Tin price surges to unsustainable heights

The first three months of 2008 has seen world tin prices surge to their highest level ever recorded. In an illiquid market where LME stocks are low and underlying industrial demand is very high, speculative buying by hedge funds and others has pushed the price up to unsustainable levels. Prices seem to have peaked at around $25,500 per tonne and at this level there will be a significant degree of research effort being initiated on materials substitution in industrial processes, particularly in packaging and electronics assembly.

Tin has always been subject to this sort of pendulum market, principally because it is a very small market compared to the other non-ferrous metals. The last twenty years has also seen an increasing share of the market being taken up by direct selling from integrated producers into the industrial market and increasingly the emergence of truly vertically integrated producers taking tin from mine to finished product.

PT Timah (Persero) Tbk has reported its unaudited results for the first quarter of 2008.The company posted a net profit of Rp 487.3 billion, or 55% higher than that of the same period in 2007 of Rp 314.3 billion. Higher net profit was due to higher tin price received during the quarter. 

Malachite Resources has made a significant new tin discovery at its 100% owned Elsmore Tin Project, located about 20km east of Inverell in northern New South Wales. The new discovery is at the Newstead Prospect, which comprises a large tin-bearing greisen system, with associated alluvial and other surface deposits and numerous shallow old tin workings. 

Australian specialist Ausmelt Ltd has signed contracts with Empresa Metalurgica Vinto to use Ausmelt Technology for a new tin smelter at Oruro in Bolivia.

Australian miner Metals X is on schedule to restart its Renison project in the second half. With the re-start well underway and it remains on track for production of the first tin concentrate in mid-June.