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Chinese refineries/smelters still faces challenges after the work resumption

2020-03-02 09:53:48

With the orderly resumption of production, the external pressure brought by the epidemic is gradually diminishing, but smelting/refining producers are still facing great challenges.

1.      Sulfuric acid is in unsalable state; business revenue from by-product income decreases. At present, domestic sulfuric acid stock has risen rapidly from about 800,000 to 900,000 tons before the spring festival to about 1.4 million to 1.5 million tons. As copper smelters resume production, sulfuric acid stocks will further increase. But the demand from downstream sectors is still weak, because of the delayed work time of resumption and recruitment difficult. The oversupply of sulfuric acid is expected to continue for some time which in turn affects the sales income of by-products.

2.      Refined copper stocks increase, and financial pressure is big. First, copper end-using sectors have not fully resumed production. Second, Labor cost increase. In addition, it is still in off-season for copper consumption.

Based on Antaike’s survey result, in the absence of downstream acid consuming capacity in the location of smelting enterprises, although production can resume normally, the pressure of sulfuric acid sales and the weak demand for refined copper in the downstream may lead to passive production reduction. Specific production reduction depends on the subsequent transport and the severity of the sulfuric acid problem.

 

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