Tin supply shortfall seen in 2003 and 2004: Report
Monday, June 2 2003 - 02:01 AM WIB
World tin consumption is likely to exceed production by some 12,000 tonnes in 2003, CRU said in a presentation made to industry group Tin Technology at its board meeting in Kuala Lumpur.
"Although demand is forecast to decline slightly, the main feature in the market is a sharp fall in production by Asian custom smelters," Tin Technology said in a release based on the CRU presentation.
Tin is used mainly in packaging and lead-free soldering.
CRU's analysis showed continued demand growth through 2001 and 2002, despite the sharp downturn in the electronics industry. Tin was the only London Metal Exchange (LME) metal to register an increase in global usage in 2001, due to strong Asian demand.
In 2002, Asia was estimated to have accounted for 51 percent of world consumption, with China at 21 pct displacing the U.S. as the largest national market. Tin usage in Japan was stimulated by a switch to lead-free solders.
Measures taken in Indonesia to manage small-scale 'unconventional' production and the reversal of the long-term growth in Chinese production since 2000 have impacted on supply, it said.
Due to a ban on Indonesian exports introduced in June 2002, production by regional custom smelters is forecast to fall by over 50 percent this year.
"Meanwhile lack of smelting capacity in Indonesia is resulting in stockpiling of concentrate there. Chinese production is expected to be little changed from last year's level, estimated by CRU at 88,000 tonnes," it added.
There will be a further supply shortfall next year, although this depends on the continuing control of small-scale production in Indonesia, implying a further accumulation of concentrate stocks there.
"With improved supply side management and emerging new technologies for tin, driven by an active research programme, we remain confident about future prospects for the metal," David Bishop, Managing Director of Tin Technology, said. (*)