July 8 (Reuters) – Shandong Fangyuan Nonferrous Metals Group, China’s biggest private-sector copper smelter, on Thursday said its subsidiary had officially launched a supply-chain partnership with state-controlled Xiamen ITG Group Corp 600755.SS.
The tie-up is a government-orchestrated initiative designed to put Fangyuan, which has capacity to produce 700,000 tonnes of refined copper annually, on a firmer financial footing after the company admitted it was experiencing liquidity problems in late 2019 and reducing operating rates. [https://bit.ly/2RMs924]
ITG, a commodity trading firm which also provides supply-chain management services, will bring in “favourable resources” for Fangyuan smelting unit Dongying Lufang Metals Material Co Ltd and work to expand sales and purchase channels, a Fangyuan statement said, without providing further details.
Reuters reported in April that ITG would purchase and store raw materials, sell them to Fangyuan and then buy back the products, citing a source briefed on the matter.
(Reporting by Tom Daly; Editing by Kirsten Donovan)
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