A spokesman for Yunnan Tin Company told Reuters on Monday that China’s government has not yet decided on a plan to stockpile tin after requests from the country’s major producers and its industry association.
“The government has not put out substantive measures,” Pan Wenhao, board secretary of Yunnan Tin told Reuters. State stockpiling would be the best option for producers, Pan said. He added that another option would be the producers stockpiling the metal themselves but they would also need the government to subsidise the interest payments for commercial loans to cover the cost of carrying the inventory. Pan said the stockpiling would depend on the market situations and the government’s policy. He did not provide further details such as the timing and the volume of the stockpiling.
As previously reported, nine leading Chinese tin producers, including YTC announced co-ordinated production cuts of 17,000 tonnes in total for 2016 last week, and called for government stockpiling as part of their announcement. We understand that lobbying for government stockpiling began in earnest in December, but it seems highly unlikely that an official response will be made until after the Spring Festival holidays. Nevertheless there has already been speculation by Chinese traders that subsidised loans could be provided to support the financing of commercial stocks if market conditions remain depressed.
