More and more talk on Buying into hard assets, when will they materialise? Does Chinese smell treasury Bubble and busy to get out before it will go Bust? Clever way of thinking we can be assured that World Growth in a good hands. Secure Raw Commodities Supply for its Growth by buying companies in the sector and outright commodities at these levels will be very profitable in next Inflation phase of "recovery".
"SANYA - The Chinese government is considering buying all types of base metals as reserves to help boost domestic demand, Wen Xianjun, vice chairperson of state-funded China Nonferrous Metals Industry Association, said on Wednesday.
Previously Wen had told Reuters that China could buy up stocks of aluminium to help struggling smelters. But the central government may cast the net much wider.
"All base metals are being considered," he told reporters on the sidelines of a conference in Sanya on China's Hainan Island.
China's metals sector has been hit hard by a slump in demand, which has caused stocks to build up and prices to plummet, forcing many to suspend part of their production.
The government, keen to offset the impact of a residential housing crisis and the global financial turmoil, has announced a $586-billion stimulus package to revive the economy.
Officials have said they plan to buy up stocks of resources and materials to shore up prices and the government has already begun buying up grains and soybean to support farmers, but it has yet to reveal its ambitions to build state metals reserves.
Earlier this week, Yunnan province, a major base metals production region in southwestern China, broke ranks by saying it planned to buy up 1 million tonnes of metals, ores and semi-finished products to support local industry.
Neighbouring Guangxi may follow suit.
But one China economist sounded a sceptical note about the idea of the government hoovering up metals stocks.
"It's hard to believe why the government would want to buy up all that stock. The question I have to ask is for what purposes? To help enterprises?" said Wensheng Peng, economist at Barclays Capital in Hong Kong.
"There are better ways to do that, by giving those firms money for example. Given the current low prices, it makes sense to build strategic stocks. There is a lot of confusion about the potential stockpile builds. More clarity and details are needed."
'IF I WAS A BANKER...'
Zhang Liqun, director of Financial Research Institute of the Development Research Center at the State Council, the cabinet, said buying metals reserves would ease pressure on smelters that were struggling with weak domestic demand and low prices.
"Considering its impact on jobs, buying reserves can be considered," Zhang told the conference in Sanya.
Weak demand has driven up aluminium stocks in China. About 1,1-million tons of aluminium are estimated to be sitting at warehouses and smelters' yards versus about 1-million tons in late November, industry sources at the conference said.
The key Shanghai aluminium futures contract hit a new 15-year low on Wednesday, after state-owned research group Antaike predicted domestic demand growth for aluminium would slow to 3% next year from 8,5% this year.
Wen said Chinese banks should buy aluminium as an investment due to the low price, adding that he believed production costs would be higher than current metal prices within three to five years.
"If I was a banker and I had money, I would buy aluminium now," Wen said."
Previously Wen had told Reuters that China could buy up stocks of aluminium to help struggling smelters. But the central government may cast the net much wider.
"All base metals are being considered," he told reporters on the sidelines of a conference in Sanya on China's Hainan Island.
China's metals sector has been hit hard by a slump in demand, which has caused stocks to build up and prices to plummet, forcing many to suspend part of their production.
The government, keen to offset the impact of a residential housing crisis and the global financial turmoil, has announced a $586-billion stimulus package to revive the economy.
Officials have said they plan to buy up stocks of resources and materials to shore up prices and the government has already begun buying up grains and soybean to support farmers, but it has yet to reveal its ambitions to build state metals reserves.
Earlier this week, Yunnan province, a major base metals production region in southwestern China, broke ranks by saying it planned to buy up 1 million tonnes of metals, ores and semi-finished products to support local industry.
Neighbouring Guangxi may follow suit.
But one China economist sounded a sceptical note about the idea of the government hoovering up metals stocks.
"It's hard to believe why the government would want to buy up all that stock. The question I have to ask is for what purposes? To help enterprises?" said Wensheng Peng, economist at Barclays Capital in Hong Kong.
"There are better ways to do that, by giving those firms money for example. Given the current low prices, it makes sense to build strategic stocks. There is a lot of confusion about the potential stockpile builds. More clarity and details are needed."
'IF I WAS A BANKER...'
Zhang Liqun, director of Financial Research Institute of the Development Research Center at the State Council, the cabinet, said buying metals reserves would ease pressure on smelters that were struggling with weak domestic demand and low prices.
"Considering its impact on jobs, buying reserves can be considered," Zhang told the conference in Sanya.
Weak demand has driven up aluminium stocks in China. About 1,1-million tons of aluminium are estimated to be sitting at warehouses and smelters' yards versus about 1-million tons in late November, industry sources at the conference said.
The key Shanghai aluminium futures contract hit a new 15-year low on Wednesday, after state-owned research group Antaike predicted domestic demand growth for aluminium would slow to 3% next year from 8,5% this year.
Wen said Chinese banks should buy aluminium as an investment due to the low price, adding that he believed production costs would be higher than current metal prices within three to five years.
"If I was a banker and I had money, I would buy aluminium now," Wen said."
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