Trade thin on China's first indium metal exchange in Guangxi
China's first indium exchange platform, Guangxi Indium Metal Exchange Center (also named Guangxi Yin Gu Jiao Yi Zhong Xin) targets to consolidate and protect the country's indium reserves and regulate prices, an exchange official told Platts on Friday. Trade, however, was thin and the exchange was now encouraging more market entries.
The indium exchange has traded since May 9 in Liuzhou city, Guangxi province of China and it currently has six members including Liuzhou China Tin Group, Guangxi Intai Technology, Liuzhou Indium Germanium Metals, Guangxi Tanghan Zinc & Indium, Laibin Debang Industrial and Trading and Nandan Jilang Indium.
According to the exchange official, the trading platform trades minimum 99.99% grade indium metal spot material. Trading hours are 09:30-11:30am local time every Tuesday and Thursday. The trading unit is "lots", with each lot containing 100 kg of indium metal. The exchange was open to all registered buyers who are members of the exchange, the official said, adding: "The current six Chinese suppliers are all major indium producers in China and we have our own warehouse for storing their material so we should have no problems to delivery large quantity for as much as 20-30 mt."
Only one spot deal settled so far
The exchange, however, had only settled one deal so far. It was settled on the first trading day at $700/kg on a total traded volume of 1 mt.
"No more deals were settled after that as offer prices set by the six producers are higher than the current market level and no one is interested in buying now," the official said, adding that their offer prices on the exchange were now set at Yuan 5,200 ($678)/kg while current domestic market levels were only at around Yuan 4,000/kg. "There is a price gap between the offer and market price levels so no more deals have been done after the first one," he said.
According to the exchange official, Guangxi has more than half of the indium reserves in China and the exchange was set up in the area to help consolidate the country's available reserves and regulate prices. "Jointly cooperating with the local government, we also target to gradually reduce the number of small indium producers in China," he added.
One Guangxi provincial government official added: "We have been working with related associations for slightly more than one year to set up the exchange. We aim to consolidate the country's limited indium reserves and regulate prices." She said further that there had only one transaction so far as the six producers refused to lower their prices. She did not however rule out the possibility that there would a monopoly on prices in the future with only big indium Chinese producers leading the market. "But the market will finally decide on the price itself," she added.
An official from Liuzhou China Tin Group, one of the exchange members, said the company now has about 2-3 mt of indium ingot at the exchange warehouse. "Transactions remain very limited so far as prices are at a low level....We can actually sell our material at a better price outside the exchange."
He expected that the exchange would invite more major Chinese indium producers to participate in the trading platform in the future. "In the near future, it will only be those major producers who will be actively involved in the market." Liuzhou China Tin aims to produce about 35-40 mt/year of indium metal in 2007, the official said.
An official from Nandan Jilang Indium which produces slightly above 10 mt/year of indium ingot, said: "We currently only have about 1-2 mt of indium at the trading center. The exchange charges handling fees so we want to minimise the amount storing at its warehouse." He added: "It will take time to see if the exchange could actually work out because what we concern is whether they can help us sell the material with better returns." |
