London 29/01/2016 - China will provide a loan of around 2-3 billion yuan ($304-456 million) to several leading Chinese producers to carry out commercial stockpiling of 20,000-30,000 tonnes of tin, well-informed sources told Fastmarkets.
The loan is part of a larger 30 billion yuan loan from Beijing at low or zero interest rates to Chinese base metal producers, with the purchase aimed at lifting low tin prices and soaking up excess capacity in China, one source said.
There is speculation that the stockpiling will take place after Chinese New Year (which starts February 8) but there is no further details like how much will be stockpiled per month and how much tonnage each of the tin producer involved will contribute to the stockpile.
“30,000 tonnes is an enormous number for the tin market. The fundamentals of this market will change significantly,” a local trader said.
The tin market recorded a deficit of 11,100 tonnes in the first 11 months of 2015. Apparent demand in China was 8.0 percent year-on-year lower during the same period, according to the World Bureau of Metal Statistics.
The London Metal Exchange three-month tin price slumped by around 30 percent over the past year and dropped as low as $13,085 per tonne in mid-January, its lowest since June 2009.
Tin was last at $14,100 on Select on Friday, down $150 on Thursday's close.
(Editing by Vivian Teo)