Xstrata warns on economic risks despite production boost

City A.M. Reporter
MINER Xstrata yesterday warned about short-term economic risks as it posted solid first-quarter production, but was confident about growth in metals demand as carmakers and other industries bounce back.

“The current macroeconomic environment remains volatile... nonetheless underlying signs of recovery continue to strengthen,” chairman Willy Strothotte told the group’s shareholders at the annual meeting.

He added: “While near-term risks to recovery remain, they seem unlikely to disrupt full global recovery in due course. The markets for our products remain high attractive with supply shortages likely.”

Heavy appetite for raw materials from China and gradual recovery from industrialised countries has boosted demand for commodities, including copper and coal, Xstrata’s two most profitable products. China, the world’s top consumer for many industrial metals, reported soaring copper imports in March. Xstrata is led by chief executive Mick Davis.

“Xstrata have come in with a solid production report for [the first quarter] with production up year-on-year,” analyst said Richard Knights at Liberum Capital.