The supply of tin appears to be on the rise again.
MSC is re-entering the market slowly, with operations running at “very limited capacity” according to FastMarkets. The smelter will likely ramp up to full output over the coming weeks and months, adding physical liquidity back into the market.
However, the market has taken this news in its stride so far, with cash prices up around recent highs. The LME 3-month price closed yesterday at US$ 35,350/tonne, a new record.
The sharp recession of 1981–82 proved to be quite harsh on the tin industry. Tin consumption declined dramatically. The ITC was able to avoid truly steep declines through accelerated buying for its buffer stockpile; this activity required the ITC to borrow extensively from banks and metal trading firms to augment its resources.
The ITC continued to borrow until late 1985 when it reached its credit limit. Immediately, a major “tin crisis” followed — tin was delisted from trading on the London Metal Exchange for about three years, the ITC dissolved soon afterward, and the price of tin, now in a free-market environment, plummeted sharply to $4 per pound and remained at that level through the 1990s.
The price increased again by 2010 with a rebound in consumption following the 2008–09 world economic crisis, accompanying restocking and continued growth in consumption by the world’s developing economies.
