Japan's Sumitomo Metal lifts profit f'cast on higher metals prices

TOKYO, Feb 8 (Reuters) - Japan’s Sumitomo Metal Mining Co Ltd on Monday raised its annual net profit estimate by 70% for the year to March 31 thanks to higher copper and nickel prices as demand bounced back from the COVID-19 crisis.

The company now predicts a net profit of 78 billion yen ($739 million) for the year, against its previous guidance of 46 billion yen. The revised forecast represents a 29% annual increase, compared with an expected fall of 24% previously.

“We are now expecting higher prices of copper and nickel than we had anticipated,” Shuichi Yasukawa, Sumitomo Metal’s managing executive officer, told a news conference.

Its assumption is for an average copper price in January-March of $7,500 a tonne, up from $6,345 in April-December. Its estimate of the nickel price this quarter is $7.25 a pound, higher than $6.41 in April-December.

“The copper market has been strong amid expectations for growing demand from automobiles, especially electric vehicles, but it looks to be a bit overdone from a perspective of supply and demand,” Yasukawa said.

“We are not expecting the prices of copper and nickel to keep rising.”

Sumitomo Metal also raised its annual dividend forecast to 100 yen a share from its previous estimate of 59 yen.

The mining company said in October that it was considering selling its stake in Sierra Gorda copper mine in Chile.

“We are still considering to reshuffle our portfolio, including the possible sale of our stake in Sierra Gorda,” Yasukawa said.

$1 = 105.5900 yen Editing by Kirsten Donovan