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Tinplate mills fear shortage as prices hit two year high - 9 August 2010

Friday 6 August saw the London Metal Exchange report a two year high of $20,795- 20,800/tonne (cash) for the price of tin, its highest price since 12 May 2008. However the cost increase is unlikely to affect tinplate producers.

Independent tinplate consultant Philip Rogers tells Steel Business Briefing: “Tin mills adjust their prices according to the average LME price over the previous six months, so such increases are, to some extent, priced in”.

As demand and prices are increasing, tinplate producers are beginning to fear that there is going to be a shortage of tin supply. Along with demand, the fact that tinplate only accounts for 20% of global tin usage, and that the mines coming on line now are much smaller are all contributing to the mills fear of tin supply.

The increases in both price and demand have provided impetus in considering the re-opening of older mines such as those in Tasmania and Cornwall.

Rogers warns: “Although costs are currently being passed on, prices can sooner or later get out of line to the extent that they can cause a material to be subject to substitution”.

 

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