Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Norilsk Predicts Large Loss, Puts Stop on Copper Sales

Russia's metals giant Norilsk Nickel is predicting losses of $20 million after temporarily stopping sales of copper in the wake of falling world prices, following last month's Sumitomo trading scandal, a Norilsk spokesman said Friday.

Sergei Vetchinin said the company will wait "until conditions improve on the market" before resuming copper exports, although he would not estimate when the situation would change.

But he said reports in the Russian press that falling prices could cost Norilsk $200 million were exaggerated, predicting the company's losses at about $20 million.

Benchmark copper prices on the London Metals Exchange are now about $1,830 a ton, unable to climb back to their previous mid-June price of $2,150 a ton. The sharp drop came after the discovery that the world's premier copper dealer, the Japanese Sumitomo firm, had falsified trading records and lost $1.8 billion over the past 10 years.

Vladimir Glubanov of the Moscow Non-Ferrous Metal Exchange said he expected copper prices to remain low at least through the end of the summer and that any pickup would be slow.

"It will take time for the situation to clarify itself and for prices to go back to a normal level," he said, expressing concern over the fate of Russia's copper industry.

A Norilsk Nickel representative in London responsible for selling the company's copper to Western buyers said Russian producers were especially hurt by the scandal's fallout.

"The crisis affects Russian copper producers more than American or German ones, because they have less visibility to hedge [against risks]," said the representative, who asked not to be named.

Norilsk last year exported 115,000 tons of the metal, according to Reuters.

The agency also quoted a news release from the Gaisky ore-enriching complex, Russia's second-largest copper concentrate producer, saying low prices put Russian producers in a dire situation.

"In several weeks, it is possible that Russian copper exports will halt completely," the company said.