The Yunnan government has agreed to buy 6,000 tonnes of tin from Yunnan Tin Company. The metal had already been reserved as part of a short-run stock financing scheme, due to run to the end of December, but this has now been converted into an outright purchase.
Beijing research company Antaike reported today that the Yunnan provincial government will pay 105,000 yuan per tonne (US$15,365/tonne) for the tin, which is at a premium to both the LME and the local physical tin price of 99,000 – 100,000 yuan/tonne.
The Yunnan government first announced plans to reserve tin and other base metals in December 2008, with a stockpile of up to 100,000 tonnes of tin. It was subsequently made clear that the plan was based on providing financing support to local producers using their metal as collateral and the target volume for tin to be reserved up to end-December 2009 was revised down to 30,000 tonnes. However the switch to genuine stockpiling should support the market more, and Antaike forecasts that 10,000 – 20,000 tonnes could be acquired for the stockpile.
