* Expects to make FY operating profit * Q3 net loss 9 mln loss vs 167 mln profit last yr * Shares down 1.4 pct, lag German mid-cap peers (Adds detail, improved product demand) FRANKFURT, Aug 12 (Reuters) - Europe's biggest copper smelter, Aurubis (NAFG.DE), said on Wednesday that steady demand for primary copper and recovering demand for copper products would help it post a fourth-quarter and full-year operating profit. Pretax profit in the third quarter to June fell to 51 million euros ($72 million), in line with the average estimate of 50 million in a Reuters poll of analysts. However, it swung to a net loss of 9 million euros from a 167 million euro net profit a year earlier, sending its shares down 1.4 percent to 24.91 euros by 0716 GMT, underperforming a 0.4 percent fall in the German MDAX mid-cap index.. "The sound business model at Aurubis has prevented the operating result from sliding into the red despite the poor economic environment," Chief Executive Bernd Drouven said. "If the recovery tendencies on the product markets continue, we also expect a positive operating result in the last quarter and thus for the fiscal year," he said in a statement. PRODUCT DEMAND IMPROVES The first recovery in product demand and production was seen in mid-May in the cable and wire industry and some sectors of the semi-finished product sectors, it said. The low point in the wire rod market was reached in April with state economic stimulus packages showing results in sectors including automobile wiring. Order intake for continuous cast shapes stabilised in May at a low level before a further upturn in June. "Although the expected recovery in (product) demand has so far been relatively sluggish, an improvement in the market situation for the entire product range is discernible," Aurubis said. "We expect this trend to continue and that our product business will pick up further

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