Despite concerns over the euro-zone economy, demand in the region is helping to drive up the price of tin with both European and Japanese buyers dominating the market. These purchasers are preferentially buying from the Kuala Lumpur Tin Market (KLTM), which in turn is placing Kuala Lumpur prices at a premium over the LME. This strong overseas demand has led to a KLTM price premium that has been ranging between $380- $490 per tonne of tin.  Previously, before the heat-up in overseas demand the price differential between the KLTM and the LME stood at approximately US$120 per tonne.

The tin market has been very volatile over the past month, tracing the price moves of the overall market. The metal dropped below $16,000 per tonne at the beginning of June when panic over euro-zone solvency permeated the markets.  Now, since the start of July as overall market sentiment has improved, so has the price of the metal. Tin peaked around $18,000 and found support at approximately $17,300 per tonne. This week on the LME, the price of tin has been recovering from its near-term low of $17,300. On July 7^th, the metal opened at $17,600 per tonne. Stockpiles stood at 16,820 tonnes, less than one month’s worth of consumption.

Company News

Consolidated Tin Mines (ASX: CSD) has reported results from an in-house preliminary scoping study conducted in conjunction with SEMF Pty Ltd on its Mt Garnet Tin Project. The project, located near Cairns in North Queensland, has the potential to produce the equivalent of US$437 million of tin over its initial 7.5 year life span. The gross value of US$437 million will be earned over an initial 7.5 year mine life, provided tin is priced at $15,740 per tonne. Returns are based on mine throughput of 700,000tpa of tin ore producing 22,868 tonnes tin metal in concentrate plus 1,774,500 tonnes magnetite concentrate grading >65 percent iron over initial 7.5 year mine life. The project has significant expansion potential to deliver additional financial returns over an extended mine life beyond the initial 7.5 years, with an estimated surplus of $214 million in indicated reserves.

Preliminary data from the Indonesian ministry of trade recently indicated an increase in shipments of refined tin in April. For the previous month,  7,926 tonnes of tin were reported prior to export by surveying companies, up from 6,576 tonnes the previous month and 30 percent higher than in April 2009.

The reported increase was ascribed to improving weather conditions. Tin production in the first three months of 2010 was significantly impacted by heavy monsoon rain and winds, which created impediments to mining for tin offshore. The cumulative tonnage checked for export in the first four months of the year was 27,901 tonnes, down 12.9 percent compared to 32,041 tonnes in January-April last year.

Mining News

PT Timah (JAK:TINS) plans to increase mining of deposits in the sea as illegal miners infringe upon its territorial mineral rights.  The company’s President Director Wachid Usman told reporters last week at a conference in Jakarta that offshore mining may account for as much as 60 to 70 percent of total output this year.   Timah said that it plans to borrow $162 million to buy five new offshore tin dredges in 2011.  In the past, offshore production has accounted for 48 percent of 2009 mine production (including purchases from small onshore mines within its leases), up from 29 percent in 2008 and 21 percent in 2007.   Mr. Usman also said that the company is maintaining a refined tin output target of 50,000 tonnes for the year, “We remain conservative for this year especially as the crisis in Greece may affect global demand for tin.”

By Kishori Krishnan Exclusive To Tin Investing News

Commodities may be teetering on second U of the W-shaped recovery. Tin continues to face a challenge again, 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 based on its survey on tin consumers.

According to Ben Westmore, commodities economist at the National Australia Bank, “We expect the second ‘U’ of the ‘W’ to be less deep than the first. Commodities are starting to see the effect of dollar appreciation and this weakness may last for one or two months.” He added: “But we see the trend in global industrial production rising in the fourth quarter and markets pricing that recovery in during the third.”

He added there was a risk that China, which to date has been the main engine of the surge in commodity markets, might not pick up the ball and run with it in the second half of the year. “If China feels like it has stockpiled enough and demand doesn’t pick up, then the weakness could last longer, though that is a risk, not a forecast.” he said.

However, determining the percentage of each commodity being stockpiled is difficult, especially in China, where scant data are released. Assessing steel demand, in particular, has become a subject of almost obsessive interest among economists as a barometer of emerging markets’ health and as an indicator of demand for things like iron ore and cars.

