South Korea, the world’s fourth biggest buyer of industrial metals, will lift purchases by its state-run procurement agency in the second half from a planned 297 billion won (US$260 million) if metal prices drop further, a senior agency official told Reuters. The Public Procurement Service (PPS) also intends to raise copper and tin purchases due to low inventory levels, PPS administrator Kang Ho-in said in an interview. “PPS will expand its metal purchases if global prices make additional falls,” said Kang, noting non-ferrous metal prices were expected to remain weak for a while despite already being at levels close to metal producers’ costs.
The procurement agency last month raised its budget for this year to buy non-ferrous metals to 580 billion won, up 60% from last year. Under its plan to expand its inventory of metals by 2015, PPS will increase copper and tin purchases, Kang said. As of end-June the agency held enough copper to meet 37.6 days of demand, against a target at 80 days, and 47.6 days of demand for tin against a target of 75 days, PPS data showed.
Korea usually imports 16,000 – 17,000 tpy of refined tin, of which normally around 2,000 tpy is handled by the PPS as a service to smaller users. Based on the interview, ITRI estimates that PPS current tin stocks amount to a little over 2,000 tonnes, while the medium term target is around 3,500 tonnes. So far this year the agency has bought 1,100 tonnes of tin, mainly for delivery in the second half.
