UPDATE 2-China's Hunan Nonferrous to boost metals reserves
reuters.com
Tue Apr 14, 2009 5:15am EDT
SHANGHAI, April 14 (Reuters) - China's top zinc producer, Hunan Nonferrous Metals Corp Ltd (2626.HK), plans to spend 1.2 billion yuan ($176 million) to build up metal reserves as prices slump, the official regional paper Hunan Daily reported.
Chinese government agencies and smelters are building up metals stockpiles to support the loss-making industry. The purchases reduce supply in domestic markets and help buoy prices.
Hunan Nonferrous plans to ask banks for a loan to buy lead, zinc, tungsten, antimony and indium from its smelters, and will sell down the stockpiles when their prices recover, the newspaper said in a report carried on the website of the official Xinhua news agency.
The report did not give the breakdown of the size of the metal purchases. Company officials were not available to comment.
The money to be spent on metals is equivalent to more than 90,000 tonnes of zinc and lead, or 600 tonnes of indium, according to Reuters cauculation based on the spot prices in Shanghai on Tuesday.
Hunan province's treasury will offer interest subsidies to help the company buy the metal, the newspaper quoted Mei Kebao, vice secretary of Hunan's party committee, as saying.
Hunan Nonferrous Metals Corp controls China's largest zinc producer, Zhuzhou Smelter Group Ltd (600961.SS). ($1=6.829 Yuan) (Reporting by Alfred Cang and Jacqueline Wong; Editing by Nick Macfie) |