Some economists insist they are bullish on commodities though, because they believe that the United States and European economies are on their way to recovery. “The commodity price rally is for real,” said Ajay Kapur, the chief global strategist at Mirae Asset, a big Korean financial firm. “I’m not expecting any huge correction from here.”

Tin stock

In 2007, world tin usage peaked at over 360,000 tonnes, having grown at some 4 per cent a year over the previous decade. Growth rates in fact were slowing even before the onset of recession and demand dropped very sharply in the final quarter of 2008.

Tin surplus as at end-April was at 8,500 tonnes, the highest since 2005 while the price of the commodity has dropped about 26 per cent so far this year.

However, industry observers still cannot figure out whether the drop in tin demand is entirely due to reduced usage, consumers running down their tin stocks or reduced stocks of semi-finished tin products. Apparently, there is still a lot of uncertainty on consumer stock levels over the past quarters.

In Malaysia, a potential drop in tin demand could stall the Malaysian Chamber of Mines’ initiative to push for further exploration and opening of new tin-rich mines particularly in the Kinta Valley area.

Even though Malaysia is no longer a major tin exporter, Malaysia Smelting Corp Bhd, the country’s sole tin company, is ranked the world’s third-largest tin refiner based on its operations in Malaysia and Indonesia.

Outside Indonesia and China – the two world’s largest producers – ITRI has identified mine projects with combined annual capacity of some 38,000 tonnes a year and possible projects with a capacity of around 35,000 tonnes a year.

Company news

PT Timah, the world’s largest integrated tin producer, has cut its 2009 capital expenditure by half to Rp 350 billion ($34 million) from Rp 700 billion, saying that it believed the demand for tin may not recover this year.

“The world’s economy is not getting any better,” said Wachid Usman, Timah’s president director. “Therefore, we have to revise our capital expenditure this year with some of our projects, such as the asphalt project in Buton, South East Sulawesi, until the economy recovers.

“The new levels of capital expenditure this year at Rp 350 billion will be sufficient,” Usman said, adding that this would not allow Timah to acquire coal mining concessions. Usman said that the current global economic crisis had caused a slump in tin demand and company profit.

“In 2007, the world’s demand for tin was at 350,000-360,000 tons, but it decreased to only 320,000 tons last year. We expect tin demand will be at about 300,000 tons this year,” he said. Timah expected to sell about 46,000 tons of tin this year, slightly down from last year’s sales of 46,438 tons, said Abrun Abubakar, Timah’s corporate secretary.

By Kishori Krishnan Exclusive To Tin Investing News

Local commodities like tin, rubber and steel could be heading for a short-term rally in the near future bolstered by active buying interest from institutional and fund managers on most major world commodities, dealers said.

Manufacturers worldwide were seen building up inventories to take advantage of the current weak US dollar, traders said. The weak greenback makes commodities attractive as a hedge against inflation. It makes purchases affordable for China and India, the two key engines helping to spur growth in demand for world commodities.

Traders indicated that the fundamentals were looking good for local commodities, which closely track the prices of crude oil, copper and aluminum, which have been hitting highs for the past two to three months.

The Kuala Lumpur Tin Market (KLTM) closed firmer on Wednesday by US $100 at US $14,700 per tonne on strong overseas demand, especially from Europeans, a dealer said. He said the tin price on the London Metal Exchange (LME), which normally influences global trade in the metal, was however down by US $200 to US $14,500 per tonne. The price differential between the KLTM and the LME widened to a premium of US $430 from US $130 on Tuesday.

Kasbah Fund

Meanwhile, ASX-listed Kasbah Resources is to bring forth a rights issue to raise some A$2.7 million to fund further drilling at its Achmmach tin project in Morocco. The cash will go towards 15,000 metres of diamond drilling in the Meknes Zone aimed at identifying a JORC indicated resource.

The work is part of a plan to produce a feasibility study on the project by June 2011, in line with a recently extended agreement with the Moroccan government, which will allow it to exercise an option to acquire 100 per cent of the project in the El Hajeb region of Morocco.

