Cadbury has abandoned its tin cans for cardboard boxes, in an attempt to go green this Christmas. Could this prove to be the death knell for the tin industry?
One investor seems to be buying up most of the tin traded on the LME. Sparking unease among traders, several questions are doing the rounds - are the prices being pushed up artificially? Why the big position? Who benefits?
The metals markets got a surge of heat with world leaders committing $1.1 trillion to combat global recession. Tin was up at $10,950 a tonne, its highest since March 11, from $10,450.
It couldn't have come at a better time. Sentiment on the LME metals complex is still trapped between the conflicting signals coming from East and West, resulting in choppy, consolidatory price action. However, downside momentum has stalled across the board with predators now looking for "relative value" plays.
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.
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.
The price of tin was given a nearly 6 percent boost last week from Yunnan province’s announcement that it would spend about $3 million on building a 100,000 tonne stockpile of tin. The tin stockpile is a part of a wider base metals stockpile plan meant to help support local metals smelters.
The world’s leading tin miner, PT Timah has announced it may restrict refined tin production in an attempt to counteract falling prices. PT Timah’s production curbs are representative of a growing trend in Indonesia. Tin smelters across the nation are halting production.
Thursday, November 5, 2009
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