Yunnan Tin to sell 30,000 T for provincial reserves

Top Chinese tin producer Yunnan Tin 000960.SZ has proposed to sell 30,000 tonnes of tin ingots to Yunnan province for its planned base metal reserves, a company executive said on Monday.

Yunnan Tin would buy back part of, or all of the 30,000 tonnes of tin ingots once it received a confirmation from the State Reserves Bureau (SRB), he said.

The amount is nearly 4-fold the current stocks in the London Metal Exchange's warehouses and around 7 percent of global annual tin production, which could lead to reduced exports from China, the world's top producer of refined tin.

"We are transporting our stocks to an SRB warehouse in Yunnan," the executive told Reuters, without providing details.

That warehouse is also being used by the provincial government to store metals processed under Yunnan's stock-building plan.

The plan, announced in early December, calls for the building of a reserve of 1 million tonnes of base metals, including 100,000 tonnes of tin, to take advantage of the lowest prices in years and to bolster weak demand.

"The storing is temporary. The central government will buy tin as reserve soon," the Yunnan Tin executive said. "When the SRB buys, we just have to change the warrant to the SRB."

He added the SRB had not finalized the amount of tin the state body would buy for reserves.

This month, the SRB has already bought 30 tonnes of indium and about 300,000 tonnes of primary aluminium from smelters for stockpiles. It is expected to buy up to 300,000 tonnes of zinc soon. [ID:nHKG364654] [ID:nPEK267000]

Yunnan Tin stopped production on Dec 8 due to low tin prices and a reduced supply of tin concentrates from local mines that have cut production on the provincial government's safety checks, he said. [ID:nHKG8566]

The firm's tin production would be around 60,000 tonnes this year, out of annual capacity of 70,000 tonnes.

The Yunnan Tin executive was unwilling to speculate when the firm would be able to restart production but said it was unlikely to happen in coming month.

"Once we restart production, we can deliver as much as we produce to the SRB for the state reserve-building plan," he said.

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