Some decent tidbits today from UBS Metals Daily that reveals China and Japan are stockpiling metals. Only the most naive would assume they are not doing the same with gold and silver, the most precious of metals. Further down is an interesting paragraph on the insatiable demand for global gold ETF's, despite anemic gold price advances in NY.

Regards - VHF

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UBS Metals Daily

John Reade

March 25, 2009

China Stockpiling Rare Metals, Wogen Pacific Says

China, the world's largest metals consumer, is stockpiling rare metals for strategic reserves after prices tumbled, according to Wogen Pacific Ltd., a specialized minor metal and ferro-alloy trader. China's State Reserve Bureau has bought 5,000 metric tons of titanium and 30 tons of indium from domestic producers and may purchase more, Norman Ting, managing director at the United Kingdom-based company, said. Global demand for metals including titanium has fallen amid a deepening global recession. China is using the opportunity of lower global prices to stock up on raw materials such as copper and aluminum, helping buoy prices. "With the dollar depreciating, these resources are going to be worth more in the future." Provincial governments have also helped local smelters store a few hundred tons of cobalt, Ting said. Demand for the blue-coloured cobalt, used in rechargeable batteries, may drop 6.3 percent this year, keeping prices below $20 a pound, London research company CRU said March 4. "The Chinese cobalt market will remain oversupplied this year because China has a very large cobalt smelting capacity now, Zhai Yang, marketing manager for Zhejiang Huayou Cobalt Co., said at the conference today. (Bloomberg)

We have wondered recently whether the surge in platinum trade (imports and SGE turnover) in China might have been partly due to state purchases. While we have heard anecdotal evidence of good retail sales of platinum jewellery in China, the magnitude of the Chinese buying interest - confirmed by conversations with platinum producers - has surprised us. If any of the readers of the Metals Daily have any insights into the possibility of Chinese buying of PGMs for stockpiles we would be interesting to hear it - in confidence, obviously.

Japan Oil, Gas & Metals Seeking to Boost Rare Metal Stockpiles

Japan Oil, Gas and Metals National Corp. is seeking to boost government stockpiles of rare metals to the equivalent of 48 days of demand, up from 22 days now, Kita Yoshiyuki, director of the rare metals stockpile department, said in an interview in Hong Kong today.

Gold ETF’s

The nine gold ETFs that we track increased their metal holdings by half a million ounces yesterday: the NYSE-listed SPDR added 344koz and the UK-listed GBS up 124koz. Over the past month the holdings of the ETFs increased by 3.9 million ounces, less than half the peak seen in mid February, but a still-impressive quantity.

The surge in ETF investment since mid-November has been both more protracted and larger than the previous two spikes. Over this time, totalling a little over four months, investors have added 15.8 million ounces or 492t of gold to their holdings, more than the annual total for any of calendar year since these products were introduced.

Since November, the SPDR collected 76% of the total, with the GBS (UK), ZKB and JB (Switzerland) and ETFS (UK) ETFs each adding 4-6% of the total. Recent inflows into the ETFs has been strong with 2.1moz added over the past week and 1.7moz in the week to March 17. The ETFs' holdings now exceed 1621t of gold, an impressive amount to be sure, but only about 1% of the total gold ever mined.