Commodities may be teetering on second U of the W-shaped recovery. Tin continues to face a challenge, with a possible erosion in demand. The main culprit: the current global recession. Last week, ITRI Ltd, an international tin grouping, came up with a disturbing report stating that demand would likely drop 10-15 per cent this year, on the back of excess supply.
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.
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