February 3, 2016 / 11:14 AM / 3 years ago

UPDATE 1-Japan's two biggest oil refiners warn of second year of losses

* Japan’s 2 biggest refiners see second straight year of losses

* JX sees Caserones copper mine hitting full output in March (Recasts with earnings, adds details)

By Osamu Tsukimori and Yuka Obayashi

TOKYO, Feb 3 (Reuters) - Japan’s two largest oil refiners warned they will lose money for a second consecutive year, saddled by inventory losses as oil prices slump and the general decline in global commodity prices.

Top refiner by sales, JX Holdings, and second-ranked Idemitsu Kosan both said they will incur losses in the year ending March 31. JX expects a record loss of 330 billion yen ($2.74 billion) in fiscal 2015 while Idemitsu warned of a 13 billion yen loss.

Globally, top oil companies have struggled to cope with a roughly 70 percent decline in oil prices since their 2014 peak, triggering a wave of spending cuts on new wells and projects to conserve cash.

To overcome the downturn, JX expects to sell some stakes in upstream projects to attain its goal of creating 200 billion yen worth of cash flow by March, JX Holdings Director Katsuyuki Ota said at an earnings announcement on Wednesday.

JX, whose metal unit is Japan’s biggest copper smelter, is also grappling with the overall drop in global commodity prices and start-up issues at a copper mine.

JX said on Wednesday its Caserones mine in Chile ran at only about 60 to 70 percent utilisation in January, missing its earlier target of full utilisation throughout the month.

JX is now aiming for full utilisation at Caserones in March, Ota said.

Caserones produced 45,000 tonnes of copper concentrate in the calendar year 2015, missing its earlier target of 64,000 tonnes, the company said.

Its output target for January-March is 23,000 tonnes, up from 17,000 tonnes for the October-December period, a spokesman for JX’s metal unit JX Nippon Mining & Metals said Wednesday.

Caserones has struggled with its waste system and other problems during the ramp-up phase, which has repeatedly delayed reaching full production.

JX also said it will book an impairment loss of 80 billion yen on Caserones for the current business year amid plunging copper and molybdenum prices.

$1 = 119.7800 yen Reporting by Osamu Tsukimori and Yuka Obayashi; Editing by Himani Sarkar and Christian Schmollinger

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below