China's entry into ATPC sends tin prices up
China's entry into ATPC sends tin prices up
KUALA LUMPUR (AFP): Tin prices rose yesterday on the local tin market on news that China, the world's largest tin producer, had signed up in Bangkok to join a global pact as its eighth member, traders said.
The Kuala Lumpur Tin Market shot up seven cents to close at 14.43 ringgit (US$5.77) from 14.36 ringgit a day earlier.
China formally signed an agreement yesterday at the Thai foreign ministry to join the 10-year-old Association of Tin Producing Countries (ATPC) that groups Australia, Bolivia, Indonesia, Malaysia, Nigeria, Thailand and Zaire.
Jumrus Atikul, the executive secretary of the Kuala Lumpur- based ATPC, said China's membership of the ATPC was important in enhancing the effectiveness of the association's supply rationalization scheme (SRS) aimed at improving prices.
"China's membership is expected to expedite this process. The significance of its membership is underlined by the fact that it is currently the world's largest supplier," Atikul said.
Traders said China's decision to join the ATPC raised hopes that tin, which had long been in the doldrums largely due to oversupply, could very soon regain its luster.
Tin prices had peaked at 29.15 ringgit a kilogram (2.2 pounds) in the mid 1980s before the tin market crashed in October 1985. Prices have remained low over the past five years due to high excess stocks and poor demand.
Stocks
The global overhang of stocks stood at 39,700 tons at the end of July last year, ATPC said.
The ATPC, which accounts for 67 percent of the world's supply of tin, launched the SRS in 1987 to try to normalize the market and bolster prices.
China and Brazil, which although not yet a member but cooperating fully with the ATPC in the scheme -- account for another 13 percent of global supply.
"China's entry will lend new credibility to the ATPC as an organization that has more clout to sway world tin markets and can change the world demand-supply equation for the metal," said local commodities analyst T.L. Kwong.
A Thai foreign ministry official said in Bangkok Thursday that "it was quite difficult to get China to join. But finally they saw the advantage of being in."
China, after being courted for several years, had in October 1991 pledged to join the ATPC, but "the restructuring of the management system in Beijing" had delayed the process, ATPC officials said.