Further information on planned stockpiling by China’s Guangxi province emerged at the weekend. China’s three main tin-producing provinces now all have stockpile plans in operation or planned, with Yunnan’s in effect since the start of the year and Hunan’s Chenzhou city also considering a scheme.
Guangxi has begun stocking 400,000 tonnes of metals, including 200,000 tonnes of aluminium, to support 20 local smelters, a senior local official told Reuters on Saturday. "Right now demand is not so good, production is below cost. Smelters are not making any profit. So they don’t want to produce and if they’re not producing they may cut jobs," said Zhang Yuanxin, director of the Guangxi branch of the National Development and Reform Commission (NDRC), China’s economic planning ministry.
Except for aluminium, Zhang did not say how much of each metal Guangxi planned to store. Guangxi is an important producer of alumina, aluminium, tin, indium and other minor metals. Under the scheme, enterprises will store metals in return for bank loans. The government subsidises the interest on the loans, effectively ensuring the smelters have cash and the metals are taken off the market. The metals would be stored until the market improved – not expected to be more than six months, he said. Apart from being a major metals producer, Guangxi is China’s top sugar producing region, and has joined the central government in buying up the sugar crop to support farmers’ incomes.
Guangxi produced 21,586 tonnes of refined tin last year, compared to 22,843 tonnes by Hunan and 73,809 tonnes by Yunnan. Yunnan announced a metals stockpiling plan last December and could acquire or arrange financing for up to 30,000 tonnes of tin this year. So far 6,000 tonnes has been acquired from Yunnan Tin Company.
