Tin price hits 17-year high on Indonesian supply worries: Report

The price of tin has hit a 17-year high point in trading owing to expectations of a supply deficit in 2007, largely owing to a drop in Indonesian output.

On the London Metal Exchange (LME) the price per tonne for delivery of tin in three months reached US$11,350 on Wednesday, the highest level since 1989 when the metal was re-introduced on the London market.

The price of tin has risen by about 75 percent in 2006.

According to Societe Generale, a shortage of supplies of tin will shoot up to 25,000 tonnes in 2007 from a deficit of 3,000 this year, as output fails to satisfy rising demand for the metal which is used to make electronic devices.

Expectations of a deficit have meanwhile been fuelled by a recent move by Indonesian authorities to shut about 20 illegal tin smelters.

Indonesia is the world's second-biggest tin producer, behind China.

"The market's been very nervous about whether the smelters that were closed down and the fringe miners and fringe smelters would be able to resume operations in 2007," William Adams, an analyst at BaseMetals.com, was quoted by AFP as saying.

"The fringe smelters produce quite a tonnage of metal and with the market finely balanced (people are) nervous in case they don't produce next year." (*)