Tin industry braces for further drop in demand

FROM one crisis to another in past decades, tin is now being challenged again with...

FROM one crisis to another in past decades, tin is now being challenged again with a possible erosion in demand, which is suppressed by the current global recession.Last week, ITRI Ltd, an international tin grouping, came up with a disturbing report stating that demand would likely drop 10% to 15% this year on the back of excess supply based on its survey on tin consumers.In 2007, world tin usage peaked at over 360,000 tonnes, having grown at some 4% a year over the previous decade. Growth rates in fact were slowing even before the onset of recession and demand dropped very sharply in the final quarter of 2008.Tin surplus as at end-April was at 8,500 tonnes, the highest since 2005 while the price of the commodity has dropped about 26% so far this year.However, industry observers still cannot figure out whether the drop in tin demand is entirely due to reduced usage, consumers running down their tin stocks or reduced stocks of semi-finished tin products.Apparently, there is still a lot of uncertainty on consumer stock levels over the past quarters.In Malaysia, a potential drop in tin demand could stall the Malaysian Chamber of Mines’ initiative to push for further exploration and opening of new tin-rich mines particularly in the Kinta Valley area.