By Kishori Krishnan Exclusive To Tin Investing News Share

Tin prices gained a whopping 18 per cent on the LME in the month of April, despite a huge gain in LME inventories by almost 15 per cent. Global production, however, is expected to fall 6.5 per cent by 21,000 tonnes, to 304,500 tonnes in 2009. According to the International Tin Research Institute demand for tin is expected to fall by 10.5 per cent in 2009 amid the global economic crisis. Hence, the market could be in surplus by 5,000 to 10,000 tonnes in 2009.

Demand is not the key factor behind the rising tin prices, traders said. It is the production cutback that have played the role of a catalyst in pushing prices higher. The overall rally and bullish sentiment across base metals has also supported the trend.

Global production of tin is expected to decline this year due to the cutbacks implemented over the last few months. Producers have cut production given the grim demand situation. Most traders said recovery could be expected only in the second half.

Tin price on the Kuala Lumpur Tin Market (KLTM) ended higher on Tuesday, by gaining US$260 to settle at US$14,150 per tonne, supported by strong overseas demand, dealers said. The uptrend was also in line with gains on the London Metal Exchange (LME) that provided a further boost to the local market, they said. The tin price on the influential LME increased by US$100 to US$14,000 a tonne. In Kuala Lumpur, turnover added 90 tonnes compared to 73 tonnes last Friday. The dealers said the market traded firmly, with demandcoming from Japanese, European and local traders.

At the opening level, buyers made bids for 120 tonnes, while offers were at 50 tonnes. Price differential between KLTM and LME widened to US$380 from US$220 previously.

Indonesia’s weather woes

Few tin smelters in Indonesia, the world’s top exporter of the metal, will be able to crank up output to exploit higher prices because wet weather and depleting reserves have crimped access to ore, industry officials said on Monday. Last week the price of tin, used in food packaging and soldering of electronic components, surged to a near six-month high at $14,249 a tonne, driven by shortcovering and fund buying.

However, prices of the silvery, malleable metal MSN3, which stood at $14,000/14,050 a tonne on Monday, remain 44 per cent below an all-time high of $25,500 a tonne struck in May 2008.

Smelters in the Bangka-Belitung islands, Indonesia’s main source of tin, said supplies of raw material were limited. “It’s getting more difficult now to mine tin because reserves are depleting,” Patris Lumumba, director of PT Bangka-Belitung Timah Sejahtera, a consortium of 7 small smelters, told Reuters. “We are keen to increase production as prices are recovering…but we don’t have enough raw material,” he added.

Company news

Geodex Minerals Ltd. (TSX.V: GXM), a Canadian-based resource company, is focused on the exploration and development of two significant property areas in New Brunswick, Canada. Its flagship project, Sisson Brook, has a superior open-pittable structure with existing infrastructure in place positioning the project to become one of the largest and least expensive tungsten mines in North America.

The company has appointed Mark Fields, P Geo, B Comm as President and CEO. He replaces Jack Maris who had announced his retirement. Last month, the company had entered into an option agreement to acquire a 90 per cent interest in the Flume Ridge property, located in Charlotte County, New Brunswick. The property is comprised of 63 claim units optioned from Southfield Resources Ltd. and Campfire Resources Ltd. Minimum work commitments by Geodex are $20,000 in year one and $100,000 by the end of year three.

The largest tin producer in the world China Yunnan Tin Minerals Group Co Ltd has announced that it has signed an agreement to acquire a metal mine located in Guangdong Province for HK$610 million. The mine in Guangzhou has deposits of magnetite, copper and lead, and its total value is around HK$630 million.

HK$550 million of the consideration will be paid in cash, while the remaining HK$60 million will be paid by issuing convertible notes. After the issuance, convertible shares will account for 11.94 per cent of the company’s outstanding shares.

Questions about this article? Leave a comment below or contact our editorial team at editor@resourceinvestingnews.com.