Following major criticism over the increase of its tin-plate prices, which were adjusted yearly by 69% to 78%, ArcelorMittal South Africa (ACLJ.J)
has toned down prices. The decision was welcomed by the packaging industry. But tin prices have yet to respond significantly to the fresh supply problems in Indonesia, which may be partly due to the strong recovery in Chinese production.
Even as stockpiling in China is set to raise the bar for the price of tin, miners in Peru may go on strike on March 15, which could bring on some pressure. Queensland Small Miners too have blamed the government for not adequately supporting small miners.
South Africa’s Gatumba Mining Concessions (GMC) will invest $2.5 million exploring for tin and tantalum in Rwanda this year, the company has said.
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Unlike most of the other base metals, there is no growing tin surplus. Inventories held at the London Metal Exchange now sit at 8,820 tonnes, against a 52-week high of 11,430 tonnes. The potential is that a rebound in Chinese demand, coupled with the closing of mines in Indonesia, could trigger supply shortages.
China has been bailing out its struggling domestic smelters by stockpiling metals since December. Heralding the Chinese New Year, wherein most companies and projects run overtime during the Spring Festival in order to ensure annual production plan, several firms have decided to take the long road.
Normally, tin doesn't get a lot of attention. The lowly, non glamorous tin is becoming increasingly important however, overtaking lead as the metal of choice in modern electronics soldering, especially after EU regulations requiring lead-free solders was implemented in 2006. In 2006, tin accounted for 50 per cent of solders; in 2007, that market share grew to 52 per cent.
Although lower tin prices may appear to be a sign of a faltering market, many metals analysts say the supply market remains increasingly tight and a deficit is expected this year. There is a huge contradiction of what is happening to the price and the underlying state of the market.
Tuesday, September 29, 2009