Citi: Jiangxi Copper’s third-quarter net profit falls quarter on quarter as lower sulfuric acid prices and processing fees weigh

Why did third-quarter profit decline quarter on quarter?

The company said net profit fell quarter on quarter in the third quarter of 2026, mainly due to lower sulfuric acid prices, lower actual copper concentrate processing fees and a high second-quarter comparison base.
Part of the high comparison base stemmed from a mismatch in recognition timing: the related fair-value losses on hedges were recognized in 2025, while gains on the hedged inventory were recognized in the first half of 2026, lifting the first-half profit base.
Production changed relatively little: third-quarter cathode copper output fell by approximately 5000 tonnes quarter on quarter, mined copper fell by approximately 2000 to 3000 tonnes, and sulfuric acid output rose slightly.

The average sulfuric acid price in the second quarter of 2026 was 1700 to 1800 yuan per tonne. Prices fell in the third quarter, reducing profit from the sulfuric acid business.
In the first half, the company consumed some overseas copper concentrate inventories subject to last year’s higher annual long-term contract processing fees, so actual processing fees were higher than in the third quarter. The company expects consumption of overseas copper concentrate subject to annual long-term contract processing fees to decline further in the fourth quarter, as it retains some inventory for use the following year.
The company expects tight copper concentrate supply, low spot processing fees and relatively high sulfuric acid prices to make long-term processing fee negotiations difficult for copper smelters.

Higher copper foil profit drove a quarter-on-quarter increase in profit at the copper processing segment in the third quarter of 2026; financial gains in the quarter came mainly from foreign exchange gains.
The company said that, given attractive gold prices, the Solgold project may first develop a smaller pit and could begin production before 2030.

Citi assigned Jiangxi Copper’s H shares a “Buy” rating and a target price of HK$49.50, based on the average of discounted cash flow and price-to-book valuations; the share price listed in the report for 29 October 2026 was HK$26.04.
The bank said weaker-than-expected copper prices, lower-than-expected sulfuric acid prices and higher mining or smelting costs could affect the share price’s ability to reach the target.