The agreement also has provision for Kasbah (ASX:KAS), at its election, to utilise a further 12 months from June 2011 to optimise the study if required. On exercise of the option the energy and mines ministry will transfer the Achmmach mining permits to Kasbah in return for payments of US$ 1 million on transfer and thereafter, annual payments of US$ 1 million for four years. The total transfer price is US$ 5 million plus a 3 per cent net smelter royalty.

Indonesia’s Permit

A new Indonesian smelter have got an export licence. Indonesia has approved an export permit for a new tin smelter in East Java, bringing the number of smelters allowed to export the metal to 28, a trade ministry official told Reuters. The official, who declined to be named, did not give any details on the capacity of the smelter, PT HP Metals Indonesia.

HP Metals has been active in tin for over a year, although its main business is in the production of aluminium alloys and extruded products. It is the first company outside the traditional tin producing provinces of Bangka-Belitung and Riau to obtain an export licence. The company has a smelting and refining capacity of 600 tpm of 99.95 per cent tin, although actual production varies according to availability of slags and concentrates.

Bolivia Builds

Another report suggest that a plan to almost triple ore processing capacity at Bolivia’s largest tin mine has been approved, according to a report quoted by BN Americas. Empresa Minera Huanuni (EMH) and state mining company Comibol will spend US$40 million to build a new mill which will raise daily ore throughput to 3,000 tpd from less than 1,200 tpd currently. The mine produced 7,875 tonnes of tin-in-concentrate in 2008.

Work on the expansion will begin in the second half of this year, mining director Freddy Beltrán was quoted as saying by state news agency ABI. Increased production of low-grade concentrates will commence in the beginning of 2010. However, Beltrán said there are still 15 days remaining to reach a final decision on equipment to be installed.

Russian Tin

In corporate news, Novosibirsk Integrated Tin Works (NOK), Russia’s sole producer of the metal, reported that first quarter sales volumes declined by 72 per cent from the year-earlier period as demand slumped, Reuters reported. First quarter sales totalled 122.3 tonnes, compared to 432.3 tonnes a year ago. However, the company said it expects demand to revive in the near future.

Last year the group produced only 1,405 tonnes of tin, down from 2,480 tonnes in 2007, due mainly to a shortage of tin concentrate. NOK said late last year that it had stopped receiving concentrate from the Sakhaolovo mining company in the second quarter and was unable to offset the shortage with supplies from other sources. Sakhaolovo is the largest tin mine in Russia and is now believed to be exporting its concentrates to SE Asia.

Chinese Revival

To top it all, Chinese tin production has revived in April. Provisional data released by China’s National Bureau of Statistics showed that refined tin production continued to recover in April. April production was reported at 12,472 tonnes, up 8.5 per cent year-on-year. This is the first month this year that output has been higher than in 2008. Cumulative production in January-April, at 32,970 tonnes, is still 20.4 per cent lower than in the first four months of 2008.

The pick up reflects improved demand and raw materials availability compared to most of the first quarter, although capacity utilisation at solder companies and other consumers is still estimated to be no more than 70-80 per cent (versus 40-50 per cent in January-February). Concentrate supply has improved as a result of the re-opening of small mines and the April production figures have probably also been boosted by the re-refining of metal imported in March.

By Kishori Krishnan Exclusive To Tin Investing News

It couldn’t have got better. North American Tungsten Corporation filed its feasibility study technical report on the Mactung Property-Yukon, Canada and on Monday, traders were faced with the prospect of mass buying in one overseas market.

Indian shares surged after a decisive election victory for the country’s incumbent government fueled hopes of stability and reforms. The Bombay Stock Exchange’s Sensex index gained 17 per cent, which is more than the S&P 500 or Dow have ever risen in a single session.

As investors cheered a decisive election victory by the Congress Party-led coalition, trading had to be halted and then suspended for the day as the deluge of buy orders trigged market circuit-breakers. Other stock markets in the Asian region ended mixed, in part because India’s surge helped turn around sentiment; markets that closed earlier such as Japan ended in the red, while later exchanges like China ended higher.

