The provincial government in Yunnan, China, hopes to save local metals markets through a lengthy and impressive plan from the Ministry of Land and Resources. The province, which serves as home to Yunnan Copper, Yunnan Aluminum, Yunnan Tin, Luoping Zinc and Chihong Zinc, plans to purchase one million tons worth of local metals and hold them for a year. Eager to salvage jobs and avoid decreasing local output, the government is expected to ask banks for financial backing.
Although metal makers near Yunnan were excited to hear that the Chinese province planned to support local smelters with their considerable purchase, some weren’t too thrilled to learn the plan includedÃ‚Â more than base metals. The government plans to include ores, primary metals, and semi-finished products in the purchase,Ã‚Â since not limiting their purchases makes the most financial sense. For example,Ã‚Â buying only primary metals would cost “nearly $3 billion overall and about $1.3 billion for the tin alone,” according to Reuters, who noted that Yunnan plans to buy nearly 100,000 tons of tin. Reuters adds that the plan for tin “represents around one quarter of global annual tin production, prompting skeptical responses which swiftly deflated an initial 10 percent bounce in tin prices MSN3 on the London Metals Exchange” yesterday.
In addition to the tin, the province plans to purchase 150,000 ton of copper, 300,000 ton of aluminum, 150,000 tons of lead, and 300,000 tons of zinc. The area’s largest smelters are expected to benefit most from the plan, and analysts predict that other provinces might follow suit with similar procedures.