Tin Price Slump Likely to Curb Mining Investments, ITRI Says
By Chanyaporn Chanjaroen
Oct. 30 (Bloomberg) -- A slump in tin prices will likely curb investment and delay new projects, according to ITRI Ltd., a group funded by producers.
Prices fell as low as $10,300 a metric ton last week, 60 percent below the record $25,500 set in May. That will have ``a major impact'' on new output capacity, estimated at 49,000 tons a year in the next five years, said Peter Kettle, research manager of the St. Albans, U.K.-based company. That excludes the capacity of the world's biggest tin producers, China and Indonesia, Kettle said.
``Today some of the once probable projects are now only possible, while many previously possible projects have already been postponed or canceled,'' Kettle said yesterday in a presentation at a tin conference in Istanbul.
Tin, mostly used in soldering and food cans, is heading for a third consecutive year of supply shortfall, Kettle said. The deficit may reach 20,700 tons, compared with 2,500 tons last year, he said. That would be more than five times larger than existing stockpiles monitored by the London Metal Exchange.
LME-tracked inventories have plunged 69 percent this year, to the lowest since August 2005. Three-month tin prices dropped $524, or 3.4 percent, to $14,701 a ton as of 9:27 a.m. in London.
``Long-term prices of around $15,000, preferably stable, are necessary to make sure there is sufficient exploration and investment,'' Kettle said.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at [email protected]
Last Updated: October 30, 2008 05:48 EDT
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