[Cu] Reserves Details Still Under Discussion - Yunnan Copper

SHANGHAI, Dec. 10 (CBI China) -- According to news released by Yunnan Province Economic Commission: As planned, Yunnan province will purchase 1 million mt of non-ferrous metals as reserves next year, including 150 kt of copper, 300 kt of aluminum, 150 kt of lead, 300 kt of zinc and 100 kt of tin. Those reserves will be mainly sourced from local smelters, with tentative reserve period of 13 months, ranging from December 1st, 2008 to December 31st, 2009. As for the source of cash, the provincial government plans to use bank loans secured by smelters’ metals stocks to establish reserves, under the promise of complying with credit principles and guarantees the safety of funds. Financial institutions give loans to these smelters, and smelters pay off debt with interests on time. 

    CBI asked about the relevant director of CHALCO Yunnan Copper who said that CHALCO Yunnan Copper is a main focus of this reserves, the specific details are under discussion at present, detailed reserve agreement has not yet been issued. It can be said that through this reserve, enterprises can obtain bank loans guaranteed by government, which would be able to ease the financial pressure and increase mobility of capital. 150 kt of the volume including copper concentrate and refined copper will be divided into 13 months, which will not affect Yunnan Copper long-term orders and retail sales significantly. CBI believe that the reserves is just a way for the Yunnan provincial government to give support to the province's non-ferrous industry, and can not change the domestic situation of copper supply and demand, and this information has long been digested by the market, so it is difficult to boost copper prices. CBI will be concern about the introduction of reserve details.

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