Tin stays put at Rs 376 a kg

Despite 6% rise on the London Metal Exchange last month

Tin prices have remained steady in the domestic market despite the fact that the benchmark LME (London Metal Exchange) prices have moved up about 6 per cent during the last month. This is significant as the domestic metal prices usually move in tandem with the international prices.

On December 1, tin prices in the Mumbai market were quoted at Rs 377 a kg, which surged to Rs 400 a kg by December 14 owing to rising international prices in the wake of a production shortfall at Peru-based Compania Minera Minsur SA.

The company's daily production fell by as much as 115 metric tonne, suffering a per-day loss of around $1 million, because of a strike at its Funsur SA tin refinery and smelter unit beginning on December 5. During this period, the LME tin price was at the $7,010 a tonne level.

Fears among consumers of a shortfall in supply forced traders to book the metal at higher prices, thereby increasing prices internationally.

However, profit booking at higher levels brought down the prices in both domestic and international markets by the end of December, and the metal, known for moving independently, started losing gradually in the domestic market and settled at Rs 376 a kg, against $6,725 a tonne on the LME, on January 9.

Earlier, in November 2004, the domestic tin price had touched an all-time high at Rs 540 kg when the LME price surged to $9,225 a tonne, but since then the introduction of substitutes slowed down the demand, which in turn eased out prices internationally.

India produces a meagre 10 tonne of tin a year compared with its total estimated yearly consumption of 4,000 tonne.

In comparison, global production of tin is estimated at 3 lakh tonne a year, with China being the number one producer by a huge margin with its annual output at around 1 lakh tonne. Indonesia stands next with 90,000 tonne, followed by Peru with around 70,000 tonne. Two of the other major producers are Bolivia (15,000 tonne) and Brazil (14,000 tonne).

Multi Commodity Exchange introduced tin futures in India recently, but trade volume remains very thin.

Tin is mainly used by industries engaged in food packaging, anti-corrosion and engineering coatings, wine capsules, fire retardants, culinary equipment manufacturing, tin chemicals, plumbing, soldering and in the production of pewter and bronze, and also in the electronics sector.