Tin price shows steady strength after cartel’s collapse

Better times may lie ahead for tin, which fell drastically in price following the collapse of the International Tin Agreement(ita) beginning in October, 1985.

Traditionally used in the manufacture of tinplate and solder, the metal, which averaged $2.94(US) per lb in New York in 1986, spent 1987 in the $3.10-$3.20 range and, according to a couple of analysts, could average in the mid-$4.50 range in 1988.

Main reason given for the price increase is lower stocks. The primary market balance of tin, both Metals & Minerals Research Services of London and Laurence Prust & Co.’s International Mining Quarterly report in recent updates, was in deficit in 1986 and 1987 and should be again this year.

The ita was a scheme whereby producing and consuming countries around the globe signed five- pact pacts (beginning in 1956) containing measures (export controls, for example) which would act to stabilize the market. It was under the sixth such agreement (the U.S., U.S.S.R. and Bolivia, leading members of the fifth pact, opted not to sign the sixth agreement) that the tin market collapsed.

Major non-Communist world tin producers include Bolivia, Malaysia, Indonesia, Thailand, Zaire, Nigeria and Australia. Stable consumption levels

Analysts note that while mine production since the price decline has responded to lower tin prices, consumption of the metal has not and remained fairly stable. Tinplate, traditionally the largest end-use for the metal, has taken a beating in developing nations from substitutes in the food and beverage market (aluminum, for example); consumption of tinplate has also suffered from the switch to thinner tin coatings. Manufacturers of solder now reportedly use about the same amount of tin as tinplate makers.

Other end-uses for tin include chemicals, in agricultural pesticides, for example, and tinning, where the metal becomes an ingredient in bronze, brass and other alloys. Producing mine

The only primary producing tin mine in Canada is located at East Kemptville, N.S., (near Yarmouth). It was brought into production by Rio Algom in October, 1985, just prior to the price collapse and has, since around the end of 1986, belonged to the banking group which originally financed the project. Rio Algom, which has continued to operate the mine under an agreement with the banking group, is currently negotiating to purchase the mine.

Tin is also mined as a byproduct in Canada, by Cominco Ltd., for example, at Kimberley, B.C.

On the exploration side, Billiton Metals Canada and Lac Minerals have signed an agreement whereby Lac may earn a 50% interest through exploration work in a tin prospect in New Brunswick, south of Fredericton.

Meanwhile, in the courts, a metal trading subsidiary of Noranda Inc., Rudolf Wolff and Co., has sued the Canadian government for $38 million in damages suffered because of the tin market collapse. Wolff is claiming breaches of contracts and fiduciary duties by the federal government, which at the time of the market collapse was a member of the International Tin Council and a signee of the ita, which is administered by the tin council.