tin price, page-20

Gee Hightrax ,you seem to have a knack of saying a lot of things I am thinking ,and getting to the crux of it . Good work .
If you have a look at the downtrend in LME stockpiles ,the last 6 months have shown a very even downward trend from around 14,000 t to now just under 8,000t .If anything the trend looks to be accellerating .
Thats around 1000t per month . Many pundits will tell you that the stockpiles have been here before .But there is some factors that are different this time .Firstly the capacity for illegal tin mining in indonesia to build stocks back up, has been cut off totally .Previously as prices increased , illegal mining would fill the demand and curtail rising prices .This cannot happen this time .The Indonesian police have shut down smelters on a number of occasions , on suspicion that they were buying ore from illegal miners. This has further cut production .China is now a net importer of tin an looks set to stay that way with the electronics industry growing at a high rate .Antaike has forecast this growth rate at a FULL 10% per year for the next few years .Now thats a lot of growth ,and the chinese government has introduced a 10% tax on Tin to cut exports in an effort to preserve their precious reserves .Now the Indonesian government is taking steps to limit exports of tin in an effort to preserve their precious reserves .It has been reported that the proposed quota could stretch reserves in the Bangka province from a few years to possibly 20 years ,still not a particularly long time .That begs the question ,where is the shortfall going to come from ?
At the moment it seems to be coming from stockpiles at the rate of about 1,000t per month .Thats about 8 months worth of stockpiles left at the present rate of depletion .
Chinas usage of refined tin is expected to be 146,000t this year, up from 132,000t in 2007,or roughly 14,000t more .Thats more than the total stockpile thats left .If Chinas usage is 10% more next year ,their usage will be well over 160,000t .With governments beginning to recognise the strategic value in protecting their tin reserves, its hard to see how this void is going to be filled .None of the main Tin producing countries has a AAA rating for sovereign risk ,so what Hightrax says is very important .Tin is quickly becoming a very strategically important metal ,and MLX is quickly becoming a very strategically important company in more ways than one .Just how important that is ,will depend on how this scenario folds out in the next 6 months or so .The electronics industry is a juggernaut ,and supply is critical .If tin stockpiles reduce by another 2,000 t in the next 2 months ,the alarm bells wil be ringing so loud it will be deafening .
The press is beginning to sense this could get serious .
Stockpiles of tin were down on friday another 110t to 7,840t.
I beleive this scenario could possibly unfold within the next few months ,and if it does, could result in a huge spike in the Tin price ,similar to what happened in the nickel price when it tripled in about 12 months during 2006.
At worst, I see the tin price being sustained for a very long time .
MLX will be one of the largest tin miners in the world when in full production ,period .If stockpiles continue to be depleted at this rate MLX will have lots of people knocking at their door ,for lots of reasons .