Dongying Fangyuan’s phase 2 smelting line to start in October

The phase 2 operation line has capacity to process 300,000 tonnes per year of copper cathodes using copper concentrates.

“The company will start to run phase 2 because the phase 1 production line has to undergo maintenance in October for one month after operating for two years,” a source familiar with the matter told Fastmarkets.

The existing phase 1 smelting line – with a daily output of around 500 tonnes of copper cathode – is the only one Fangyuan is running now since the company began to face a liquidity crunch late in 2019. 

“Tight cash flow is still a big issue to Fangyuan now, and from my perspective, the smelter will not simultaneously run the two production lines even after the completion of the maintenance for phase 1,” a second market veteran said.

“We heard the company has stocked some copper concentrates for the restart of the phase 2 production line recently, but the current low TCs will exacerbate the company’s financial situation if it expands production at the moment,” the second source added.

Fastmarkets’ spot copper concentrate TC/RC index was last published at $45.10 per tonne/4.51 cents per lb on Friday August 7, the lowest since Fastmarkets began calculating the index.

According to Dongying Fangyuan’s website, it produced 748,000 tonnes of copper cathodes in 2018 and was the fourth-largest refined copper maker in China for that year.