Resigning members force tin body to rethink strategy

Resigning members force tin body to rethink strategy

SINGAPORE (Reuter): The Association of Tin Producing Countries (ATPC), hit by resignations of two member-nations the past week, needs to be restructured to make it relevant, a senior official said yesterday.

"A cartel is no longer effective," the official told reporters on the opening day of the ATPC's two-day ministerial conference in Singapore.

"A restructuring may be necessary and the ATPC could become a study group for consumers and producers which may also compile statistics for the industry," said the official, who asked not to be identified.

The ATPC must face the reality that it can no longer control tin prices in the market and must cope with the decisions by Australia and Thailand to leave the organization, he added.

Zaire, which now produces no tin at all, has also stopped attending ATPC meetings.

The membership roll is down to five countries -- Bolivia, China, Indonesia, Malaysia and Nigeria. Brazil is an observer, but has decided to delay joining the group, saying it would be "useless" to join the ATPC now.

"Nickel has a study group now and it has worked," the official said.

Other officials said the ATPC would continue to exist despite the departure of Thailand and Australia.

"We will stay," a Chinese source said.

"We are committed to the ATPC," said an Indonesian official. Discussions in the conference also focused on the fate of an export quota system which has been violated by many of the ATPC's own members over the years. The so-called supply rationalization scheme (SRS) was suspended in May.

Another delegate said a proposal would allow the current free market system to continue for a year and keep the SRS scheme suspended.

The effectiveness of the free market system would then be reviewed at the next ATPC meeting in September, 1997, he said.

But China, the world's largest producer of tin, said it wanted the SRS to continue, although its reasons were not immediately available, one official said.

"The Chinese want the SRS to continue," the official said, adding that discussions were continuing on the issue.

Indonesia has said the SRS should be abandoned since nobody followed it.

"It has already died," Kuntoro Mangkusubroto, director general of mining at the Mines and Energy Ministry, said last month.

A conference source said the Indonesians believed the export quota system was "obsolete. The free market is the way to go."

China's tin output fell 5.91 percent to 35,504 tons in the first eight months of the year. It exported 16,228 tons of tin in the first seven months of 1996, down 27.7 percent year-on-year.

The United States is the world's biggest consumer of tin, importing 33,200 tons of the 45,000 tons it consumed in 1995.

Tin company officials in Malaysia said any attempt to revive the SRS would fail.

Singapore-based tin traders said the ATPC should drop any attempt to impose export quotas and concentrate on possibly becoming a forum for consumers and producers.