The price of tin on the Kuala Lumpur Tin Market (KLTM) closed lower on Monday on lack of demand, dealers said. At close, the local tin price was down by US$80 to settle at US$13,650 per tonne from last Friday. On the London Metal Exchange (LME), it closed higher by US$75 at US$13,700 per tonne from previously. The premium price differential between the KLTM and the LME had narrowed to US$180 per tonne from US$335 per tonne last Friday.

The price of tin on the KLTM is likely to be steadier next week on consistent demand from overseas buyers, dealers said. They said the metal price is likely to trade between US$13,900 per tonne and US$14,200 per tonne with the participation of European, Japanese and local traders. A dealer said that the sentiment was also expected to be in line with the performance on the LME.

In the case of North American Tungsten (TSXV: NTC) too, which filed its feasibility study report, the Mactung economics are positive with a 23.5 per cent internal rate of return and a pre-tax net present value discounted at 8 per cent of CDN$277 million. The technical report is based on an initial 2,000 tpd underground mine with an 11 year Life of Mine (LOM). There is potential to expand the initial LOM with exploitation of the open pit resource.

Mactung is forecast to produce an average of 749,000 metric tonne units (MTU’s) of WO3 over the first five years of operation. The average operating cost for the first five years of operation is estimated to be CDN$104/MTU.

The estimated capital cost is CDN$356.5 million plus a CDN$45.6 million contingency. Capital payback is expected to be in 2.9 years. The Mactung Project is forecast to run at 2,000 tonnes per day from an underground operation using conventional long hole plus cut and fill mining methods.

North American Tungsten was down 2.56 per cent on the CDNX Exchange to $0.19.

Playfair Mining Ltd. (TSX: PLY) announced that its Risby Tungsten Deposit Resource has increased by 37 per cent.  Announcing the results of the updated NI 43-101 compliant Inferred Mineral Resource Estimate on its wholly owned Risby Tungsten Deposit, the company said the update was completed by PEG Mining Consultants Inc. of Barrie, Ontario, who combined the 2008 drill results with Playfair’s earlier 2007 resource estimate.

The updated inferred resource reports a 37 per cent increase over the 2007 Wardrop Engineering resource. The 2009 study reports an inferred resource of 89.4 million pounds tungsten trioxide (8,537,000 tonnes). The PEG Mining report also indicates an increase in average deposit grade from 0.462 to 0.475 per cent WO3.

Playfair Chairman Don Moore said, “We are elated that the NI 43-101 Compliant Resource Estimate at Risby is 37 per cent larger than our previous numbers, but even more exciting is the untested surface gossan zone located an additional 750 metres on-strike to the north of the newly established deposit outline; which implies that the current resource has significant upside expansion potential.”

Playfair’s wholly-owned Risby Tungsten deposit is a scheelite-bearing skarn occurrence. The deposit is located approximately 55 kilometres west of Ross River, Yukon, Canada and is underlain by lower Paleozoic sedimentary rocks that have been intruded by Cretaceous age biotite-quartz monzonite.

Playfair Mining was in positive territory on the CDNX Exchange to $0.06.

Company news

Solid Resources Ltd. (TSXV: SRW) has appointed D. Randy Hayward to the board of directors. Hayward has maintained a successful law practice in Edmonton for 20 years. During the latter phase of his law practice, he founded and managed Canadian Dispute Resolution (Alberta) Ltd. and marketed the service of mediation to the legal community and the insurance industry.

Concurrent with Hayward’s appointment, the company has granted to him an aggregate of 150,000 options to purchase commons shares of the Company. The options expire at the end of five years and the exercise price is $.24 per share.

The company also announced that it had received regulatory approval to close a private placement of 6,900,000 Units at a price of $.05 per Unit for total gross proceeds of $345,000.00. Each unit consisted of one common share and one common share purchase Unit. Each Warrant is exercisable for a period of 24 months at a price of $.075 if exercised during the first twelve months and $.10 if exercised thereafter. The common shares of Solid acquired pursuant to this private placement are subject to a four month hold period which will expire on August 21, 2009.

