April 14 (Bloomberg) -- Jiangxi Copper Co., China's largest producer of the metal, said first-quarter profit jumped more than threefold to 331 million yuan ($40 million) as international copper prices surged on rising demand.

Unaudited net income rose from 90.5 million yuan in the first quarter of 2003, the company said in a statement to the Shanghai Stock Exchange. Jiangxi's six-month and full-year earnings are reported under international accounting standards to the Hong Kong stock exchange. Sales doubled to 2 billion yuan.

The average price of copper futures in the quarter rose 60 percent from a year earlier on the London Metal Exchange, fueled by demand from China, the world's biggest consumer of the metal. First-half profit may rise more than 50 percent, the company said from 203.6 million yuan last year, Jiangxi said.

``International copper prices are firm this year as the inventories have dropped to a very, very low level,'' said Patrick Pong, an analyst with Hong Kong-based South China Research Ltd. ``Economic growth and investment may slow down in China in the second half as the government will try meet its gross domestic product target of 7 percent, but still 7 percent is rapid growth to keep copper demand sustainable.''

Production

Jiangxi, which accounts for a fifth of China's copper output, produced 77,863 metric tons of the metal in the first three months, up 15.3 percent more from a year earlier. Gold production rose 21.2 percent during the same period to 2.8 metric tons, the company said. The average price of gold futures traded in New York rose 16 percent in the quarter from a year earlier.

Gold for June delivery was trading at $408 an ounce at 10:41 a.m. Shanghai time.

China produced 1.76 million tons of copper last year, according to China National Bureau of Statistics. That represent a 13 percent increase on an annual basis. Production of copper in the first two months was 286,100 metric tons, bureau said.

The nation used 2.95 million tons of copper in 2003, an increase of 10 percent over 2002, according to Yang Changhua, an analyst with Beijing Antaike Information Development Co. Ltd. Growth of copper consumption may slow down to 8 percent this year, with the power sector the largest user of the metal.

Copper for May delivery traded on the Comex division of the New York Mercantile Exchange, fell as much as 1.4 percent in Asian hours. It was 0.3 percent lower at $127.60 at 10:10 a.m. Shanghai time.

Supplies

Copper futures in New York yesterday fell for the fourth session in a row amid concern that demand growth will slow in China, the world's biggest consumer of the metal.

Prices have dropped 8.8 percent from an eight-year high in early March, partly after China took steps to rein in its economy. Buying by hedge funds, which had contributed to the rally, has almost dried up, figures from the U.S. Commodity Futures Trading Commission show.

The most-active contract, which reached $1.403 on March 2, still has gained 76 percent in the past year after increased demand in China and the U.S., the world's second-biggest consumer, sent global inventories to a six-year low.

Supplies in warehouses in Hull, U.K., approved by the London Metal Exchange ran out yesterday, the exchange's daily warehouse report showed. Stockpiles have also run out at warehouses in Singapore, Hamburg and Barcelona, Spain.

Total stockpiles fell 3,350 tons to 170,200 tons, the lowest since July 1997, the report showed. Supplies have dropped 79 percent in the past year.

To contact the reporter on this story: Xiao Yu in Beijing at yxiao@bloomberg.net.

Last Updated: April 13, 2004 22:45 EDT