Tin prices may rise as Indonesians reduce smelting
Tin prices are likely to rise as much as 5% on the London Metal Exchange (LME), as Indonesian smelters are cutting production.
Indonesian output cuts are expected to remove 2,000 metric tons of tin a month from the global market.
Indonesian smelters are trying to boost the price of tin, which has dropped 22% since reaching a record high of $9,240 a ton on October 11. The smelters, which account for 17% of global supply, cut output by as much as 50% from last week. Tin is used to make food cans and electronic equipment.
Tin prices are unlikely to reach $8,000 a metric ton because demand from the electronics industry has weakened and new mines have opened in Australia and the Democratic Republic of Congo.
However, not withstanding the price rise, Hindustan Tin Works, India’s largest manufacturer of lithographed metal containers, is envisaging to further invest Rs 500 million in the metal packaging business which shall result into major expansion of its business since it went public in 1995. It proposes to tap the unexplored new packaging opportunities available in the domestic market by setting up a 2-piece can manufacturing line to cater to requirements of beer and beverage industry.
This will be the first project of its kind in India and shall substitute the imported cans in this segment. The proposed investment shall also help the company to substantially increase its export business by meeting the increasing demand of its product in international market.
The plant expected to be operational in the first quarter of 2006, will have a capacity of approximately 350 million cans per annum. The Cans would be manufactured based on Drawn Wall Ironed (DWI) and Draw-Re-Draw (DRD) technology. The company is planning to set up a new manufacturing unit in the state of Maharashtra and funds for expansion will be partially met through issue of peferential equity and zero coupon warrants.
India’s increasing processed food segment is growing at a robust rate and the demand for tin cans is ever increasing.