The Company has also received approval from the TSX Venture Exchange to issue 1,254,960 shares at $.05 per share to settle outstanding debt for $62,748.

International Barytex Resources Ltd. (TSX-V: IBX) has reported that it has received, in full, from Touch Lucky Investments Limited the first of two payments related to the sale of East China Capital Holdings Limited and its interest in the Shituru Copper project located in the Democratic Republic of Congo.

The first payment was received in accordance with the previously reported terms of the amended sales purchase agreement(SPA). Under the SPA the second, final, payment is due on or before July 21, 2009.

President Leo King said, “We wish Touch Lucky every success with the Shituru project and its endeavours in the DRC. With the receipt of this first payment the company has completed its activities in the DRC and will now step up its activity in looking for new business opportunities.”

By Kishori Krishnan Exclusive To Tin Investing News

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.

By Kishori Krishnan Exclusive To Tin Investing News

Malaysian tin jumped 7.5 per cent to score more than a 4-month high on Monday to US$ 12,080, as soaring London Metal Exchange prices and buoyant demand led by Europe boosted prices, one dealer said. The current price level was unseen since December 12, 2008.

Tin price had peaked at $25,495/t in May 2008, but then slumped by more than 50 per cent in five months, due to the global financial crisis. Prices are volatile but have found support at $11,000/t. The Resource Capital Research (RCR) group anticipates that tin will trade in the $9,000/t-$15,000/t range in 2009, with an average price of US$ 12,750/t.

The price of tin, used in food packaging and soldering of electronic components, has fallen about 56 per cent from an all-time high of $25,500 a tonne hit last May as the global economic crisis hit. Global demand for refined tin was 350,000 t in 2008, a 3.6 per cent decrease from 2007. China consumed 36 per cent of supply in 2007. In 2008, mine production was 333,000 t, up from 320,000 t in 2007. Of this, 72 per cent was mined in China and Indonesia.

“We believe that the mid-term outlook for the tin sector is strong,” says RCR tin analyst  Trent Allen. “For much of 2008, supply problems were predicted for the tin market due to surging demand from China and decreasing alluvial production out of Indonesia. These problems could quickly re-emerge if the current round of global economic stimulus restores reasonable demand for base metals – in fact, they could be exacerbated by lags in reestablishing tin output from existing mines and restarting future projects that have been shelved due to the credit crisis. We think tin will be one of the first metals to recover once markets stabilise.”

Plans curtailed

Indonesia, the world’s second-largest tin producer, has called off a plan to impose limits on tin exports this year following the metal’s price decline on the international market. An official said the proposal had aimed to keep prices above $12,000 a ton by constraining supplies to the international market. It was abandoned because of low demand for the commodity, said Bambang Setiawan, the director general of minerals, coal and geothermal energy at the Energy Ministry. On Sunday, tin was priced at $12,355 per ton on the London Metals Exchange.

The quota system was also proposed so the government could easily keep track of illegal mining of the mineral, which was on the rise when prices were high. Illegal mining and exports of tin from Indonesia were blamed for a sharp plunge in world tin prices in 2002. “The drop in the metal’s price reflected the current slow demand,” Bambang said. “Without a quota limit, the tin producers will have to work together to cut their production and keep the price stable in the market.”

Despite the cancelation of the proposal, state mining firm PT Timah Tbk had already cut production because of the global slowdown. “The current metal price had forced us to cut production from last year,” said Abrun Abubakar, Timah’s corporate secretary. “It made us suffer significant losses too.”

Timah’s tin production dropped to 49,029 tons last year from 58,325 tons in 2007. The company’s revenue rose 6 per cent from Rp 8.542 trillion ($751.7 million) to Rp 9.053 trillion in 2008, due to soaring tin prices in the first nine months of 2008. For this year, revenue is estimated to be down almost 50 per cent, Abrun said.

