen significant price increases in the "year-end-Spring Festival" and the "autumn market" in the third quarter when the market demand for stock is strong. It continued to be pushed up to 500000 yuan/tonne after August 2021. The average annual price of cobalt recorded by MB (British Metal Guide) in 2021 is $23.98/lb, up 56.02 per cent year-on-year.
▲ Average annual price of MB metal cobalt (Image source: Luoyang Molybdenum Annual Report)
In forecasting cobalt prices, the company said, "new energy vehicles will still be the main source of cobalt demand growth, although the reporting period of lithium iron phosphate battery growth faster than the growth rate of ternary batteries, but the sharp rise in the production of new energy vehicles so that the demand for cobalt continues to increase, the outbreak in South Africa is expected to continue to adversely affect the shipment of cobalt raw materials in Africa, thus supporting cobalt prices." Luoyang molybdenum industry also revealed that looking forward to the supply side in 2022, there will be new production of cobalt raw materials in Congo (DRC), and the nickel wet process project in Indonesia will also bring a certain increase in cobalt.
Output continues to hit a new high 10K put into production is particularly bright
The report shows that in addition to the substantial increase in operating performance, Luoyang Molybdenum's output of many products has set a record. TFM's copper output has reached a four-year high, cobalt output has reached a three-year high, Brazil's phosphate fertilizer output has reached a new high since Brazil's factory was established, and IXM's annual physical sales volume has reached a record high, achieving a pre-tax profit of US $0.16 billion.
According to the annual report, in 2021, Congo (DRC) produced 209,120 tons of copper and 18,501 tons of cobalt respectively. China realized 16,385 tons of molybdenum and 8,658 tons of tungsten respectively. Brazil's niobium and phosphorus output were 8,586 tons and 1.12 million tons respectively. Australia's NPM(80% equity) produces 23,534 tons of copper and 19,948 ounces of gold respectively. IXM achieved a trade volume (sales volume) of 2.884 million tons of concentrate products and a trade volume (sales volume) of 3.613 million tons of refined metal products.
Among them, the company's first overseas large-scale expansion project Congo (DRC) TFM 10K project was successfully completed and put into operation and overproduction, which is considered to be an important factor to ensure the stable production and overproduction of TFM and the substantial increase in output value and profit. By December last year, the 10K ore processing capacity reached 161 per cent of the design capacity.
The project's output has increased significantly, breaking a number of production records. The company disclosed that in November 2021, TFM produced an average of 690 tons of copper per day, creating a new high of average monthly copper production, and from October to December, cobalt metal production for three consecutive months since the establishment of TFM plant to refresh the historical record of single-month cobalt production. Excluding the impact of bulk material prices, the average full cost of TFM tons of copper in 2021 is 3.9 percent lower than the same period in 2020, and the average full cost of cobalt tons is 8 percent lower than in 2020.
Key projects efficiently promote the "2022 construction year" in the future
Luoyang Molybdenum's 2021 annual report also reveals the progress of several other projects--
TFM Copper and Cobalt Mixed Mine Project plans to build three production lines. It is planned to increase the average annual output of copper by 200000 tons and cobalt by 17000 tons after it is completed and put into operation in 2023, thus realizing another TFM. KFM, another world-class high-grade copper and cobalt mine obtained by the company in 2020, is currently rapidly and orderly pushing forward the preliminary work of supplementary exploration, environmental impact assessment, river diversion, integration of mineral rights, feasibility study design optimization, ground clearance, etc. The company's 30% stake in Indonesia's Hua Yue nickel cobalt project was put into operation at the end of last year. At present, it has reached 50% capacity utilization rate, and is expected to produce 60000 tons of nickel and by-product cobalt after production.
It is reported that Luoyang Molybdenum's (NPM)E26L1N project, located in Australia, is officially put into operation. It is expected to provide additional production space for the company in the copper and gold metal sector.
As of the end of 2021, Luoyang Molybdenum's foreign assets amounted to 118.693 billion billion yuan, accounting for 86.35 of the total assets.
It is worth noting that Luoyang Molybdenum disclosed its operation from January to February 2022 on March 16. The output of copper, cobalt and niobium products increased by 20%, 52% and 42% respectively year-on-year. At the same time, it benefited from the increase in the sales prices of various products year-on-year. The company's main operating indicators were better than expected, achieving a good start to the year.
It is reported that Luoyang molybdenum industry will position 2022 as the "construction year", which is the key stage for the company to realize the "step up" capacity doubling. The company's president Sun Ruiwen said, "On the one hand, based on the existing high-quality resources, under the premise of fully completing various production tasks, accelerate the construction of two world-class mines in Congo (DRC) to ensure the realization of the milestone plan. On the one hand, look at the world and continue to seek M & A opportunities for new energy metal resources have laid a solid foundation for the company to achieve new leaps."
About Luoyang Molybdenum Industry
Luoyang Molybdenum is mainly engaged in mining, processing and mineral trading of basic metals and rare metals. At present, its main business is distributed in Asia, Africa, South America, Oceania and Europe. It is the world's leading producer of tungsten, cobalt, niobium and molybdenum and an important copper producer. It is also a leading phosphate fertilizer producer in Brazil. Its basic metal trading business ranks among the top three in the world. Ranked 15th in the 2021 list of the top 40 global mining companies (market capitalization). The company's traditional main business mainly involves molybdenum and tungsten, which are listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong Limited (03993.HK).
▲ Luoyang Molybdenum Portfolio (Image Source: Luoyang Molybdenum Annual Report)
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