Indonesia’s tin production was estimated to fall to 80,000 tons this year from the average of 120,000 tons in the last few years. However, with tin prices increasing from their low of $9,730 a ton in December, Trade Ministry data show tin exports rose by 30 per cent to 11,086 metric tons in March from 8,534 tons in February, which brought the total exports from January through March to 25,959 tons, worth $252 million.

But Timah also saw more opportunity to do spot trade as slowing demand has prompted buyers to reduce long term contracts. “Buyers now only seek short-term supply for three months not a full year contract because of slowing demand. We see more opportunity for spot trade as demand is not fixed yet,” Abubakar said.

Company news

A Toronto junior miner is of the belief it has $2.5 billion worth of resources in its two zones in southern New Brunswick. Adex Mining Inc. (TSX.V:ADE) has released the results of a mineral resource estimate of the north zone of Mount Pleasant, 80 kilometres south of Fredericton. The report showed 10.88 million tonnes of tin-indium-zinc based on sample analysis and geologic projections and another 7.6 million tonnes of the resources from projections alone.

Based on “back of envelope calculations,” the company said the partially sample-based resources estimates could be worth about $900 million, and the projected resources could be worth $600 million.

“The results from our drill program has not only significantly increased the size of the resource but it also has upgraded the quality of the resource,” Adex president and chief executive Kabir Ahmed said. A 1997 report had estimated 3.65 million tonnes of resources in the north zone.

However, Adex is holding back on development given the current low metal prices and tight credit markets. Like many others of its ilk, it is waiting for the right moment.

For full story, click here

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Tin Plate prices rise despite lower steel prices

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.

Tin and lead are still the metals with the best recovery potential since neither is burdened with the same sort of inventory build that has mired the fortunes of aluminum and nickel. Tin, the minnow of the LME complex, is still being subjected to a front-month squeeze with the cash-to-three-month period still trading in consistent backwardation.

Recovery, though, is not here yet, analysts state, and further price strength will only come from what looks set to be a war of attrition between the bulls and bears. Moreover, any resumption of bad news flow from either the banking or the automotive sector can be expected to bury the positive signals coming from China and send fledgling bulls scurrying back for cover.

However, recession has boosted demand for tin cans. According to a Reuters report, tin can makers are paying about 50 per cent more this year for tinplate, used to make cans, despite falling commodity prices as demand for canned food rises due to the recession, Crown Food Europe said on Monday. Crown Food Europe is part of U.S.-based Crown Holdings, the world’s largest producer of food and aerosol cans and the third-largest producer of beverage cans.

Tin cans are made from tinplate – essentially flat-rolled steel covered with a layer of tin – and prices have risen despite the slump in commodity prices. “Historically, times of economic recession have tended to increase sales of canned food, as consumers curb their ‘out of home’ eating activity,” Olivier Aubry, a vice president at Crown Food Europe, told Reuters.

Tinplate is made by companies including the world’s top steel maker ArcelorMittal (AMS:MT) ThyssenKrupp’s RasselStein and Tata Steel’s (BOM:500470) Corus. A Corus spokesman said the company raised tinplate prices by 40 to 50 per cent this January, partly because of rising demand.

Incidentally, prices of hot-rolled coil, one of the most widely used forms of flat steel, have nearly halved to between $475 and $580 a tonne since the middle of last year in Germany, China, Japan and the United States. The tin price on the London Metal Exchange, has fallen about 60 per cent to around $10,450 a tonne since last May.

Company news

Silver Standard Resources Inc. (TSE:SSO) has reported that its wholly-owned Pirquitas Mine in Jujuy, Argentina, is on schedule to commence concentrate production in the current quarter. Initial production will focus on the processing of over 400,000 tonnes of run-of-mine grade jig tails from historic operations and then transition to material from the open pit.

To date, approximately five million tonnes of material has been moved from the Pirquitas open pit and stockpiling of ore has commenced. At current metal prices, the silver and tin concentrates account for over 95 per cent of the anticipated revenue from the mine.

As a result, the silver circuit will be optimized first, followed by the tin circuit. A decision to complete the zinc circuit is dependent on the results of metallurgical test work to be received on increasing silver recoveries. Process equipment purchased for the zinc circuit may be better served increasing the silver recovery.